Change, collaboration, communication will be crucial to recovery

June 7, 2020 | By Rupkatha B

Change, collaboration, communication will be crucial for the recovery of the retail industry, states Said Daher, CEO, AZADEA Group. Globally, retail is one of the severely affected industries due to the COVID-19 pandemic.

“I think the Darwinian philosophy of ‘survival of the fittest’ will apply to our sector in the coming months, as COVID-19 has put a great strain on retail businesses around the world. The pressure isn’t easing yet, as we are trying to understand the kind of changes that retail will have to confront in the coming months.”

Recovery will be long and hard

Businesses have had to quickly realign goals and pivot to survive the storm and succeed.

“Our foremost goal, irrespective of the retail segment, is to become even more relevant to and transparent in our communication with customers,” says Daher. “The recovery period will be long and hard. We have to take a futuristic view and factor in changes to implement in our business for 2021-22.”

It may not be misplaced to surmise that 2020 is being ‘written off’ partially. Even if recovery happens, it will be slow and arduous.

Strengthening relationships

“We also need to be transparent with our suppliers,” Daher emphasises. “Most of the businesses in the region is heavily dependent on foreign supplies and follow the franchise model. As such, we must understand the health and strength of our suppliers and franchise partners. We must understand their ability to withstand the weak environment in the short-and-mid-term, at a time when several global brands have filed for Chapter 11 and reorganisation. It will impact the supply chain and product availability. It has the potential to impact the regional market negatively.”

Such situations call for swift readjustments, especially in the case of retail conglomerates – like AZADEA Group – that operates with multiple global franchise partners.

In this context, Daher says, “On an immediate basis, we are resetting expectations. Since this is a global pandemic, it has not been difficult to explain our challenges to the suppliers. So far, they have been very empathetic, pragmatic and supportive of us. After all, consumer buying behaviour has also changed dramatically. We have to ‘wait and watch’ how consumers revert to their ‘old’ consumption patterns.”

Along with customers and suppliers, there is a third stakeholder with whom retailers must maintain a cordial relationship – the landlord. Will the crisis force retailers to rethink relationship with landlords?

“What the UAE, and specifically Dubai, offers to consumers is diversity and choice that makes the retail environment incredibly dynamic. Landlords, retailers, government entities will all have to bear a part of the pain to be able to navigate the crisis. The onus lies on each one of us and our workforce,” Daher observes. “We have to be pragmatic and empathetic to do what’s right and beneficial for all stakeholders. We also need to factor in what is good for the economy and people in the long-term. We have to find a way to emerge healthy from the crisis because even if a single stakeholder is severely affected, it might scar the entire business landscape.”

Becoming channel-agnostic

The changes in the current business landscape and consumption pattern are being termed as the ‘new norm’, sharply pointing towards the need for building omnichannel experiences and becoming channel-agnostic. Sometimes, even necessitating retailers to accelerate digital transformation. In the case of AZADEA Group, omnichannel has been a focus area since the past few years. However, with a diverse portfolio – spanning from fashion and food to entertainment and home – the question is the level of maturity on the part of the brands in their digital transformation initiatives.

“Several of our brands were already available online, much before the current crisis,” Daher points out. “In normal times, most of our global brand partners are already recording anywhere between 12-and-20% sales via the online channel. We are still hovering around a low single-digit, which presents a massive growth opportunity. Today, with the limited access to offline channels, a bulk of our business comes from online, as we are ramping up our digital transformation drive to offer an integrated shopping experience to our customers.”

“We are in the business of experience, which has to be exciting yet simple,” he continues. “Customers must be able to shop across our channels comfortably. Today, many people are forced to turn towards online, which we see as an advantage. We have also noticed that an omnichannel customer, as opposed to single channel, is more loyal towards a brand. And our brands can deliver the omnichannel promise, wherein a customer can choose from a plethora of options – shop online, pick up from store; shop online, return in-store; and access store inventory online, among others.”

When asked if online can offset losses incurred by brick-and-mortar due to a period of store closures driven by the pandemic, Daher admits, “Not at all! Online is only an additional channel to ensure our customers can continue with their shopping habits amidst the crisis.”

“Interestingly, children wear, electronics and homeware items sold well online during the lockdown phase, driven by necessity. We have also noticed the same trend in our stores, in the past few weeks, in markets that started opening in phases,” he adds.

Being compassionate

Another principal responsibility for any business is to be compassionate towards their people, now more than ever before.

“Compassion is an automatic reaction when every single individual across the globe is fighting against a common enemy. In the current situation, it is straightforward to understand each other’s pain. Ensuring the health and safety of our people, their families and our families has been our number one priority amidst the COVID-19 outbreak. We have also promised not to make anyone in the region redundant until we can estimate the impact of COVID-19 on our operations,” Daher stresses. “Then there is another huge priority to sustain and survive the difficult times ahead, for which we all have to bear the pain together.”


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