Saudi E-Commerce, You Cant be the Amazon of Everything.

Why are some local e-commerce websites failing in Saudi Arabia? The idea of following a trend is all the wrong reasons to enter a business. After short glory, most fail to sustain growth, why? you can’t always point at the economy, you’re part of the economy and you must apply the proper tools to sustain your business. The opportunity is enormous but as long as you’re applying the old trick for short wins you’ll only live short.

Saudi consumer spending on travel, fashion, and beauty are the biggest in the region and Souq thrived on the Saudi market but the question still remains. Where are the local potential brands? Things must change. There are generic problems with E-Commerce, such as a reliable payment gateway but even regional brands like PAYFORT became an Amazon company. In fact, many E-commerce platforms prefer PAYFORT after Amazon bought the company, why? They trust Amazon…the brand.

First and Foremost, you can’t be the Amazon of things. In recent years, young entrepreneurs and traditional businessmen with trading mindsets thought the model of Amazon works for everything. Entrepreneurs dream of becoming the next big thing and this is their ultimate dream but unfortunately, they overlook the reality of things or the basic understanding of how things work besides having the resources

Dreams are big but dreams require tools to become reality and one of the key tools is knowledge. Without knowledge and experience, the risks are high. There is clearly an emotional hype across the region on technology and dreamers are emotionally charged to be part of the next big story. I fully support the way forward but I’m asking dreamers to walk before they fly, each step is a learning experience and very costly. I’m speaking out of experience in my industry where many launched or revisited their brands without prior experience and knowledge. The results were very costly and I’ve published many case studies on Alnahdi, Rabea Tea and Cofique; all available here on Linkedin under articles.

In response to the decline of traditional retail, everyone’s answer was: Go “online” to survive. So both the traditional trader and the entrepreneur decided to buy the idea over value but one can sit behind his/her desk and ask where is the value?

If Amazon, the shark, owns a smaller shark (Souq) in the region and then there’s Noon, a heavily-funded ‘can stand all sorts of waves until they find there market space. The key question is, where should the small entrepreneur fit in this equation or even the traditional local businesses that decided to develop their own E-Commerce platform. Even most websites of local brands failed to become a destination while their Instagram pages have huge followers.

A question to ask is, did all E-Commerce platforms mature as brands? In my humble opinion, few independent E-commerce platforms have matured to be a brand out of necessity due to price, time, convenience and availability and since the price is the ultimate factor compared to others, its either price or the brand.

If we look at some categories point of reference in E-Commerce, there are some that moved away from mainstream and were able to build their relevance ( http://www.dokkanafkar.com ; http://www.cobone.com ) Hunger Station and many more. E-commerce is a reality but being relevant in the most cluttered marketplace is key to success, you can’t be the Amazon of Everything.

The idea of selling everything with a lower price and in volume online is Amazon’s model. Amazon’s expansion strategy outside of Europe and the US is to own the largest share in any leading e-commerce and dictate its value for full transformation as an Amazon Company. Souq is a model and few are in the pipeline in Turkey, Brazil, and a few other countries. 

The Amazon of things

The E-commerce market is cluttered with Amazon’s business model and each country has it’s own Amazon wannabe. In short term, this might be viable but in the long-term, it slows growth. Now you might ask why? Well, each sector has generic values created by the category creator and that brand becomes the point of reference. In the case of E-commerce, Amazon is the industry’s point of reference and one of the early pioneers and game changer. If Amazon’s model is replicated by everyone that enters the E-commerce industry then those same values are commoditized by others while Amazon remains the brand, the most trusted one.

So can you become the Amazon of things? Well, before you sit with your friends over shisha and decide the path of your business with a group of people that never strategized in their life or their business success is inherited, you must first believe that traditional business and online business are two different creatures with extremely different sets of values. E-commerce requires a massive investment on all fronts, Startups’ focus should be on differentiating and growth not on “what worked for others will work for me.”

One point that really bugs me is how people get into business without understanding. Being technically savvy and having great business sense are two different things, each compliments the other. If you’re a tech-savvy with zero business logic, I recommend you get help and if you have so much money and you’re in rush to make money don’t enter the E-commerce business or app, it takes time to grow and requires patience. If you don’t believe in written strategies, knowledge, brand building or vision and mission then stop there.

No Strategy, No Success!

Second, business strategy implementation failure is a major drawback in many cases. If you don’t have a strategy, what are you selling? E-commerce at this stage commoditises your business and the only relevance stronger than quality is price and time. How much is it? How fast can I get it? Can you guarantee two days delivery? Most functional values are shared values. You need a robust organization and consumer centric to succeed.

The dynamic of how things change fast requires an organization structure that adapts easily to all changes and is able to survive threats as well as embrace the ‘new’ part of the ongoing change. E-commerce business is mainly built on trust and you’re tested every second of the customer’s journey and unlike traditional business, the journey doesn’t end at the cashier. The journey takes much longer and sometimes up to a month, that depends on your time and how fast you deliver, guarantee, warranty, exchange, refunds or returns. The customer owns the journey and his words matter the most, the values he experienced build a certain image in his mind which can either be positive or negative. The only way to build a great online brand is to become a “customer-centric” organization and to travel on the same journey that great brands traveled or else you’re doomed.

The Mind Challenge

A trade mindset will suffer as an online business. A trader’s purpose is money earned immediately and online business requires a much longer time to mature or even breakeven. It took Amazon over twenty years! why would it take you a lot less? Online business is a cluttered market and in order to stay relevant, you must continuously innovate. It requires constant investment in innovation, brand, and point of difference. To survive in E-commerce you must focus on being relevant and that requires a massive investment on people, marketing and technology.

Back in the ‘50s or even late ‘40s, the service industry was relatively new and brand as a subject was less scientific, today with E-commerce we’re back in the same age but in online trading instead of the old traditional one. In the near future, as the industry evolves, no business will survive unless it owns a unique set of values. Imagine someone blindfolds you and requests you to walk an entire block alone, the first thought is to remove fear and that requires “Trust”, so who will you trust? You’re all alone to explore this new experience.

For a new E-commerce platform to win, it must realize the Blindfolded Customer’s experience and find ways to build “Trust”;. This is the reason why Amazon decided to position its brand as “Customer Centric”

Those who are successful in traditional business and managing a successful business model will face difficulty adapting to new trends. Why? Online is a different nature and requires a completely different strategy. Some bet on their brand equity or relevance to help penetrate the online market. In fact, airlines sell more tickets through other online vendors than their own. Hotels sell a lot more rooms through other channels than their own.

Brands like Expedia, Booking.com and few others are online travel destinations that have become the points of reference for the online experience knows as ” Booking” the value to book instantaneously. versus the old traditional travel agencies experience was known as “ticketing” values dictate experience.

Where is Thomas Cook today? the once ticketing giant. Thomas Cook is thriving, they revisited their business strategy and repositioned from a ticket company to a holiday company. Thomas Cook today is thriving as a brand both online and offline and only a few Thomas Cook retail offices are available in major metropolitan cities across the globe.

The One Man Show!

The one-man show hurts culture and values. You can’t have growth based on a few individuals, it’s the organization that matters over a few individuals. There are decision-making flaws such as centralized decision- making, interrupting a working strategy or even controlling the details.

E-commerce is dynamic and too fast and as a leader, you must create decision-makers across the board. Sadly, the reality in our region is that our decision-making is centralized i.e. “The One Man Show.”

Let’s look at key functional values in e-commerce global trend:

A, Easy returns is one of the key factors to be successful.

B, It’s a price war… (Get out if you can’t fight).

C, Your sale doesn’t end at click-paid button. The sale is not

finalized until the 14 days return period is over.

D, Customer trust is not just on purchases but exchange/return and

complaints management.

E, Customers control the rating and reputation and this is

everything. If you don’t understand brand-building, don’t get into

online ventures. Unless you own a strong offline brand, don’t go

online.

F, Two to three days delivery max or forget it.

G, Warranty all across and guarantees on delivery.

H, Easy returns and hassle-free  (Mental comfort is key).

I, Hardly any offers that lures the audience or they’re poorly packaged.

E-Commerce is an uphill battle. You’re fighting giants on values they strongly own and helped build their brands, to America E-commerce is Amazon and to the Middle East it”s Souq. I strongly believe that the future of E-commerce is specialty. Today’s small players are tomorrow’s big players. Stick to your specialty, it’s the road to brand building.

Baaghil N’ Brand

After two years of data analysis, I came up with a model that helps both online and traditional businesses on how to build their brand without the need for advertising.

Brand G

 

My 8-steps brand-building model answers every problem of customer and user experience. A brand needs to be in the heart of every touch point and brand building comes through interaction, that’s the most genuine brand building process over a false claim.

Your brand is the point of reference and must become relevant. Your Customer experience means nothing without brand values and just how your customer experience and its design means nothing without customer retention. This image illustrates the 8-steps required to become relevant in the brand building process. Feel free to contact me for a 1-day session on Brand Maturity: the steps required for Brand building. Don’t waste your resources on advertising, own a BRAND!

Baaghil is Middle East’s most recognized name on Brand. His unconventional way of thinking has earned him recognition on the world stage including endorsements by America”s best.

Uber: The New Identity

Uniting the “Bits” and “Atoms” for the first time, the bits is the refined “technology” and atoms is everything around us “objects”. Uber’s rationale behind the new identity is unifying the two for the first time, the technology and the atoms. The technology is used as process and the atoms is the object that moves from one point to other. If we look at the business strategy of Uber which evolved from passenger transportation to logistics and transportation, the new “Uber” brand core perfectly says who they’ve become

I’m a strategist not a design expert, many designer could disagree on the use of font, color palette and so on and that’s not my argument here but from a brand strategy point Uber successful reflected their evolution and their new rationale perfectly reflects their evolved business strategy

On the other hand many argued why Uber will ditch the slick stylish logo the most recognized in today’s app world, I agree but the more the brand delivers values the higher chance the symbol becomes recognized. Google’s identity looks like grade school kids drawing but since the company delivers constant values you can’t help but constantly recognize their identity

Said Baaghil is the ‘Unconventional’ Branding and Marketing Adviser to reputable companies in the Middle East, an author of many reputable books including the ‘The Power of Belonging’ and a Speaker. Baaghil appeared in books published by America’s experts on Branding and Marketing such as Dan Hill and Libby Gill. Most recently Baaghil was interviewed by world renowned Brand Consultancy firm Siegel+Gale on Branding in the Middle East

Brands work well with Segments

There are different sets of Needs to different type of Segments under one Category. Each segment has a different set of Values and Benefits, the more the Brand is focused on each segment; the higher the significance of the Brand

One of the major challenges many companies face is keeping a Brand focused in order to address all different sets of values and benefits. This line extension challenge became a nightmare for heads of Marketing and CEOs

Brands are like humans who can’t be everything, they need to standout for a single well-Differentiated Essence. The more the Brand is focused to a segment, the more it is preferred

Brands these days lack consistency they are constantly pressured by the Board from day one on functional deliverables such as ‘instant’ Sales. It took Starbucks 40 years to where is is today, it took Coca Cola a century to reach where it is today

It took Google 20 years to reach where it is today, but did Google display Brand Arrogance? When a Brand becomes very significant, the Board thinks competition is irrelevant and the same Brand name as well as principles start to address all segments. Google+ and Google Buzz are good examples in Social Media category wherein the 1st trial i.e. Google Buzz, failed and in the 2nd trial Google+, is barely surviving. Google is THE ‘World of Information (web links, images, videos, maps and so on)’ but after the success of Google Search Engine, Google became both Information and Tools. Does Google need to revisit its Mission and separate Information and Tools? I say yes, that will even make Google more significant on both information and tool fronts

It took these global Brands that long to build their presence, it surely should take Brands from the Middle East that long (IF Brand and Branding Strategies are in place) or longer if the right ingredients are missing

Brands and Branding are complex. Not every Consultant, head of Marketing/CMO or Advertising agency can literally deliver what’s expected. You need the subject matter EXPERTS to guide both the CEO and the management, through

Said Baaghil is the ‘Unconventional’ Branding and Marketing Adviser to reputable companies in the Middle East, author of many reputable books including the ‘The Power of Belonging’ and a Speaker. Baaghil appeared in books published by America’s experts on Branding and Marketing such as Dan Hill and Libby Gill. Most recently Baaghil was interviewed by world renown Brand Consultancy firm Siegel+Gale on Branding in the Middle East

He can be reached on AskBaaghil.com

The article was first published on Linkedin Pulse on 8th February, 2015

Space and Evolution

If the Brand Google is on the cover of any magazine, Google owns the entire edition; Google is preferred, relevant and owns the space. Google is irrelevant in the social arena but more preferred in sharing information. What Google needs to do is capitalize on the space the Brand has created rather than extending the Google name in areas that are irrelevant like Google+ (Social Media) and others. ‘Create Your Space’ is about being the most relevant within your space so competitors face barriers when trying to enter that space

When the space matures, your Brand becomes the reference point for the space it created. Every Brand seems to focus on Communication over Values or Design over the science of Branding; however, it’s crucial to hold on to your Values as a Brand through enhancing customers or users experience rather than focusing on Advertising. If you ‘Create Your Space’ and provide genuine experience you’ll own the space, if you own the space you’ll lead the category, it might not be as easy as it sounds but look at the following example:

Is Five Guys taking over McDonald’s and Burger King? Not now but eventually. Reason being McDonald’s is fried, Burger King is broiled, Five Guys is grilled and fresh. McDonald’s long holding space is threatened; will fried burger eventually die? McDonald’s need to innovate within the space and not outside the space. Recently McDonald’s claimed that their produce is fresh from the farms and that failed to sit well with their audience. A fast food fried burger Brand is far from being fresh which is why McDonald’s leads the ‘Junk Food’ perception and owns the junk food space

Chipotle the fresh, conscious ingredients Mexican chain of restaurants is growing super-fast across the US and rarely do you see the old guard ‘Taco Bell’ around unless in rural areas or in most highway service centers. Did Taco Bell lose the space? There are so many keys in creating your space, but usually management who chase short-term returns to please the board are threat for Brands to lose their space and this is the case with most Fortune 500s

In order to own your space you must continuously innovate with in the space!

Said Baaghil is the ‘Unconventional’ Branding and Marketing Adviser to reputable companies in the Middle East, author of many reputable books including the ‘The Power of Belonging’ and a Speaker. Baaghil appeared in books published by America’s experts on Branding and Marketing such as Dan Hill and Libby Gill. Most recently Baaghil was interviewed by world renown Branding Consultancy firm Siegel+Gale on Branding in the Middle East

He can be reached on AskBaaghil.com

Create Your Space logo cropped

The article was first published on Linkedin Pulse on 3rd July, 2015 

Microsoft’s Hotmail, no more! Outlook is the new Hotmail

Did Gmail threaten Hotmail over the years?

Gmail witnessed unprecedented growth in the past decade as the new comer in Free Web-based Emails category while Hotmail and Yahoo deteriorated exceptionally. Key questions now will be:

  • Is Outlook replacing Hotmail?
  • Is Microsoft looking for a rim with the new Outlook as their new Free Web-based Email?
  • How much of the new product features will push Outlook over Gmail?
  • When and how, will Gmail respond?

Interesting days ahead of us. We’ve seen too many changes with Microsoft in recent years, which leaves us with many thoughts as well as additional questions such as why Microsoft is too concerned about market share? Is it because they’ve ventured into too many things in the past two decades? Is Microsoft battling Innovation and Marketing efforts of others? Something is going wrong with how the management foresees the future of the company with its products

Said Baaghil is the ‘Unconventional’ Branding and Marketing Adviser to reputable companies in the Middle East, author of many reputable books including the ‘The Power of Belonging’ and a Speaker. Baaghil appeared in books published by America’s experts on Branding and Marketing such as Dan Hill and Libby Gill. Most recently Baaghil was interviewed by world renown Branding Consultancy firm Siegel+Gale on Branding in the Middle East

He can be reached on AskBaaghil.com