Seamless Xtra’s Micah Edwards speaks with Kartik Bhatt, Chief Digital Officer, Modern Electronics, Al-Faisaliah Group (Sony, Playstation, Panasonic). In this interview, they explore omnichannel trends, how to be a successful digital leader and the four vital ingredients for ensuring customer loyalty.
Kartik also explains why the most critical technology for businesses in Saudi Arabia, right now, is not artificial intelligence.
As you know one of the biggest trends is omnichannel and omnichannel is a buzzword that’s been around for such a long time now. Many have said that omnichannel is dead, while some say that it’s not going anywhere.What would you say is the current state of omnichannel in the retail and e-commerce industry?
Right now, there are a lot of successful companies that have established a very strong omnichannel presence. If you look at businesses like Sharaf DG. They have been thoroughly bred into the ecosystem of omnichannel. Businesses like ours, which are large businesses, two and a half, three billion in scale are now embarking on this journey. And I think omnichannel is the way.
Historically, everybody thought omnichannel was to have one store and one website. It’s not about having a store and a website. It’s about driving synergies to seamlessly manage the experience. And as businesses, when you change your mindset from either being a retailer who owns a store or a website into an aggregator of a consumer who’s trying to make the customer’s journey easy, omnichannel becomes that much easier for you.
Take an example of a brand like Argos. Argos does a beautiful job in the UK of having a store historically, which was 15,000 square feet into one and a half thousand square feet. It shows one product, displays 10 on a tab and it makes sure that by the time you finish shopping and get home, your products have reached home. Now that is what I call omnichannel service delivery. Or somebody like an ao.com. It doesn’t have any store, it only has its website. It makes sure that the nearest LG store delivers the product or the nearest Samsung store sends the washing machine and somebody gives you a demo.That’s what I call a thorough experience in an omnichannel ecosystem.
So if you are able to make a customer’s journey shorter, faster, more streamlined and convergent compared to going to a mall, you’ve succeeded in it. I wouldn’t say with omnichannel everybody’s arrived but a lot of companies who invested four, five, six years ago, either have failed a few times or are now learning from the mistakes and sharpening the saw. Sharaf DG did it better. Some of us are learning how to do it.
Kartik, obviously you mentioned at the start of the introduction that one of your main roles is to lead the digital transformation. For you, what are the top technologies that you believe are truly changing and, you know, forever advancing the digital transformation within the industry?
This is one question that I hear every day and everybody wants me to say Chat GPT is the buzzword and the answer to the word is Chat GPT and artificial intelligence. I think the GCC region is still one generation behind the ChatGPT and AI curve especially in a place like Saudi Arabia.
Saudi has 27 to 30 million people and a population growing faster in terms of its affluence. In this geography, I do not want to be seen as a retailer with so many assets and so many stores. I would want to be seen as an aggregator of consumers and hence as a retailer or as business for me, getting my CRM, CDP, Martech, consumer mapping, database creation, journey management technology is what I consider my immediate priority and my immediate requirement
Once I have my frequency map, my predictive logics around who’s going to shop where, how much can I maximize his value, how does his experience link to his shopping and his referrals and his rewards in my network I would have optimized that part. Hence I would have put my business on a strong steady state pedestal where it will keep running on its own. Then I would go into building my artificial intelligence and machine learning as necessary tools to sharpen my saw.
At the moment I’m building the platform for the business and hence its a combination of Martech and CDP which are the most important. The thing that everybody is talking about which I very strongly believe in is moving the e-commerce journeys from the traditional elimination journeys into a very strong intent driven journey.We expect that a consumer when he comes on the website, when you throw an entire catalogue open to him, he knows what he wants to buy. Contrary to the belief is that a consumer comes to the website to understand what does the website offer to him.
Like a traditional salesman that goes into a Saree shop in India, the salesman should be able to show the products and help the consumers decide. And that’s what intent driven journey does. Airbnb has mastered this art of building an intent driven journey. Home Depot and Booking.com are more or less close to those journeys too. So these are my key takes for the technology in 2024.
I think that’s an interesting angle that you’ve mentioned and I do like how you would always bring it back to the consumers. You are essentially using your website not just as a channel directly for sales, but yet at the same time still enticing consumers.
So the science is called decision science. You don’t ask a consumer to shop, you help the consumer decide. When the consumer starts deciding on your website and starts eliminating what he or she doesn’t want, he ultimately lands up on the product of his choice. And that joy of discovering the right product suited for me, which we call solution selling, increases your conversion compared to me throwing a plethora of 100,000 products in your face and telling you, go pick up what you like. It doesn’t help a consumer.
Yes, I think the consumers nowadays are very smart, they’re very tech savvy. They know exactly whether you’re just selling for the sake of selling or whether you actually care about your products. You also mentioned that you’re leading the director consumer omnichannel portfolio for one of the largest gaming consumer audio, video and home appliances businesses for brands like Sony, Panasonic, Hitachi within the Al Faisaliah Group
What’s your advice on executing a successful transformational road map that consolidates multiple in-store and online businesses into a linear direct Omni channel D2C operation?
This is this is extremely critical for any business that goes on this journey because what comes on a strategy document or what comes on a theory document is very different from how the world opens up when you start executing it. Getting what’s lined up, which is your people process technology is very important.
Generally, businesses that are in this phase love to work on the idea that we will keep evolving as we move.It doesn’t work necessarily until unless you have the basic building blocks in place. So that’s one. So get your people process technology in place.
Second, build, plan, do check mechanism, which means you plan something, you do something and you always have measures, KPIs and milestones that you continuously check against. Especially in the transformation journey, if you miss your couple of milestones, you’re suddenly realising that back loading becomes that much more difficult and your business numbers will not meet with your transformation journey.
Keep your business asset like do not try and build up assets or inventories. It’s an old and conventional way of doing business. You’re no longer in the business of holding TV’s in your warehouse or holding T-shirts in your warehouse. You are in the business of being in a consumer’s mind only so own the inventory.
Third, very critical is we used to historically work on a very strong upper final discovery where brands had millions of dollars to pour in the market and say let me get consumers mindshare. Consumer is a very fickle minded person today. He loves everyday trends. Just because brand X was popular six months ago and they spent billions, it’s not going to be in the consumer’s mind forever. Tomorrow if somebody does something new and different that brand will get positioned in the consumer’s mind. So continuously evolve, continuously move with changes, get away from the conventional way into more influencer, content driven content, content democratization, convergence 2.0 communications ecosystem.
So it’s people process, technology, asset-light businesses, milestones and KPIs and strong continuous communication is what I would suggest to businesses or to young leaders who are embarking on this journey. And more importantly, be ready to fail.
You will get it right maybe the 3rd or the 4th time. So it’s important to build that transparency with your business leadership where you set expectations right and get everybody involved for the long haul.
When we do talk about it in Seamless as well, everyone talks about the journey. As you point out there are some risks in that journey too, especially at the start of the journey. But I suppose if you want something good in reward, then you have to take some risks for that to happen.
Willingness to change is a very important criteria to have. Digital leaders or Omni channel leaders are typically in their mid 40s and at that age, they have been so hard boiled into a way of doing business. But it’s ok, if you get it wrong once, move on to a new plan. Don’t get stuck to a plan and continue to prove to yourself and the world that you were right. Eliminate the choices and start working. That nimble footedness, agility, problem solving mindset is the most critical factor around getting this entire ecosystem right.
Yes, and I think one of the harsh truths that you mentioned is sometimes a brand can spend a lot of money on the advertising of the products. But this doesn’t always last. I think it also links back to the question then of how loyal consumers are now to a specific brand and what is driving this loyalty within the brand?
Today’s consumer is loyal to two critical elements, convenience and services. Pricing goes without saying but the difference is loyalty is not just about pricing alone. Loyalty is about who does it faster, who does it better and who does it consistently. It’s not just bigger, better and bolder, it’s bigger, better, bolder and consistent. Who does this consistently? And that’s why probably I draw a leaf from successes like noon 15 minutes.
Noon 15 minutes might not be a profitable proposition for all we know, but the fact that it has driven consumers being hooked to a Noon app where the consumption per consumer has moved from 4 to 5 visits a month into somebody like me visiting 40 visits a month. I’m on the app almost every day because its about what is necessity driven, experience driven, service driven, consistency driven loyalty and that loyalty is likely to stay much longer than anything else.
OK, that’s a very good point. So just to wrap up then Kartik with the discussion, for our audience or listening, what would your top advice be for digital leaders in the industry on how to embrace consumer mindset while also getting the balance right to be a technology first culture?
A lot of people again ask me because I’m in the tech space, how would you differentiate your business? Technology is not going to be a differentiator. Technology is democratised. Adobe Experience Cloud is something that everybody can buy. Whoever is willing to pay $120,000, they’ll be able to buy Adobe Experience Cloud. Whoever is willing to pay $500,000 for a top SI based out of Europe will be able to get the same in store implemented as well.
So don’t let technology be a differentiator. Be your consumer journeys, your consumer insights, be your user experience. Be a differentiator. Get it right. It’s no longer a product that sells. It’s the convergence to that zero ecosystem where product, services, engagement and experience, all four of them merge together into creating a convergence. Every young digital leader needs to get move away from technology being the Messiah to the customer journey. It’s not the machine, it’s the man behind the machine that matters. So get the user experience right, get the right people in your business built accordingly and get your business model sharp enough. Cost light, nimble footed, agile business models are what are here to stay.
Invest in SAS based technologies. Do not get into heavy licence technologies. Companies would not be willing to invest that long. The gestation period or the mindset used to be 3-4 years for a technology platform but has now come down to a three months. Things move in three months, so stay that much lighter.
