How can Middle Eastern retailers improve customer conversion rates?
Over the next two decades the potential prize for entering and mastering the Middle East market is immense. Across the Gulf Co-Operational Council (GCC) region – which comprises Saudi Arabia, UAE, Kuwait, Bahrain, Qatar and Oman – affluence is growing at a rate of knots, and the young, aspirational demographic is hungry for Western fashion brands, beauty products, and luxury goods.
So how do international retailers looking for growth markets capitalise on the Middle East opportunity?
Recently, ShopperTrak spoke to Nicolas Rubeiz, Senior Consultant at Middle East business consultancy, The Unit. His advice was to start small, so retailers can fine-tune their proposition before growing their footprint. “Open for a year and wait while you learn from your experiences,” he said. “Refine your services and adapt to your market. Once you are 90% close to getting everything right, expand aggressively with 10 or 20 stores, established as quickly as possible.”
Rubeiz is the first to admit that the Middle East can be a steep learning curve for international retailers, and one reason for this is that consumer behaviour is different to other parts of the world. The omnichannel retail model is less developed in the Middle East region, but the influence of digital is having an increasingly large impact on shoppers’ use of the store.
To learn quickly, therefore, retailers need to invest in the traffic insight technology needed to understand shopper movements – and to optimise the store experience around this data. This will provide vital metrics to benchmark and improve conversion rates, with best practice that can be applied to further stores as their Middle East network develops.
One retailer in the Middle East already doing this successfully is outdoor clothing and equipment specialist Adventure HQ. The retailer has been mapping footfall against other key business metrics – including conversion rates, average transaction values and units per transaction – using ShopperTrak Analytics Suite, to analyse performance by time of day, day of the week and week of the month.
The insights our solution has provided showed Adventure HQ that while conversion rates reached 21% at some points during the week, at other times they dipped to 12-13%. Senior personnel were able to look at which stores performed best at which moments, analysing what differentiates them from other stores within their estate, comparing metrics such as stock availability and staffing levels.
By applying lessons from peak sales times at other points during the week, Adventure HQ has been able to increase its average sales conversion by 4%. Among the key techniques it has introduced are proactive marketing campaigns to drive store traffic during quieter periods. For example, once it became clear that Wednesday evenings were quiet, the retailer introduced a series of in-store talks to deepen customer engagement.
And Adventure HQ has utilised traffic insights to inform its operational decision making. For instance, staff breaks are now timetabled outside of busy footfall periods, and store associates are encouraged to take annual leave during the summer footfall drop in July and August. This way, the retailer optimises its infrastructure around natural dips in store activity, to run the business more cost effectively.
Adventure HQ is just one example of a retailer using consumer traffic insights to make their store footprint more profitable. For retailers entering territories for the first time, getting underneath the skin of shopper behaviour is even more important than it is for local businesses, as they do not have previous data or even gut instinct to rely on.
“We believe that data is knowledge, and that knowledge gives us power,” advises Adventure HQ’s COO, Shibily Moidy, and this is definitely true for international retailers targeting the Middle East. Analytics data delivered through a traffic insight solution will underpin their growth strategy, and help retailers build a lasting presence in this lucrative market.
Read our Adventure HQ case study to find out more about how ShopperTrak is helping the outdoor specialist to drive store profitability.