With advancing competition, evolving technology, and digitization, attaining customer satisfaction while maintaining the time frame of deliveries is no easy feat. Ordering food online is an on-the-go task both for Gen Z and millennials. In Saudi Arabia, serving customers across all the accessible channels was tricky, even for established brands. When GenZ contributes to more than 30% of the global population, it’s no mystery why the popularity of Quick Service Restaurant (QSR) brands is growing.
Leader in Saudi Arabia’s fast food chain, with more than 300 stores across the Kingdom, bakery & gourmet manufacturer for nearly four decades now! Besides that, it also stands out as Kingdom’s first fully-integrated food service company with its bakery chains & meat processing plants. Though this fast food brand has been serving customers flawlessly with its wide range of delicious food items in-store for years, it faced tough times delivering the same online experience. This blog will take you on the phygital transformation journey of Saudi’s renowned fast food chain to meet customer preferences in this digital era.
Building an Omnipresent Fast Food Chain
Saudi Arabia is the leading GCC QSR market with a 43.8% market share. When the scorching heat of Saudi keeps consumers indoors, their strong urge for gourmet food pushes them to visit fast food serving restaurants. Even a decade ago, people in Saudi adored the online food ordering system. In fact, 2022’s Middle East PRIME Report unfolds various reasons for low footfall in the Post-COVID era & highlights an urgent need for QSRs to go online when adapting to the ‘new normal.’ The Full-Service Restaurants (FSRs) were the largest channel in Saudi Arabia’s food service sector, with a 45% revenue share of total sector revenue in 2020. With 28.5% of revenue share, QSR was the second most prominent channel.
With an enthralling journey of over 37 years, the brand has been a world-class food brand people adored in Saudi Arabia. They had a significant offline presence throughout their journey. They knew digitalization would help them serve more customers & the brand eventually went digital with an e-commerce website. But, ensuring smooth ordering experiences, timely deliveries & management of in-store & online orders were proving to be challenging. Moreover, they were struggling with their food delivery app experience, running the risk of losing a large chunk of mobile users. When restaurants were forced to shut down during the COVID-19 pandemic, it was ironic that they witnessed a significant increase in the number of orders across digital platforms. And that made the brand think of undertaking a digital transformation exercise that would:
- Strengthen their digital infrastructure
- Enable an omnichannel approach
- Provide a seamless customer experience
Reimagining Digital Experiences
At a time like this, deploying Capillary’s Anywhere Commerce+ to revamp their digital commerce infrastructure, drive performance & conversions, and ultimately reimagine their consumers’ digital experience was the need of the hour. The brand’s requirements included providing a super fast app experience to consumers, seamless experience across offline & online customer journeys, tight integration with loyalty and e-commerce platforms enabling a 360-degree view of the customer, and a superlative pre and post-sales experience.
That’s precisely where Capillary’s Anywhere Commerce+, CRM & loyalty platforms, leveraging Web storefront, Mobile PWA, and iOS App powered the brand’s iconic digital transformation. Seamless Menu and POS integration, roll-out of promotions, coupons and loyalty points across offline stores and e-commerce, and flexible ordering & delivery options helped the brand serve and engage more customers while delivering a true omnichannel experience. Deploying Anywhere Commerce+ simplified this complicated implementation of multiple tech solutions for the brand. Some of them include:
- Omnichannel order system: They had an e-commerce website and mobile app for both Android & iOS users for seamless ordering. Consumers can select the stores in their vicinity & choose from the entire menu available online in just a few seconds.
- Flexibility to choose the delivery option: Deliveries for the brands’ consumers are solely at their discretion. They can order online & get it quickly delivered at their location or drive through and pick it up from the nearest stores.
- Boosting in-store experience: Implementation of QR scan ordering simplified customers’ in-store experiences. Instant digital pay options simplified billing & minimized the hassles of ordering, especially during the peak season of Ramadan or weekends.
- Rewarding customer behaviors: The system was installed not only to collect customer orders but to increase customer engagement as well. This was enhanced by creating personalized promotions to convert first-time shoppers to the brand’s regular customers. The promo engine manages promotion configurations across all outlets and e-commerce stores seamlessly. It adds to customer engagement & improves customer loyalty.
Further, Deepen Customer Engagement with Festive Campaigns
One of the most popular initiatives in the Middle East region is the Ramadan campaign. When people globally long for festive discounts & shop more on holidays, the Middle East is no exception. A recent survey by a leading global payment solutions provider says nearly 30% of Saudi & UAE consumers purchase either daily or weekly online. In Ramadan 2022, 55% of respondents from the MENA (the Middle East & North Africa) region planned to shop/order food for gathering in the month.
Customer preferences do change within seconds when they shop online. In such situations, static cart-level discounts may not serve the purpose well. In contrast, dynamic offers can bring better ROI by focusing on up-selling, cross-selling, and instant discounts for abandoned carts to increase the conversion rate. People get enticed with personalized vouchers more than mere discount coupons. Deploying a Dynamic Voucher System (DVS) powers marketers to send personalized vouchers to their customers in real-time. With personalized, targeted offers, we’ve helped leading brands in the QSR sector to assure instant customer gratification for repeat visits & optimize their marketing budget. The brand has seen 5 – 10% higher conversion rates with DVS in sync with Capillary’s AI-powered promo engine. Moreover, Order Management System (OMS) and console helped the brand in both order & promotion management, especially during festivities.
And, an Appetizing Growth Story Continues…
Creating a seamless experience across offline stores & online channels, the brand witnessed an 1150% increase in average sales since the partnership in October 2021. Brands’ fans can check menus across channels, order online or opt to dine in, get deliveries per their preferences, opt for the best promo offers, & earn loyalty as well. Moreover, order cancellation, instant refund automation, and OMS let everything be managed centrally. The omnipresent leading QSR brand is now serving 25,000 orders daily on average, an approximately 25X increase in daily orders. On the weekends & festive occasions, the brand happily serves over 40,000 customers in a day with zero technical challenges. The food brand is now gearing up to serve more than 100,00 customers in a day, leveraging the in-built ‘auto scalability’ of Anywhere Commerce+.
Want to emulate the success story of this four-decade-old food service business? Book a free demo with our experts to understand how Anywhere Commerce+ can grow your e-commerce business at least 10X.
With Southeast Asian online marketplaces booming since lockdowns, Indonesian e-commerce is expected to grow by 23.8% in 2022 to reach $30 Bn as forecasted by GlobalData. This optimistic trend can be attributed to the rising middle-class population contributing to increased internet usage (170 Mn users) – from 64% in 2020 to 73% in 2022 – alongside high smartphone penetration, cheap mobile data, and rapid digital payment adoption. The evolution of new buying preferences and habits also contributed to omnichannel commerce replacing traditional in-store purchases for leading retail outfits in Indonesia. Almost 30% of total expenditure is now online, with 1.6 billion shipments recorded in 2022. 2-3% of the GDP was thereby supported by e-commerce, which is a huge transition from 2017 when it was negligible. Moreover, the sector increased employment significantly with 26 million new jobs, primarily created by small and medium industries transitioning to commerce enablement.
E-commerce heralds Digital Transformation
Apart from building a reliable logistics infrastructure to support the influx of online orders, digital transformation was the need of the hour. Many businesses turned to in-house tech solutions by implementing partner-based applications that could merge easy payment setup and optimization seamlessly with existing operations. Global tech companies played a huge role in deploying excellent data management systems during the lockdowns. Toys, fashion, food and media purchases made up the largest share of the online revenue pie, followed closely by beauty, furniture, household and personal care. Owing to the pandemic spike in online consumption across key categories, Amazon also made heavy investments in Indonesia’s e-commerce startup market of up to $87 Bn in Ula alone. Meanwhile, Shopee, Lazada, Bukalapak and Tokopedia are all independent online marketplaces thriving in the here and now. It is, thus, safe to say that the nation’s e-commerce landscape is developing rapidly, and brands need to innovate now to retain the customers they have newly acquired, through personalization and curated brand experiences, the cornerstone of successful CRM initiatives.
Traditional E-commerce meets Social Commerce
McKinsey reported that almost 30 Mn Indonesians transact online frequently to open up possibilities for an already strong market that could go up to upwards of $40 Bn in the next 5 years. The demographic trend is towards tech-savvy, mobile-first young consumers who spend the most time connecting with peers and influencers online. It comes as no surprise, then, that social media companies such as Meta, Line, YouTube and Twitter are all investing heavily in social commerce. This subset is expected to be valued at anywhere between $15 Bn to $20 Bn in 2022. Leveraging new formats of interaction with high engagement through influencers, this mode of online purchase through social platforms is clearly then redefining the way forward for many industries.
While the goods are listed for sale online, the informal approach of social commerce, however, requires a very solid backend SKU management and delivery system. Due to fewer SKUs getting listed on social media platforms – compared to traditional web or mobile e-commerce applications – many companies are taking the ‘hybrid’ approach where they sell across all their owned platforms. This works best for the customer experience to improve progressively as the awareness of products grows through social media marketing. The strategic advantage of an integrated model, thus, far exceeds operating through individual platforms in silos.
Order tracking and last mile fulfillment depend on the same online and offline operations that are utilized by larger e-commerce players through the web or mobile applications. Hence, an omnichannel customer experience strategy is essential for the smooth functioning of e-commerce platforms – social or not – overall, as it ensures that the customer journey & data is tracked across multiple touchpoints, enabling a superior customer experience. This aspect of digital transformation was the most crucial for those Indonesian companies, in particular, who came online for the very first time during the pandemic. The need to deliver goods and services, previously available only in stores, led to varied innovations including BOPIS/ROPIS that combines online selection and order placement with offline trials or collection. Provinces outside of Jakarta are now finding better access to all that they need to be delivered at home, and are spending 10% more on delivery instead of traveling to the capital for any major purchase.
Superior Tech Implementation Proves Crucial
Whether a social media account or an online marketplace, acquiring and activating the customer and unifying customer data into a singular repository is very important for omnichannel hyper-personalization. Thus, while companies choose their e-commerce solution, they are also investing into CDP, and marketing automation software to deliver true omnichannel engagement. Companies are increasingly adopting a full-stack e-commerce stack that offers native integration with CDP, CRM/Loyalty layer and Engagement Platform. This integration enables omnichannel hyper-personalization, across storefront, mobile, social media, email marketing, loyalty campaigns, etc.
Capillary Technologies has been partnering with Indonesia’s leading brands such as Levis to enable the end-to-end omnichannel customer experience for their customers. The native integration of digital commerce and CDP+, Loyalty+ engagement capabilities enable us to offer AI-based algorithm-driven insights (nearly 70 behavioral and propensity filters) and deliver compelling campaigns at scale. Engage+, Capillary’s AI-powered engagement and automation platform, helps in precision-targeted engagement across social, in-store, email, mobile push, etc.
Across locations in Indonesia, such implementations ensure that customers remain engaged at all times, whether through messaging around new product launches or rewards and recognition based on their most-loved existing products. As a result, our Indonesian clients are seeing higher customer loyalty through online transactions than ever before. Get in touch with our experts at Capillary Technologies to know more about making a full-stack transition within e-commerce.
Some changes make an everlasting impact.
We all know how COVID-19 pandemic made online selling a priority for businesses of all sizes. In Europe, overall digital adoption rose from 81% to 95% during the pandemic. Instagram, social media and marketplace focussed sellers were looking at short-term opportunities and never looked at the scalability of their business models. But was it sufficient to stick to the short-term gains derived from selling on marketplaces? While large enterprises were well-versed with the granular details of the e-commerce world, small and medium-sized businesses faced numerous challenges, from building a brand to personalizing the platform, to setting up a team with the right skill sets to managing customer experience. The accelerated digitized shift clearly led to one thing – Everywhere, everyone bought everything online. Let’s take a look at the global statistics to understand how the E-commerce world fared in the last two years:
- U.S. e-commerce sales in Q3 2021 were up 45.6% compared to Q3 2019
- E-commerce sales made up nearly 20% of all retail sales in 2021
D2C E-commerce: A Profitable Future
While selling on marketplaces and through social media might be a good starting point, D2C E-commerce empowers brands to ‘own their customers’. By launching own-brand D2C E-commerce, companies can design signature customer experiences and buyer journeys, collate invaluable first-party data, establish direct connections with customers, and ultimately control profits.
Indian market share of D2C is expected to reach $100 billion by 2025 with over 800 brands expected to foray into the D2C world.
The challenging e-commerce world for D2C brands
E-commerce has struck the right chord with enterprises, signaling their digital transformation intent. The closure of physical stores due to COVID regulations, low-cost shipping rates, and relatively easier customer acquisition through cheap Facebook ads had enabled many retailers to drive online sales. However, what businesses didn’t factor in during that time was their ability to look at the scalability of the existing e-com model, 8 to 12 months later. Following is a list of the recent turn of events that have created a stir for businesses:
- The era of cheap Facebook ads drawing to an end: In the past, cheaper Facebook ads led enterprises to sell more by driving product discovery even when the organic traffic was low. Browsers were often turning into purchasers. What was once a boon for retailers to advertise their goods and services, has now become a bane for the community. With the price of Facebook ads having almost tripled in the last two years, brands’ endeavor to build brand recognition and product discovery has become that much more difficult. Customer acquisition cost has increased immensely. Shopify too experienced this jolt as brands who launched their E-commerce storefronts on Shopify relied significantly on Facebook ads to acquire customers. The immediate fallout was Shopify’s growth began to slow and eventually led to its stock price being reduced by 50% over the last 12 months.
- Restricted tracking activity imposed by global tech giants: Apple’s key privacy update a year back in April 2021 clearly established that advertisers need to seek permission to track users’ activity. This further made it harder for D2C brands to measure Facebook ad performance, optimize the digital marketing campaigns and track important metrics of ROAS (Return on Ad Spend).
- Last-mile supply chain management woes: Managing the overall fulfillment infrastructure can be an arduous task. While not all retailers will be gifted with multiple warehouse storage spaces, shrinking delivery times offered by Amazon and the likes have further heightened customer expectations with respect to delivery. Globally, the import costs have been largely impacted by a steep increase in the price to ship a container from China to the US (from $2k to $15k).
- Investors’ focus on profitable ventures: Did you know that only 24% of new businesses launched in the last decade have turned out to be large-scale enterprises? That implies a major chunk of businesses are still waiting to turn a profit for their investors. Investors are showing more inclination towards profitable ventures which implies that medium-size direct-to-consumer entities clearly need to improve their e-commerce game.
- Erratic technology infrastructure: Setting up an e-commerce platform from scratch can be taxing with the plethora of platforms and features available currently, making technology selection a complex and time-consuming task. One wrong choice of tech partner/platform might create an almost irrecoverable dependency later on, forcing brands to invest more time and resources to salvage the situation. With so many technology partners serenading the SaaS market, brands must be clear with their objective first and then choose the technology platform accordingly.
How D2C brands are braving all odds in today’s e-commerce world
D2C businesses must strive to keep themselves future-proof, in order to prevent unforeseen challenges. Here are 5 ways how D2C brands can make the most of their e-commerce sales:
- Leading with word-of-mouth recommendations: 92% people trust recommendations through word-of-mouth and other direct sources. Influencer marketing is also gaining prominence as being a credible resource. Brands can focus more on building the experience organically than focusing solely on paid promotions.
- Focus on customer engagement: Unless there is a comprehensive customer retention and engagement strategy, D2C businesses are bound to stagnate. Customers must thus be engaged beyond their regular purchase transactions with personalization or loyalty programs thereby helping the brand to create an emotional connect with the customers.
- Choosing the Right E-commerce Partner: D2C brands would do well to partner with e-commerce solutions providers who are as invested as they are in building the business. Increasingly D2C brands are turning to full-stack e-commerce solutions providers who manage the entire e-commerce infrastructure, from platform to growth marketing, from order management to customer retention and loyalty. Challenges that might arise at a later date such as scalability are addressed by the full-stack partner, leaving the D2C brand to focus on Growth and Revenues. D2C brands would be well advised to select a full-stack partner with their own proprietary e-commerce platform combining digital commerce, experience management and growth marketing, as customizations and integrations would be quick and seamless.
- Choosing the Right Operating Model: Successful D2C brands are increasingly adopting a revenue-share model with their full-stack e-commerce solutions partners, ensuring minimal upfront or switching costs.
- Investing in brand-building: While most successful D2C brands start off with a great product, it is critical in today’s competitive e-commerce scenario to build a ‘brand’. The significant costs incurred in acquiring a customer is only recovered if the customer stays with the brand for a long-time. Also, investors are increasingly favoring D2C businesses that have demonstrated an ability to differentiate from competitors through intensive brand-building.
India is on the verge of a take-off in the D2C e-commerce space. The success of brands such as Nykaa, Bombay Shaving Company, Sugar Cosmetics, etc. has inspired a whole generation of entrepreneurs and mavericks to start their own D2C businesses. The e-commerce partner ecosystem in India is also maturing; newer engagement and operating models such as full-stack e-commerce are empowering entrepreneurs to dream big and focus on the idea or the product while leaving the heavy-lifting to experts.