February 14, 2024
February 14, 2024

Retail Innovation vs. Customer Expectations: Who is Falling Behind?

The innovation surge in Saudi Arabia presents vast opportunities for retailers, yet many lag in embracing change. As consumers rapidly adopt tech-driven shopping experiences, many retailers aren’t moving as fast. Our whitepaper written in collaboration with Kearney, aims to tackle this gap by offering a forward-looking guide for navigating the evolving innovation landscape in the Kingdom.

The Innovation Gap

The pace of innovation in Saudi Arabia presents a significant opportunity for retailers, yet many are lagging behind in prioritizing innovation. Despite the Kingdom's commitment to digital transformation, less than 30% of consumers perceive the retail sector as technologically advanced. However, with a 97% smartphone penetration rate and consumers engaging in over 5 hours of daily mobile use, there is clear potential for growth, particularly in e-commerce which is projected to grow globally by 8% over the next five years.

Perception of the most technologically advanced sectors

Interviews with retail leaders in KSA highlight the differences in digital maturity across categories and brands. While lifestyle brands are relatively advanced in digitization compared to other retailers, local consumer packaged goods (CPG) players still lag behind.

Stages of excellence across key dimensions

Recognizing Barriers to Innovation

Common barriers to innovation include underinvestment, limited C-Suite focus, reliance on traditional media, and resistance to value chain digitization. Retailers recognize the need for better digital strategies to understand consumer needs and optimize customer journeys. However, these strategies are often compartmentalized and not connected across organizations, which hinders building a truly omnichannel experience for shoppers. Recommendations for accelerating innovation include focusing on both front-facing and back-end areas of the business. Within these areas, there are five key pillars that should be prioritized: advertising, branding, eCommerce, in-store experience, and supply chain management.

A Guide for Navigating the Digital Landscape

Snap Inc. and Kearney partnered to produce a forward-looking guide for navigating the evolving digital landscape in the Kingdom. Download the whitepaper for strategic and tactical recommendations applicable to retailers at different levels of digital maturity.