When I started my career 14 years ago, digital was a small media channel where advertisers would invest the remainder of their budgets. The budgets grew year-on-year and digital media became the core.
There are a lot of flashbacks now we are living a similar experience with e-commerce. The only difference is that this will happen at a much faster pace. This disruption is coming from a consumer need and is heavily accelerated by Covid-19.
Worldwide, 3.47 billion people use e-commerce. The adoption of digital shopping is growing exponentially, affecting verticals across every single market.
Our MENA region is witnessing tremendous growth in e-commerce penetration. Analysis by the World Economic Forum identified Saudi Arabia as a worldwide leader in digital competitiveness, and, according to eMarketer, the Middle East & Africa is the second-fastest-growing region in commerce.
The change in customer needs and demands has reshaped the retail world and this change is here to stay and grow, which is the reason e-commerce is a top priority for CEOs across all industries (both products and services).
What does it mean to manufacturers and advertisers?
- The product-centric approach is dead; it’s all about the consumer. On one side, consumer pantries and product size are getting bigger; on the other side, brand disloyalty is at its peak. The supply chain challenges during the early days of the pandemic led to a lot of out-of-stock incidents, resulting in customers becoming more comfortable with the concept of substitution.
- Winning the digital shelf is essential to survive and grow. Being discoverable and visible with the proper listing fundamentals is key to your consumers.
- Performance marketing is no longer merely an appealing term to use in meetings and seminars; it is now a mindset. The good thing is that plenty of solutions are already out there, and that is just the start. Social commerce is the new influencer marketing. With the new shoppable features that some tech platforms are offering, brands of all sizes can boost sales, capture conversion data and initiate direct-to-consumer (D2C).
- Measurement and data are the new oil and gas. With Google and Apple, announcements on cookies and IDFA (Identifier for Advertisers) opt-in, and with the rise of online-to-offline and pure-players attribution, e-commerce ad offerings will become more appealing. Data will always be a challenge until it surpasses sales on your D2C priority list. Direct-to-consumer will always be the preferred answer to the first-party data challenge.
- Marketing and trade; partners in crime. With the rise of e-commerce and with media becoming shoppable, the line between marketing and trade is becoming more and more blurred. Aligning the efforts and having a common agenda, with the support of commerce and media teams, is the secret ingredient.
What does it mean to retailers, marketplaces and omni-channels?
- The stage is yours. The pandemic put the MENA online infrastructure under a major test. Indeed, it was not a failure and it is getting better by the day. During Covid-19, new players entered the market. Dark stores and food delivery apps expanded their offerings, and more assortments of pure players and omnichannels became part of the scene. The change in consumer habits and needs drove the massive growth in online shopping. We witnessed a small dip post-lockdown, but it is still at almost 20 per cent growth vs. pre-pandemic. We are living a new normal. Prime Day sales are expected to hit $9.91bn globally, which is more than 40 per cent growth over 2019, while the economy is going downhill.
- Enjoy the glory and ensure it lasts. While we are seeing brand disloyalty, consumers are also not loyal to where they order from.
The addressable audience to convert is higher but all customers are at risk and you should defend them.
Retention first, acquisition second. 88 per cent of shopping carts are abandoned globally; consumers seek a frictionless journey all the way from discoverability to advocacy (assortment, user experience, payment methods, fulfilment, loyalty programs, etc.). BOPIS (buy online, pick up in-store) is a good solution for omni-channels to capture more audiences, reorganise retailer stores and create further advertising opportunities.
- Go beyond sales. You are a valuable media player now; enhance your media offering. Bringing in biddable tech is expensive, but becoming part of the social commerce solutions, optimising your ad placements, basic third-party measurement and strategic pricing are easy wins. While you are already offering a delicious meal to the advertisers by connecting media and sales, only very few pure players are tapping into attribution. Omni-channel players have a major opportunity to close the offline and online attribution loop.
Consumers will always value convenience. Tech players are bringing more SMEs online and will keep growing their lower-funnel solutions. Gaming will play a bigger role and the internet of things is beyond just a delivery drone. The list goes on.
How long do you think it will take for retailer media and social commerce to have a double-digit share of your channel mix allocation in MENA?
