Retail is one of the fastest-growing business sectors in the Middle East today, according to Asim. The region is seeing the expanded presence of hypermarkets, which can include between 300,000 and 500,000 SKUs under one roof. The mounting complexity of retail operations in the region calls for state-of-the-art enterprise resource planning systems and related applications, including integrated demand planning.
Modern techniques of inventory management and planning allow retailers to reduce slots within the warehouse, expand the number of SKUs and increase turns, resulting in better margins overall. While the technology is similar to that found in other parts of the world, the Middle East represents a unique culture to which retailers must adapt.
One major characteristic of the region's population is its youth, with a large percentage of people under the age of 30, Asim says. Younger consumers tend to show a greater interest in newer products, resulting in shorter product lifecycles for manufacturers, and making it more difficult for retailers and suppliers to predict demand.
The idea of integrated demand planning is still relatively new to the region. Retailers must balance international plans with local consumption patterns. Their success depends on the ability to collaborate more closely with suppliers. "There's still work to be done," says Asim. "It's a very traditional market. Business owners are not easily able to do data sharing."
Asim expects retail demand planning in the Middle East to mature over the next five to seven years. The trend toward hypermarkets will continue, along with malls that feature a large number of smaller stores. At the same time, he says, consumer taste in the region will continue to evolve. "Brands that used to sell two years back are not selling anymore," he said.
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