The need to deliver meaningful and relevant experiences has only deepened during the past two years. Abdellah Iftahy, Partner at McKinsey & Company and Jhonny Jha, Associate Partner, McKinsey & Company Dubai walk us through the shifting landscape in retail explaining the trends identified in their recent consumer sentiment survey in the region, and in two global surveys on business building.
The shifting consumer behavior and the rich consumer data are creating the new retail of the future. There is an increased price sensitivity for all consumers here in the region, especially in Saudi. This has almost increased by 30% in two years. Consumers look for value for money, the right quality at the right price. This is an opportunity for retailers and consumer companies to tailor their offering.
The behavior of the consumers and their activity online is growing and is here to stay. This is related to transparency they get in terms of price and discounts, but also in terms of convenience. Consumers are also making more conscious buying choices especially in relation to health-related products and localization. Purpose and innovation are two main attributes that they are actually looking for in the companies or the brands that they want to buy from. This is extremely important thinking about how to transform the core of retail, but also in the new businesses you want to build in the future.
Personalization creates a whole new world for retailers to grow while 70% of the consumers expect it from a brand. Every interaction with the customer should be measured, stored, and cleaned to make sure that data are available for further use. The use of the right analytics to extract the data and the right talent to analyze and embed them to the organization are essential in this personalization process. The consumer is at the center of everything retailers do. Consumer behavior and data will transform the core, but at the same time will bring an opportunity to create a growth platform for many retailers.
In other regions we see a lot of partnerships private-public, private-private taking place in building new businesses and we expect this to actually accelerate here in the region. We believe that business building is not a choice. It’s a strategic priority for all companies, especially here in the region, where there are still a lot of opportunities across the value chain, across all sectors, across all categories.