From e-commerce to Omnichannel, Consumers Drive Retail’s Digital Transformation in MEA

By Ola Williams

The pandemic left little room for error when it came to adapting to the new normal. For retail this meant e-commerce experienced a renaissance, “omnichannel” received a lot of attention and customer experience was no longer an after-thought but a necessity. Meanwhile, it’s the customer that lies at the heart of these new trends and will ensure their staying power.

Globally, retail is a $25 trillion market with e-commerce accounting for a sizeable $9 trillion. In the Middle East and Africa (MEA), Microsoft retail customers reported that online sales brought in between two and five percent of revenues before the pandemic. Today, this has reached around 20 percent of top line profits. This is an extraordinary amount of growth that took place in just two years, and according to Mastercard’s Economy 2022 report, this shift is expected to stay. 

The Federal government recently said the current e-commerce spending in Nigeria has grown to $13billion per annum and is expected to hit $75billion in revenue per annum by 2025. With an increase of 30%, the Nigerian eCommerce market contributed to the worldwide growth rate of 29% in 2021. The place of e-commerce in the Nigerian economy is being boosted by gradual transition of informal retailers into the online shopping community.

While this move to online shopping is a gamechanger for many retailers, it does not mean this is the end of brick-and-mortar stores. In fact, we are seeing omnichannel retail becoming a key approach for brands as they look to navigate a post-COVID-19 landscape. As lockdowns eased, consumers returned to their favourite stores, but were now more likely to have looked up the desired item online beforehand or research a product while perusing the shelves in person. 

Retail brands that are able to seamlessly connect their customers to these different touchpoints will unlock greater business value. A Harvard Business Review study found that the more channels customers used, the more valuable they were. Omnichannel customers spent on average four percent more in store and 10 percent more online in comparison to single-channel customers. A seamless approach to creating customer engagement from the virtual world into the physical can yield results for retailers. 

The customer is always right

The omnichannel approach is also having a positive impact on the customer experience. It’s through these multiple channels that shoppers are given more choice than ever. Consumers are looking for brands that meet all their needs, whether it’s browsing online or in-store, or opting for delivery or curb side collection.

Retailers are further building on the customer experience through personalisation. Data holds the key and customers are more comfortable sharing their data in exchange for better services and experiences. MyMusic is a digital music platform in Nigeria that allows users to download high-quality local music and pay for it in a convenient way through mobile airtime. They partnered with Microsoft to use cloud technology as the backbone of their product. Using Microsoft Azure and its related services, MyMusic has integrated data analytics, machine learning and augmented reality into their solution. MyMusic gather data around their consumer’s music preferences, browsing behaviors and spending patterns. More importantly, they use this data to improve their customer service. They personalize their user experience, giving users exactly what they want and need, before they even know they want and need it.

Loyalty programmes are a valuable asset for retailers looking to personalise the customer experience. In the case of Emaar Properties, the company sought to automate its Dubai Mall loyalty programme with the help of Azure Cognitive Services. Shoppers scan a receipt using the mall’s app, which will log their purchases and reward loyalty points accordingly. 

In a world where consumers have more choice than ever before, retailers will need to work harder to maintain customer loyalty. Tools that help to automate loyalty programmes and provide insight into customer behaviour will help brands spend more time innovating products and services for their customers. 

Building this loyalty and trust can be completely derailed by a single cyberattack, which is why any sort of data management should always be paired with a security solution. For Turkish conglomerate Doğuş Group, protecting its highly sensitive datasets was a growing concern as it witnessed a rise in cyberattacks. Improving its threat detection and resolution was top of mind when it deployed Microsoft Defender to secure its data and staff against security incidents. The group’s technology team are able to react faster to suspicious activity that before may have taken days to investigate. 

Meeting customer demand with the right tech tools

Another growing trend is the conscious consumer. Sustainability has become a major priority for customers with many choosing to spend more money with brands that demonstrate their commitment to environmentally conscious and ethical products and services. The right tech solutions can provide retailers with more transparency within their supply chains to ensure they meet this consumer demand. 

Microsoft is working with Interswitch, an impressive payments and fintech innovator in Africa. Interswitch is working with banks like GT, UBA and Zenith to bridge the supply chain financing gap between an existing corporate-focused infrastructure and a small entrepreneurial economy emerging in the region using AI-enabled solutions. Partnering with large banks and corporates in Nigeria, Interswitch has built a bank guarantee service on Azure that extends the reach of the banking system to non-traditional players, empowering bank lenders, corporate suppliers, and borrowers of all sizes to manage their supply-chain financing under objective terms and complete transparency.

It’s through technology that retailers can gain visibility through their supply chains and demonstrate transparent practices to their customers. 

These cloud-powered solutions are helping companies like Spar in South Africa to reduce inefficiencies and empower their employees. With the help of Azure and Microsoft 365, the food retailer was able to standardise its systems, better understand its market and apply best practices throughout its operations to become a more nimble and agile company.

To help our retail customers on their digital transformation journey, Microsoft has developed Cloud for Retail, a tailored set of industry-specific cloud solutions. By working closely with retailers and our partners, Cloud for Retail helps maximise data, enhance the customer experience, optimise supply chains and empower employees. 

COVID-19 may have been the unexpected push into a new way of doing retail business, but it’s consumers that give these trends staying power. To take advantage of the business benefits, retailers will need to continue with their digital transformation journeys in earnest. 

Ola Williams is the Country Manager, Microsoft Nigeria