Enabling SMBs to succeed in the Digital Economy

Customer expectations are increasing. More than half of regional customers expect one-hour or same-day delivery of their products, according to a recent GCC consumer survey by Kearney. In a rapidly evolving customer, business and technology landscape, what was best in class yesterday is a hygiene factor today. With 35 percent of consumers in MENA saying they will mostly shop online for things they used to buy in stores, SMBs need to urgently address this area if they are to make the transition to the new digital economy; if they are to survive and thrive. Though it may be a small part of the product journey, a mediocre or poor customer experience at this stage can have disproportionate impact on trust and retention. Many SMBs approach this dilemma by stretching resources to own every aspect of their operations from product to delivery, deeming the ‘jack of all trades’ route a safer bet, but forgetting the ‘master of none’ part of that equation.

Consider a few home truths: First, SMBs are an essential contributor to every economy. Regionally, they generate 52 percent of UAE’s non-oil GDP; constitute up to 99 percent of Saudi Arabia’s private businesses; and account for 75 percent of Egypt’s labour force. Second, online and digital transformation is here to stay, a necessity for all businesses and consumers. For businesses who want to remain relevant, retain customers and continue to grow, this is non-negotiable. Third, SMBs are not running alone – there are a huge variety of specialist services and provider partners who excel in the non-core areas that SMBs need. Running the race on your own requires investment in best-in-class logistics infrastructure, real-time customer service and delivery – partnership with experts in their field will likely be a more feasible route to success.

With this context, let’s examine some critical capabilities that SMBs need to succeed in this new environment and how can they quickly develop these capabilities for competitive advantage.

Good to the Last Mile

Last-mile delivery, the final leg of a product’s journey from a delivery station to the customer, is one of the most significant challenges in contemporary, online-enabled business. Customers demand consistency, speed and reliability in both product delivery and returns process; brand loyalty and long-term success are at stake.

For SMBs to create a differentiated last mile delivery experience, it needs the following elements: First, a non-negotiable focus on the safety of customers and employees, including world class safety protocols and enablement of contactless delivery. Second, superior customer convenience to alleviate their concern and anticipation through features like real time order tracking, reliable delivery estimates, choice of delivery windows. Third, continual improvement of efficiency and delivery success through technology enabling improved address quality, and routing efficiency. Fourth, faster speed and range of delivery options through an optimized topology or fulfilment and delivery network. Last but not the least, is a seamless returns and refund process to address any customer anxiety, supported by a responsive and customer obsessed customer service.

For both large-scale businesses and SMBs, last-mile delivery is the need of the hour, a critical inflexion point. But where it may be possible for the former, it is unrealistic to expect SMBs to build a world class last-mile service on their own. For SMBs, making that pivot requires partnering up.

Partner up to power up

SMBs have superior agility, responsiveness, adaptability, and a deep understanding of customer requirements in their core area, sometimes a niche. They have built their business by successfully identifying and addressing a key gap in customer needs better than competitors. They should continue to focus on their core strength that gives them competitive advantage. Outsourcing fulfilment and delivery operations allows SMBs to switch to the digital online space almost instantly, leveraging the capabilities of the partner – network of fulfilment centres, sort centres, delivery stations, state of the fleet powered through the latest technological innovations.

Companies specialized in fulfilment and delivery operations, have invested time and resources in process and technological innovations to overcome some of the inherent infrastructural and systemic challenges in the region. In the UAE and KSA, the average cost of package delivery is more than three times the global best-in-class costs. Address systems in the region are in a nascent stage, and technological and AI innovations around maps and geo-coding as well as standardization of address structure help drive significant benefits of efficiency and speed. Innovative solutions are evolving around the region to address the last mile challenges: Egyptian startup, Bosta, for example, provides last-mile delivery solutions using an asset-light network of freelance delivery drivers. The Arabic-enabled ‘what3words’ location reference system was quickly adopted by global and regional brands including Aramex, Domino’s Pizza, vanilla.sa and Jaguar Land Rover.

For SMBs to remain the backbone of the economy, they need to quickly and effectively undergo a digital transformation to meet the increasing customer expectations. They need to stay focused to delight customers in their core areas of strength, while developing capabilities in fulfillment and last mile delivery through partnerships with the right partners.

Prashant Saran is Chief Operations Officer, for Amazon Consumer Business, Middle East and North Africa (MENA) Region. He is responsible for developing and leading the company’s MENA Operations strategy, overseeing fulfilment and logistics and optimizing supply chain processes to ensure a fast delivery experience for Amazon’s customers across the region.