Lunch Program - Part 2: The New Age of Consumerism

Panel Overview & Moderation

• Moderated by Dan Murphy (CNBC International) at the Milken Institute Middle Eastern Africa Summit.
• Panelists include Mohamed Alshayer (Executive Chairman, Alshaya Group) and Mike Novogratz (Founder/CEO, Galaxy Digital).
• Topic focus: "The New Age of Consumerism," emphasizing brand reinvention, technology, and generational shifts.

Brand Strategy & Consumer Behavior

• Mike Novogratz characterizes a brand primarily as a "story," citing Bitcoin as a social construct and line of code valued at $200 billion with significant market recognition despite its lack of physical substance.
• Novogratz notes a shift in personal branding strategy, stating he prefers to "look stupid than be stupid" to generate engagement, illustrated by his decision to wear a felt hat in the desert, which resulted in 6–7 times more interactions than previous years.
• Mohamed Alshayer identifies that Millennials and Gen Z prioritize service and life experiences over static brand loyalty or traditional advertising.
• Alshayer reports that e-commerce sales for Alshaya's portfolio have reached 25% of total sales, significantly higher than the previously projected 5–10%.
• Brands fail when they neglect innovation and talent retention, with Alshayer citing the decline of Nokia, Gap, and Marks & Spencer as examples of complacency in the face of changing markets.
• Novogratz highlights that successful modern brands must align with environmental, social, and governance (ESG) principles to appeal to the "millennial and Gen Z consumer," citing the purchase of Bojangles as an acquisition focused on "wholesomeness" and fair labor practices.
• Chick-fil-A serves as a benchmark for tapping into the "millennial mom" demographic by creating a perceived safe, clean environment through superior service and operational details (e.g., kid-height sinks).

Alshaya Group Strategy & Regional Expansion

• Alshaya Group operates 90 brands across 4,500 stores, holding the title of the world's largest Starbucks franchise partner.
• The group successfully introduced Shake Shack to the region by leveraging the "line" as a metric of demand, expanding from an initial two-store partnership to 75 locations.
• Alshaya's "The Avenues" mall in Kuwait attracted 42 million visitors despite a population of 4 million, driven by a destination model combining 200 restaurants, entertainment, and hospitality.
• Alshaya plans to invest $5 billion over the next six years in Saudi Arabia, including two mega-projects in Riyadh featuring significant leasable mall area and four Hilton hotels.
• The group is expanding into the health and wellness sector in the region through partnerships with Equinox, SoulCycle, and Blink gyms.
• Alshaya is developing a unified loyalty and reward system across its portfolio (Starbucks, Shake Shack, MAC Cosmetics) to combat the high turnover of customer loyalty in the digital age.
• Alshaya anticipates launching digital delivery services for Starbucks in the region within the next 1–2 years to meet the consumer demand for instant gratification.

Saudi Arabia & Market Liberalization

• Saudi Arabia is experiencing a surge in tourism and air traffic due to Vision 2030 reforms, reducing the relative volume of visitors heading to Dubai.
• Employment of Saudi women in Alshaya's operations has reached approximately 4,000, with female employees outperforming male counterparts in service competitions (e.g., Najiba finishing 4th in the EMEEA Masters of Coffee competition).
• Novogratz observes that the global perception of Saudi Arabia is shifting positively, noting that only 20–25% of his social media reaction to the country's liberalization was negative, a figure he found surprising.
• Novogratz predicts Saudi Arabia will develop a robust eco-tourism industry, citing the "Edge of the World" destination as a prime example of untapped potential.
• Alshaya emphasizes the need for authentic storytelling to close the gap between Western perceptions of Saudi Arabia and the reality of its societal transformation, including women driving and working in public spaces.

Digital Marketing & Celebrity Influence

• The advertising model is transitioning toward celebrity-driven viral marketing, where individuals with large social followings (e.g., Kylie Jenner, Kanye West) command significant power and direct monetization.
• Novogratz notes that celebrity influence has shifted from indirect endorsement to direct brand ownership, citing Kanye West's Yeezy brand as generating hundreds of millions in annual revenue.
• Popeyes leveraged a viral marketing campaign for its chicken sandwich that generated massive demand without traditional media spend, demonstrating the efficacy of "hysteria" and scarcity in social media.
• Novogratz asserts that future restaurant concepts should ideally partner with individuals who already possess a massive social media following to ensure immediate brand traction.

Cryptocurrency & Future Outlook

• Bitcoin is currently trading around $10,000, up 40% from the year's start of $7,000, and Novogratz projects it will become the "digital version of gold" as a store of value.
• Institutional adoption is accelerating through new "plumbing" infrastructure, with Fidelity and the NYSE offering custody services to protect assets for wealthy investors aged 50–80.
• Novogratz cites 20 prominent billionaires (including Jack Dorsey and Bill Miller) as advocates for Bitcoin, signaling a shift from skepticism to acceptance as a legitimate asset class.
• Current cryptocurrency adoption for payment or savings remains low among the general public, with only 5% of conference attendees reportedly using Bitcoin.
• Alshaya confirmed openness to accepting Bitcoin as a payment method across its portfolio, while also highlighting the UAE's success in attracting global health talent through the Cleveland Clinic Abu Dhabi.