SME Advisor Issue 125

Presenting partner

Strategic SME partner

ISSUE 125

THIS BENCH WILL CHANGE THE WORLD

Lift up your business with more data The New Business Ultimate mobile plan

T&C apply

The New Business Ultimate mobile postpaid plan, starting at AED 100/month, comes with even more data and great benefits.

You can also get the latest smartphones as an add-on at zero upfront.

800 5800 I Etisalat Business etisalat.ae/newbusinessultimate

Your business grows with us

Extraordinary benefits this Ramadan.

Celebrate this season of giving with bespoke offers from Bentley Emirates with up to 4 years warranty and 4 years service.*

*Terms & Conditions apply.The name ‘Bentley’ and the ‘B’ in wings device are registered trademarks. © 2016 Bentley Motors Limited.

BENTLEY EMIRATES

374961-373609

Bentley Emirates Dubai, Tel: +971 4 294 4492 Bentley Emirates Abu Dhabi, Tel: +971 2 222 2445 Bentley Emirates Pre-Owned, Tel: +971 4 292 9333 www.uae.bentleymotors.com

Print a card.

Any card.

Secure ID issuance WITHIN REACH.

HID Global is leading the industry with the most robust portfolio of secure ID issuance solutions in the world. Our FARGO® line of printers and encoders provide governments, financial institutions and businesses of all sizes fast, efficient and reliable solutions that are as secure as they are affordable.

You’ll call it innovation on demand. We call it, “your security connected.”

YOUR SECURITY. CONNECTED

|

Visit us at hidglobal.com

© 2016 HID Global Corporation/ASSA ABLOY AB. All rights reserved. HID, HID Global, the HID Blue Brick logo, and the Chain Design are trademarks or registered trademarks of HID Global or its licensor(s)/supplier(s) in the US and other countries and may not be used without permission.

Co Founder and CEO Nadeem Hood Co Founder and COO Georgina Larsen Head of Content Paul Godfrey paul@cpibusiness.net Editor in Chief Rushika Bhatia rushika@cpibusiness.net Deputy Editor Beth Burrows beth@cpibusiness.net Relationship Director Mark O’Hara mark@cpibusiness.net Account Executive Freshia Mistry freshia@cpibusiness.net Account Manager Mrudula Vempuluru mrudula@cpibusiness.net Creative Director Sam Birouty Designer Solomon Arthur Printed by Print Well LLC Images Shutterstock, Cover photo by Official White House photographer - Pete Souza

Are you ready to dominate online?

After several years of interacting with business leaders, entrepreneurs and industry experts, here’s an interesting observation I’ve made: many people are – in some way or another – doing something to change the world. And, guess what? A majority of these people are entrepreneurs! Maybe it is the case that there is no better way to make an impact than choose the path of entrepreneurship? Perhaps, this is the larger goal motivating entrepreneurs to go through the immense pressures of creating something from scratch.

Editor

In this issue, we’ve launched a new section called ‘Top Changemakers’ dedicated to this league of entrepreneurs. We’re showcasing small businesses that are changing the world for the better, whether they set out to do so or not. This month we reached out to nine different business owners operating within the e-commerce landscape, and extensively talked to them about their challenges, goals, aspirations and much more. Don’t put this issue down without reading how these hidden heroes are bringing beauty, convenience and comfort to their customers’ lives.

As usual, we also reached out to experts within the e-commerce landscape to share industry insights and give practical advice on the way moving forward.

Here’s a handy infographic to guide you through this month’s issue -

Innovative business models: Two entrepreneurs that are disrupting the market with their unique propositions on pgs. 64 and 68 Preparing for the future: What’s yet to come and it will impact your business on pg. 92

Emerging trends: Souq.com and SPRING Singapore provide compelling data on pg. 12 and 24

Your SME within the regional e-commerce ecosystem

Improving your customer offer: In the era of the experience economy, the customer comes first – find out more on pg. 86

Templates for growth: Take a look at seven businesses that are driving change within the sector from pg. 34-63 Working with renowned service partners: Experts from Criteo and PayFort share critical advice on pg. 16 and 74

Dominic De Sousa Chairman

2015-1959

www.facebook.com/SMEadvisor @SMEadvisorME www.tinyurl.com/smeadvisorme

PRESENTING PARTNER

© Copyright 2016 CPI. All rights reserved. While the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.

STRATEGIC SME PARTNER

OFFICIAL GOVERNMENT PARTNER

CONTENTS

68

07 EDITOR’S NOTE Are you ready to dominate online?

10 SME CONTENT CURATORS Presenting this month’s portfolio of industry specialists and thought-leaders, who played a critical role in the content of the magazine.

The Economist’s View 12 E-commerce at a crossroads. A compelling outlook presented

by Ronaldo Mouchawar of Souq.com.

16 #Trending – Top forces shaping the world of e-commerce.

Criteo’s CEO Eric Eichmann assesses the key priorities...

Editor’s Roundtable 22 Boosting growth through omni-channel retailing. Singaporean expert Eu Gene Ang shares critical insights on the subject.

SME ADVISOR ISSUE 125

34

46 Master of marketplaces. A meeting with Omar Kassim of JadoPado.

38

52 No comparison! Jon Richards of Compareit4me.com on defining a competitive advantage, tackling challenges and dominating the e-commerce industry…

56 Bringing up baby. We speak to Mona Ataya, the woman holding the reins of Mumzworld.com.

80

60 Clutching success. How Shohra Hussain is stepping out of the home onto the high street, proving any woman can turn her passion to profit.

Start-up diaries 64 Cracking the code. In a market where having a business plan is an expensive essential Deerasa offers entrepreneurs an economic alternative. Here’s how…

Business Banking 28 15 marketing tips for SMEs. Strategies to help your SME get noticed in a crowded marketplace.

Infographic of the month 32 Unlocking the potential of the digital economy. A snapshot of the key trends impacting the e-commerce sector.

Top Changemakers 34 Signed, sealed, delivered. In a region where postal systems aren’t standardised, Fetchr is tracking success with its GPSenabled mobile delivery app.

38 Fashion at your fingertips. Inside Namshi’s game-changing plan to revolutionise the online fashion industry.

42 A clean slate. Shelina Jokhiya of DeCluttr ME in a candid chat with SME Advisor.

Making a difference 68 Changing the world…one bench at a time. How Sandra Richter transformed an ordinary bench into a tool for digital disruption.

Organisation & structure 74 Lifting the barriers to e-commerce.

Omar Soudodi, Managing Director, PayFort, recommends practical solutions.

80 Blockchain – exploring the different facets and legal implications. Experts from Clyde & Co. weigh in on the opportunities and challenges.

86 Shaping customer experiences of the future. Dirk Henke, Managing Director – Emerging Markets at Criteo, analyses the trends and outlines their implications.

The big debate 92 Looking to the future: Delivery drones. Before you decide to jump onto the bandwagon, here’s something to consider…

Content Curators

“In the percentage of cash-on-delivery transactions will significantly reduce as tech-savvy consumers in the region get increasingly comfortable with online payments.”

Ronaldo Mouchawar CEO & Co-founder, Souq.com

CONTENT CURATORS Presenting this month’s portfolio of industry specialists and thought leaders, who played a critical role in producing the feature content of our magazine and ensuring that we were more topical than ever.

“As an increasing share of transactions happens on smartphones, retailers need to prioritise their mobile app strategy and optimise their mobile buying experience.”

Eric Eichmann CEO, Criteo

“Be present online. As a number of theorists have argued, the question is not about engaging in the digital sphere, it’s about how well you do it. Have a website and engage with your prospects on social media.”

Dr. Constantine Dino Kiritsis Consultant and Professional trainer, PwC

10

www.smeadvisor.com

Content Curators

“It’s been proven time and again that money is no longer a sole motivator; people need to feel good about where they work and want to contribute to making a difference.”

“For many businesses in e-commerce, the success and profitability of your organisation depends on your internal fraud management strategies.

Developing a strong risk management structure, that incorporates transaction controls and fraud prevention tools, will greatly reduce fraud-related losses.”

Hosam Arab

Omar Soudodi

Co-founder and Managing Director, Namshi.com

Managing Director, PayFort

“Successful retailers personalise their marketing strategies; improve the effectiveness of marketing campaigns; optimise promotions and merchandising strategies based on consumer demand; and remove inefficiencies in distribution and operations, both in store and online.”

Eu-Gene Ang Lead Trainer, Econsultancy

www.smeadvisor.com

“When you think of smart city applications, the first thing that comes to mind is the large investment that it would require out of governmental budgets.

The reality is that your smart city initiative doesn’t need to have a million dollar budget, and Soofa is revolutionising that.”

Sandra Richter Co-founder, Soofa.co

11

The Economist’s View

Ronaldo MouchawarCEO & Co-Founder, Souq.com 12

www.smeadvisor.com

The Economist’s View

E-COMMERCE @ A CROSSROADS This issue of SME Advisor is committed to helping established as well as upcoming e-commerce players realise their growth ambitions by providing them with fresh, compelling insights from accredited business sources.

The first, and perhaps the most significant, in this series of features is the following outlook presented by Ronaldo Mouchawar – the man at the helm of the region’s most successful e-commerce site Souq.com…

With high GDP per capita and the highest smartphone penetration rate in the world, the Middle East represents one of the fastest growing e-commerce markets globally - with UAE and KSA taking the lead. 2015 saw e-commerce in the region touch a staggering US$39 billion and this is expected to surpass US$45 billion this year. 2017 can see the results reaching up to US$51 billion or even more. In the UAE and KSA alone, 6.8 million and 10 million online transactions were carried out last year respectively. These figures are a clear indication of the great opportunities that exist within the region’s thriving e-commerce industry. Major players such as Souq.com are fuelling this growth further; for instance Souq.com is providing consumers access to over 1.5 million products across categories such as consumer electronics, fashion, household goods, watches, perfumes and many more.

Moreover, high rates of smartphone penetration are driving m-commerce growth rapidly. There has been a significant rise in the level of smartphone penetration in the Middle East, currently at 96 per cent and valued at US$4.9 billion. UAE

www.smeadvisor.com

is ranked the highest in the region with a smartphone penetration rate of 78 per cent. This highlights a huge opportunity for e-commerce players – especially those that have mobile apps.

In fact, more than 60 per cent of our sales are driven by mobile shopping today has also led to a demand in tailored payment solutions.

With the rise of technology and internet penetration, consumers are getting smarter and realising that e-commerce gives them convenience, lower prices and a greater variety.

Top trends reshaping Middle East’s e-commerce sector 1. While e-commerce in the Middle East region is expanding and growing at a fast rate, there have been certain product categories which seem to be in a greater demand specific to the region. These include electronics, apparels, shoes, toys and games.

2. While 60-80 per cent (percentage varies from market to market) of the online purchases in the Middle East are on Cash On Delivery (COD) basis, there has also been a development of facilitated electronic payments, resulting in increased confidence

in e-commerce transactions. This change in consumer behaviour will see a growth in retaining existing satisfied consumers and recurrent transactions. Over the longer term, we believe the COD percentage will come down as the tech-savvy consumers in this region fast getting more comfortable with online payments.

We are seeing a shift towards credit card usage.

3. As consumers are becoming more sophisticated and demanding higher level of service logistics, next day delivery is growing to become bigger.

4. M-commerce within the region is booming and by great numbers, which is leading to the development of better app-based offerings and providing easier access to consumers through mobile friendly websites.

5. Social media is everywhere these days and so easily accessible on various devices right from a desktop device to a smartphone or tablet. With the large influence of these social media platforms, there has also been an emergence of new trends including social shopping. An increasing 13

The Economist’s View

number of businesses are realising the influence these social platforms can have on consumer buying behaviours and are integrating them in their development plans.

6. Brick and mortar shops are now embracing e-commerce and offering the same products and price points through digital platforms. With such intense competition, it becomes important to stand out from the clutter and offer a personalised and customised online shopping experience to the consumers. Many experts have termed 2016 as the ‘year of experience’ and this is something that every business needs to consider.

This includes integrating elements such as live chat assistance on your platform and using customer preferences information to offer customised products specific to their needs and demands.

Shopping in the future: how it will be different by 2020, both online and at malls…

As the largest online retailer and marketplace platform, it is imperative for us to stay ahead of the curve and work in tandem with the trends influencing the online shopping world. We believe that our offering should be backed by scalable technology and intensive market intelligence. Based on our research, here are some key emerging shifts we’ve identified that will impact the e-commerce landscape in the next three to four years such as: - App-based shopping: We envisage most of the people to be shopping on apps and desktop share would reduce significantly. The technology backing the apps platform will see significant improvement and shopping experience would improve significantly.

- Social shopping: A lot of product recommendations would be generated on the social media and they would be customised to suit the individual 14

needs of the customer. For example, based on the number of likes for a particular dress, a customer could decide whether to buy a product or skip it. Therefore, social recommendations will increasingly influence shopping decisions.

- Image search: Search would not be limited to text alone; you would be able to search the images you see and like on the internet. In fact, this is a space that Souq.com is personally looking to pioneer; we want to be the first portal to introduce this to the region.

- Omni-channel: Omni-channel will be an important strategy for all the brands and retail stores going forward.

- E-wallets: Finally, as a trend e-wallets will become a reality. All loyalty programmes would be linked to the wallets and so will bank accounts and credit cards.

At Souq.com, our team is completely dedicated to adopting emerging technology to meet the needs of these emerging trends. This is the only way we can realise our mission to further grow our platform to integrate millions of consumers, thousands of merchants and hundreds of services; and above all provide a strong technology platform for empowering the youth in the Arab World which opens up a new means of livelihood for them.

Your partners in growth As we grow year-on-year and evolve over time, it is important that we take our partners with us. We enable SMEs and entrepreneurs in the region to start and grow their business online and provide a multitude of ways to earn money through our online e-commerce platform.

There are many businesses who are localising international ideas and dealing with the challenges of that, and there are many new ideas coming off the ground. Start-ups need solid technology platforms, technical

10million

online transactions in KSA

78%

the smartphone penetration rate in the UAE

assistance and market exposure to develop and grow their businesses.

We believe that we can address these needs and bring value to regional entrepreneurs, by providing fast and easy access to their products with no upfront costs and minimal eligibility requirements. Additionally, this will also provide start-ups with increased visibility to potential investors, clients and partners to help accelerate business success and thereby foster innovation and encourage entrepreneurship in the Middle East.

We’re committed to the development of e-commerce in this region and offer various programmes which enable any individual or business to earn revenues from sales on Souq.com. Last year we also launched exciting new initiatives behind the scenes, allowing third party sellers to benefit. Souq.com became the first player in the MENA region to open up its API (application programme interface), which allows third party developers to embed shopping deals in their site or mobile application. This highlights our ongoing commitment to foster a dynamic e-commerce ecosystem.

Anyone, from large businesses through to individuals, can participate in this affiliate scheme. We also announced our developer program that allows any business to ‘white label’ the Souq.com platform to launch its own e-commerce site. By taking advantage of the Souq. com API, business owners are able to set up their own website, where the end-to-end e-commerce process, including fulfilment, is powered entirely by Souq.com. www.smeadvisor.com

38th

UK

Europe

Global

Manchester

Hong Kong

14th

São Paolo

7th

Shanghai

Dubai

Singapore

FT Global MBA Ranking 2016

Gain an edge with a world-class MBA

Manchester Global Part-Time MBA Accelerate your career and gain your MBA while you work.

Stand out and make a difference in the workplace, with the world-class Manchester Global Part-time MBA.

Moatassem Moatez Al Moatassem Business Partner Innovest Middle East, UAE MBA Class of 2014

The Manchester MBA focuses on you as a leader from the beginning, through practical learning and workshops attended across our global centres in Dubai, Manchester, Singapore, Hong Kong, Shanghai and São Paolo.

Manchester Business School is truly international, with students of over 120 nationalities studying across six centres, and with a global alumni network of more than 50,000 professionals worldwide.

Tailor your MBA programme to your career through a wide range of electives and apply your new knowledge immediately in the workplace.

With 96% average salary increase 3 years after graduation*, and 82% of alumni achieving their aims for doing an MBA*, MBS is ranked 12th in the world for career progression*.

Contact our counselors to learn more!

FT Global MBA Ranking 2016*

Blended Delivery Online learning, 6 residential workshops and a 6-month project.

As much face-to-face time as most full time MBAs.

Flexible Format A customisable MBA that fits around your commitments - same qualification as our full-time MBA.

“Following 8 years of multinational FMCG experience at BAT, Unilever and Nestlé, moving from the corporate world to starting my own business was a transition in my career.

The Global Part-Time MBA gave me exposure to lots of real life examples of start-ups and new business development, which helped me develop my own business plan. This would not have happened without the commercial understanding I got from the programme”.

Step Up. Change Direction. Transform your career.

Manchester Business School The University of Manchester, Middle East Centre Office F-16, Block 2B, Dubai Knowledge Village.

Email: mba@mbs-worldwide.ae | Tel: +971 (0)4 446 8664 www.mbs-uae.ac.ae

Triple MBA Accreditation

Permitted by the Knowledge and Human Development Authority. The academic qualifications granted by this institution and certified by the KHDA shall be recognised in the Emirate of Dubai by all public and public entities for all purposes.

The Economist’s View

#Trending – Top forces shaping the world of e-commerce

As the world economy flounders, one sector in particular is bucking trends.

Criteo’s CEO Eric Eichmann assesses the global forces and priorities that are shaping the e-commerce landscape...

16

www.smeadvisor.com

The Economist’s View

www.smeadvisor.com

17

The Economist’s View

Most shopping journeys will be multi-device Half of all e-commerce transactions are already made using multiple devices. As that figure crosses the 50 per cent mark in 2016, retailers will need to redesign the online buying experience for this new reality.

Multiple device users are also 20 per cent more likely to complete their purchase on mobile than the average user.

Implication on your business Retailers will need to redesign their online buying experience to reflect the fact that the majority of users visit them via multiple devices. Campaigns must be activated on all devices and all properties fully tagged to leverage mobile and desktop.

Smartphone shopping will continue to gain ground Mobile is now the first screen for the majority of consumers, especially as larger smartphone screens make mobile shopping more convenient.

Smartphones account for over 40 per cent of e-commerce transactions in Japan and South Korea. Smartphone share is steadily catching up with tablets in the UK, Germany, France and Russia.

Implication on your business – As an increasing share of transactions happens on smartphones, retailers need to prioritise their mobile app strategy and optimise their mobile buying experience. While on tablets people can use websites that aren’t mobile-optimised, on smartphones it’s crucial to have either a mobileoptimised website or an app.

Expect more big online shopping days with even bigger sales In the US, Cyber Monday remained the biggest online shopping day of the year with US$ 3 billion in sales, according to Adobe. Singles Day (Nov 11) celebrated in China was the world’s biggest online shopping day of the year, with Alibaba alone reporting

18

Very important capabilities/skills for responding to marketing landsacpe disruptions (according to US markets)

78%

Analytics capabilities to understand customer behaviour

78%

Developing content and experiences across the entire customer journey

74% Delivering relevant personalised customer experiences

sales worth US$14.3 billion, a 60 per cent increase from last year. These big online shopping days will get even bigger in 2016.

Implication on your business – Retailers will need to rebalance their online and in-store strategies for these big shopping days. Brick and click retailers should expect more traffic online than in-store on the year’s biggest sales peaks.

Retailers will see a high web influence on their in-store sales As the majority of consumers now research online before visiting a store, understanding a shopper’s prior online activity is vital for retailers.

According to Google, eight out of ten shoppers with a smartphone are using it inside the store to help them shop, even though most prefer purchase at the POS (point of sale). Retailers are starting to get a better view of the customer’s shopping journey by connecting with them via their app, and/or by using beacons and technologies to match the customer e-mail ID or loyalty programme at the POS. Implication on your business – As retailers invest in these technologies, they must make sure that they also have the expertise and operating resources in place to manage customer interaction in real-time.

www.smeadvisor.com

The Economist’s View

2015

SINGLES DAY (CHINA)

2014 2013 2015

2013 2015

BLACK FRIDAY (U.S.)

2014

1

5.7

eCommerce Spending on Shopping Holidays

3

1.2

1.

2.6

2013

5

14.3

2014

2.3

$ BI LLI ON S

CYBER MONDAY (U.S.)

.7

In 2016, marketers will prioritise spend to enable them to understand how consumers are moving across devices, platforms and publishers to consume information.

9.3

Marketing will shift from devicefocused to people-focused Only a handful of companies are able to effectively leverage customer data across devices and platforms today. Even with probabilistic and deterministic matching now possible, most retailers still struggle with tracking cross-device sales and customers’ movement across apps and browsers. In 2016, marketers will prioritise spend to enable them to understand how consumers are moving across devices, platforms and publishers to consume information. Consequently, we will start to see more evidence of true people-focused marketing.

www.smeadvisor.com

19

The Economist’s View

Which of the following would you consider to be “fast shipping”?

FAST SHIPPING Same-Day Delivery

96%

4%

next-Day Delivery

96%

4%

Within 2 days

92%

Within 3-4 days Within 5-7 days Within 1-2 weeks

Implication for your business Consumers don’t think about their media consumption by device, browsing environment, or by publisher in a silo; therefore, neither should marketers. B2C organisations need to restructure their marketing teams to fully understand consumer intent and to look beyond the walled gardens.

Ads will become more relevant and non-intrusive The annoying pop-ups, overlays especially on mobile. Consumers want personalised content, and advertisers must deliver. Ad-blocking will also accelerate the move toward nonintrusive ad formats. The good news?

According to Adblock Plus, 75 per cent of users don’t mind receiving non-intrusive ads.

Implication for your business – Shifting to non-intrusive and relevant ads will help advertisers to achieve genuine engagement with consumers, and lead to higher conversions.

Instant delivery services will become common Order fulfilment will be a big focus for retailers in 2016, with many offering delivery options to match Amazon’s 20

NOT FAST SHIPPING

8%

63% 18% 10%

Prime Now service. Both online and brick and click retailers will be trying this strategy through specialised third parties like Instacart. Faster delivery at lower charges will also drive growth of cross-border shopping as consumers won’t mind buying from other countries to save money.

Implication for your business – Retailers offering same-day delivery – or even faster – will enjoy a significant competitive edge in 2016. This trend will also drive a lot of advertisers to adopt the “in the moment” style of advertising to drive conversions.

Unlocking the potential of e-commerce 2016 will be another exciting year for e-commerce, but there are also major challenges. Retailers and advertisers must consider the following to make the most of the e-commerce opportunity this year: • Advertisers must develop capabilities to understand their customers’ shopping journey across devices, browsers and apps to ensure a unified customer experience.

• The massive growth of mobile shopping is driven by smartphones.

Investing in a mobile app is therefore worth considering as

37% 82% 90%

it can bring a significant uplift in sales.

• Retailers should focus more on the opportunity to sell online during the big shopping periods e.g.

Black Friday and Cyber Monday.

Consumers will increasingly buy online to avoid the rush at the stores.

• Advertisers should look for an ad tech partner who can enable them to optimise their online conversions by delivering personalised and non-intrusive ads for genuine engagement with consumers.

There’s plenty of change on the horizon in consumer expectations, retail investments and marketing strategies. Social media will continue to have a big influence on online shopping, and improved mobile payment services will also help drive e-commerce growth in 2016.

Eric Eichmann CEO, Criteo www.smeadvisor.com

LOOKING TO SET UP YOUR BUSINESS? COMPLETE BUSINESS PACKAGES STARTING FROM AED 15,000 Ras Al Khaimah Free Trade Zone provides the right elements for a successful business, including licences, visas, facilities, 100% foreign ownership, and zero taxation.

Call: 800 7111 Visit: www.rakftz.com Follow:

/ rakftz

Editor’s Roundtable

BOOSTING GROWTH THROUGH OMNI-CHANNEL RETAILING SME Advisor asked Eu-Gene Ang, Singaporean expert and Lead Trainer at digital marketing research firm Econsultancy, for his insights on how omni-channel retailing can help SMEs build customer engagement and encourage growth...

22

www.smeadvisor.com

Editor’s Roundtable

www.smeadvisor.com

23

Editor’s Roundtable

Retail business owners are often keen to jump on the omni-channel retailing bandwagon but may be afraid of the complexities involved in integrating new retail technology, such as cloud, into their existing operations.

Why should traditional bricks-and-mortar SME retailers adopt omnichannel retailing?

With a bricks-and-mortar store, you can’t sell anything unless potential customers walk through your door.

But in today’s fast-changing world, marketers and customers routinely interact with each other across a web of digital touchpoints. This is where omni-channel retailing comes in. It involves using a variety of platforms – including retail outlets, online touchpoints and mobile apps – to keep up with more demanding customers, meet their changing expectations and provide a seamless, consistent shopping experience across all channels of communication. This will, in turn, lead to higher levels of customer loyalty and profitability.

Do consumers prefer buying from retailers that offer an omni-channel shopping experience?

Consumers these days are constrained by lack of time. As such, they want immediate solutions and flock to retailers who offer convenience-oriented shopping services and platforms.

In fact, a 2015 Consumer Barometer study by Google found that nearly half of all Singaporeans (48 per cent) used their phones at some stage when buying the last item they purchased – for instance, to research the product, read reviews or obtain price information. That’s one of the highest rates in the world – ahead of China at 46 per cent and the US at 30 per cent.

Here’s some food for thought: 69 per cent of Singaporeans surveyed also said they conduct research online before making a purchase.

This should be a wake-up call for any business without an e-commerce store, mobile site or app to adopt omni-channel retailing if they wish to attract and retain today’s tech-savvy customers.

Why then do you think some retailers are slow to adopt omni-channel retailing?

Retail business owners are often keen to jump on the omni-channel retailing bandwagon but may be afraid of the complexities involved in integrating new retail technology, such as cloud, into their existing operations.

Businesses also find it difficult to let go of legacy systems and old, comfortable work systems and processes.

Resistance from staff is another challenge – mainly because they lack knowledge about the benefits of omnichannel retailing, and the skills to use new technology solutions. This is where businesses need to focus their energies.

24

www.smeadvisor.com

Editor’s Roundtable

How can such retailers overcome these challenges?

First, study your customers – who they are, their preferences and the factors that motivate their shopping behaviours. Use customer relationship management solutions to measure and evaluate customer data and learn more about customers’ wants, needs and behaviours. This will open the door for more personalised retail opportunities.

Second, use government grants, to develop staff capabilities and help you adopt and implement new technologies that facilitate omnichannel retailing. SME retailers can also collaborate with enterprises on solutions that improve their innovation and productivity capabilities.

Finally, retailers should conduct a pilot project to assess their omnichannel efforts. First, introduce several new channels through which a customer can research your products or make a purchase. For example, they can buy online and pick up in the store or use mobile phones to research or make a purchase; or buy in store and initiate a return online. Then, use a metrics system to monitor and assess the efficiency and effectiveness of these new approaches. If successful, they can be expanded and launched across all stores.

What makes for a successful omni-channel retail strategy?

Successful omni-channel retailers know how to capitalise on the evolving customer decision journey.

They use big data solutions to collect, manage and analyse a tremendous volume of customer data and generate valuable insights. In other words, they know how to efficiently use various cross-channel data sources to gain a holistic view of their customers.

This helps successful retailers personalise their marketing strategies; improve the effectiveness

www.smeadvisor.com

of marketing campaigns; optimise promotions and merchandising strategies based on consumer demand; and remove inefficiencies in distribution and operations, both in store and online. In this way, they’re able to take advantage of the huge omni-channel business opportunities.

Could you provide an example of an innovative omni-channel retailer?

In May last year, British catalogue retailer Argos launched a group of ‘digital stores’. These smaller-than normal outlets offer up to 20,000 items for instant purchase or later collection, and everything else in the catalogue is available for home delivery.

Argos has also introduced a fast-track service that allows customers who

have ordered their products online to collect them from a store within 60 seconds of arriving. Argos aims to make digital channels the primary interface for its customers, with physical stores used mainly to collect purchases and access customer service.

Earlier this year, you conducted a masterclass in Singapore on omnichannel retailing, organised by SPRING and the Workforce Development Agency. What were some of the key insights you gained from your interactions with the participants?

Many local retailers have the right business mind-set but lack the tools to adopt omni-channel retailing. They are also not quite sure what the next steps are, and are afraid of taking risks. Education and awareness are key here – something the masterclass aimed to address.

25

Editor’s Roundtable

As customers expect retailers to understand them and their lifestyles better – whether that’s in store or online – more digital customer touchpoints will be created, especially with the rise of the Internet of Things and smart wearables.

So how should bricks-and mortar SMEs go about adopting omni-channel retailing?

First, these SMEs should develop an online presence. Second, they should engage an experienced consultant to help develop an omnichannel roadmap and implement solutions and strategies.

Reproduced with permission from SPRINGnews January 2016 issue.

Published by SPRING Singapore

26

What does the future of omni-channel retailing look like to you?

As customers expect retailers to understand them and their lifestyles better – whether that’s in store or online – more digital customer touchpoints will be created, especially with the rise of the Internet of Things and smart wearables. Think virtual dressing rooms that use body-scanning technology.

Many businesses will also come to realise the importance of big data analytics to better understand customers and offer personalised, consistent customer experiences across all communications and touchpoints

Eu-Gene Ang, Lead Trainer at digital marketing research firm Econsultancy

www.smeadvisor.com

Business Banking

15

marketing tips for SMEs As a consultant and professional trainer at PriceWaterhouseCoopers (PwC), and Founder of his own training company StudySmart, Dr. Constantine “Dino” Kiritsis, a Greek national, is an expert practitioner within the SME space. Over the past 15 years, he has delivered over 10,000 hours of training and travelled to more than 30 countries. One thing he realised is that although cultures are different, marketing tactics and strategies for SMEs are very similar across the world.

During an SME Academy workshop earlier this year, a programme co-led and sponsored by the National Bank of Abu Dhabi (NBAD) in collaboration with SME Advisor to support SMEs in the region, Dr. Kiritsis guided a bustling room of entrepreneurs through the fundamentals of marketing.

“No need to spend millions in marketing,” he said. “You can spend almost zero money and really get across”.

Speaking without notes for three hours he delivered a thought provoking session. Here is a selection of his most crucial marketing tips.

28

www.smeadvisor.com

Business Banking

1. Have a vision Your marketing has to be aligned with your strategy and your vision. A vision is an imperative. ‘Making money’ is not a vision, it’s the consequence of a vision. You must have a reason to do something otherwise your chances of failing are enhanced. When you ask people about their vision, they often say something very generic, sometimes even something they have already achieved. That’s not an effective vision.

A vision should be something that is still out there for you. It’s the grand idea, which in many cases can sound “crazy”. Bill Gates wanted to see one PC on every desk and everybody was laughing. Now we have five each.

Once you have a vision you can plan a strategy to reach that vision.

2. Cut down on your time wasters We live in an era of problematic time management. We are swamped with e-mails, have personal issues to deal with, we check our mobile phones over 150 times per day on average.

You cannot fight these changes easily, but you need to adapt. What you can do is at least manage yourself. Start writing down all your time wasters and make a plan. Without checking what you’re doing, you cannot fix this and have the time to think strategically about your marketing.

3. Understand what marketing is not Marketing is the planning process; sales is part of that process, the frontline. In Europe, working as a sales person is often perceived as a bad thing. But the most successful business people, including Bill Gates, Steve Jobs, Richard Branson and others, have passed through sales. It is one of those crucial areas in business that does not come with a degree.

www.smeadvisor.com

- Marketing vs. Public Relations Public Relations (PR) has a different objective than marketing. It’s about managing the company’s image, how to enhance the organisation’s reputation in the eyes of stakeholders. We are living in the era of transparency.

Reputation can take you down in one day, so you have to make sure you are doing the right thing. Marketing on the other hand is there to make profits. You can do good PR campaigns on social media for instance, but in many cases, as Dr. Kiritsis noted, there is little correlation between the number of Facebook likes and revenues. Yes, you may have raised awareness but it does not mean that you are getting more money. It takes a lot more than that.

You can also be offering a product in a niche market. Niche markets can have great returns even though in many cases no one would remember the names of these brands. For example, do you know the names of the companies that manufacture generic screws or coat hangers?

Probably not. But they can be very successful and have loyal customers.

Therefore, know where you are and wherever you are, be consistent.

If a company intends to offer a product that departs from the original strategy, creating a new brand may be a solution. Toyota for example created Lexus to enter the high-end auto market in the mid 1980s.

- Consumers vs. Customers The consumer uses, the customer buys. You have to market to the person who is ‘buying’. When you give a present to your children, you buy it and the children will use it. The children will also push you to buy that present.

So the consumer needs to know but it’s the customer who needs to be driven to purchase. Some SMEs get confused and are pushing the consumer instead of the customer, when they should have both in mind while creating their marketing mix.

5. Segment your market Who is your customer?

Who is your ideal customer? You need to segment your market. Customers change over time. There is a life cycle and you have to know who your customer is and in which stage of the ‘customer life cycle’. You may segment customers by geography, behaviour, demographics, psychographics, and decide for instance to sell to people between 20 and 30 years, living in Europe, who are interested in ecofriendly products.

4. Identify your market positioning and be consistent Marketing needs to be aligned with strategy. You can either be “Low” or “High cost”, either “Mass product” or “Different” (brands / quality), or even hybrid adopting a combination, which is more difficult, but you must know where you are before you market because tactics need to be applicable and aligned to your organisation. If you are a high-class differentiated company for instance you will want to advertise in high-end magazines that “relate” and could “support” your product.

6. Have a good customer relationship management (CRM) system CRM is very important!

We collect hundreds of business cards and contacts per month and need to utilise some sort of system that must be constantly updated. Yes, you may know the segmentation and your marketing mix, but few companies have a good, reliable and up to date CRM system. You need to make sure your customers are documented. A solid CRM system can make you focus on target segments more effectively and in many cases, be automated.

CRM is crucial.

29

Business Banking

Marketing is a combination of things. You need to consider all the so-called 7Ps: Product, Price, Place, Promotion, People, Processes and Presentation

7. Identify your stakeholders When you build your strategy, think about all your stakeholders: shareholders, suppliers, employees, the bank, the government, lobbyists, everyone who has a level of interest and influence in your organisation.

Your actions, products, tactics, posts on Facebook for instance can affect them all. Stakeholders must generally be satisfied. This is the beginning of effective corporate governance and corporate social responsibility (CSR).

8. Screen competition… all your competition When asked about competition, people often make a big mistake. 95 per cent of the time, they name companies they are directly competing with. Don’t overlook potential new entrants in the market or substitutes: bitcoin and telecom companies for instance for banks, or skype for the airline industry as many people now choose conference calls over traveling. Other examples include Amazon and Alibaba, the largest retailers in the world with no products, that affected the whole retail industry, and Uber, the largest taxi company with no taxis. We need to think holistically and constantly attempt to predict and forecast.

We also need to maintain existing customers’ loyalty. Few companies know that it is cheaper to keep a customer than to find a new one.

Dr. Constantine Dino Kiritsis Consultant and Professional trainer, PwC

30

9. Market your strengths Every company should have something unique to sell. Marketing should focus on the company’s strengths, on what you are good at, not on weaknesses. Many companies market very generally. It sounds strange but it is true.

10. Know your growth options: 4 directions, 7 methods By using Andsoff’s model, Dr. Kiritsis noted that there are four main directions companies can take to grow.

- Penetration Sell more of the same services/ products in the same market - New market development Enter a new market to sell the same products - New product development Create a new product/service for the same market.

- Diversification Enter a new market with a new product.

In many cases, large companies can use all four directions at the same time, however SME’s may not have the resources to do so and ‘spread themselves’ too much.

In terms of methods used, Dr. Kiritsis rolled out his “7 methods” theory based on the most common approaches used by organisations, including: Licensing, Franchising, Acquisition, Merger and Acquisition, Joint Venture, Exporting and Organic growth. Again, choosing how to grow and which method to use requires effective evaluation of methodologies, that relate to financial return, feasibility, and suitability for the company.

11. You need a Marketing ‘mix’ Marketing is a combination of things.

You need to consider all the so-called 7Ps: Product, Price, Place, Promotion, People, Processes and Presentation.

And don’t rely to only on one tactic.

There needs to be a combination to reach the desired promotional result: offline/online, audio, podcast, video, blog, social media, etc. Ingredients out there are the same for everybody but the way you mix those ingredients

www.smeadvisor.com

Business Banking

High cost

Mass Product

Different (brand)

Low Cost

makes the difference. You must have a great marketing mix that works specifically for you. And you can’t have the same mix for each product.

12. Embrace the digital sphere Be present online. As a number of theorists have argued, the question is not about engaging in the digital sphere, it’s about how well you do it. Have a website and engage with your prospects on social media. In Europe, online shopping is growing by 10 per cent every year. Based on 2015 stats, 72 per cent of all Internet users are now also active on social media. It is no longer just used by the young and the restless. It is global and embedded in every corner of the web.

13. Think “content marketing” You can use smart techniques to market.

Content is one of them. People like stories. They like testimonials. They read engaging articles on LinkedIn.

www.smeadvisor.com

Creating good content in various formats on different platforms is important to reach out to customers.

Video is also a very popular tool for content. Do you have a Youtube channel?

14. Innovate and believe in your ideas What makes you different? And how can you have a sustainable competitive advantage when everything can be copied? The reality is there is no sustainable advantage. You cannot win forever. That’s why you need to ‘innovate’. How? Think of solving a problem. In most cases, when somebody has come up with an innovation, there was a problem that has been solved.

As an SME you have the ideal size to be innovative. SMEs have a lot of creative ideas. And they have the flexibility to say ‘I am going to do this and I am doing it tomorrow’. They take the risk. Big corporations on the other may not have this competitive advantage as they face too many

procedures and risks. People can spend up to 40 per cent of their time on tasks relating to reporting, regulations and compliance. They tend to lose that entrepreneurial activity they had in the beginning and this is why large companies buy out small companies to keep the momentum. SMEs are the future and play an integral part of the economy.

But you have to believe in your ideas and go for it.

15. Implement!

Companies fail because they don’t implement.

We all have ideas. Why don’t they materialise? In many cases, because we don’t have time. We tend to analyse too much, which may lead to paralysis. Implementation is the strategy. Take action and take it now.

Get the ball rolling because things take time. So don’t wait.

31

Infographic of the month

Unlocking the potential of

Brought to you by

the digital economy What goes on in one digital second?

2467055

e-mails are exchanged

117070

videos are viewed on YouTube

7114

tweets are shared

485

images uploaded on Instagram

33012

GB of data is transferred

1465

Tumblr posts are created

The digital economy in the Middle East

32

Over 50% of the Middle Eastern population has access to the internet

About 80% of online shopping in the Middle East is done using cash-on-delivery

15% of Middle East SMBs have an online presence

10% of e-commerce transactions take place between local consumers and local SMBs

Saudi Arabia is the second largest B2C e-commerce market in the region

In Qatar, the country with the third highest per capita GDP worldwide, less than 20% of Internet users made purchases online

www.smeadvisor.com

Infographic of the month

The regional e-commerce landscape – key insights

Understanding consumer behaviour

17%

of shoppers complete their entire shopping journey online

67%

only do their research online

29%

consider the price as the deciding factor

What are consumers What influences shoppers buying online? when shopping online?

45% 44%

Mobile phones

The pivotal role of mobile devices

• Online shopping continues to grow with 61% of the Middle Eastern population shopping online • 53% of the population makes at least one purchase per month

• 1 in 3 transactions take place on a mobile device • Over 50% of e-commerce traffic is routed through mobile devices • 56% of Kuwaitis shop using mobile devices • 42% of Egyptians shop using mobile devices

40% 38% Clothes

Utilities bill

33% 31% Watches

Perfumes

What influences shoppers when shopping online?

Sources: Gartner, PayFort, Frost & Sullivan

Growth of the e-commerce market

Flight tickets

55%

Best deals

Roadblocks that e-commerce SMBs face • • • •

Acquiring market share: 47% Delivery: 28% Inventory management: 9% Returns: 9%

www.smeadvisor.com

Best marketing channels to push e-commerce sales • • • •

Social media: 16% SEO: 16% E-mail marketing: 13% Paid search: 9%

39%

Product review

31%

Friends’ recommendation

33

Top Changemakers

SIGNED, SEALED, DELIVERED This case study is about

In a region where postal systems aren’t standardised, Fetchr is tracking success with its GPS-enabled mobile delivery app.

Delivering the goods You’re sat in an obscure little cafe having a coffee and catching up on e-mails when someone taps you on the shoulder.

It’s your Fetchr driver, delivering the parcel you ordered online yesterday. The cafe doesn’t even have an address, but the courier still managed to find you.

This isn’t some farfetched reality, it’s the service provided by Fetchr the region’s hot new delivery app.

“Receiving a package has always been a painful experience. We want to change that and make the shipping experience as delightful as shopping,” smiles Idriss Al Rifai, CEO and Founder of Fetchr. No one has time to sit at home all day and wait for the doorbell to ring. Rifai gets that and he has designed his business to work around the customer’s schedule

34

not the other way around. The app uses patented technology to turn your phone’s GPS location into an address.

No need for building names or zip codes.

Last year Fetchr was named Forbes’ MENA Startup of the Year and Rifai claims the business is seeing 80 per cent QoQ growth. The service is already available in the UAE, KSA, Bahrain and Egypt and Rafai has set himself a target of being in eight new countries by the end of 2017. In the courier and delivery services market, an industry worth $242 billion globally, the app has the potential to make a real splash. If Rifai can harness the power of geolocation to the full we betcha Fetchr can do for deliveries what Uber has done for transport. And that’s big.

www.smeadvisor.com

Top Changemakers

Established: 2013 Number of employees: 600 USP: On demand GPS-based delivery service Year on Year growth: 80%

Postal problems Already an e-commerce aficionado, Iraqi-born Rafai was working for regional fashion website MarkaVIP when he had the idea for Fetchr. So many customers were submitting order forms with incomplete addresses that he decided to seek a solution. Building an in-house logistics department, Rafai was able to expedite services and reduce the number of unsuccessful deliveries. “After implementing the changes I saw a huge jump is results - it made me curious about what I had created,” the entrepreneur explains.

Leaving MarkaVIP, Rafai set out on his own to form the foundations of Fetchr.

The Founder, who holds an MBA from the University of Chicago’s Booth School of Business, invested US$300,000 of personal savings and sourced another US$1 million from friends and family in a seed round. With the first flush of funds, Rafai started work on the app in September 2012. With the help of four developers, the businessman spent the next nine months perfecting the platform before bringing it to the market in June 2013. “To be successful first and foremost you need a kick-ass product. We worked very hard on the IPO integration as well as the front and

www.smeadvisor.com

back end to deliver just that,” he asserts.

Putting the logic back in logistics The result is a cloud-based solution that is constantly changing. The app is smart: if you change location it will follow you there. When first booking a delivery you decide where you think you’ll be at a certain time. But if life gets in the way as it is want to do - you can amend your location. “When the driver is on his way a notification is automatically pushed through the app to ask the customer to share their current position,” Rafai explains. Proving how popular this flexibility is, the founder reveals that some 70 per cent of customers change their location. But, interestingly, about 80 per cent are still within 500 metres of their original spot. But it’s not just the clients that are being followed. Fetchr also GPS tracks its drivers to ensure customers have the most accurate ETA. Messengers also work off a tablet which automatically tells them the fastest drop-off route. Who knew a courier

service could be so competent?

Finding funding Rafai’s initial injection of US$300,000 savings and US$1 million from seed funding started him off on his journey, but it couldn’t see him through to his end destination. Fetchr needed the guidance, direction and - not least - finances of a venture capital firm to take it to the next level. With considerable expe-rience working Middle Eastern markets, it made sense for Rafai to pursue partners in MENA. But the entrepreneur was disappointed by the options he found.

“VCs were offering me really low valuations of the company and very harsh financing terms. They were more concerned with equity and revenue that seeing how Fetchr promised to shape the market long term,” the Founder explains.

Finding a dearth of daring VCs in the desert, Rafai sought more fertile ground in Silicon Valley. Giving himself

35

Top Changemakers

just one month to secure funding, the entrepreneur filled his schedule with networking, meetings and pitches. He won six rounds in a row and found himself in conversation with Joy Ajlouny, an American-Palestinian Silicon Valley entrepreneur. “She came on board as Co-founder and, with the help of her connections, last July New Enterprise Associates (NEA) took us under their wing,” Rafai recalls.

It was a victorious play: Fetchr raised US$11 million in series A funding, led by NEA. The investment was the largest ever received by a start-up in the Middle East from US based venture funds for a Series A. NEA’s Chairman even sits on the Fetchr board, something Rafai still cannot quite believe: “he has

really taken a chance on us. NEA has a tremendous track record; 28 per cent of companies they invest in go to IPO, so all eyes are on us!” With Mobily, the Saudi-based venture capital arm of Etihad Etisalat, announcing that it too was investing in Fetchr last August, it seems the company has found the support it was looking for.

Regulations and red tape Indeed, it is encouraging to see local VCs take an interest in the platform, especially since it was nearly strangled by the strict rules that govern doing in the Middle East. surrounding business here. “Regulations can be a real challenge,” Rafai notes, “Dubai is trying very hard to make business better here, but

the reality is that the environment can very nearly kill a start-up,” he continues.

Shareholder agreements, trade and office licenses all need to be authorised and paid for before a business can even begin trading. “If you raise US$200,000 in a venture capital round you will probably spend half of it on legal fees to just get past the red tape,” the founder laments. He claims the situation improves as the business grows, but this too is easier said than done.

“It can be hard to scale a business in the UAE,” he asserts. For a while Rafai had to press pause on Fetchr’s growth as he wrestled with local legislation. In Dubai World Central (DWC), the free zone Fetchr is registered under, the number of visas a company is allocated corresponds with the square footage of the office space. For an e-commerce courier company this threw a major spanner in the works. Why would Fetchr want extra offices when the majority of its 600 odd employees spend the day out delivering parcels? “It was a ridiculous prospect for us, but thankfully DWC has been very flexible and understanding,” Rafai explains.

Delivering worldwide Having successfully jumped through Dubai’s many hoops and satisfied all the small print, Fetchr is ready to fly.

Literally. Rafai is determined to drop pins in eight new countries between now and the end of 2017. And although the Middle East is the main target, the founder wants to dispatch operations outside MENA too. “We’re growing very fast and doubling every few months - we just need the network effect now,” he explains. There can be little doubt about the product’s potential to perform abroad. Its appeal is universal.

In the past decade consumer behaviour has changed beyond recognition; any company flexible enough to cater to new habits stands to benefit. Still unconvinced? We’ll let you mull it over while we catch an Uber to our Airbnb accommodation.

36

www.smeadvisor.com

Give your business an easy start. Call us now!

800 5800 etisalat.ae/hellobusiness

T&C Apply

Get on board and experience a smooth start to your business with a personalised visit within 24 hours, exclusive offers on telecom services, priority helpline any day and at any time, and much more.

Top Changemakers

38

www.smeadvisor.com

Top Changemakers

FASHION AT

YOUR FINGERTIPS It’s got big-name brands and millions of loyal customers, but here’s what Namshi considers as its biggest asset: talent. We got talking to the fashion retailer’s Co-founder and Managing Director – Hosam Arab…

This case study is about

www.smeadvisor.com

Often touted as the region’s leading online fashion destination, Namshi has established itself as a major player in the e-commerce landscape. Facing a growing army of online retailing competitors, Namshi gives its customers what they really want: fashion at their fingertips. It is this very USP that has helped the brand secure loyal customers across key markets in the Middle East including Kuwait, KSA and Bahrain.

Given the brand’s skyrocketing growth, it is hard to believe that not so long ago it was a small start-up with a humble beginning. Hosam Arab remembers the phone call. He (and his partners) had just been approached by Rocket Internet – a company that looks to build start-ups and online companies. “This was around the time when I had finished my MBA. I had tried my hands at several things including engineering, private equity and finance. I was at a point where I wanted to venture out on my own and create something from scratch.” It was a classic case of being at the right place at the right time. “It was around the same time that Rocket Internet was looking to launch a fashion e-commerce portal in the region and they reached out to us. I was really intrigued by the digital sphere – there was obviously a lot of

potential in the space because not many companies were around at that time. So, I took the leap and the rest is history.”

Since its launch in 2012, Namshi has come a long way. The online fashion retailer now features a portfolio of 500 international and local brands – some of which are exclusive to the portal. It also offers free and fast deliveries in the GCC, 24-hour delivery in the UAE as well as the option of cash on delivery.

That’s not all. Customers also enjoy a 14-day exchange policy. “We’ve had an incredible journey – with a lot of ups and downs. Yes, we are new, but that hasn’t stopped us from enjoying tremendous growth over the last three to four years. Today, we are the largest fashion pure play in the Middle East and we sell a range of popular brands.”

With several accolades and accomplishments under his belt, there is still one thing in specific that Hosam is particularly proud about: “When we first entered the market, there was a lack of awareness about online retail; people were hesitant to make purchases on a website. Namshi has succeeded in overcoming that and has built an element of trust with its loyal customer base. In fact, I think we’ve pioneered a community of like-minded individuals,

39

Top Changemakers

who are interested in fashion that inspires, and this is such a huge achievement,” he remarks.

Unlimited growth Under the leadership of Hosam and his partners, Namshi also recently hit another important milestone. The brand announced the opening of a new and expanded warehouse facility that will help accommodate its ever-increasing growth in orders. Eight times larger and with the capability to house 1.7 million additional stock items, the new warehouse ensures Namshi.com offers its customers the brand’s trademark next day delivery service throughout the UAE, while allowing it to process 30,000 products every day.

“Following robust growth across both our e-commerce and m-commerce platforms, it was essential that Namshi’s inventory and overall product offering increased in line with demand for our services. As such, we have invested in a significantly larger space, allowing us to feature more great fashion brands on the site. This in turn ensures that we always provide our customers with the best possible online shopping experience, and we will continue to invest in infrastructure and logistics support to maximise our capability to perform as a leading online retailer,” explains Hosam.

E-commerce companies in the region are often under pressure to globalise, while still staying true to their core values; achieving that balance is especially critical. Namshi offers a good example of how companies can grow without being overwhelmed by complexity.

Over the years, Namshi has divided itself across three areas of operations.

But one goal remains: to provide affordable fashion through a seamless shopping experience. “My partners and I have strategically divided our roles across the company. I am responsible for the overall brand, buying and merchandising. While my partners have the technology, marketing and operations departments divided

40

amongst themselves. Of course, we all keep each other in the loop, but it is important to have a strong management structure at the top, which ensures smooth operations throughout the company.” Hosam believes that this mantra of ‘divide and conquer’ has played a significant role in driving their fast-paced growth.

Looking past challenges Even as Hosam and his partners scale Namshi up, the emphasis has always been on integrating core values within the corporate culture and building the company’s ethos. That culture is all about creative freedom, ensuring that every individual is passionate about what they do and is contributing to the company’s overall mission. But, this certainly hasn’t been easy to achieve.

“Talent development has been one of our biggest challenges. At the startup stage, it was very difficult to hire

people that were going to stick around and give their 100 per cent to the business.” Hosam tackled this challenge with a simple solution: giving his team complete creative freedom. “The reality is that you get the most out of your team when you give them the freedom and autonomy to do things their way,” Hosam remarks. “Of course, we do expect them to share their ideas with us at the end of the day, but we let them do things their way, as much as possible.”

Now that Namshi is at the growth-stage, Hosam is faced with a slightly different challenge. “We realised that hiring the right people is such a difficult task.

How do you find someone that is as passionate as us about the brand? Very often, we have to go through a series of interviews and meetings, before we hire the right person.”

Hosam doesn’t mind that he had to endure a few bad experiences along the way before he was confident that he finally knew how to build a good team. In fact, he believes that the long

www.smeadvisor.com

Top Changemakers

companies wary of employee poaching should develop a positive mind-set. He offers this rule of thumb: “If a larger counterpart or a competitive entity steals one of your key staff members, remember that running a successful company isn’t just about hiring talented people, it’s requires creating a healthy ecosystem around those people as well.

It’s been proven time and again that money is no longer a sole motivator; people need to feel good about where they work and want to contribute to making a difference.”

learning curve has played a significant role in Namshi’s success. “Let me tell you this: we’ve made serious mistakes when it comes to hiring. Very recently, we hired a Senior Director and it turned out that his style of working didn’t bode well with the department he was overlooking. As a result, many employees within that department started losing interest and there was a drop in productivity. When this caught our attention, we immediately let go of this employee.”

While it may seem like an obvious course of action, Hosam believes that companies often dwell too much on their mistakes and tend to make compromises or adjustments to hide them. “It’s not just important to rectify your mistakes, it is important to rectify them NOW! The sooner you identify that there is a problem, the faster you can find a solution and get on with the business,” he explains of his pragmatic approach.

Finally, Hosam recommends that

www.smeadvisor.com

Teaming up with the best Even though Hosam and his partners have now developed a core team that is at the forefront of their brand’s success, talent continues to be a critical priority. “It doesn’t end at hiring. Talent development is an ongoing process.

Almost every day, we brainstorm exciting ideas that will motivate the team,” Hosam smiles. “And, it isn’t always something grand. For instance, we’ve hired a barista who makes coffee for the team. A steaming hot cup of coffee can make a huge difference in productivity! We also have a ‘half-day’ Thursday policy, which means you can leave a few hours early and get a head start to your weekend. It is simple things like these that spike creativity and productivity.”

Hosam’s own leadership mantra has been instrumental in defining Namshi’s corporate culture; he firmly believes in ‘people first, profit follows’. Employee happiness is another area that is on the top of his agenda. “We look out for employee unhappiness and encourage team members to voice any concerns they have; our doors are always open to anyone that wants to share their opinion. We organise a company-wide meeting once every month, where we share macro-level updates with the entire team. If they don’t know what the overall vision for the brand is, how can we expect the right contribution from them?”

Hosam’s straightforward enthusiasm

brings back to memory Stephen R. Covey’s famous leadership mantra, “Always treat your employees exactly how you want them to treat your customers.”

He quickly adds: “We always talk about new developments for our customers, but I want to share that we have so many exciting things in the pipeline for our employees. We’ve recently hired a yoga expert who comes in once every week for a session with the team, we also have an ice cream van that is here every Thursday. In addition, we’re currently working on a system that will allow every team member to get additional paid leave which can be used to work at a non-profit organisation of their liking.” He wraps the conversation with a laugh as he jokingly says: “Don’t you wish you worked here now?”

Major milestones Namshi’s new facility measures 40,000 square metres, and is capable of housing over 200,000 styles of apparel, accessories, and footwear from an extensive range of international high street and designer brands for women, men and children.

On average, Namshi photographs between 150 – 250 new products every day, uploads 800 – 1000 new products each week and books 20 new models to showcase these items every month.

In addition to the brand’s stateof-the-art photography studios, which produce all imagery for the website, Namshi also has a resident hair and make-up artist on-hand for all shoots.

41

Top Changemakers

A CLEAN SLATE At a time when space is at a premium, an up and coming Dubai-based company is helping individuals get rid of clutter from their homes, offices and working environments.​ SME Advisor speaks exclusively to Shelina Jokhiya, Managing Director of DeCluttr Me. We are all too familiar with that one corner in our home or office that is dedicated to things that we don’t need, don’t use or simply don’t know what to do with. And, lack of time (and effort!) means that this clutter could essentially lie there for weeks – and months – at a stretch. But, what if there was a service to do it for you?

When Shelina started DeCluttr ME in 2013, people scoffed at her business concept. Would people really pay someone to get rid of unwanted clutter?

“It wasn’t easy convincing people of the idea,” she recalls. “I had to introduce the concept to the region. At first, it involved a lot of word of mouth and sharing ideas with close friends and family.

This evolved into larger workshops that provided education on decluttering and organising. In fact, even today I’m raising awareness through blogging, speaking opportunities and attending a range of events. It has also helped that Marie

42

www.smeadvisor.com

Top Changemakers

This case study is about

www.smeadvisor.com

43

Top Changemakers

Kondo arrived in 2015 with her own method of organising. People are now more aware of the merits of decluttering and organising and that a professional organiser can help them greatly.”

As you sit down with Shelina (in her impeccably clean workspace), it’s only a matter of seconds before you notice that she’s a hardened professional with a wealth of experience. So, it is hard not to wonder: what brought about DeCluttr ME? She promptly responds: “I get asked that question a lot. Before I moved to Dubai, I was a lawyer for several years.

Funnily enough, I was always organised and used to constantly use my skills across the legal departments I worked in. Believe it or not, I always wanted to start something on my own – and I knew it had to be something I was immensely passionate about. In April 2013, I finally gave in to my entrepreneurial urge and started doing market research. I noticed that there was a market gap; there weren’t many businesses providing decluttering and organising services.”

Shelina saw an opportunity, finally quit her job in October 2013 and soon began approaching potential clients. Initially, her plan was to reach out to close family and friends, and slowly work her way through her social circle – using social media channels to aid her. “I built the website and social media channels for my brand, and through these platforms shared a range of quality content on organising.” Luckily for Shelina, this proved to be highly beneficial as word spread about her work and soon new client requests starting pouring in.

finally individuals looking to move out of the country, needing help to organise ship items abroad,” she explains.

But with the large-scale resources and budgets at their disposal, one would assume that these clients could surely work with bigger vendors such as cleaning companies and maid services.

How does DeCluttr Me come into the picture? The very confident Shelina smiles as she says: “You see – very often people associate the word ‘clutter’ with a physical state of being, but in fact it is something that affects you psychologically as well. My mission is to help people become more productive in their day-to-day lives by organising their homes and offices in a systematic manner. So, it’s not just about physically

moving things around, I also show them the merits of buying and storing less stuff which will in turn reduce stress, anxiety, depression and leave them more money in their wallet.”

Many of Shelina’s corporate clients have indeed enjoyed savings by reducing wastage and unwanted junk.

Working as an extension of their team, Shelina has spent weeks at end helping companies free up space by getting rid of unnecessary paper, junk, samples and boxes. These spaces were later converted into larger employee desks, meeting rooms or break-out areas.

“By working with DeCluttr Me, clients have been able to see how much easier it is to live in a less cluttered, more organised environment and that is a true

Winning over customers Given the unconventional nature of her business, Shelina had to be strategic in terms of her target demographic.

“A large proportion of my client base includes: expats that have recently relocated to the UAE with a lot of belongings; Emirati joint families with a high number of family members (hence, more stuff!); corporates that have been around for over 20 years and have never decluttered their office spaces; and 44

www.smeadvisor.com

Top Changemakers

testament of my success.”

Less is more The solution that Shelina provides is not the only unusual aspect of her business.

Her working style is also exceptional.

Shelina believes that she reduces costs, mistakes and oversight by being personally involved in all projects. The result: a satisfied customer that knows the job will be done right. In other words, Shelina runs her entire business by herself!

“I work on my own so deal with the administration, as well as working with the clients and finally networking. It does seem like there are days when there is not enough time, but being organised helps. There is no one else in the sector www.smeadvisor.com

currently, so this is all a learning curve.

Of course, I do understand I can’t be an expert at everything, so I outsource the PR, marketing, website maintenance and, occasionally, creative development to third parties,” she remarks.

In an ironic twist, running a ‘one-woman show’ has turned out to be Shelina’s strength, not her downfall. Rather than panic, Shelina relied on a core tenet of her success to date: listening to what her customers’ wanted. “I know it’s the road less travelled, but it has really worked for me. My clients know that they can expect a certain level of service quality and that’s exactly why they don’t hesitate to recommend DeCluttr ME to their colleagues and friends.”

But as Shelina looks to scale her business in the near future, the biggest challenge she faces is sustaining the high level of service she provides to her clients. “When I start to take my business to the next level, I will focus on building a core team. I do realise that it is a difficult task because I will need to find people that are able to meet the benchmarks I have set within the company. Technology is going to play a major role in helping me achieve this. I think there are great solutions available today that facilitate communication, collaboration and teamwork – and I will definitely use them to my advantage.”

“I will cross that bridge when I get to it,” she laughs. “But for now, it’s just me – and my (long) to-do list!”

45

Top Changemakers

This case study is about

46

www.smeadvisor.com

Top Changemakers

MASTER OF MARKETPLACES:

JadoPado’s OMAR KASSIM After almost seven years in the business, Omar Kassim is as passionate about creating the leading online marketplace as ever. Under his leadership, JadoPado continues to dominate the e-commerce landscape and bring innovations to the market.

SME Advisor digs deeper and gets a closer look at his everevolving strategy…

At a time when many of its industry peers were sceptical about the strength of going online, JadoPado had already cast its sight on the region’s nascent e-commerce landscape. In September 2010, with a small initial investment, JadoPado launched as an online platform selling electronic goods and gadgets. “JadoPado was dreamed up as a response to why no one had done scalable e-commerce in the region. Rather than continually ask the question, we decided to see if we could come up with an answer.

Six months later, our initial experience went live in March 2011. We launched as a fully integrated, electronics focused, inventory-based e-commerce proposition controlling everything from the experience all the way through to delivery. In fact, we ran our own fleet of vans across Dubai,” Omar Kassim, the

www.smeadvisor.com

wild-eyed genius behind the business, opens up to SME Advisor.

The idea was to give customers access to an extensive range of products within the electronics category – at the convenience of a few clicks, and then deliver it to their doorstep within three to six hours of order placement. “We wanted to give our clients a proposition they couldn’t refuse and at the same time wanted to provide value by saving them not just money, but also time and effort.”

So, did customers start pouring in?

Omar smiles and says: “We tried to be very strategic in the way we launched our platform; we timed it to coincide with Apple’s iPad 2 launch and used the growing momentum in the mobile devices market to build an initial customer base. Believe it or not, it worked out pretty well!”

47

Top Changemakers

Triumph in adversity Following a successful launch and overwhelming reception, the company grew its inventory range, expanded the team and moved into new offices. Soon it started delivering across the UAE and

by March 2013 it was shipping globally with FedEx. Even though JadoPado had enjoyed a great head start, it was soon faced with a looming challenge. Managing a delivery process in-house was proving to be a tedious and costly affair – but delivery was JadoPado’s central USP. Omar was faced with a tough decision.

“By early 2014, we realised that it was too expensive to keep running our own fleet and after much hand wringing, we decided to let go of our core proposition and turned to FedEx to carry all our delivery volume and switched to primarily a ‘next day delivery’ model,” confesses Omar.

This, however, didn’t dampen his spirits. Hungry for growth and determined to create a diversified offering, Omar and his team got back to the drawing board to brainstorm ideas.

“By the summer of 2014, we started looking at ways to improve our offering and evolve it from a single category.

Expanding our portfolio of products meant that we would have to carry significantly more inventory – and that was a massive challenge because of the investment it involved. I have to admit, at that time, we felt like we had hit a wall.”

“Yes, here we were, faced with yet another roadblock, but that didn’t deter us.” Hardened by his experiences as an entrepreneur, Omar isn’t afraid to call it as it is. “Look, we’ve seen (and are currently seeing) many challenges.

Being an entrepreneur has taught me that challenges don’t go away, they just change; don’t believe anyone that tells you otherwise,” he explains.

After much debate, research and ideation, Omar and his team finally nailed it. “It became apparent after a while that perhaps building an online marketplace was the way to go and so

48

that’s exactly what we did,” explains Omar with a sparkle in this eye. By late 2014, JadoPado unveiled a beta version of its new marketplace to some of its early sellers. “It’s funny because what started out as an experiment to test the waters eventually set the foundation for where we are today. Much later on we realised that the marketplace needed to be more than just an add-on, so we ended up re-positioning our entire business around it.”

In his mind’s eye, Omar knew that selling products directly to the customers wasn’t a viable business model. JadoPado was being cannibalised on pricing by more competitive sellers, and it didn’t make sense to compete more aggresively for margins that didn’t exist. He made a calculated decision to let go of the current business model (of retailing electronic products) and shifted to operating a marketplace platform,

JadoPado was being cannibalised on pricing by more competitive sellers, and it didn’t make sense to compete more aggresively for margins that didn’t exist.

www.smeadvisor.com

Top Changemakers

where buyers and sellers could interact freely – across a broad range of product categories. By the summer of 2015, JadoPado made a second pivot of sorts and completely shut its retail business down. It was an incredibly tough decision as it had spent the last four years selling its own product directly to customers.

The makings of an e-commerce empire JadoPado’s new model of an online marketplace rapidly picked up pace and is now regarded as one of the leading platforms in the region. Speaking of this tremendous about turn, Omar says: “It has never been easy journey, but we’ve always believed that running a marathon rather than a sprint would eventually pay for itself.”

And, Omar is quite right. JadoPado has not only succeeded in creating a space for itself in a crowded market, but is also proving to be a disruptive force in the e-commerce landscape. Last year, the company raised its first round of external funding of US$4 million from BECO Capital, money that it plans to use towards scaling up and entering into

www.smeadvisor.com

new markets.

Moreover, JadoPado now has a new (and much more powerful) core proposition – service. The company solely focuses on providing unparalleled services to its buyers and sellers. “We aggregate demand and supply around physical (and increasingly, digital) consumer products. We help sellers who are looking to sell online without having to, for example, invest in their own technology, optimise for speed, security, checkout efficiency and spend on customer acquisition. We provide buyers with a stable, secure, fun and tightly knit experience with greater choice than they’d every find in store or in a single branded channel, whether online or offline.

“So pretty much anyone who may want to buy or sell something online can set up on our platform. We work with sellers around the world who sell product over 5000 different categories as well as buyers from across the GCC, Sub Continent and North Africa.

We’re a platform that likes to provide the right tools and then get out of the way as much as we can. It’s about

providing both buyers and sellers the right environment in which they can be themselves, build their own business, communicate with each other, transact with each and trust each other. We try to provide solutions rather than exercising control,” explains Omar.

Building the right support system Since its inception in 2010, JadoPado has undergone serious changes. Its core proposition has changed. Its business model has evolved. It is definitely a more mature business. But, one thing that hasn’t changed much is Omar’s support system – his team. This support system contributed to his success during all the rough patches. “Given the rollercoaster journey we’ve had, it was critical that we had the right people. As a team, we are patient and persistent. We’re now 50 people in size (up from 20 in December 2015) that work very closely together.

We are very tightly knit and are always evolving. We experiment, we change, we adopt.”

Of course, good talent doesn’t come easy. Omar quickly adds: “We found it incredibly difficult to strike the right

49

Top Changemakers

balance between strong talent and what we were willing to pay for that talent in today’s market. This resulted in us setting up an operation in Colombo (Sri Lanka) in October 2014, to be able to access a larger talent pool at a more balanced cost. Since then we’ve evolved our approach and as we become better at managing remote teams, it’s likely that we’ll run more and more of our organisation in a remote fashion, with a view to access and hire talent wherever it may be available.”

The road ahead Omar believes that he is at an exciting juncture in his entrepreneurial journey.

Even though JadoPado is already ranked as one of the region’s leading e-commerce platform, Omar thinks he’s only scratched the surface. “We’ve got a bunch of exciting things across our pipeline as we scale up to take more share across the region. I’d argue that we’re currently No. 2 in our space, investors, potential investors and the industry in general compare us most closely to Souq.com, who has a five year head-start, buckets more capital and

50

has a headcount in excess of 3000. We are eyeing number One (eventually)!”

This isn’t just wishful thinking. Omar has a plan in place that will catapult his company to the next level – and a lot of it involves further strengthening his team.

“We’ve spent a lot of time thinking about the sort of organisation that we’re building. Why do so many organisations create policies that manage the two per cent of individuals that don’t perform and abuse the system versus creating simple guidelines that embrace trust and collaboration? It’s all about the right people, together with a sensible approach to working in an information rather than an industrial economy. For example, we kicked off and unlimited leave recently. It’s been a very interesting experiment, and we’re probably one of the only organisations that practices it in the region. Time will tell if it works, but we suspect that it shall.

“We’re in build mode at the moment, attempting to do what hasn’t happened yet – and if we’ve got the right people and systems around us, we march onwards,” he concludes.

JadoPado went from 8000 SKUs to over 200K SKUs on its platform till date Traffic scaled organically from 200K visitors to 3 million per month The company has signed up over 5000 sellers to the platform from around the world JadoPado’s top seller recently crossed US$1 million in lifetime sales, after just over a year on the platform

www.smeadvisor.com

Want an easier way to ďŹ nd SMEs? Visit: www.smedirectory.me

Join the region's fast growing SME Directory

Scan QR Code

The SME Directory is designed to give you access to a repository of valuable company information.

This dedicated website comprises of detailed business proďŹ les and serves as a virtual marketplace for companies looking to promote their products and services to potential buyers - both regionally and globally.

www.smedirectory.me

Contact us at info@smedirectory.me

Top Changemakers

NO COMPARISON!

This case study is about

52

www.smeadvisor.com

Top Changemakers

Jon Richards, CEO of compareit4me.com, on defining a competitive advantage, tackling challenges and dominating the e-commerce landscape…

Jon Richards

CEO,Compareit4me

www.smeadvisor.com

In the very first meeting with Jon Richards of compareit4me.com, one thing is very clear: he belongs to a cohort of entrepreneurs who passionately believe they may be able to address a serious gap in the market.

“Having spent around eight years working in digital in the UK for a range of companies from banks to job portals, all mainly start-ups, I moved to Dubai in 2011 to head up the digital team at propertyfinder.ae. Like every other new expat to Dubai, I needed a bank account and didn’t know which bank I should go with, I didn’t know which products were right for me and there was no way of comparing finance here back then. In the UK you wouldn’t take a financial product unless you’ve compared it. Back then the banks weren’t fully utilising digital as a performance marketing channel.

There wasn’t a great deal of product information available online, so there was a gap we could fill. That motivated me to launch compareit4me.com in August 2011 and it eventually became full time in April 2014.”

Based in Dubai, compareit4me is a finance comparison site in the Middle East. The online platform allows users in nine countries (UAE, KSA, Jordan, Lebanon, Kuwait, Egypt, Oman, Qatar and Bahrain) to compare financial

products, such as loans or credit cards, from the leading banks in the region.

At the same time, it gives banks access to educated users i.e. people who are ready to start talking to them and make a decision.

“Simply put, we are aimed at anybody that might be interested in getting a better deal on their banking or insurance products. No matter what your income or lifestyle, there are always a choice of products. Our mission is to match you with the product that best meets your needs. As well as comparing credit cards, we compare personal loans, car loans and mortgages; we recently also developed and launched a new portal that allows consumers to compare and buy car insurance online. This means we’ve widened our customer base still further; anyone that owns a car can potentially save money by using our platform,” explains Jon. Speeding ahead While Jon’s platform provides a compelling comparison solution to its customers, ironically, the company itself is continually being compared to its competitors. But this doesn’t worry Jon too much. “We are the only comparison site that is specifically focused on financial and insurance products.

53

Top Changemakers

We believe that this laser focus gives us the edge. We are also the only platform in the Middle East that allows online insurance purchases. Competitors such as they are, only allow the user to input their details and then wait for a call or e-mail back. We provide the immediacy that the internet was built for,” he says.

“Obviously, by being the first and only provider able to offer a full quote to buy solution, we were able to immediately and decisively differentiate ourselves from our competitors.” And, Jon plans to sustain this competitive edge. “We continue to on board further car insurers to give our customers an even greater choice and we are already working on other insurance verticals including home, travel, life and medical insurance. We know that if we do not evolve and improve our offering every single day, we will very soon be caught and passed by new potential competitors. Also, if we cannot deliver the consumer a better service than he could get directly from the financial institution, then we no longer have a compelling business proposition. Thankfully, this certainly isn’t the case right now and we could not be more pleased with the feedback we get from both customers, clients and suppliers.”

Given the nature of Jon’s business, it is important for him to maintain strong relationships at both ends of the spectrum. He explains: “We’re really able to perfect our offering which isn’t only good for the consumer, but it’s also good for the banks. They know anyone coming to our site is looking for a finance product. The idea is win-win for both consumers and banks. It’s a good way for users to compare financial products and get that clarity that’s so important when you need to make a financial decision. It’s free and really a ‘why wouldn’t you?’ type of product.

At the same time, it gives banks access to educated users, people who are ready to start talking to them and make a decision.”

54

Driving growth Last year, compareit4me closed a US$3 million round of investment from three of the largest venture capital funds in the region, giving it the ability to grow quicker, expand further and add even more talent to the team. How did this fuel growth?

“As I mentioned earlier, we launched a new portal for car insurance. Our insurance platform, which is absolutely unique in the Middle East, allows customers to compare, choose and buy car insurance online. Not only does this allow customers to find the best deal, but it empowers them to shop around. The alternative would be to spend hours on the phone talking to each insurance company separately, or to spend time during the working week talking to a broker. Moreover, it provides transparency to the customers by showing them exactly what each product does and does not include for the price.”

The diversification appears to have

paid off: Jon’s business is now a lot less dependent on economic circumstances.

“For example, where as a bank might flex its marketing budget in response to an economic downturn, everybody that has a car is still going to need and therefore buy car insurance every single year. In that sense, the car insurance market is relatively stable and rather than being dependant on anybody else, it becomes our challenge to go out and attract as many customers as we possibly can,” he explains.

Bumpy ride But climbing up the ladder hasn’t been easy. “The biggest challenge we faced was in relation to the creation of our insurance comparison platform.

Whereas in the UK and Europe, aggregators such as ourselves would integrate with insurers via an API solution, the technology in the wider UAE insurance industry was simply not ready to support this. That meant that

www.smeadvisor.com

Top Changemakers

we needed to invent a whole new way of delivering real time quotations to customers. Accordingly, we developed our own bespoke platform that takes the insurers pricing logic and methodology and automates that within our environment. This allows us to deliver instant quotes on behalf of, as opposed to by, the insurers.”

Thankfully, Jon had the support of his development team, who did a commendable job of understanding the objective and building a suitable technology that could benefit both customer and insurer. “Before starting the build, we did a lot of research with insurers, Lawyers and even senior people at some of the largest comparison sites in the world. Apart from the technology requirements, the shift in business model meant hiring a whole new team for the operation.

To give us the best possible chance at success, we went out to the market and found and hired the best insurance

www.smeadvisor.com

and tech people that we could. The whole project was a huge challenge and was a great opportunity for lots of the team to learn new skills and work on a project that will genuinely change the insurance landscape in the Middle East,” he recalls.

Just as things were starting to settle down, Jon’s team soon hit another roadblock. “We were faced with another major challenge: we had to make the transition from delivering leads to banks (for them to close) to actually selling insurance ourselves. This required a completely different mind-set and different skill set. In order to bridge this gap, we set about finding team members with deep experience in insurance sales that could both execute the task themselves and teach us about the skills and tricks necessary to be successful.”

Patience, eagerness to learn and collaboration are all hallmarks of a successful entrepreneur, and Jon ticks all those boxes. Even as he faced immense challenges, he didn’t give up.

In fact, his positive mind-set helped him build and maintain strong relationships with his partners as well.

“I knew we were stepping into the relative unknown – nobody had ever done this in the Middle East before, so it was as much about learning on the job as it was about training new team members. As this was a new venture, for both us and the insurers we represent, it was necessary to work very closely with them. Very early on, we identified that even on the insurer side there was a need to adjust mind-set. For example, whereas in the past a customer buying through an intermediary might expect his policy to be delivered in a couple of days or even a week, an internet customer required a much higher degree of immediacy. By working closely with the insurers, we have been able to design and implement processes on both sides which have significantly reduced the lead time between payment and policy delivery.”

On the horizon Now that compareit4me’s insurance comparison platform is successfully up and running, Jon has put the company’s past challenges behind him and is focusing on the road ahead. Talking about the future gets Jon really excited.

He has large aspirations for where he wants to take his business. “Over time, we would expect to migrate from quoting on behalf of insurers via our own technology to more direct integration with insurers and obtaining quotes and policies from them electronically. We are already working with one major insurer to implement instant policy delivery. In other words, as soon as the customer pays he will immediately receive his policy. This clearly requires development effort on both our side and the insurers.

Insurance technology in this region is definitely still playing catch up. We have built technology to bridge that gap, however the long term future of the industry will require a much higher degree of technical sophistication.

Our challenges are to maintain the competitive edge that we have built ourselves with our technology, yet still be ready to partner with insurers as they become more and more tech and digital savvy,” he concludes.

Insurance technology in this region is definitely still playing catch up.

55

Top Changemakers

BRINGING UP BABY Growing at 29 per cent GARG globally, e-commerce is tearing ahead of itself like an unruly toddler. We speak to Mona Ataya, the woman holding the reins of Mumzworld.com, the Middle East’s leading mother, baby and child platform.

This case study is about

56

www.smeadvisor.com

Top Changemakers

www.smeadvisor.com

57

Top Changemakers

E-commerce has become the biggest single trend of the decade – there’s no denying it.

58

A whole new world Which is harder, being a first time parent or a first time entrepreneur? It’s debatable. Both involve careful planning, countless sleepless nights and the joy of baby’s first steps into the big, bad world. For Mona Ataya that unknown world was e-commerce, specifically the mother, baby and child segment (MBC), a market set to be worth US$66.8 billion globally by 2017. The sector is growing handsomely. But in 2011 when Ataya founded mumzworld.com she - like any other new mother - had no idea what to expect. “E-commerce was still a nascent industry, so entering the market was dangerous. But it gave us an advantage too; as the first MBC player in the Middle East we were pioneers – we set the playing field,” the Palestinian-born businesswoman explains.

Since then Ataya has watched blossom with pride as her baby business: today the company enjoys 50per cent growth Q/Q and 300per cent ROAS. The team behind the platform has also expanded from three co-founders to some 50 employees, scattered across Dubai, KSA and India. Crucially, Ataya has recruited some pretty impressive mentors for Mumzworld in the form of Wamda, TwoFour54 and Endeavour Catalyst, the region’s godfathers of investing.

The trio reiterated their commitment this spring when they - and others - injected ‘millions of dollars’ in the company. It’s fair to say that Mumzworld is enjoying all the warm benefits of life in the incubator.

Building blocks Anaya has always been intrigued by e-commerce: her background is in marketing and her CV boasts roles at top corporates including Procter & Gamble. “Through my work I saw that the world of bringing brands to life was changing, and so was consumer behaviour. E-commerce has become the biggest single trend of the decade – there’s no denying it,” the entrepreneur enthuses. But why dummies and dippers? Inspiration was born from frustration. The mother of three was shopping for a stroller for her twin boys in Dubai, but the only two options she found were overpriced and ugly. Her husband ended up bringing a buggy back from a business trip in New York. “I couldn’t believe it – it shouldn’t be that way!” she exclaims.

Buddying up with her brother and Cambridge-educated female business partner, Ataya set out to shake up the options available to Middle Eastern mothers. Having cut her teeth on e-commerce as the co-founder of online recruitment platform Bayt.com, Ataya knew something of the industry. With experience on her side, she took the risk of bringing Mumzworld.com to the market somewhat prematurely after just a two month gestation period. But the reaction to the October 2011 launch was unprecedented. By 2012 mumzworld. com had amassed 1.2 million unique hits and was the most-visited online MBC retailer in the Middle East, a title it defends today.

www.smeadvisor.com

Top Changemakers

Growth spurts Courting the clicks of so many consumers, Mumzworld naturally came to the attention of investors.

In 2013 Ataya was invited to join Endeavour Catalyst and last year the entrepreneurial platform sent Ataya to Harvard University to complete a business programme. Most recently Endeavour upped its commitment in the company. “This marks our third investment in the region in the past 12 months and we couldn’t be more excited to support Mona and her team,” a representative said. Ataya is pretty chuffed too. This February she received a sizeable amount from TwoFour54, Wamda and other investors that pulled in 40 per cent above her target number.

But the co-founder insists it’s not all about the money. “Finding the right strategic partners is so important to guide us in the right direction. Our investors open us up to capital, but also human capital – there’s so much knowledge they give us,” she explains.

Perhaps the businesswoman places such precedence on people because she had such a struggle sourcing her own.

www.smeadvisor.com

Teething problems Mumzworld may look like the poster child for e-commerce now, but it wasn’t always that way. In its early years the company was a troublesome toddler.

The problem? Staff. “You can’t grow a business without great people. One smart, intelligent executor is as strong as twelve mediocre players,” the entrepreneur states. But finding and retaining top level people who are willing to work long hours in a startup for less money isn’t easy. And she needed smart cookies too: “even in our first year as a startup we were growing fast – I didn’t have time for hand-holding.”

One area of the company felt the strain of the brain drain more than the rest. Anaya battled with finding top IT experts, a common complaint of businesses operating in the region. For an e-commerce offering the platform has to be perfect, but who could deliver here? Armouring the power of the online, Ataya temporarily outsourced IT to India and lightened the load on her local team, allowing them to focus on delivering a stellar service.

And what is it that makes Mumzworld run as smoothly as a baby’s bottom?

Flexibility. “The key to our success is the constant fluidity in our supply chain.

Customers need immediate gratification and their Pampers in an hour, not a week,” Ataya explains. The entrepreneur prides herself on providing the most efficient service available.

But this, too, was not straightforward.

Dealing with numerous manufacturers (all with different production and distribution schedules), Ataya initially struggled to meet demand for Mumzworld’s 120,000 products.

The problem was compounded by the disparity in delivery times between different couriers. Determined not to be defeated by logistics, Ataya partnered with Aramex as lead courier and also recruited her own pod of private drivers. She now maintains a 50/50 spilt between the two groups and finds that operations are far more efficient as a result.

Baby steps to big steps Ataya has come a long way from frustratedly searching for strollers in the mall. In establishing Mumzworld she has – she hopes – empowered a generation of Middle Eastern mothers to make smarter, more educated choices for their children. 90per cent of Mumzworld users would recommend the website to a friend, so she must be doing something right. But, with the e-commerce market growing by the day, Ataya will have to keep abreast of things if she is to maintain such healthy stats. “The major new industry trend is m-commerce. Mobile purchase and payment is redefining the playing field,” she asserts. Without delving into particulars, she claims she’s already planning how her own platform can pivot to take advantage of the change.

But what of her plans for the website beyond the fickle twists and turns of industry trends? Ataya has a grand scheme: “I would love to one day be able to have a grand exit and have Amazon purchase my company.” It would be quite a send-off, seeing her business enrolled in the best university of e-commerce there is. Perhaps it’s a little farfetched, but - as Ataya explains - “I think creating a start-up in e-commerce is for people with a bit of insanity in them. I probably shouldn’t say that should I?!” Mum’s the word, Mona.

59

Top Changemakers

Clutching Success Shohra Hussain’s designer reseller business had small beginnings in her apartment. But the Bahraini entrepreneur is stepping out of the home onto the high street, proving that any woman can turn her passion to profit.

A luxurious landscape Covetous Jimmy Choos, glittering Rolex watches and buttery soft Birkin bags that call out to be stroked and smelt line the shelves of Shohra Hussain’s Dubai showroom. Hussain, Founder and CEO of designer reseller business OMG Fancy That, picks out a sparkly gold and pearl bracelet. “My customers are desperate to get their hands on one of these by Van Cleef & Arpels,” she says excitedly, with a twinkle in her eye to rival that of the bracelet. From this room in her Dubai home the Bahraini entrepreneur has forged the foundations of a growing e-commerce fashion reseller business.

Selling new and pre-loved designer handbags, shoes and accessories at 60 per cent to 70 per cent off the retail price, word of OMG Fancy That is catching on with women worldwide. Her network consists of over 4,000 international customers, including royalty from Abu Dhabi and Sharjah. It is an eclectic mix she both buys from and sells to, taking 35 per cent of any second party sale made. With projected revenue of US$250,000 for 2016 and partnerships already in place with

60

“global reseller giants”, Hussain’s future is as bright as the hot yellow trousers she sports.

Trash to cash Indeed, there is something butterfly-like about the thirtysomething entrepreneur. As she flits around the showroom talking colourfully about her different treasures it is hard to pin her down. Even harder to believe is that OMG Fancy That started life as an afterthought. “I was moving house in 2013 and had all these old designer shoes and handbags. I was going to throw them out, but then I figured I could make some money from them,” she explains. After months of market research and business meetings with a web design company, OMG Fancy That was born via a free mobile app (available on iOS), website and boutique showroom in Hussain’s apartment—the latter to accommodate local clients who wanted to see wares first-hand before splashing their cash.

And the founder’s customers are not shy of spending. The average sale carries a price tag of around US$1,400,

www.smeadvisor.com

Top Changemakers

This case study is about

www.smeadvisor.com

61

Top Changemakers

Established: 2013 Number of employees: 2 The only designer reseller in the Middle East to guarantee merchants payment within 24 hours Year on Year growth: 15%

62

but some items go for eye-wateringly more. Her record is a lizard skin Hermès Birkin bag that sold for US$16,300. With such tasty takings, Hussain made back her initial investment of US$27,000 from personal savings within the first six months of trading in 2013. “Things picked up very quickly after that,” smiles the businesswoman, who holds a BA in accountancy and an MA in human resources from the University of Middlesex, Dubai. OMG Fancy That saw revenue of US$200,000 in 2015, a number she plans to swell to US$1 million by 2020. How? By working the web, of course.

The fashion for online From May to December last year OMG Fancy That had a pop-up store in Riffa, Bahrain. The project promised to expand the brand’s physical footprint, but despite being “an overwhelming success” Hussain walked away resolute against renting. “I thought Bahrain could be the first in a chain of retail stores, but I quickly realised that bricks and mortar can’t compete with online,” explains the entrepreneur. Rents in prime spots such as Dubai Mall exceed US$1,700 per square meter; pricey but not impossible start-ups leading international brands.

Startups, however, don’t stand a chance.

“For me, drifting away from online to malls isn’t smart: I can do better online,” Hussain surmises.

And she’s right. According to eMarketer the Middle East’s e-commerce industry is worth US$4.9, a figure that is expected to double by 2018. The UAE is leading the trend regionally; the Emirates’ share of B2C e-commerce is forecast to triple between 2014 and 2019. And Hussain has positioned herself in a particularly sweet spot: sales of personal luxury goods in the Middle East hit US$8.7 billion last year, a US$6.8 billion increase on 2014.

Keen to cash in on the hordes of online shoppers lusting after a Louis Vuitton bag, Hussain has commandeered social media to hook

designer dies hards. OMG Fancy That is on Facebook, Twitter and Instagram. The latter, Hussain notes, is where she can lay her best honey traps: “Instagram is crucial to my business strategy – a good picture translates to sales.” But while Hussain seems to have now got it in the bag, it was a very different picture a year ago.

Fakes, fraud and frustrations Last spring Hussain was defrauded of US$41,000, the equivalent of 2014’s profits. Still a comparatively new concept, e-commerce is rife with suspicion; particularly in reseller circles where customers worry about buying fake goods. But it is not only buyers who can get burned. Hussain made a large merchandise order with an online agent. Two weeks later when just one fake bag arrived with no sign of the rest of the order, she realised she had been scammed. Hiring a specialist anti-counterfeit lawyer, Hussain filed a case against the perpetrator who – it transpires – was a 22 year old Arab girl.

It was not the IT student’s first attempt.

“It took me nine long months to get the money back – the girl had already spent it so her family had to pay me back in installments,” Hussain recalls.

Crucially, the businesswoman learnt a lot from the experience. “I’m even more cautious now – I’ll only ever take payments via PayPal now,” says Hussain, who did not use the trusted web payment provider for this particular transaction. Based on a template from her lawyer, she also makes merchants sign an authenticity guarantee for purchases of over US$2,700.

High designs The fraud fiasco has been the low point of OMG Fancy That’s story so far. But the Bahraini is keen to encourage, rather than deter, other curious entrepreneurs with her tale. “There are so many talented women in the Middle East who have great ideas but question their abilities; self-doubt is one of the most debilitating things,” she declares. www.smeadvisor.com

Top Changemakers

Pulling the titles of entrepreneur, accountant and – not least – fashionista out of her seemingly bottomless bag, Hussain is the entrepreneurial butterfly she first appears to be.

Shopping At OMG Fancy That E-commerce functionality and search engine ranking Brand awareness and designer expertise

Having weathered the start-up storm alone, Hussain is now finding strength in numbers. “My strategy is to collaborate with the biggest international players in the designer reseller field,” the businesswoman enthuses. She has already partnered with market leaders in India and the UAE. And, although she declines to give names, the gleam in her eye suggests the partnership is already proving profitable.

It sounds like the Mary Poppins of the Middle East is ready to take flight.

Pulling the titles of entrepreneur, accountant and – not least – fashionista out of her seemingly bottomless bag, Hussain is the entrepreneurial butterfly she first appears to be. Since establishing OMG Fancy That the CEO has seen her fair share of challenges; playing with the big dogs in the international arena will further test her mettle in the coming years. But, as she sashays away in her sunshine trousers, it is clear this is one butterfly that refuses to be caught in the net of negativity.

www.smeadvisor.com

Low commission and affordable pricing Aggressive social media penetration Secure shopping cart & SSL Site and applications Advertisement campaigns and partnerships (Souq.com) State-of-the-art portal and smart phone application Professional detailed catalogue of items Two-way profitable payment service

63

Start-up diaries

CRACKING

THE CODE In a market where having a business plan is an expensive essential Deerasa offers entrepreneurs an economic alternative. But while founder Khawlah Almadoudi is saving her clients money, she has herself paid a high price in the process.

What’s in a name?

Deerasa means ‘research’ in Arabic. It is ironic that research, or rather a lack of, is the thing that has haunted Khawlah Almadoudi over the past eighteen months. The founder of Deerasa, an online business planning platform, studied the SME and e-commerce market intently before launching the website in November 2014. But what the entrepreneur didn’t investigate was the credentials of her IT team, a mistake that has - by her own admission - cost her untold “time, money and reputation.” Today Almadoudi has amassed small but solid base of over 100 clients and she claims the business is seeing 85 per cent revenue growth. There are even has plans to launch a sister service for business valuations. Things are looking up, but the businesswoman has had one of the roughest rides an e-commerce start-up has seen.

The premise for Deerasa is simple enough; a streamlined, affordable online business planning platform. The Saudi entrepreneur had the idea whilst talking with a young female student who needed help but couldn’t afford to pay US$4,000

64

for a professional consultant. When the girl asked to see some templates to help draft her own document Almadoudi realised there was a market for assisting ambitious but budget-tied businesspeople. But it isn’t just fledgling female entrepreneurs who subscribe to the service. “It’s interesting that what inspired us to create the platform was a young lady, but 51 per cent of our users are male,” Almadoudi notes. Interestingly, some 60 per cent of her client base also opt for the Arabic version of the website, something she claims is a business USP. Work on Deerasa began in April 2014, with Almadoudi using her banking experience (she holds an MBA in Islamic Finance) to create a range of professional templates based on the Harvard/ Stanford style. The result, she says, is a “business plan that has everything the management team and investor needs but is still lean - about 10 pages long, not 100.” Since she couldn’t code herself, Almadoudi invested US$8,000 of savings in outsourcing IT to a team in India. She thought she was making her life easier, but nothing could be further from the truth.

www.smeadvisor.com

Start-up diaries

This case study is about

www.smeadvisor.com

65

Start-up diaries

Bugbears Problems started when Almadoudi asked her test group - colleagues from her corporate finance days - to trial the website. They picked up a number of issues: the platform didn’t save data, PDFs weren’t displaying properly and pages were freezing.

“Basically there were a lot of bugs and it took about 50 minutes to get anything done,” Almadoudi explains.

With the product in such poor shape, she asked her Indian IT team to blast the bugs and fix the problems. But the developers had tied themselves in such a knot that even they couldn’t wriggle out of it. “They used a really complicated approach and the quality of code was terrible. It was like they’d painted a house with too many colours - it made the whole experience really unpleasant,” the entrepreneur laments.

Cutting her loses, Almadoudi fired the Indian team and sought help on the ground in Saudi. She found just one person qualified to help, but after briefly reviewing the platform even he walked away. His diagnosis? The code was fundamentally flawed and beyond repair. This left Almadoudi in the tightest of spots. “For a week I was without any IT support,” she reveals. “It was the longest week of my life!” she jokes, but the weariness in her voice reveals the intense strain she was under. She had to refund two clients their US$200 subscription fee: one later returned, the other did not.

Confounded by code and addled by algorithms, who could Almadoudi turn to next? Giving up hope of finding a regional expert, the businesswoman cast her net further afield and hired an agency in London to totally redo the design. With her baby business in intensive care, Almadoudi decided to increase the support system around it.

She reallocated the entire marketing budget to IT and employed another developer in Eastern Europe. “I hired him via an unconventional talent agency and he works full time on the website. His salary is higher than the

66

Indian team, but quality of work is much better,” she notes.

A bitter pill From her office in Jeddah, Almadoudi has traversed the globe in her quest to crack the code. In the process she has employed nine different people in four separate countries and spent, she estimates, in excess of US$50,000 to fix the website, something that cost her US$8,000 to make. It has been an expensive learning curve. But after the entrepreneur injects a final US$30,000 in the website next month she believes her troubles will be near an end. “I’ve hired a tester to put the product through its paces - he make a list of any bugs he finds and they’re fixed,” the founder explains. Although she admits that about 10 per cent of errors are still slipping through the net, it’s a vast improvement, and one clients are already noticing. “We’re nearly there

now - once the new platform is rolled out I’m confident of reaching my target of 1,500 unique users,” she smiles.

Almadoudi is resilient. In her bid to build a successful e-commerce company it is technology - the main premise of the business - that has blighted her path. The entrepreneur has had more than her fair share of start-up stress, but would she do it differently? It appears not. “If I faced the same issues again I would still outsource the tech team offshore. We don’t have the skills required here in Saudi,” she acknowledges. Crucially, she would do a little more ‘deerasa’ before beginning work. “I would do much more research into the IT team, asking for sample work and checking for recommendations from previous clients.” Hindsight is a wonderful thing, but Almadoudi isn’t the retrospective type. Her sights are set on making a splash next quarter.

www.smeadvisor.com

Start-up diaries

Visit www.deerasa.com Create an account & Sign in

Explore the features

Get started!

Widening the net Deerasa started life as an e-commerce offering, but the founder is keen for her business to have some tangible presence too. “After Ramadan I’m going to hold a one day workshop in Jeddah on writing business plans,” Almadoudi enthuses. By the sounds of it the session will be a bootcamp for eager but uneducated entrepreneurs, covering the basics of financial and operational planning. And there’s more.

She’s keen to launch a sister service covering business valuations. This could be a real game changer, not just for Almadoudi but for KSA too. Considering that SMEs account for 90 per cent of Saudi Arabia’s registered companies, an affordable valuation service for presenting pitches to VCs could be of interest to the majority of the kingdom’s businesses. And what about Almadoudi?

Is she searching for investors for her own SME? Not just yet: “it would mean having less control over the business and its direction - that’s something I want to avoid for now.”

Almadoudi has endured more than other CEOs leading companies ten times the size of Deerasa. Admittedly, much of the burden was self-inflicted by her lack of research. But she has persevered with her problem business when others would have abandoned it by the wayside. The e-commerce market is on the up and set to hit US$13.4 billion in the Arab world by 2020; there’s a good chance Almadoudi will finally see the fruits of her many labours.

From her office in Jeddah, Almadoudi has traversed the globe in her quest to crack the code. www.smeadvisor.com

67

Making a difference

CHANGING THE WORLD…

ONE BENCH AT A TIME

This case study is about

How does a start-up, pioneered by three MIT and Harvard graduates, manage to raise one million dollars in funding from the likes of Atlas Ventures and Cisco Systems? More importantly, how does it launch a prototype that not only attracts serious global attention, but is invited for a demo to the White House by President Barack Obama himself?

In search of these answers, Editor Rushika Bhatia scheduled a sit down with Sandra Richter, Co-Founder of the game-changing start-up Soofa…

As a city-dweller walking through a bustling park of Boston on a Saturday afternoon, you will come across hundreds of benches. For the most part, they serve the purpose of sitting – giving people the chance to relax, soak in some sun or simply chat with one another. But, not all benches are just seats.

Launched in early 2014 by three MIT and Harvard graduates, a Bostonbased technology start-up called

68

Soofa is pioneering the concept of smart benches. These solar-powered benches can charge phones, monitor the environment around them and preserve renewable energy. And, it doesn’t stop there. The bench comes in a range of vibrant colours, which enhance its aesthetic appeal and easily blend in with the city’s natural surroundings.

Moreover, with zero wiring and set-up infrastructure requirements, the bench is extremely easy to install.

www.smeadvisor.com

Making a difference

A solar panel that captures energy Smart Wi-Fi in most benches

Internet sensors to measure critical data within 100 metres Charging nodes where you can plug-in USB cables

Simple installation with 4 bolts on the ground A range of colours that fit into any natural surrounding

www.smeadvisor.com

69

Making a difference

70

www.smeadvisor.com

Making a difference

Soofa’s benches have been installed across 16 states in the US

The inception of Soofa Intrigued by Soofa’s ground-breaking product, we reached out to Sandra Richter, a young MIT graduate, who co-founded Soofa with two friends – one who is a fellow MIT graduate and another who has a Harvard degree under her belt. Speaking to Sandra, it is difficult to not get excited about Soofa – she brings an infectious energy to the table and is extremely passionate about what she does. Looking back to her days at MIT, she remembers, “Being part of a prestigious and hands-on programme at the MIT Media Lab, we would often get invited to large gatherings, events and conferences. Most of these discussions would focus on the future of cities and how smart technology is here to reshape the way we live. While there was a lot being said about smart cities, not much was being done about

www.smeadvisor.com

Soofa was born out of the MIT Media Lab with investment from the E14 Fund and Accomplice Ventures. We were energised by the Media Lab’s ethos Deploy or Die.

it. There were limited applications available and most of them weren’t even using advanced technology i.e. Web 2.0.

It got to a point where it was frustrating and I was sitting there asking myself: what can I do to create something that will help us move a step ahead in the right direction?”

Determined to use her tech expertise to make a change, Sandra partnered with her co-founders and launched a MIT Media Lab spin-off firm called Changing Environments. “When we started out, our vision was simple”, Sandra recalls, “we wanted to get people out of their homes and into a smarter and more sustainable city. Soofa was born out of the MIT Media Lab with investment from the E14 Fund and Accomplice Ventures. We were energised by the Media Lab’s ethos “Deploy or Die”.”

71

Making a difference

Sandra’s meeting with President Barack Obama

Every element within the Soofa bench has been carefully thought out. The charging nodes, for instance, have all been developed using state-of-the-art desktop 3D printers by a fellow MIT start-up called Formlabs.

The first prototype Shortly after the inception of their company, the three partners started working on a prototype that would not only fill a critical gap in the market but would also prove to be a disruptive force in the world of smart city applications.

“We wanted to create a simple, yet very functional solution,” Sandra remarks.

And, that is exactly what they did. When the Soofa bench was finally unveiled, it included the following elements –

ϭϭ Internet sensors: these can measure critical information within 100 metres of the bench such as pedestrian data, pollution, weather changes and much more.

ϭϭ Charging nodes: each bench has two charging portals that enable users to plug-in using USB cables.

ϭϭ Solar panel: this captures solar

energy which is then used to power the bench – essentially working like

72

any other solar panel.

ϭϭ Smart Wi-Fi: every bench can

provide Wi-Fi signals to its users.

Trained by some of the best technology experts in the world, attention to detail is second nature to Sandra.

Every element within the Soofa bench has been carefully thought out. The charging nodes, for instance, have all been developed using state-of-the-art desktop 3D printers by a fellow MIT start-up called Formlabs.

The benches have also made the concept of solar power very accessible to the urban population. “Usually you would find that solar power cells are so removed from us – they are on rooftops or in backyards; totally out of sight. This is the first time that you can actually experience how it works first hand! In fact, a lot of the areas that the benches are placed in attract young crowds, and they are getting educated on the concept of solar power.

www.smeadvisor.com

Making a difference

The smart city integration When exploring Soofa’s website, you will come across a section dedicated to research; something that really stands out here is an outline of “how Soofa is turning cities into R&D Labs”. This begs the question: how does this novel idea fit into the larger scheme of things?

Can Soofa really change the way cities operate? Without hesitation, Sandra explains: “When you think of smart city applications, the first thing that comes to mind is the large investment that it would require out of governmental budgets. The reality, however, is that your smart city initiative doesn’t need to have a million dollar budget. We believe that Soofa is revolutionising that; all you need is four bolts on the ground, and you’re ready to go. The best part is that it’s all solar powered and completely fits into the natural surroundings.

It’s as simple as that! Of course, I’m not suggesting that it doesn’t require investment at all, but it’s a significant step down from what has been used in the past.”

“In addition to the huge savings aspect, the Soofa benches create a city that is completely responsive; the benches can connect with each other.

Moreover, all the data collected such as street level activity or environment information, is shared with the relevant authorities for analysis. Can you imagine how this can facilitate decision making at a macro-level?”

The reality is that the government entities that are working closely with Sandra look at these smart benches as the first phase in a larger project.

The inception of smart furniture opens a doorway of opportunities; it means that other elements with the urban landscape could be converted into automated sources of information and connectivity.

Powering through the challenges Given the nature of Soofa’s offer, government buy-in was extremely important to effectively implement the benches across the city. “We

www.smeadvisor.com

had to adopt a top-down approach because we needed the blessing of senior government officials to move ahead. Looking back at the experience, I wouldn’t say it was a challenge; it just required significant amounts of effort, time and patience. Even though the entire process took about four to five months, in the end we got there. We consider ourselves privileged and lucky that our concept was welcomed with open arms and the procedures were quite straightforward.”

“A major challenge was putting a team together after we had the approvals.

For any product to be a success, the team behind it needs to be extremely passionate and completely aligned to the company’s vision. I’m actually glad that this is something we’ve realised very early on and were able to knock it on its head straightaway. Today, we are very careful about who we hire to be part of the team. I think it is great that we are growing so quickly, but we want to ensure its sustainable growth.”

participating in one of the largest expositions in the world, Soofa has surely come a long way. “This is of course just the beginning for us,” Sandra quickly adds. “We still have a long road ahead and will need to overcome our fair share of obstacles.” But for now what keeps Sandra and her team going is something that Boston Mayor Marty Walsh said during the launch of Soofa: “your cell phone doesn’t just make calls, so why should our benches just be seats?”

Charging ahead The next challenge that lies ahead of Sandra and her team is to make their presence felt on an international level.

“In the USA, we are present across 16 states and are looking to go nationwide soon. Major cities across the globe have taken notice of Soofa and are acknowledging its potential. However, we need to start placing the benches in strategic locations outside the USA. We know that it will take some time to get all the authorities on board, but this is definitely the next step in the natural progression of Soofa.”

A recent visit to Dubai proved to be very beneficial for Sandra, with regards to her ambitious expansion plans for Soofa. “We were approached by large government-led institutions that were seriously interested in partnering with us. This is a major milestone in Soofa’s journey! We are also looking to showcase our offering at the much anticipated Expo 2020.”

From being a local start-up to

2

How it works?

1 Go to Soofa.co

Using a function called the Soofa Atlas, you can map all of the benches across Boston, New York and the other states

3 Each and every Soofa has a name and can be seen using this tool

4 You can now track: The number of people currently using the benches The amount of renewable energy produced The number of people using the benches to charge their phones

73

Organisation & Structure

74

www.smeadvisor.com

Organisation & Structure

LIFTING THE BARRIERS TO E-COMMERCE Omar Soudodi, Managing Director, PayFort, discusses the challenges that currently exist within the e-commerce landscape and recommends solutions that can help local players propel to new heights of success…

1. Failure from 3D secure In the ongoing fight to prevent fraud, credit card companies and banks are working with online retailers to implement 3D secure technologies – namely Verified by Visa and MasterCard Secure Code. 3D Secure offers an extra layer of protection for both cardholders and merchants. It works by requiring customers to enter an additional password after checkout completion to “verify” that they are the cardholder.

Challenge: Even with the extra security benefits, 3D Secure has seen mixed responses from retailers.

Adding an additional step to what is for many already a complicated process means online businesses are being forced to make a tough decision; adopt 3D secure technology and risk abandoned sales or avoid the technology and take responsibility for fraudulent transactions. So how

www.smeadvisor.com

can you determine if it’s right for your business and how can you minimise the impact 3D Secure has on your conversion rate?

Solution: It’s important to remember that your business particular situation will vary according to a unique mix of industry, markets, preferred card types, customer payment preferences, mobile/desktop experience, and many more.

To remain competitive while implementing 3D secure technology we encourage merchants to consider a dynamic approach, which includes the following points. Take the time to customise your strategy: the first and most important step to effectively implementing 3D secure is to customise which transaction types should be routed through the technology. Take some time to think about what transactions pose the

Omar Soudodi

Managing Director, PayFort

highest risk for your business and consider implementing 3D Secure as an extra security layer just for those specific purchases. Make sure you educate your shoppers: As we discussed above, one of the main reasons 3D Secure has a high rate of abandonment is that shoppers are unaware of the process and become concerned it is a security threat. Merchants who work to proactively educate their shoppers about 3D secure and the security benefits it brings are far less likely to experience the drop off. Regularly re-evaluate: As your businesses continues to grow and expand to new markets, you’ll likely need to accept different card types, and roll out new products, what works today may not necessarily be valid tomorrow. This is also true for attempted fraud, as fraudsters constantly change tactics in an attempt to beat the system.

75

Organisation & Structure

2. Credit card penetration Credit card penetration across the MENA region varies wildly between countries. Some countries such as Kuwait have nearly ubiquitous adoption with 97 per cent of the population claiming to have access to a credit card while others, such as Egypt, see credit card penetration levels in the single digits. Other countries across the region see varying levels of adoption; the UAE has card penetration of 89 per cent, KSA and Qatar ~45 per cent, while Lebanon falls towards the lower end with 15 per cent.

Challenge: With all that said, on average the MENA region remains behind many areas of the world of the in terms of credit card usage. As a large percentage of adults across the Middle East still do not utilise a bank account, online retailers in the region are often forced to accept cash payments for online transactions.

This brings a range of challenges for merchants such as: • Unexpected returns – These comes as a loss for merchants when customers change their mind between the time of purchase and the time of delivery.

• Fear of theft – The agents responsible for delivery a required to handle large amounts of cash making them targets for potential thefts.

• Slow payments – COD payments take substantially more time to reach a company’s bank account, particularly if you are using third party services for collection. Though for many businesses, credit card penetration isn’t something that they can address directly, there are opportunities for improving the landscape.

Solution: For businesses, working with banks to encourage a wider range of credit card solutions is a strong first step. It is important that businesses communicate demand and offer their insight into was modern consumer

76

need to access the online market place. Finally, educating consumers on credit card payments and lobbying payment gateways to innovate on their behalf should be a top priority of all ecommerce businesses. In the meantime ecommerce businesses need to work hard to understand what solutions which are preferred locally.

Credit cards may not be popular but e-commerce businesses are already making significant headway in introducing alternative payment solutions to the region.

3. Fraud and risk tolerance As consumers continue to demand simpler solutions and push towards ‘ease of use’, security is becoming a more difficult challenge for big and small businesses alike. Today’s consumers are placing more value on speed and convenience, leading to a

‘convenience culture’ that is driving the cashless revolution. Whether it’s using contactless cards to pay for a coffee, or a one-click purchase on Amazon, quick and easy is winning the war over secure.

Challenge: Unfortunately, as the new convenient technologies become widely accepted, risks to both businesses and consumers grow in parallel. In the case of ecommerce and online payments, the risks have materialised primarily in the form of identity theft and fraud. Fighting fraud and safeguarding transactions remains a minefield, with each payment type bringing its own risks.

Whether the transaction is made using the well-established credit card or more novel technologies like the virtual wallet, security remains a constant concern. What can you do to safe guard your business and how can

www.smeadvisor.com

Organisation & Structure

fraud-related losses.

• Ensure PCI compliance: The Payment Card Industry (PCI) Data Security Standards (DSS) provide standard procedures and tools to help e-commerce businesses protect sensitive account information.

To comply, you will need reliable encryption capabilities for data transmission and if you are storing cardholder information, effective internal controls. Be sure to check the DSS regularly and review your own security measures frequently.

you minimise daily risks of accepting online payments?

Solution: The steps you need to take to safeguard your business will depend on a range of factors including the products you provide, frequency of transactions, and whether you deal in the B2B or B2C space. While you will need to constantly monitor and re-evaluate your risk management procedures to stay safe; implementing the below strategies will give you a strong foundation to build off of.

• Educate and train your staff on e-commerce risk: As we mentioned above, the amount of risk your business faces will depend largely on internal practices as well as the fraud detection and prevention tools you use. It is important that everyone in your organisation understands that online transactions can pose a risk

www.smeadvisor.com

to your business and that they are trained to follow established risk management procedures.

• Focus on risk reduction: A well designed sales order process is an essential tool to help you address a wide range of risk concerns. Make sure you clearly label all required fields in your online payment acceptance form and verify all cardholder information that you receive from your customers over the internet.

• Develop internal fraud prevention structure: For many businesses in e-commerce, the success and profitability of your organisation depends on your internal fraud management strategies. Developing a strong risk management structure, that incorporates transaction controls and fraud prevention tools, will greatly reduce

4. Mobile payment Over the past five years, the proliferation of mobile devices, particularly smartphones and tablets, has transformed the way people interact with the internet. Through streamlined mobile websites and dedicated applications, consumers have more control than ever over how they shop. Now this rapidly growing technology is poised to dramatically change the payment ecosystem, bringing new players such as mobile operators and handset manufacturers into the mix.

Challenge: While mobile payments bring a lot of exciting opportunity for consumers, this fledging payment method is causing mixed responses amongst businesses. Difficult challenges such as perceived security threats, cross platform support, and slow user adoption make it difficult to justify the investment. Unfortunately failure to adopt is not an option and ignoring new payment methods can quickly put companies at a competitive disadvantage. As we’ve seen with many modern technologies, the landscape often shifts rapidly and with little warning. To stay ahead businesses need to be prepared for quick changes and remain aware of how mobile payment technology is evolving.

Solution: Mobility for customers will continue to inspire innovation and create new experiences. To 77

Organisation & Structure

To really impress customers you can send out autoresponses that notify the message has been received and follow up with a personal response at a later time. stay relevant, your business will need to remain flexible and be prepared to support a range of mobile payment models as they enter the market.

Though there is no clear cut solution on how to transition to the world of mobile payments, there are a few things your business can do to be more prepared.

• Stay on top of disruptive changes to payment behaviour that might disturb your existing revenue streams.

• Be prepared to run traditional and mobile payments options in parallel while the technology develops.

• Keep up-to-date on emerging standards for issuing credentials, making payments, and accepting payments as well as the business risks they create.

• Build relationships with new players, including mobile device suppliers, peer-to-peer payment services, wallet providers, loyalty applications, consumer credit scoring agencies, and others.

5. Trust When it comes to making any purchase there are many obstacles that can interfere with the sale.

One of the biggest difficulties many Middle Eastern businesses face still relate to ‘Trust’. At the end of the

78

day if consumers don’t trust you, you’re never going to sell anything, regardless of how good your product is. Making sure your customers have faith in your organisation is paramount if you are going to be successful. Trust is not only important when attracting new customers, but also for building a network of loyal repeat-buyers.

Challenge: Online shopping brings the trust issue to a whole new level. The delay between consumer payment and actually receiving the product, the risk of falsified images and descriptions, or even the potential of an outright scam, leave many consumers wary of the online marketplace. What makes trust such a large issue is that there is no simple way to address it; no magic bullet that will simultaneously make all retailers honest and all consumers comfortable. In many cases it simply takes time and a degree of consumer training to help them feel truly secure while shopping online. With all that said there are a few different techniques that businesses can use to make the overall process better for consumers and help push user through that learning curve of online shopping.

Solution: Achieving trust online is always more difficult than gaining trust in person at a brick and mortar shop, simply because you will not have the opportunity to reassure the person face-to-face. However, there are a few simple techniques you can use to help build trust on your ecommerce site and make your customers feel confident while they shop.

• Invest in usability and design: For the average internet user, it only takes 15 seconds for them to decide whether to stay or leave.

This means your site’s appearance and first impression matters, a lot.

Make sure that your website has a professional look and feel that exudes reliability in every way. Your

site will need attractive visuals, well written and error free content, links that actually work and fast loading times throughout the site. Usability also needs to extend to the sites payment gateway; invest in a robust platform that provides well known payment methods and thoroughly tested security.

• Deliver great customer service: Aside from responding to every email, social question and general inquiry you receive, if you want to ensure customer trust you need to make sure these responses satisfy the customer. An effective way to get started is to create a simple and easy to locate web form where users can ask questions.

Route these questions to a central support mailbox and filter based on question type. To really impress customers you can send out autoresponses that notify the message has been received and follow up with a personal response at a later time. Finally if you really want to develop a lasting customer relationship and improve trust, you’ll need to be prepared to extend you customer service needs to beyond the final sale. Services such as free returns and warranty support help to show customers that you believe in the products and services you provide, and you are willing to put down your own money to prove it.

• Be up front about pricing: Each day thousands of transactions are lost due to abandoned shopping carts.

With such a huge problem at hand you may be wondering what leads customers to desert their shopping experience. The answer is hidden costs. If you really want to gain trust be sure to disclose full costs as soon as possible in the shopping process. If you try to hide costs such as shipping and reveal them at the last moment, the customer will feel deceived and will be far less likely to continue with your business.

www.smeadvisor.com

COMPLEXITY

© 2015 SAP SE or an SAP affiliate company. All rights reserved.

TURNS LOYAL CUSTOMERS INTO FORMER CUSTOMERS.

SIMPLE

KEEPS THEM COMING.

It’s not about how much consumer data you have. It’s about how simple it is to put it to work for your customers. SAP helps bring together insights into every customer, and lets you engage them in the exact time, place and channel that’s right for them. So your customers feel cared for, respected and, most of all, delighted. That’s running simple.

Find out more at sap.com/runsimple

Organisation & Structure

Blockchain–

exploring the different facets and legal implications The financial and technological industries are coming together to explore the possibilities in blockchain, or distributed ledgers, the technology underlying the digital currency bitcoin. Blockchain offers the potential to become an essential component of the infrastructure for the Internet of Things. Experts at Clyde & Co. explore some of the opportunities and challenges.

80

www.smeadvisor.com

Organisation & Structure

www.smeadvisor.com

81

Organisation & Structure

A blockchain is simply a database or ledger. Given its broad meaning, it can be a database of virtually any recordable information (for instance, the transfer of bitcoins).

What is blockchain?

A blockchain is simply a database or ledger. Given its broad meaning, it can be a database of virtually any recordable information (for instance, the transfer of bitcoins). Simply, blockchains store data in “blocks”, and “chain” them together to form a cohesive, unbroken record of that information.

The joint operation of two features in particular makes blockchain revolutionary. First, identical copies of the particular blockchain (or ledger) are stored on and accessed from many computers around the world - sometimes in the thousands or more. Any attempted addition or change to the information is authenticated by the entire network of servers, and any validated change to one ledger automatically updates the others. Second, together with this decentralised ledger system, the cryptographic technology that validates information stored and edited on the blockchain is said to make information kept on it extremely difficult to attack or corrupt.

Smart contracts and decentralised 82

autonomous organisations Arising out of the blockchain phenomenon are two further concepts: • So called smart contracts are coded instructions which execute on the occurrence of an event.

These often use blockchain technology to record and execute transactions. While their common name is arguably a misnomer (they are not necessarily contracts in the traditional legal sense), their implementation can enable, for example, insurance monies to be transferred virtually immediately on the occurrence of a verified insured event (such as a delayed plane) • Decentralised autonomous organisations (DAOs) are entities which operate through the implementation of pre-coded rules. DAOs operate using smart contracts, and maintain their business records on a blockchain.

Theoretically, once it is created and programmed, human input into its operation should be close to zero Why should blockchain interest you?

While these are early days for the wider-use of distributed ledger technology, predictions are that it will revolutionise everything from the operation of the finance industry to the trade of precious gems. Such technology could permeate through and across industries and be used for: • Identity verification • Near-instant money transfer • Recording of all kinds of property ownership (including real estate) • Transaction certification • Automation of contract performance • Verifying authenticity and origins of valuable items such as diamonds and rare musical instruments • Secure voting of all kinds, including for national politics

Tackling the challenges Much attention has been paid to the challenges posed to the adoption of blockchain and associated technologies within the existing regulatory framework. These are important considerations certainly, but a creative approach to the fundamental nature and status of the organisms and platforms created by blockchain, DAOs and smart contracts is warranted. Once these have been determined, the detail of the regulatory position will follow. We outline some of the challenges below: Legal issues The use of blockchain, DAOs and smart contracts raises significant legal questions, the answers to which cannot be determined with certainty in the abstract. As the technologies become more widely used, legislators, regulators and courts will have to turn their minds to these issues and provide a proper legal framework within which blockchain can be utilised. Some key legal issues are: • Jurisdictional and applicable law issues - where servers are decentralised and can be spread around the world, pinpointing where a breach or failure occurred (and taking the appropriate crossborder action) may be complex • The legal status of DAOs as entities – where the entity is essentially self-governing software engaging in or facilitating commerce, what legal status will attach to DAOs? Are they simple corporations or something else?

• What, if any, is the liability of DAOs and their creators? Who or what is claimed against in the case of a legal dispute?

• The legal enforceability of smart contracts – we consider the wholesale adoption of the phrase to be unhelpful, as the term ‘contract’ invites the traditional associated concepts such as

www.smeadvisor.com

Organisation & Structure

offer and acceptance, certainty and consideration, which are unlikely to be relevant to many coded programs For some, such questions miss the point of the technology – rather, DAOs are seen as operating so as to render traditional concepts of ownership and liability redundant.

However, we consider that this perhaps more utopian view ignores the reality that coding may suffer from errors, or hosting platforms may fail. It also fails to consider the impacts of fraud at any point in the DAOs creation or operation. Courts and regulators across the world are unlikely to allow the wholesale adoption of technology which bypasses established oversight.

There are a number of possible ways to approach the appropriate structure, dependent on the nature of the transaction.

The easiest solution may be to agree a wrap-around contractual agreement in contractual terms – perhaps a Master Supply Agreement for example – incorporated as the prevailing terms for the linked DAO. Alternatively, a split-contract could be used which incorporates elements of both a codified program and more traditional contracts, thus linking the agreement (established pattern) and the execution (non-established pattern).

In respect of the status of the platform for the DAO itself, the most straightforward option would appear to be for contracting entities to simply adopt a free-to-use platform with an agreed code. Seeking to apply a traditional view, is the DAO itself so very different from a road network used to transport goods?

That network does not form part of the contract itself, but it is an implied necessity.

This of course raises questions as to the recourse in the event of technical problems and wider framework.

For those wishing to enter into a more determined, traditional

www.smeadvisor.com

A beginner’s guide to Blockchain Here are key terms to help you get started: • Bitcoin – a finite digital currency created and held in purely electronic form. As with most modern currencies, it has a fluctuating exchange rate • Blockchain – in a narrow sense, the database of every bitcoin transaction ever made. More loosely, the term is used to describe the style of database, which sees information stored in a series of “blocks” and “chained” together. Copies of the database, or ‘ledger’ are stored on a number of servers in a decentralised fashion • Decentralised Autonomous Organisation or DAO (also known as decentralised autonomous corporations) – a digital entity which, once pre-coded to function in a certain way, operates with minimal or no human input • Disintermediation – the process of reducing the use of or need for intermediaries. In this context, refers to the reduced need for trusted third party intermediaries to validate and facilitate transactions, especially in the finance industry • Distributed ledger technology – see “blockchain” above.

The broader use of the term blockchain. Blockchain is one example of distributed ledger technology, although the terms are often used interchangeably • Internet of Things – refers to the increased connectivity, or the networking of previously unconnected items embedded with technology to open communication streams between them. For example, a smart phone “talking” to a home air-conditioner and, based on the phone’s location, instructing it to begin heating a house for the owner’s arrival • Smart contract – coded instructions which execute on the occurrence of an unequivocal event. The common example of a “primitive” smart contract is the simple vending machine. On the insertion of sufficient funds, the machine will release the requested item. Questionable whether these are truly contracts or not.

83

Organisation & Structure

framework one option may be a freestanding Protected Cell Company (see box to right) type structure which is responsible for the maintenance of the DAO and for fulfilling the relevant legal obligations. The content and purpose of those DAOs would be the subject of wider agreement but the DAOs themselves could operate as self-policing and operating units.

The combination of these types of structure – separating the blockchain infrastructure from the contractual agreement leaves the DAOs or smart contracts as essentially execution methods. Again, therefore, to adopt a traditional concept, the smart contract is akin to a Letter of Credit.

While uncertainty remains, the courts will seek to give effect to some kind of oversight and legally recognised status to DAOs and distributed ledgers. Continuing the road analogy, whilst we now take for granted public ownership of the road network this has grown out of a network of privately funded and managed roads dating back to turnpikes on key routes.

At this stage, however, flexibility remains and we consider that, certainly, in England, with its long tradition of the common law adapting to technological changes, an opportunity exists for those willing 84

to furrow new ground and to take a creative approach.

Regulation From the rise of e-commerce in the ‘90s to the current debates around how the world will adapt to driverless cars, the adoption of new technology gives rise to complicated regulatory issues. As already mentioned, legislatures will have to consider what legal status to grant to DAOs. Further, the potential for anonymity on some distributed ledgers may complicate anti-money laundering compliance and taxation regulation, while consumer protection laws will need to be revised just as they were to accommodate the rise of e-commerce.

Other issues Other challenges to the wider adoption of these technologies include: 1. Mistrust of bitcoin related technology due to dark-web and criminal connotations 2. Questionable capability for smart contracts to accurately execute complex instructions 3. Fear of disruptive potential can often lead to adoption resistance 4. Privacy and data-security on public blockchains 5. Software compatibility issues

Further information If you would like further information on any issue raised in this update please contact: Lee Bacon Partner,Clyde & Co E: lee.bacon@clydeco.com T: +44 (0)20 7876 4410 Nigel Brook Partner, Clyde & Co E: nigel.brook@clydeco.com T: +44 (0)20 7876 4414 James Contos Associate, Clyde & Co E: james.contos@clydeco.com T: +44 (0)20 7876 4859 Clyde & Co LLP PO Box 7001 Level 15, Rolex Tower Sheikh Zayed Road Dubai, United Arab Emirates T: +971 4 384 4000 F: +971 4 384 4004 Clyde & Co accepts no responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this summary. www.clydeco.com

www.smeadvisor.com

Organisation & Structure

86

www.smeadvisor.com

Organisation & Structure

SHAPING CUSTOMER EXPERIENCES OF THE FUTURE The rising importance of the mobile device as the lynchpin in the omni-channel purchase journey begs the question: where should marketing funds be spent in 2016 and beyond? Mobile is in the centre of almost everything, but what is game-changing and what is a hype? SME Advisor turned to Dirk Henke, Managing Director Emerging Markets at Criteo, to analyse the trends and outline their implications‌

www.smeadvisor.com

87

Organisation & Structure

To get an answer to these questions, Criteo undertook partnership reports with WBR to define what is hot in 2016, and with Ovum for a long-term view into the year 2026. Below are some of the key findings: Mobile will be the glue between all commerce and digital marketing initiatives Best-in-class mobile capabilities help retail brands serve numerous critical goals throughout the customer lifecycle. Perhaps the starkest example of mobile’s value to retail brands can be seen in the rise in sales from mobile browsers and apps.

Retail revenue from mobile devices has been climbing rapidly. In the Middle East alone, almost four out of 10 e-commerce purchases happen via a smartphone or tablet, according to Criteo’s State of Mobile Commerce Report. Forrester Research forecasts that mobile-based sales will make 88

up 49 per cent of all e-commerce revenue by 2020 (US Mobile Commerce Forecast, 2015 to 2020, Forrester Research).

The value of mobile devices is much larger than direct revenue generation, as imperative as that is. Customers are no longer following a singular path to purchase, but rather have become part of a ubiquitous shopping ecosystem.

We need to talk about a shopping pretzel today, as linear paths don’t longer exist. Mobile apps can help counteract this phenomenon through in-app retargeting, push notifications, and opt-ins that can be used to improve loyalty. They are also a rich source of information on customer behaviour and shopping patterns. However, many brands have not executed these tactics yet, leaving plenty of room for improved customer loyalty. Mobile is also a vital component for effective omni-channel commerce.

Blurring boundaries between physical and digital While mobile is disrupting retail tremendously, it won’t be fully replacing other shopping channels.

Buying will become more complex, and emerging technologies like M2M and IoT will alter the path to purchase. This non-linear pathto-purchase continues to include physical stores as well. They won’t cease to exist, but in-store shopping will change by becoming a form of entertainment. Stores will become more interactive and deliver a great experience to consumers, for example by integrating ‘Augmented Reality’.

Offline sales can already be pushed through digital commerce, as consumers are more likely to buy a product or service when they have a better understanding of a brand’s offering through their digital channels.

The popular interpretation that consumers using their smartphone

www.smeadvisor.com

Organisation & Structure

As screen sizes increase on iPhone and Android devices, transactions stemming from smartphones every quarter will continue to rise.

in-store are simply show-rooming and browsing to see if the same product is available somewhere else cheaper, is not always true. More and more consumers are web-rooming; they visit product test pages to get more info and are often also on the website of the retailer they are physically visiting.

Further proof that in-store will remain important: existing pure-play online retailers will continue to develop physical presences, mainly to enhance fulfilment and customer service for multi-brand sellers. For most, this will take the form of partnerships along the lines that are emerging today, such as the ‘click and collect’ models adopted

by UK retailers. The UK today is the most advanced market for ‘click and collect’ models, examples of which include ASOS and Boots. Online retailers are also establishing a physical presence to support the showcasing of brand and private-label products. It can also help them to provide the shopping

www.smeadvisor.com

experiences that many consumers crave.

The already blurred lines between physical-heritage retailers and Internet-heritage retailers will have been eradicated by 2026, according to Ovum. The former will continue to reduce the amount of physical space they hold, switching their investment emphases online, while the latter will invest further in establishing physical presences to support the showcasing of brand and private-label products.

While the large pure-play Internet retail brands will survive, the term pure-play will be rendered obsolete.

Customer experiences and engagement in the digital world The majority of mobile transactions come from smartphones, not tablets.

As screen sizes increase on iPhone and Android devices, transactions stemming from smartphones every quarter will continue to rise. Whether

consumers are travelling for work or pleasure, are in between meetings, or killing time, smartphones are a part of their everyday life. Marketers must know how to optimise their mobile sites and apps, identify consumers as they move from device to device, and leverage smartphones as the premier channel for conversions.

To increase mobile sales or drive consumers to physical retail locations with geo-targeting and discounts, look to smartphones. Identifying opportunities that mobile devices hold and optimising mobile strategies to align with increasing mobile adoption will drastically improve ROI. In order to emulate the visual and interactive components of in-person shopping, retailers rely on mediarich, interactive features. While these features may improve the digital shopping experience, they can also increase page load times and deeply frustrate users. Media-rich

89

Organisation & Structure

Mobile is the glue that holds marketing, commercial, and engagement opportunities together in one place.

93%

agree that a fast user experience is the most important element of websites

Dirk Henke Managing Director, Criteo

90

product displays are important, but so is site performance. Respondents of the WBR research understand this, with 93 per cent agreeing that a fast user experience is the single most important element of Internet sites and applications, even trumping security.

Although retailers have a wide range of technology needs, they are prioritising personalisation and omni-channel capabilities in 2016.

When it comes to omni-channel, retailers are looking to do more than simply increase the number of revenue-generating channels they have available; they want to strengthen the ties between those channels in order to create connected, overlapping experiences in which each channel influences purchasing decisions everywhere else.

Non-linear purchase funnels require reliable cross-device tracking Mobile is the glue that holds marketing, commercial, and engagement opportunities together in one place. However, mobile does more than engage and convert: it enables retailers to learn more about the omni-channel customer experience. Brands must use mobile as a full-funnel marketing tool and create attribution models that accurately demonstrate its value.

Above all, these mobile offerings must be user-centric, giving consumers seamless access to the information they want, when and where they want it.

Our advice to retailers is to not only view mobile as a conversion channel, despite its growing importance in e-commerce. Many customers are simply using their mobile devices as part of the journey to purchase in-store. For example, a customer’s mobile journey could include checking his or her local store inventory before heading to the store or comparing product reviews for two similar products while in the aisle. What’s

more important is distinguishing what portion of the lower mobile conversion can be attributed to in-store conversion (and thus isn’t a negative outcome) and what portion is really the opportunity to improve one’s mobile experience.

According to WBR, most retailers are able to track sales across devices and platforms (55 per cent), although two-thirds still struggle to identify multiple customer touches across devices (68 per cent). Way to go for the industry.

Key takeaways Refrain from getting distracted by hype topics. Instead, focus on how consumer behaviour is changing and how new technologies can help your brand to continue delivering what people expect. For example, everyone is currently talking about drones which are supposed to revolutionise delivery as we know today. However, the security and organisational problems around drones are too complex to make drones a mass phenomenon. The real story behind it is: Drones won’t be replacing delivery systems we have today, but we will see new fulfilment models. Ondemand delivery and click & collect locker pickups and other formats that deliver goods quickly to consumers will come up because this is what consumers expect. The biggest need in meeting consumer expectations today revolves around mobile: a solid mobile experience, a transactionoriented mobile app, optimised mobile web offerings, user tracking across devices, browsers and apps, and valuable online content about a brand’s products and services in order to meet in-store consumer’s demand as well. In the end, it’s all about consumer experience.

www.smeadvisor.com

The Big Debate

Looking to the future: Delivery drones Whether we like it or not, drones are here to stay. A recent study by the Association for Unmanned Vehicle Systems International (AUVSI) predicted that the drone industry is set to have a US$ 100 billion economic impact. This means that drones are soon going to be integrated across key industry verticals and present a massive opportunity to businesses – especially e-commerce companies. But before you decide to jump onto the bandwagon, it’s worth exploring the following pros and cons‌

92

www.smeadvisor.com

The Big Debate

www.smeadvisor.com

93

The Big Debate

Better for the environment: using battery-powered drones to slowly replace conventional modes of transport can help significantly reduce fuel consumption and large emissions.

Establish your position as a market leader: any company that succeeds in implementing drone delivery will be seen as the innovator in the industry and will prove to be a disruptive market force. This is particularly true for companies operating within traditional industry sectors such transportation, oil & gas and telecommunications, where the potential for drones is massive and any inroads made in this regard will be revolutionary.

Cost effective: not only are drones energy-efficient, they are also cost-effective. Although the initial investment might be steep, the long-term savings are substantial.

In fact, RobotEnomics’s Colin Lewis suggested that drones could help Amazon bring their cost down to US$2/shipment – in comparison to the current US$2-US$8 price range.

Speedy and more accurate delivery: when Amazon announced its plans to invest in drones, they suggested that they would be able to drop packages off to customers in 30 minutes or less. If this is truly achievable, it could transform the world of delivery! The same study on robotenomics.com highlights that Amazon’s one Prime Air drone could potentially make 30 deliveries in a 15 hour window (at maximum efficiency levels).

New job opportunities: this is definitely a double-edged sword – and hence it is something that goes across both sides of the argument. While using drones eliminates several layers of jobs such as delivery personnel, truck drivers 94

and so on, it also creates a wide range of opportunities such as monitors, controllers and security personnel.

Gain a competitive advantage: many critics have argued that Amazon’s announcement on drone delivery was a smart way to intimidate competition and give them something serious to think about. The number of companies that are already offering same-day delivery has sky rocketed in the last couple of years, so to secure a competitive advantage, companies will need to think out of the box, and that’s exactly what Amazon is doing.

Lack of privacy and serious security concerns: it is very likely that delivery drones will employ GPS tracking technology to be able to locate and deliver products accurately. In fact, it might be the case that they go a step further and use cameras to navigate through their surroundings. If video is not an option, there will need to be other identification mechanisms (such as biometric scanning or pin codes) to ensure delivery to the correct person. The question then arises: how does all this confidential information get stored and used?

Companies will have to implement stringent laws to protect the privacy of their customers.

Global aviation laws: several countries around the world such as Australia, France, Canada and Germany have legal permits to allow the use of commercial drones. However, across the rest of the world, there is no legislation that safeguards the interests of customers, suppliers and other stakeholders. Moreover, as drones gain popularity, there is a requirement for a universal law that can govern airspaces these drones operate in, and ensure that they aren’t being intrusive. The possibility of realising the full potential of drone technology will largely depend on how quickly these regulations are put infw place.

Injuries, mishaps and technical difficulties: federal authorities in many countries require formal training before the operation of drones can be permitted.

And, rightly so. Several experiments in the field have proven that there is a high possibility of errors, which could lead to damages or severe injuries.

Wind is another factor to consider.

Loss of employment: it is obvious why using drones has the potential to put hundreds of people out of jobs. While we argue that it will also generate new jobs, many of these will require skilled labour – this could be a huge setback for many countries.

www.smeadvisor.com

AFRICA

ASIA

EUROPE

L AT I N A M E R I C A

MIDDLE EAST

NORTH AMERICA

Elevating Luxury to New Heights.

Comprising two iconic towers, the JW Marriott Marquis Dubai stands elevated above Dubai’s Business Bay on Sheikh Zayed Road, in the heart of one of the most desirable locations in the city.

Enter an exceptional destination providing a spectrum of facilities for the most discerning travellers from diverse restaurants and lounges to exclusive meeting spaces.

1,608 LUXURIOUS GUEST ROOMS AND SUITES 14 AWARD-WINNING RESTAURANTS AND BARS SARAY SPA FEATURING TRADITIONAL HAMMAMS AND STATE-OF-THE-ART HEALTH CLUB OVER 8,000 SQM OF SPECTACULAR INDOOR AND OUTDOOR EVENT SPACE 2 CUTTING-EDGE AUDIOVISUAL EQUIPPED BALLROOMS 32 MODERN MULTI-USE MEETING ROOMS

For more information, contact the Event Booking Center on +971 4 414 2000 or visit jwmarriottmarquisdubai.com

Sheikh Zayed Road, Business Bay, PO Box 121000, Dubai, UAE | T +971 4 414 0000, F +971 4 414 0001 | jwmarriottmarquisdubai.com JW Marriott Marquis Dubai | @JWDubaiMarquis | JWMarriottMarquisDubai

Multi-currency Facility SME, MNC and Non-Resident Businesses POS Transaction Accounts Minimum Balance requirements

NBAD Business Account Solutions.

Multiple benefits from a range of business accounts www.nbad.com NBAD Commercial Banking offers a wide range of business accounts with multiple benefits, to help your business move ahead.

• Available for SMEs, Multinationals and Non-resident businesses • Range of business accounts with multiple benefits to choose from • Option of multi-currency deposits • Tenures from 1 week to 10 years with fixed interest rates • Low minimum balance SMS ‘Account’ to 2050, or email: CommBankingSales@nbad.com 800 2211 www.nbad.com Subject to bank approval. Terms and conditions apply.