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Sun 24 Mar 2019 12:12 PM

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How to win the data insights battle

Retailers in the Middle East must take a holistic view of what digital and analytics could do to their business

How to win the data insights battle
Analytics is a process of interpreting and communicating relevant patterns in data

Digital disruption, or digital transformation, is upon us. Industry after industry is witnessing a sea change in every aspect of their business, whether it is understanding – in fact predicting – what the consumer wants, the way in which the products and services that they desire are being designed, how they are being delivered, or creating loyalty for products and services.

The situation is arguably most pressing for retailers, who are at the frontlines – the front of the frontlines – of the interface between business and consumers. They are witnessing a drop in footfall, or if not, at least a drop in sales, as customers choose increasingly to purchase online. They need to think about how to transform in order to capture the sales or the revenues from those customers, or lose out to new competitors.

What this means for every industry, including retail, is that must win the data insights battle. What they do, and what they can do, is almost immediate, as they have the greatest access to the consumer, which brings an opportunity and a challenge. The opportunity is that they can make a big difference in how their products, services and organisation is being perceived by the consumer. The challenge is that those retailers that get it right are going to win it all, and so the ability for the others to catch up with the winners is going to get more and more difficult.

What are some of the areas that retailers risk getting wrong as they embark on digital and analytics transformation? In our observations of industries across the board, including retail, three bottlenecks are common.

There is no longer any space to follow a so-called “waterfall approach”, going about change sequentially, with the pace of change we’re seeing today

One is organisations that become consumed chasing shiny objects – apps, gizmos, robots. Management gets distracted sometimes with some of these funny, or interesting, shiny objects, while missing the larger piece of the pie – all the insights that one could have gathered from customers, and how to use these insights to serve customers in a very different way. The second is organisations chasing investments in technology and in digital on the advice of technologists. They invest large sums of money without fully understanding the spectrum of possibilities of a particular technology. The third are organisations frozen in limbo, waiting to see what the others do.

Path to transformation

The path retailers should follow is three-pronged.

First of all, they should take a holistic view of what digital and analytics could do to their business. This is not a project: this is the way in which your industry will operate now and in the future.

Secondly, they need to forget about doing things in the traditional way, which means the entire operating model of organisations needs to change. There is no longer any space to follow a so-called “waterfall approach”, going about change sequentially, with the pace of change we’re seeing today. From the outset, all the stakeholders have to abandon a silo mentality and collaborate when it comes to figuring out what the consumer wants, from design all the way to delivery.

Attracting the right digital and analytics talent to the Middle East has proven to be painful for most companies

And finally, they must invest in the right skillsets. Digital literacy of the employee is as important as digital adoption of the consumer, so the entire human resources model, from trying to understand where to look for the right skillsets, to developing these skillsets, to retaining these skillsets, has to be rethought. Organisations need those people who not only understand the technology, who not only understand the business, but who are able to bring the two together.

Organisations are running after technologists and running after business enablers, but that middle, that gap, one needs to mind that gap very well today as compared to the past. Industries are focused much more on digital adoption of the consumer, on whether the consumer is using their apps, whether the consumer is providing the data, but are missing out on ensuring the digital literacy of their own employees. A lot of these industries have hundreds, if not hundreds of thousands of employees. If the employees themselves are not digitally literate, and cannot understand the power of digital and analytics, the benefits that organisations are getting out of digital in the frontlines with the customers will not be sustained.

Attracting the right digital and analytics talent to the Middle East has proven to be extremely painful for most companies. Some of them have succeeded, but a lot of them have found it very difficult.


Joydeep Sangupta, Senior Partner, and Abdellah Iftahy, Partner, McKinsey & Company

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