MEA Retailers’ Intelligent Expansion Aimed at Meeting High Customer Expectations, According to IDC Retail Insights Survey
MILAN, November 23, 2011 – As the Middle East and Africa (MEA) emerge as key markets for both local and international retailers, a recent survey by IDC Retail Insights reveals the state of the MEA retail industry and the drivers for IT investments by retail IT organizations. A recent report by IDC Retail Insights discusses local retail companies' business priorities and IT strategy, IT budget structure, adoption, and investment plans for retail industry specific solutions, and IT vendors' preferences. More insights are revealed in the report MEA Retailers' Intelligent Expansion Will be Matching High Customer Expectations – An IDC Retail Insights Survey (IDC Retail Insights #GIPW05T, September 2011).
IDC Retail Insights' survey results suggest that MEA companies' approach to retail is quite traditional, with more than 80% of retailers considering physical stores as their principal sales channel, with only around a third of respondents currently taking advantage of online stores and call centers as their secondary sales channels. According to the report, local retail CIOs are focusing on three main areas to improve their company performance and preserve their market share:
Store expansion. Local retailers are implementing strategies aimed at increasing their presence both at local and regional levels to expand their potential customer base and, as a consequence, drive their revenues up.
Customer and merchandise. Local merchants are putting an emphasis on gathering more insight about their clients to strengthen and tailor customers' value propositions. The survey shows their overall goal is to offer assortments that better align with local and regional customers' profiles, buying patterns, lifestyles, and expressed preferences.
Operational excellence. Among the top business objectives of MEA retailers, improving supply chain efficiency appears to be the number 1 priority for retail CIOs, as this also aligns with store expansion strategies and merchandise and product assortment optimization.
The IDC Retail Insights survey highlights the following key ICT trends in 2011 for MEA retail IT organizations:
MEA retailers' 2011 business agenda is mostly focused on external growth and expansion topics, such as physical presence, stock control and availability, and loss control.
IT strategies are in tune with business objectives of improving service levels, aligning suppliers with internal business processes, and increasing innovation at firm level.
MEA retail companies' ICT budgets are expected to increase in the coming year. This trend is driven mostly by the need to adopt new retail-specific technology and not by IT optimization or cost-related considerations.
C-level business executives are the key decision makers for ICT budgets, while IT people can influence that decision.
Point-of-sales systems are the top hardware investment priority for MEA retailers, followed by loss-prevention systems and warehouse automation.
MEA retailers seem to rely mostly on global IT vendors that are able to provide a local presence and touch in a direct or indirect way. When it comes to selecting an IT supplier, customer service and post-sales service are the most important selection criteria.
"Survey results clearly indicate that ICT budgets of MEA retail organizations are expected to increase in the coming year, a trend driven mostly by the need to adopt new retail-specific technology to support MEA retailers' 2011 business agenda, strongly focused on external growth and expansion topics," said Ivano Ortis, international head, IDC Retail Insights. "In fact, MEA retailers' IT departments are committed to aligning their strategies with business objectives. Innovations are seen as a key requirement to meet customer expectations and MEA retailers' IT departments represent a key area of investment to improve performance of checkout lanes, increase loss-prevention ability and warehouse automation, along with the imperative to optimize inventory, merchandise management, and ecommerce platforms."
For more information about this survey, or to arrange a one-on-one briefing with one of the report's authors, please contact Kanupriya at firstname.lastname@example.org. Reports are available to qualified members of the media.