As dynamic shifts are reshaping the retail industry, digital transformation is non-negotiable. The COVID-19 pandemic has only accelerated businesses’ digital transformation adoption across operations. These include developing and improving e-commerce presence to customer relationship management, agile supply chain and inventory management and leveraging the power of data and people, among others.
In April 2020, brick-and-mortar retail sales plummeted in the range of 85-90%, while sales from e-commerce channels increased from 1-2% to almost 10% during COVID-19 crisis, cited Katia Kachan, general manager at technology company, Brandquad – during RetailME’s second Virtual Roundtable hosted by our COO, Justina Eitzinger. This clearly points towards the need for businesses to swiftly ramp up digital transformation initiatives, if they weren’t doing it already!
Small wonder, research firm IDC estimates global spending on digital transformation to reach $2.3 trillion in 2023.
Digitalisation is a long-term plan
As the need of the hour, several retail businesses have turned their focus towards digitalisation initiatives to still be able to engage with consumers amidst store closures – across April, May and in some GCC countries until now.
However, digitalisation must not be a reaction to COVID-19, but a long-term plan, Kachan recommends. “Digital transformation is a process of trial and error, which requires a strong vision to drive change.”
“Indeed, digital transformation is about the ability to test, learn and iterate,” agrees Phillip Smith, group head of digital for retail conglomerate, Kamal Osman Jamjoom (KOJ) Group. “It is important to find solutions that will work for the business, as opposed to over-investing to find scalable options.”
For UAE’s oldest bookstore chain Magrudy’s, leveraging the power of digital has been at the heart of the business. “We’ve had a website since 1998, long before digitalisation became a topic of discussion. We always felt digital will be the future and help us to creatively adapt to new waves of change,” shares Isobel Abulhoul, co-founder, Magrudy’s.
“Digital forms the backbone of our business,” observes Ian Ohan, founder & chief executive of a technology-forward F&B company, KRUSH Brands. “Decisions around digital transformation mustn’t be based on return on investment (ROI). It must be based on how such initiatives will create longevity for the business, while engaging meaningfully with the consumer.”
“Our organisation-wide transformation journey began in 2018, much before COVID, therein creating a backbone for our businesses to stay relevant even amidst the crisis,” observes Rania Masri, chief transformation officer for luxury retailer, Chalhoub Group.
Hybrid is the future
If anything, COVID-19 has increased the online-offline bond, Smith emphasises. “We accelerated our e-commerce agenda in 2019, bringing five brands on our new platform, with two more to go live. We have seen 2,900% growth in e-commerce in 2020, over last year. It gave us an opportunity to reskill brand and store teams, involving them in our e-commerce operations – as the stores were temporarily closed. However, our over 700-store network will be as much important to create an omnichannel experience. The key is to harmonise the experience, continually investing in technology that’s scalable and accelerating our e-commerce operations as we have seen significant growth in our online user base.”
“Our original move for transformation was to become a hybrid retailer and engage with our customers and people in a better manner,” says Masri. “As such, we upskilled our teams and worked with brands around building CX unique to each brand and personalise experiences for customers. Thus far, we have launched over 20 sites – improvised during COVID – therein further accelerating our digital transformation strategy. We have evolved our hybrid strategy, as the role of the store may have changed, but hasn’t been diminished, while e-commerce has become integral.”
“Clicks-and-mortar has been central to our business. It has helped us to do click-and-collect successfully leveraging our store and online channels,” shares Abulhoul. “Human interaction will always play a big role in our digital transformation strategy. Our team of experts interact with customers across channels to offer a great experience. We were able to scale this experience quickly even amidst the crisis. Even when our shops were temporarily closed, our customers still shopped from Magrudy’s and we offered services like free delivery, even delivered to waiting cars.”
Commenting on the region’s readiness in e-commerce adoption that has been accelerated, Masri adds, “There is room for improvement in the ecosystem – be that last-mile, payment methods, cross border trade.”
Offering an F&B perspective on digital transformation, Ohan says, “We unwittingly became a technology-first, full-stack business, through our own brands, digital platform and delivery services. This has enabled us to engage and serve our customers wherever they are. We have a customer feedback module, which allows customers to communicate with us in real-time. We respond to customer queries within an average time of 3.5 minutes, while improving service level at our stores.”
Also read: Post-COVID Gulf retailers realign goals
Strengthening digital capabilities
After almost three months of anti-pandemic measures, several brands may not survive the current crisis. Digital capabilities will be key for those that will, Kachan opines.
“Digital transformation is an operating system for an organisation, which definitely goes beyond ROI. It gives us the choice, increases agility and helps us to become data-driven in order to evolve. Having a strong customer service team is also crucial in this effort,” says Masri.
“Communication will be pivotal, particularly for e-commerce. Customer behaviour has changed rapidly, so listening to them carefully is key to get ahead and predict shifts, while investing in data-driven transformation,” adds Smith.
“Businesses that are tech-forward and offer a seamless experience to customers will survive in the long run. For example, during the on-going pandemic, we are able to help other businesses – like Chef Paul Frangie, founder of hapi – to transform digitally through our platform and let them use our virtual kitchens,” cites Ohan. “Importantly, everything must start with the customer, aligning the back-end and technology accordingly.”
“Technology is a means to an end. No amount of digitalisation will help, if you don’t have the right product for the customer. Think about your own experience as a customer and then map the journey as a retailer. Be it pre-digital era or now, the relationship between a retailer and customer hasn’t changed much. It is important to be true to the brand promise. In doing so, customer service is important and technology is an enabler,” Abulhoul observes.
In summation, Kachan says, “Digital is no longer only a sales channel – unlike e-commerce. It can actually help businesses to adapt cost structures and make each step of the value chain better, faster and cheaper.”