Retail’s Roadmap to Recovery

Retail’s Roadmap to Recovery

DUBAI: The retail industry’s ability to adapt is the first step towards recovery. However, the road to retail recovery will need to pass through many signal posts. Indicators show that Mastercard recorded a 40% rise in contactless payments during the first quarter of 2020, amid COVID-19 pandemic.

The Visa CEMEA Impact Tracker points to a shift to online commerce, with cash transactions being replaced by digital payments. The survey found many consumers in the UAE started shopping online for the first time, during the pandemic. Two-thirds of UAE consumers (68%) surveyed said that COVID-19 led to their first online grocery purchase, while 70% have made their first online purchase from pharmacies. In Saudi Arabia, Danube Online and the Danube App registered an increase in average daily sales by over 200% and average order value was up 50% by end of March 2020, compared to February 2020.  

Meanwhile, an Accenture Digital survey in 2019 indicated that only 40% of retailers globally are leveraging data to their best use. Hence, while technology is ‘the’ enabler, retail’s transformation journey entails a much broader roadmap. 

“Retailers have indeed faced different challenges during the pandemic but have found ways to adapt to the shifts caused by COVID-19. The smarter use of data and real-time analytics will play a leading role in optimising business processes and in delivering improved customer experiences,” states moderator Mark Thomson, Director – retail & hospitality, Zebra Technologies. 

“At Images RetailME, we have closely monitored the impact of COVID-19 on the retail industry. The recent months are evidence of the industry’s ability to adapt, and in many ways, this has been the first step towards its recovery. Staying true to our mission to share retail intelligence and knowledge, we brought to the table an insightful and diverse panel of speakers from across the region. The panellists shared their experience on how to recover fast and prepare for both a more digitally connected and safer world,” observes Justina Eitzinger, COO, Images RetailME. 

Retail is still an exciting industry despite COVID-19 that caused a sort of an “electric shock” over the past few months. It is the most severe impact on retail globally, since the great depression of the 1930s, Thomson feels. “But there is a positive amidst the challenges – COVID-19 might act as a catalyst for positive changes in retail.” 

As consumption behaviour has undergone significant changes – shift towards online, demand for contactless – will these stick for the long-term? What will retail recovery entail?

“In retail, we have to be where our customer is. From high streets and shopping malls, our customers have moved online,” says Ashish Panjabi, COO, Jacky’s Retail LLC & Jacky’s Business Solutions. “Changes that were long due had and will get accelerated. Technology will enable changes, but we also have to rethink the fundamentals of doing business.”

“Changes have already happened, which is the new normal. We must ensure that digital remains at the core of these changes to ride the wave instead of being a laggard. Some retail formats must reinvent. While we may not go back to pre-COVID days in the near term, the picture isn’t gloom and doom, as retail will spring back in a different but better shape,” adds Piyush Kumar Chowhan, Group CIO, Lulu Group International. 

Everything, indeed, isn’t gloomy. While big global retailers like Inditex Group’s Zara are closing many stores, they are ramping up digital presence, with brick-and-mortar facilitating an omnichannel experience. “Therein, COVID-19 has shone a spotlight on parts of businesses that were non-profitable. Being agile is a big part of this new normal,” Thomson stresses. 

Managing demand seamlessly

“Our sector has been highly resilient through the pandemic. During the lockdown, there was huge demand as customers stocked up and prepared food at home. Our online platforms – both BinDawood and Danube Online – saw huge traction, so much so that we had to expand the capacity of operations. We have also leveraged our mobile apps, coupled with the store network to meet the surge in demand,” shares Waleed AR. BinDawood, Chief Commercial Officer, BinDawood Holding. “We have used our wide store network as warehouses to support our online sales. We are constantly enhancing the seamless experience through product availability, pricingand delivery.” 

In several countries, grocery retailers also struggled to increase their capacity aligned to the surge in online demand, Thomson points out. “Omnichannel fulfilment processes, thus, requires a relook probably with more automation.” 

“We expedited our existing home delivery services by launching online shopping. Our loyalty programme has also worked well in accelerating the online orders almost immediately after launch,” shares Youssef Olama, IT Director, Spinneys Egypt. “Recovery will be hard for everyone, and we have to cope. Digitalisation is particularly important during the coming period, and we need to find the right partners to achieve great results.”

Frictionless over contactless

As consumers are shifting online and preferring contactless, how will brick-and-mortar change, asks Thomson? “Is there an opportunity for technology to reinvent brick-and-mortar with new experiences?”

“More than contactless, it will be frictionless,” Chowhan believes. “If we can give enough confidence to customers by maintaining the highest level of hygiene, they won’t be fearful. In the UAE, customer footfall has sprung back into our stores, and that will continue. The real challenge is to understand how we can move away from transactional engagement into experiential positioning by removing friction. In doing so, personalisation will become crucial, and convenience will be key.” 

“Most retail formats will have to change. In our case, we can demonstrate a lot of product features and functionalities online, but how a smartphone feels in my hand can’t be replicated online. Hence, the relevance of brick-and-mortar. The size of the stores might change; we will have to space out and frequently sanitise the demonstration areas – these are the new realities. But with every challenge comes an opportunity. Today, the need for change is acceptable across the board – including our internal stakeholders, landlords and customers,” Panjabi explains. 

“We believe in the long-term; grocery shopping will be a family activity. Our consumers enjoy the experience of shopping in our stores browsing over 140,000 products, some of which are exclusive to BinDawood and Danube. Online grocery shopping is also here to stay, and as such, timely delivery and effective communication with customers will be crucial,” feels BinDawood. 

“In food handling, we can’t avoid contact, so we have invested a lot in communication around safety. We have communicated the same with customers through our digital platforms, therein building trust. We have also increased the use of gloves and face masks within the stores as well as social distancing markings,” Olama adds. “Egypt is generally a cash-based society. During the pandemic, the Government of Egypt reduced charges on credit cards that facilitated cashless transactions.”

“The Saudi population is also moving towards contactless payments. We are one of the first grocery retailers in KSA to launch Apple Pay,” BinDawood shares.

The road ahead

One of the critical benefits of COVID-19 is the acceleration of a ‘change’ mindset in a sustainable way involving data and technology, Thomson emphasises. 

“Technology is undoubtedly the key to future business growth. Data science will be important to understand market trends and leverage them within the business. But we should avoid tracking customers. Privacy has to be well-defined in terms of data usage,” Olama recommends. 

One of the myths busted is digital being equal to technology, Chowhan points out. “Technology will drive digital initiatives. Good customer experience will come from an innovation mindset, driven using different technology tools. How can data be used as the new soil in the digital transformation agenda is the big question, and technology will facilitate the process.” 

“Besides our massive store network, we were the first to launch a mobile grocery shopping app in the Kingdom, and we will continue to invest in technology to enhance CX. We will select the best practices for our stores and online platforms,” BinDawood adds.

“Digital can’t fix a problem; it can be an enabler. People’s mindset shift will bring about the biggest changes, and sustainability will play a key role. Post-COVID, local manufacturing and production are being talked about much more vociferously. There will be a focus on producing locally. There will also be a drive towards personalisation using technology tools,” Panjabi states.  

In summation, Thomson states, “Data is indeed the new soil; nurture it, and it will deliver abundant growth.”