'Hundreds of millions' spent on AI as Will.i.am tie-up continues, Majid Al Futtaim chief says

Consumerism and mass production ruined retail but data can save it, Alain Bejjani said

Vox Cinemas has opened a cinema at the Red Sea Mall in Jeddah. Holding company Majid Al Futtaim has improved ticket sales by analysing its consumer data. Instagram / @RedSeaMallKSA

Real estate and retail conglomerate Majid Al Futtaim has invested “hundreds of millions of dollars” in four years to build its artificial intelligence-driven consumer sales strategy and is using Will.i.am’s tech company i.am+ for parts of its new app, its chief executive said on the sidelines of the Future Investment Initiative in Riyadh.

Despite reports the business deal between Majid Al Futtaim and i.am+ had soured, Alain Bejjani said the Omega product, a voice assistant like Apple’s Siri built by i.am+, was integrated in the company’s new app rolled out earlier this month. After a test by this reporter, the voice assistant is inconsistent in quality and accuracy, and Mr Bejjani acknowledged that the company is actively looking at how it can make the app’s voice function better, either through i.am+ or other vendors.

The owner and operator of Carrefour grocery stores, Vox Cinemas and shopping malls across the Middle East, Africa and Eastern Europe began its AI strategy in 2016, ultimately building a vast data pool from more than 400 sources like its cinemas, grocery stores and retail tenants, pulled from 16 countries and 13 million customers.

Four years later, this data obsession “is our new normal and we will never stop", Mr Bejjani said. “Today, a lot of [the data] is the backbone of our infrastructure.”

According to a report by consultancy Strategy&, moving towards data-driven technologies like AI increases the economic value of data because companies and governments can get more insight from it. But GCC countries are falling behind. The GCC data economy is worth $4.7 billion (Dh17.6bn or around 0.3 per cent of regional gross domestic product), “a smaller proportion than in the EU, where it is estimated at 1.9 per cent of GDP”.

This lag is because there is a “lack awareness of the value of their data … or data’s commercial potential”.

Not so for Majid Al Futtaim, which is using data to try to spur a comeback for retail, which has been sluggish since the advent of online shopping. Mr Bejjani seems to lament the loss of ‘mom and pop’ stores, where the shop owners knew their customers’ names and preferences.

Consumerism and mass production ruined retail, Mr Bejjani said, but the amount of data gleaned from customers’ online and in-store or in-theatre habits is helping MAF “move to something more empirical, more data-driven … to delight customers with experiences we can offer”.

Majid Al Futtaim has found that “people are willing to invest more on experiential retail”.

This has translated into Carrefour selling groceries online while also building more live cooking stations and offering big barrels of spices and abundant displays of fish to evoke an old-school market in its stores. On its app, freebies such as spa or gym access, desserts at its restaurants or a skin analysis at its Dermalogica stores aim to pull customers into MAF’s malls.

Majid Al Futtaim’s Vox Cinemas uses machine learning to personalise movie recommendations on its website and app, resulting in as much as 30 per cent more ticket sales sold online, according to a case study by consulting firm Strategy&. The company also shares anonymised data with Smart Dubai, the government entity tasked with turning Dubai into a smart city, to collaborate on analytics projects to better understand trends affecting the UAE, according to the same report. To improve the performance of its malls, data is shared with MAF’s mall tenants through an online analytics portal so retail chains like Lululemon, Crate&Barrel and Sacoor can better market to customers.

"Tomorrow is not going to be like yesterday. Tomorrow is going to be more human, smarter and purposeful and all of this can happen with better technology and integration with AI to transform the customer experience,” Mr Bejjani said.

Majid Al Futtaim Group swung to a net loss during the first half of 2019 as it suffered a Dh860 million write-down on the value of its land and property portfolio. But Mr Bejjani, on the eve of opening the largest cinema in Saudi Arabia, sounded optimistic.

Asked if the company would be profitable by year-end he replied, “Of course.”