THE BLOG

Omnichannel Retailing in the Gulf - an Ongoing Challenge

03/04/2014 13:54 BST | Updated 02/06/2014 10:59 BST

The Gulf has established a powerful reputation for embracing international brands, particularly luxury brands from the West. Dubai is a shining example of a multicultural business and retail hub that has placed luxury goods firmly at the heart of its cultural identity with its scores of glossy malls. However, there are still many challenges facing retailers operating in this territory looking to take an omnichannel approach by engaging consumers through all available on and off-line shopping channels. The launch process must be carefully considered in order to succeed.

In the more mature Western digital markets there have been two key areas that the Gulf states can learn from as they continue to build their infrastructure. One was a simple lack of urgency as in-store sales continued to account for the bulk of the overall retail sales, the other was the complexity of the work involved in the restructuring operations to offer a successful omnichanel experience.

Although the market in the Gulf has evolved rapidly over the past 40 years, it is nevertheless fairly young in several aspects when compared with other territories, and continues to move at a different rate. For example, while it is growing rapidly, online retail is still in its relative infancy - some areas of the Gulf don't have postal addresses, which naturally creates difficulties for ecommerce.

This stems from a major difference between the Middle Eastern and Western cultures; in the UK, ecommerce leads the way, with consumers preferring the convenience and speed of browsing and ordering online to the hustle and bustle of the high street. In the Gulf, however, 'mall culture' remains dominant.

Another key difference is the predominantly Islamic culture, which brings a set of religious and cultural conventions that retailers must adhere to, or risk alienating their target audience. Potential obstacles include the observance of religious holidays, which may impede factors like playing music in-store (as silence is often necessary), while marketing content and online imagery often needs to be censored to stay in line with cultural views on modesty. This can result in many extra costs (for retouching catalogues, reshooting website images and ad campaigns, etc.), which could ultimately become too much for the brand's overall budget to handle.

In the West, female consumers make up one of the largest and most powerful retail demographics, but women in the Gulf are difficult to reach due to restrictions placed on them going shopping unchaperoned, which is where the blossoming of online retail is likely to come into its own - shopping online has the ability to offer a deeper level of freedom and comfort to Muslim women, as evidenced by the fact that lingerie enjoys excellent sales online.

Without the proper planning, the above factors could easily stunt an omnichannel strategy, so the 'one-size-fits-all' approach is ill advised. Retailers such as Nestle and Lipton have excelled in this area, with many of their products now manufactured using Halal processes to appeal to the predominantly Muslim population - the same goes for other Western brands like KFC, Subway and McDonalds. Various marketing campaigns by major western brands have managed to sidestep the issue of censorship in some rather original ways; for example, Olay launched a 'Most Beautiful Eyes In Arabia' competition so as to remain within strict conventions of female modesty in Saudi Arabia.

While online shopping may still be a nascent landscape in the Gulf, mobile penetration and social media are both incredibly widespread, which opens up an exciting avenue for retailers. Social and mobile shopping in the Gulf hold enormous potential for building relationships between brands and customers, in addition to opportunities for using social media to fuel brand advocacy and peer recommendations.

In this post digital marketing era, digital IS the convergence strategy, and the focus now needs to be on the creation of 'brand ecosystems' that can thrive. Branding has never been more important to ensuring a firm can successfully evolve and communicate in this vast arena, where they can now only influence opinion rather than control it. The key challenge, as with any brand, will be the meaningful values that they embody and shared beliefs that their customers can engage with and be sensitive to cultural issues.

The Gulf has already demonstrated its openness to Western brands - but if an omnichannel approach is to be successfully administered, then brands need to change the way they navigate the cultural terrain. Tried and tested methods that worked in the West, may not have the desired effects here, particularly with regard to the varying uptake of different devices and ways of shopping. As with any cross-cultural strategy, thoroughly researching and understanding the customer is the most important element of all.