The rise of the ‘M-factor’

With shopping trolleys in one hand and a smartphone in the other, the mobile phone has evolved from a simple texting and talking device into a constant companion for shoppers, having an ability to influence people along every step of their consumer journey. Shopping via mobile devices, personal computers, tablets and connected devices is now a part of the everyday lives of consumers globally. 

Estimates show that global retail e-commerce sales will be $3.563 trillion in 2019, commanding 13.7 percent of total retail sales, an increase of 21.5 percent over 2018, excluding travel, according to a report by Dubai Economy and Visa Middle East.

High digital and social penetration has meant that GCC consumers have jumped straight to mobile commerce or m-commerce, and are now operating across digital platforms with ease. Even excluding the crucial B2B and C2C e-commerce, food delivery, travel, entertainment, services, and automobiles categories, MENA e-commerce is forecast to reach $28.5 billion by 2019. 

With an annual growth rate of 25 percent, MENA is the fastest growing region in the world for e-commerce. UAE and Kingdom of Saudi Arabia are emerging to be key players — UAE’s e-commerce sales are projected to hit $16 billion in 2019, followed by KSA, where eCommerce sales are projected to reach $7.7 billion, according to the report.

In today’s multi-device world, people are discovering on one device, researching on another and converting on a third. But it’s not only about the mobile experience for these shoppers; it’s about having a seamless experience across a variety of channels on the path to purchase.

Mobile and internet serve as an inspiration for buying, but contrary to the popular perception that online mobile shopping is bringing an end to the physical shopping experience, it is in fact becoming a bigger complement to brick-and-mortar stores. 

For instance, in beauty, it’s well known that people may try products in stores but buy on their phones. It’s also true the other way around — mobile can be a gateway for brands to lead customers to in-store experiences. Even among mobile-first shoppers, the in-store experience may still be a motivator. 

Mobile-first shoppers say they care about store pick-ups more than surveyed global shoppers, and they are also more likely than global shoppers to make a purchase on their phones while in the store, according to a Facebook 2016 Holiday Study commissioned in the US. 

With more than 5 million businesses actively using the WhatsApp Business app each month, the rise of the ‘M-factor’ (mobile factor) is changing the path to purchase and presenting brands with a chance to act —  to be bolder, move faster, be adaptive and build a future-ready business.

While the digital opportunity alone is tremendous, the way digital and physical environments are intersecting and amplify each other is also promising. Digital technology and easy access to digital information not only affects sales within digital channels, but also impacts in-store sales.

While 90 percent of retail still happens in physical stores, “digitally influenced” retail (eCom + store purchases with a digital touchpoint) may already account for more than 58 percent of total sales in the US and 45 percent in EMEA, according to Forrester (2017 estimates). 

According to Instagram research, 80 percent of Instagrammers follow a business and 130 million Instagram accounts tap on a shopping post to learn more about products every month.

Max Fashion, the Middle East’s leading fashion retailer found that Facebook ads using store sales optimization was more effective than its typical campaigns, increasing sales by 5.9 percent in UAE and 8.3 percent in Saudi Arabia. 

To make a meaningful comparison of results between store sales optimization and reach campaigns, Max Fashion worked with Facebook’s measurement team to identify a testing method to show whether store sales optimization could improve the impact of its existing campaigns. The test ran during Max Fashion’s “End of Spring Sale” campaign.

The rise of the ‘M-factor’ (mobile factor) is changing the path to purchase and presenting brands with a chance to act —  to be bolder, move faster, be adaptive and build a future-ready business.

Shant Oknayan

According to Bala Subramaniam, head of Omni-Channel and Customer Experience, Max Fashion, Facebook helped them measure the impact of marketing with great degree of accuracy and with ease. “Store sales optimization is a logical next step in the right direction and is definitely something we expect to become a part of our campaign strategy,” he said.

Enhancing mobile adverts to drive in-app sales as we shift to a more visual language on mobile —  one that is made up of photos, emojis, stickers and video —  brands are now rethinking how they present product details in a visually impactful way that’s clear yet small-screen friendly. 

These brands are also focusing on eliminating the barriers that stop people from buying on mobile, like by making it easy to enter payment information and offering multiple shipping options. Brands are also using local cultural moments to test the effectiveness of ads.

For instance, Carrefour Middle East, the local franchisee of the French retailer measured significant boosts to brand awareness and online sales after running Facebook and Instagram ads during Ramadan in United Arab Emirates and Saudi Arabia. 

Between May 5–June 5, 2019, their Ramadan-themed advertisements that consisted of videos focused on making recipes using Carrefour groceries, helped them achieve 45 percent increase in app installs in Saudi Arabia and 6.2 percent increase in app installs in the UAE.

Launched with the support of Facebook Client Measurement team, the ads featured photos and videos and were delivered by automatic placements across Facebook and Instagram for maximum impact at the lowest cost. 

This led to a 15 percent increase in app and web purchases in KSA and 5.4 percent increase in app and web purchases in UAE, helping Carrefour raise awareness during the countries’ most sensitive and important time of the year — Ramadan. “The uplift on both performance and brand key performance indicators was significant, and the results gave us valuable insights on the development of our media strategy,” said Sonja Abdo, VP Digital Marketing, Majid Al Futtaim Retail.

As integrated online/offline shopping becomes the new normal, it is important for retailers to understand the intersection of physical and digital and how it continues to evolve into an intimate relationship — ultimately, it’s about making the experience physically or digitally more richer, more dimensional experience for consumers.

Viewing the path to purchase through separate channels — mobile versus desktop versus offline — does not reflect the way the world is changing. The rise in m-commerce presents brands with a chance to rewrite the rules of success by adapting to change and building a future-ready business.

• Shant Oknayan is regional group commercial director at Facebook.