The “Outside In” Approach to Service Excellence Amidst UAE’s Retail Boom

Looking from a customer intelligence perspective, the old adage of ‘know more, sell more’ goes hand-in-hand with it. Having opportunities come your way is one thing, but turning opportunities into results is an entire science. And the concept integrates perfectly with Emirates’ retail sector, a segment where sales figures are on the track to hit a whopping 151.36 Billion Dirhams by 2015.

But while a growing economy, rising purchasing power and solid consumer confidence continue to nurture the perfect sales opportunities, what responsibility lies on the part of retailers, when it comes to achieving service excellence?

It’s Like the California Gold Rush!

With so much opportunity upcoming, UAE’s retail sector is reminiscent of California’s historic gold rush of the mid 1800s, with everyone jumping on to the bandwagon to grab their bag of gleam.

At present, the food retail market is a battleground between global retailers such as French Carrefour and regional powerhouse Lulu Hypermarkets. On the other hand, non-food retail’s action is catalyzed greatly by Emirates’ growing mall retail space, playing host not just to regional brands, but also global icons. Take the color cosmetics market here, which alone has a CAGR of 28% over the next 3 years. To a lot of leading fashion houses from around the world, that figure represents more than just a motivation to sell; it presents a market opportunity so large, that there is room for experimenting and developing the next style trend, in addition to just selling.

Large Markets Need Greater Lessons in Service Excellence

However, sizeable opportunities do not come without challenges of equal size.

In a sales environment that has constantly shifting dynamics, owing to the tourists and expats that form a major chunk of overall consumption, service excellence requires a greater level of customer intelligence. It is no secret that times are tough for businesses, but some are thriving, not just surviving. Global powerhouses such as Starbucks & Best Buy Electronics, which juggle with multiple challenges and still achieve (or even exceed) their targets, hold a lot of lessons for UAE’s retail landscape, in its journey towards the Dh 150 billion mark.

‘Know your customer’ is a message that Best Buy took to heart. America’s largest dedicated electronics retailer faced stiff competition from leading retailers, as well as a barrage of online retailers who competed with equally large product offerings, sometimes at even lower rates. The first step Best Buy took was segmenting its customer base and understanding each demographic better.

What were male customers looking for? What were their problems? What type of products did women customers look for in Best Buy? By answering all these questions through comprehensive customer analysis, Best Buy remodeled their stores with store layouts that took the customer exactly to what they intended for, saving time and enhancing efficiency.

Picture the typical mall in Dubai, with 5-6 luxury retailers competing side-by-side. Do you not think that paying attention to those details like Best Buy will make the key difference? It will do wonders.

UAE’s Learning Curve Has Arrived

That approach, the ‘outside-in approach’, of analyzing your consumer demographics holistically, repays in the short, and longer terms. The concept was also highlighted as a game-winner for retailers by Ignaz Gorlschek, senior VP at Neiman Marcus Group, USA, when speaking at Future Retail Conference 2012, in Dubai. The highlight of his speech, again, was customer-centricity.

In the upcoming challenges for Emirati retailers, whether regional or international, the difference will lie in tackling consumer demand using the outside-in approach to design overall service strategies.