It’s true the world is changing fast and consumers are moving even faster. But we are fortunate to be in a part of the world where the brick-and-mortar set-up continues to be important despite the emergence of other channels – online, mobile, social media and so on,” says Renuka Jagtiani, vice chairperson of the Landmark Group.
But the power and penetration of e-commerce, m-commerce or even social media can’t be ignored, she’s quick to add. “The challenge is to keep pace and go hand-in-hand with the changing retail scenario. Physical experience has to blend in with e-retail, leading to a click-and-mortar experience. Our stores will have to focus more on the consumer experience, which is not easy to achieve online,” Jagtiani observes.
Nilesh Ved, chairman and founder of the Apparel Group is in agreement. “Consumers in this part of the world enjoy spending time in shopping malls, which isn’t the case in North America or Europe. They visit malls not just to shop but also for entertainment, or to dine, or to have a medical check-up. That’s what makes the brick-and-mortar set-up relevant. And e-commerce is now complementing this set-up. Today, consumers have the luxury of ordering online and collecting what they order from a store. Or they can check prices at a store and buy online. It’s a synergistic tie-up,” he observes. Ved feels shopping on mobiles is still moving at a relatively slower pace.
Khurshid Vakil, co-founder & executive director of Marina Home holds the view that e-commerce still has a long way to go. “Dubai has always defied convention. Nowhere in the world do we get to see so many people shopping like here. The emirate presents a unique environment, but retailers like us mustn’t make the mistake of becoming complacent. Today consumers have a lot of choice. They decide where to go and where not to go. It’s really up to us retailers to attract these smart consumers and make them purchase from our stores. An online presence works well in certain categories but not in every segment. We fall in the category where consumers like to walk into our stores to touch, feel and experience our home décor items and then make a purchase decision. While e-commerce has set course, it still has a long way to go even though the channel is growing rapidly,” he believes.
Vakil says location is of prime importance for retailers like Marina Homes that has standalone as well as in-mall stores. “Both formats have worked well for us. While our standalone stores have emerged as attractive destinations with high conversion rates
due their sheer size and offerings, our in-mall outlets are also quite high in impact, providing the ultimate shopping experience that goes beyond buying and selling,” he says.
Ved has an interesting take. “Sometimes we wonder whether we are in the real estate business or retail – both sectors are so intertwined. That’s because if we have the right location, our business will surely grow. If not, we’re doomed,” he says.
“We have to understand what works best for our target audience. It could be locations in big malls that provide an experience, or in community malls that ensure convenience,” adds Jagtiani.
Another factor that drives modern retail is technology. “Like any retailer, technology is of great importance to us,” says Sean Staunton, vice president – operations, Dubai Duty Free (DDF). “We see so many passengers passing through – our biggest challenge is to draw them to shop with us. It’s a challenge to make them select Dubai International Airport over other airports so they can avail of the ultimate DDF retail experience. We’ve been successful in doing this to a great extent. Technology has helped us. We have in place a warehouse that is 95% automated and uses a robotic system to transfer around 5,000 pallets of stock and help us make 75,000 transactions every day. To lessen queues, we also have over 500 cash registers, in addition to using telecommunications systems effectively.”
Ved has more to say about the use of technology. “If retailers are not aware of how much money they made last night, they are in serious trouble. How do we avail that information? It’s by having in place the correct technology. Be it inventory, P&L or conversion ratio, technology plays a vital role in our business,” he asserts.
“Not only do we get to know what happened yesterday but technology helps us understand what might happen tomorrow. It’s an element we surely can’t ignore. It helps us plan ahead, internally and externally,” Vakil adds.
Jagtiani too sees technology impacting every aspect of business – from the backend to the way people buy and perceive a brand. “We must make optimum use of technology to analyse customer data seriously in order to provide better services to our customers,” she adds.
Talent is another crucial area retailers constantly focus on. “While having the right people is the biggest asset, getting the right people is the greatest challenge for any business – big or small. Businesses are getting more people-oriented so more thought must go into creating better remuneration and reward system for employees, offering regular trainings to enhance their skillsets as well as giving them a great career growth platform. Take the example of Saudi Arabia where we have employed over 1,000 women – that’s been a great change,” observes Jagtiani.
“Talent is the biggest challenge for retail, especially in this region where we see people coming in from across the globe. We have started an academy to train our people to face and handle consumers in the best possible manner,” adds Ved.
DDF is not lagging behind either. “When it comes to human resource, it is immensely important to care for your staff, pay them on time and engage with them. We start our recruitment process with an in-depth induction and specify a 100% internal promotion policy – 7% of our staff is either promoted or moved to a new position annually. That helps us gain their loyalty,” reveals Staunton.
According to Vakil, retaining staff is one of the biggest challenges most retailers face. “We put in a lot of effort to recruit our staff and ensure we have the right human capital. We also work on retaining them. We offer them a multicultural work environment and focus on aspects such as work-life balance, career enrichment and leadership development,” he explains.
On the subject of collaboration between the government and private sector, most retailers seek greater information sharing. “This will help us plan and fine tune our promotions better for our consumers. Shopping festivals are great but we need to leverage them in a constructive manner. Being present across the MENA region, we have to strike the right balance in the way we promote our brands in Dubai and beyond. It’s not just about doing promotions. The brand experience needs to be consistent across the region,” says Jagtiani.
According to Staunton, shopping festivals like Dubai Summer Surprises have worked well, with a lot of Khaleeji nationals coming to Dubai from GCC countries, boosting sales figures for DDF.
Ved feels Dubai already has enough shopping festivals and needs to reduce the promotion days. “Let’s not dilute the brand value and ensure sustainability,” he says.
Vakil agrees. “We have to find more creative and inventive ways to attract customers. The government and private sector should work hand-in-hand to ensure greater tourist and transit passenger footfall instead of offering more and more discounts and promotions.”
On Dubai’s Expo 2020 win, Staunton quotes some magical numbers. “We will see 66 million passengers passing through Dubai International Airport this year and by 2018 the number will exceed 90 million, touching 98 million by 2020. These numbers indicate that Dubai has done a fantastic job in promoting its candidature for Expo 2020 – you can feel the energy and excitement everywhere,” he says.
“It’s interesting to see how retailers are getting excited about Expo 2020 although it’s difficult to predict how many of us really understand the impact. But it’s heartening to see how the government and private sector are collaborating to attract more people to visit the emirate and each concept is trying to do things differently,” adds Jagtiani.
“The whole retail scenario will change with Dubai winning the Expo 2020 bid. We will see existing shopping malls evolve and new world-class malls come up. The emirate will see more tourist footfall, with Dubai emerging as a must-visit destination that offers huge opportunities as well as challenges for retailers like us,” concludes Ved.