The on-going COVID-19 pandemic has severely impacted businesses around the world and driven home one clear message – digital transformation goals must accelerate to quickly readjust.
A question that’s occupying the minds of CIOs is – in a ‘new normal’ business environment, will digital transformation goals change significantly?
“A lot of priorities will change,” responded Piyush Kumar Chowhan, Group CIO, Lulu Group International. “Digital transformation goals will get further accelerated in the post-COVID-19 world. It will happen at the cost of long-drawn projects that organisations were undertaking – be those monolithic applications that businesses were using, transitioning them into a new digital paradigm. This prioritisation will happen very quickly.”
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Omnichannel to contactless
Pointing out a paradigm shift within grocery retail businesses, Chowhan talked about the transition from omnichannel to contactless retail. In food retail, this is not an easy job. In a segment where people want to touch the products that they will consume, implementing a contactless experience is challenging. “We have to think about a model that is not obstructive, while offering reasonable protection. After all, the possibility of transmission is higher when many people are touching a fruit or vegetable rack. We have to quickly come up with solutions to minimise any possibility of transmission – things like offering pre-packs over loose items.”
Consumers are used to touching fresh food items – fruits, vegetables and even fish – before buying. But the pandemic might drastically change shopping behaviour. Chowhan likened it to the pre-and-post 9/11 scenario that changed the travel sector permanently, with beefed-up security. “COVID-19 could be a similar decisive event for the retail sector, changing certain consumer behaviours permanently.”
“Over the last few months, most food retailers have installed screens between the cash till and the customer, alongside communicating social distancing norms and frequent sanitisation of the store. There is an on-going effort to pre-cook and pre-pack in the hot food category. A great deal of innovation is already happening, and this will differentiate agile retailers from the laggards. It will also give consumers the courage to come back into the stores, but they might prefer contactless modes of purchasing. Retailers will be forced to change the direction of their digital transformation journey to address such needs,” Chowhan elaborated.
Be agile to readjust swiftly
As the COVID-19 outbreak became apparent and lockdown was imposed in the region, consumers turned towards the online channel to shop for essentials. As a result, grocery retailers saw their online ordering platforms significantly inundated. Touching upon preparedness to handle increased online orders and in turn fulfilment, Chowhan said to a great extent, most retailers were prepared.
“We have learnt a lot from this transition in buying behaviour, which will help us to improve the digital experience, going forward,” he added. “Among some of the biggest learnings are the need to be agile and prepared for any kind of eventuality. Developing agility and the ability to react quickly to the situation at hand were discussed over the past few years. It is only now that we have realised the crucial importance of being dynamic and agile in executing decisions. Businesses that have been able to make decisions quickly are in a better situation, even amidst the pandemic.”
Taking care of capabilities within the organisation is also pivotal, Chowhan pointed out. “Depth in terms of the supply chain has to be much more reliable. The ability to keep people together is also vital, especially at times when there is widespread fear. Organisations that can motivate people and rally around them will see through and emerge from the crisis in a better and stronger manner.”
Leverage power of data
That leads to another critical area in an organisation’s digital transformation agenda – leveraging the power of data to understand consumption patterns.
“That is critical,” Chowhan asserted. “Across industries, data has played a crucial role. In terms of grocery retailing, data has helped us to plan in a much better manner, especially amidst the current crisis. It has helped us understand the key needs of people and therein demand in certain product categories at this time.”
“Think about it – categories like fresh food, daily food, cleaning essentials do not constitute more than 20% of a grocery retailer’s range, but cater for almost 100% of the business now,” he explained. “This shift in consumption pattern can be understood and planned for by leveraging the power of data. We can plan the sourcing points for these items without disruption and understand bottlenecks in terms of supply chain nodes to be able to procure quickly. It is especially important for the region, which is largely dependent on the international supply chain. To ensure business continuity and customer service, grocery retailers had to react swiftly, ensuring that the supply chain remains unhurt despite lockdown and movement restrictions by working closely with government agencies and entities that enable movement of goods in a contactless manner. Most businesses here were able to envisage and plan ahead of time, which is why product availability has not been a big issue.”
How retail will spring back
While several retail categories are suffering and might have to bear long-term consequences, some essential segments – like grocery retail – have seen a significant rise in business transactions. With predictions around the possibility of permanent change in consumption patterns, retailers will have to rethink business-critical goals and find new ways of engaging with the consumer.
The big question is, how will retail spring back post-pandemic?
“There are multiple formats and categories within retail. Discretionary categories – like fashion – might take longer to rebound, compared to essential categories like grocery and even simple home furniture. The essential categories within retail may spring back quicker than the others,” observed Chowhan.
Staying with grocery retail, will people continue shopping online, even as select GCC countries are partially lifting movement restrictions?
“What has happened is a long-term change in consumer buying behaviour,” Chowhan said. “Even those who were opposed to shopping online earlier have now realised the benefits and convenience of e-commerce and doorstep delivery, despite some challenges (like delayed timelines or product unavailability). We are seeing the number of our new online customers increasing. Hence, I think there will be higher retention in the number of people who have started shopping for groceries online, even after the COVID-19 pandemic.”