This article was written for Campaign Middle East by Waseem Afzal, Deputy managing director at OMD UAE.
It is that time of the year when pundits in the industry come out with their outlook for the future in the world of marketing and technology. So we will skip all that talk as we recognise the landscape in our region continues to evolve quicker than a lot of mature markets globally.
We also know new players continue to enter the MENA region as growth evades them elsewhere, investments in the ecosystem are spiralling and, above all, adoption of technology by consumers remains in overdrive mode in the region.
You would imagine this is a good place to be at. But all this noise aside, the growth seems to be playing hard-to-get across a lot of industries and businesses. Performance marketers and brand builders along with their partners have squeezed every single bit of value out of their available resources searching for that G-word. Yes, I’m talking about growth. But seeking growth at a time of change, constant disruption and volatility in the marketplace has meant short-term tactics for quick gains take priority over long-term strategic imperatives. The industry seems to have adopted the “beta mode” mindset as we course-correct every proven approach to drive incremental eﬀectiveness.
In the midst of all of the change, the new North Star metric appears to be digital commerce. We are seeing e-commerce emerging as a channel of reprieve for marketers and hope for the industry.
Whatever ups and downs we may have seen, when you talk about digital e-commerce, you only see it in a bigger and brighter light with lots of momentum behind it in the Arab world. From pure-player digital natives to omnichannel businesses across legacy industries, all seem to be jumping on the bandwagon and at diﬀerent stages of e-commerce adoption all are gearing up to capitalise on the gold rush.
However, a few interesting patterns are fast developing along the way that I believe will hog the talking points across closed-room sessions and industry conferences over the next year
IS E-COMMERCE A SALES FUNCTION OR AN EXTENSION OF THE MARKETING TEAM?
There is no straight answer to the question. However, there is clear ambiguity on the roles because e-commerce may be the fastest-growing P&L, yet there is no single owner and a little battle is underway. Its success hinges on the performance of many other departments within an organisation that may or may not be under full inﬂuence of either the sales leader or the marketing folk, so the clear visible alignment lacks consistency. The two functions need to come together in a more coherent fashion where sales and marketing teams have to join forces together to augment demand collectively and fulﬁl that demand collectively. Just as in the retail sector we have seen the changing role of the stores from fulﬁlment channels to marketing vehicles, similarly we need to carve out that demand-ﬁrst mindset if e-commerce is to reach its tipping point.
SCALING E-COMMERCE COMES WITH COMPLEXITIES OF RETENTION
According to various sources, including eMarketer, global e-commerce will grow by 19 per cent, and regionally it will grow by 44 per cent (thanks largely to the inﬂuence of Amazon, the expansion of Noon and the continued entry of new players into the game). This means it is going to be even more challenging to continue to build scale and maintain market share.
A shift in emphasis must be adopted, from acquisition as the only goal to a process-focused retention approach fuelled by investments in customer experience management. In more mature markets, the average number of transactions annually is between 18 and 20, however in the region, it is roughly three or four, and this is primarily because of the poor experience an online shopper has to go through, let alone the limited choice available on platforms. This region also experiences one of the highest return rates (30 per cent on average), which fundamentally means businesses must now take greater ownership of the customer experience.
To add to the complexity, a recent dipstick found that the number of days people are willing to wait for free shipping has dropped from 5.5 days in 2012 to 4.5 days on average, so this means investments in fulﬁlment and reverse logistics have to be made to eliminate friction. After all, the harsh reality is that bottom line proﬁtability generally comes from customer retention.
EMOTIONS ARE TRUMPING WALLETS FOR TODAY’S ONLINE SHOPPER
A lot of talk has centred around personalisation, and, while it is uber-critical to deliver relevant messaging in the right context at the right time, the legacy model of strictly focusing on selling products no longer applies. How often have you been remarketed the same product that you have already purchased from the same seller? Terrible, I know. Today’s shopper has trickled away from shopping for products to demanding a more engaging experience. The changing preferences and attitudes of the consumers have already aﬀected how brands present and position themselves globally, and this trend will make its way into the region.
Companies will be left with little choice but to dub themselves natively into popular consumer touchpoints and look more dynamically at embracing the culture around and within them so growth becomes a progressive journey as opposed to a bumpy road to a destination.