By: Philippe Peguilhan, Country Manager of Majid Al Futtaim Retail in Egypt

In a world where digital transformation is top-of-mind — and a cascade of tech breakthroughs is only certain — the future of retail can be a puzzle that defies standard solutions. Brands like Carrefour that are looking to lead it need to undergo a certain paradigm shift. 

Instead of separating experiences into online and in-store, we need to embrace the ‘phygital’ nature of consumer behavior. Rather than just adopting the latest technologies, we should view innovation as a continuous process reflected in every aspect of what we do. 

Most importantly, we must accept that moving aggressively towards sustainability is no longer an option, but a necessity for the safety and health of our communities.

In parallel to all that, communicating with our customers promptly and transparently is indispensable, especially during the current economic climate.  

Here are four key considerations to address these challenges:

  • Adapt with an Integrated Omnichannel Strategy

Consumers continue to desire immersive, interactive, and memorable experiences within brick-and-mortar stores despite the e-commerce boom that happened during the pandemic. According to a report published in July 2022 by Business Insider Intelligence and eMarketer, e-commerce is forecast to comprise only 24 per cent of retail sales globally, and data now suggests a return to pre-pandemic trend lines.

Additionally, the way in which consumers move between different touchpoints can vary. They no longer view the digital and physical channels as alternative pathways. For instance, some may prefer to shop online, but would rather pick up their items in-store instead of opting for home delivery.

This is where the concept of “phygital” retail comes in. It is an innovative approach that combines the best of both worlds, with an emphasis on the human touch to fulfill social and symbolic consumer needs. It’s truly the way of retail’s future. 

To go phygital, brands should continually update the technologies they utilise at their physical and digital touchpoints — while attempting to integrate some of them and offer a seamless, personalized experience to every customer.

Facilitating fast lane services and allowing customers to ’Scan and Go’ offers a faster check-out option.. In-store digital displays and experiential activations that allow customers to easily reach what they’re looking for, or discover new things, are perfect examples of interacting with customers through an integrated approach.

Equally significant, brands need to allow their customers to seamlessly move between different physical and digital touchpoints. To effectively accomplish this, brands ought to redraw their omnichannel strategy based on the data they have on their own customers’ journeys. This brings us to our second point.  

  • Leveraging Data 

Optimizing inventory management, streamlining supply chain operations, and tailoring the phygital retail experience is possible only with data specific to your target audiences. While it isn’t easy, it is necessary to monitor and adapt to changes in consumer behaviour.

Understanding how special circumstances like the COVID-19 pandemic or the ongoing economic recession affect your customers is also essential. Otherwise, the brand risks being perceived as disconnected from what their customers are experiencing.

Evidently, a recent report found that 73 per cent of consumers expect companies to understand their unique needs and expectations, and 62 per cent think companies should anticipate their needs.

The solution could be an innovative customer loyalty programme. Incentivising customers to share their feedback and purchase history grants a brand immediate access to valuable insights about their customers’ behavior, without the need for extensive research or studies. 

Using such data, coupled with a solid phygital experience, further strengthens the degree of personalisation the brand can offer. 

  • Actualising Sustainability Matters Now More Than Ever

Only brands who are genuinely committed to sustainability are future-proof. In retail, this commitment includes reducing the carbon footprint of the brand’s operations. 

Over and above, single-use plastic must also be eliminated. This represents a grave threat to our environment, and is both damaging and not cost-effective. Globally, according to the latest OECD report, only 9 per cent of plastic waste is recycled while 22 per cent is mismanaged.

To eliminate single-use plastics, however, is to introduce a substantial change to the consumers’ shopping experience. Although consumers say they would pay a high price for goods that are made from recycled, sustainable or eco-friendly materials, there can be a gap between good intentions and definite action. Therefore, brands should build up towards it. Instead of an abrupt ban, it is wiser to consistently raise awareness on the dangers of plastic pollution and sustainability to create brand affinity first. 

  • Communicating Customers’ Concerns Swiftly and Transparently

In light of the global recession, it is no surprise that the retail sector will encounter numerous challenges. While facing them, it is paramount to be mindful of all customers’ concerns including stock availability and price fluctuations. During an economic downturn, consumers tend to be more price-sensitive and value-conscious. 

Therefore, communication should be prompt and transparent. This might sound like common sense, but is commonly avoided due to fears that it might affect a brand’s image. By not incorporating this in its communication strategy, however, the brand risks being perceived as dishonest.

Brands must openly communicate about how they are planning to deal with price fluctuations, and how they support the local community in such turbulent times.This will only reinforce trust and credibility with customers, ultimately strengthening brand affinity.

Building future-proof retail brands that earn and retain loyalty in a high-potential market like Egypt can be quite challenging, especially considering the current economic downturn and its unpredictable effects on consumer behavior.

We firmly believe that all our integrated efforts across Majid Al Futtaim Retail’s portfolio enable our brands to continue leading in the market. Certainly, we hope it inspires retailers in the country to create a more robust industry that substantially contributes to a better and more sustainable future for all.