Industry
Retail
Omnichannel CX and Intelligent Innovation – The Future of Retail
HIGHLIGHTS
- Retailers are turning to the cloud to overcome skills shortages, cybersecurity risks, and legacy system hurdles, unlocking agility and competitiveness in a fast-changing market.
- With consumers demanding seamless omnichannel journeys, faster delivery, and hyper-personalisation, cloud-powered artificial intelligence (AI) and generative AI (GenAI) are helping retailers deliver experiences that truly resonate.
- From boosting customer satisfaction and sales conversions to reducing operational costs and improving inventory accuracy, cloud adoption is driving measurable results in retail.
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The tech challenge
The retail sector, especially in the Middle East (ME), faces multiple technology challenges that affect its ability to stay competitive and innovative.
Effectively leveraging cloud migration can help industry players optimise operations and enhance customer experiences. Some of the key existing challenges include:
A substantial shortage of skilled professionals in areas such as artificial intelligence (AI), cybersecurity, cloud computing, and data analytics is one of the most pressing challenges for retailers in the region. Nearly 93% of retail stakeholders in the Gulf Cooperation Council (GCC) identify the skills gap as a major barrier to adopting advanced technologies, especially AI and data-driven solutions. This shortage limits retailers’ ability to innovate, personalise customer experiences, and keep pace with global digital transformation trends.
The rapid digitisation of retail has exposed businesses to increased cyber risks. Retailers have been reporting a noticeable rise in cyberattacks and data breaches as digital adoption accelerates, often resulting in significant financial and operational impact. As retailers collect and process more customer data online, ensuring robust cybersecurity and compliance with data protection regulations becomes critical. Many retail leaders identify data privacy, data preparation, and data management as major challenges affecting their technology initiatives. Any failure to address these threats can result in financial losses, reputational damage, and erosion of customer trust.
Many retailers still rely on legacy information technology (IT) systems that are inflexible and hard to integrate with modern digital platforms. This creates operational bottlenecks, limits agility, and increases the complexity and cost of digital transformation. Integrating new technologies with legacy infrastructure often requires significant investment and careful change management, which can slow innovation and hinder the adoption of omnichannel and data-driven retail models.
Addressing these challenges requires investing in workforce upskilling, prioritising cybersecurity, and modernising the IT infrastructure to remain competitive and leverage the opportunities presented by a rapidly evolving digital landscape.
The retail landscape, especially in the ME region, is undergoing a transformation driven by a combination of advanced cloud, AI, and digital solutions tailored to local market dynamics. The adoption of AI-powered, cloud-first solutions is helping retailers drive operational efficiency, enhance customer experience, and foster continuous innovation, enabling them to stay competitive and agile. Through strategic partnerships, local expertise, and a commitment to digital transformation, retail businesses in the region are navigating rapid market changes and achieving sustainable growth.
The need for cloud
Evolving consumer behaviours are fundamentally reshaping the retail landscape.
We have observed several key trends and expectations that are driving the transformation. These include:
Consumers increasingly expect a unified shopping journey across online, mobile, and physical stores. They want to navigate across channels seamlessly and receive consistent service, offers, and support. Cloud-based platforms enable retailers to integrate data and operations across all channels, providing the real-time visibility and flexibility needed to deliver true omnichannel experiences. Generative AI (GenAI)-powered chatbots and virtual assistants provide real-time, context-aware support across touchpoints, enhancing engagement and satisfaction.
Shoppers now expect highly personalised recommendations, offers, and communications tailored to their preferences and behaviours. Cloud solutions empower retailers to collect, store, and analyse vast amounts of customer data using AI and predictive analytics, enabling targeted marketing, loyalty programmes, and individualised product suggestions. GenAI takes personalisation further by analysing shopping histories, social media activity, and third-party data to deliver individualised content, offers, and product suggestions at scale—something not feasible with manual processes.
The retail landscape has seen a significant surge in online shopping, driven by convenience, broader product selection, and changing lifestyles. Cloud-based ecommerce platforms offer scalability, reliability, and the ability to quickly adapt to spikes in demand, which is crucial during peak shopping periods like Ramadan or major sales events.
Modern consumers have little tolerance for delays or substandard experiences. They expect fast, convenient service, easy returns, and real-time support. Cloud technology supports real-time inventory management, automated customer service (eg, AI chatbots), and efficient order fulfilment, all of which contribute to a smoother customer experience. AI and predictive analytics help retailers forecast demand, optimise inventory, and minimise both stockouts or overstock situations, directly addressing consumer expectations for product availability and fast delivery.
Shoppers are more value-conscious and attentive to brand purpose, environmental impact, and corporate responsibility. Cloud solutions help retailers quickly adapt product offerings, pricing, and communications in response to shifting consumer values and market trends.
The retail sector in the region is highly competitive and fast-moving. Retailers must innovate rapidly to keep up with evolving consumer preferences and market dynamics. Cloud-based infrastructure allows businesses to launch new services, test ideas, and scale operations without heavy upfront investment, fostering a culture of innovation. GenAI enhances these capabilities by synthesising data from diverse sources (including reviews, social media, and call centre transcripts) to identify trends, predict consumer preferences, and even suggest product improvements.
Consumers expect product availability and transparency about delivery times and sourcing. Cloud-based supply chain management tools provide real-time tracking, demand forecasting, and inventory optimisation to help ensure products are available to customers at the right place and time. GenAI solutions streamline onboarding, provide instant access to product information, and automate repetitive tasks, enabling staff to focus on higher-value customer interactions.
Advanced cloud computing, AI, and GenAI are being leveraged to provide holistic strategies that impact the entire retail value chain. These AI-driven capabilities enable predictive analytics, intelligent automation, and personalised customer experiences, helping retailers strengthen supply chains, reimagine operations, and deliver improved customer engagement.
End-to-end services and AI-powered retail optimisation platforms are helping retailers gain greater visibility and control of data, uncover deep insights, and design dynamic, personalised experiences.
Innovation hubs and collaborations with a broad ecosystem of startups and technology partners are further spurring retail innovation. These centres enable retailers to ideate, prototype, and rapidly deploy new solutions, keeping pace with evolving consumer behaviours and market demands.
KPI priority
Retailers are leveraging cloud adoption to drive measurable improvements in several critical performance areas.
Customer satisfaction scores (CSAT, NPS): Retailers use cloud-based analytics and customer relationship management (CRM) to monitor and boost customer satisfaction and loyalty. AI-powered personalisation (eg, tailored recommendations, dynamic pricing), and cloud-based omnichannel integration improve satisfaction. AI-driven order management systems cut operational costs by up to 50%.
Time to market for new services: Cloud and DevOps practices reduce development cycles, allowing retailers to launch new products and services faster. Retailers use GenAI to automate workflows like order routing, returns processing, and supply chain optimisation. Many technology leaders are prioritising AI to improve operational efficiency, with an increasing focus on automating customer service and backend processes.
Sales conversion rate: Cloud-powered ecommerce and omnichannel platforms help track and improve the rate at which shoppers convert to buyers. GenAI analyses purchase history to suggest complementary products, lifting average order value (AOV). Retailers using AI-driven recommendation engines Retailers using AI-driven recommendation engines are seeing stronger digital sales performance and improved customer conversion.
Inventory turnover: Cloud platforms with AI analytics predict demand spikes (eg, during Ramadan) and optimise stock levels, helping reduce both overstock and stockouts. AI-powered systems also accelerate order processing through smarter routing and real-time inventory synchronisation.
IT infrastructure cost reduction: Cloud adoption enables pay-as-you-go models, reducing capital expenditure and ongoing maintenance costs. AI automates repetitive tasks (eg, inventory restocking, customer service), lowering labour expenses. For example, AI-driven order management systems cut operational costs by up to 50%.
Incident response time: Cloud-native security tools help retailers detect and respond to threats more quickly.
Channel consistency score: Measures the uniformity of customer experience across online, mobile, and in-store channels, facilitated by cloud integration. Cloud-based AI unifies data from online, offline channels, ensuring consistent customer experiences and improving CSAT.
The road ahead
Tailored solutions across store operations, merchandising, supply chain, marketing, and business model reinvention are helping both large retailers and regional giants strengthen performance and agility.
AI solutions can empower retailers to optimise operations, create personalised customer journeys, and stay agile in a dynamic retail environment by harnessing the full potential of AI and GenAI technologies. A comprehensive suite of AI-driven solutions tailored for the retail sector in the region can ensure focus on transforming operations, enhancing customer experiences, and driving business growth.
Jointly these capabilities can enable retailers to unlock new levels of operational agility and customer-centricity. By combining AI-driven merchandising and assortment optimisation, unified omnichannel commerce, GenAI platforms, predictive analytics, conversational AI, and co-innovation approaches, retailers can achieve faster sales planning, more accurate inventory management, and seamless integration across channels. In addition, intelligent virtual assistants can support round-the-clock engagement, while accelerated AI adoption can create the flexibility to respond quickly to shifting market demands. This, in turn, can drive stronger profitability and more consistent customer experiences. Going forward, in a competitive retail environment, these advancements can help businesses operate with greater speed, efficiency, and resilience.