Retail’s roadmap to recovery


July 21, 2020 | By Rupkatha Bhowmick

The retail industry’s ability to adapt is the first step towards recovery. In a post-pandemic world, especially after the ‘great lockdown’, retailers have accelerated their search to find new strategies to interact with a consumer whose shopping habits have changed, while sustaining in an environment that radically transformed overnight. Retailers are rethinking ways to enrich a ‘contactless’ but more human interaction, recreating personalised shopping experience by leveraging data. While technology is ‘the’ enabler, retail’s transformation journey entails a much broader roadmap.

“Retailer 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 Mark Thomson, director – retail & hospitality, Zebra Technologies.

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. It has impacted different retailers in different countries in different ways. “But there is a positive amidst the challenges – COVID-19 might act as a catalyst for positive change 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 made 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, pricing and 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 have 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.

Effective use of data

Is data being used effectively to increase the conversion rate?

“Online always had a lot more data than offline. The optimal experience is one where, as a customer walks into a store, the right technology or a robot recognises who has walked in, what would appeal to them and make recommendations, facilitate payments and checkout more efficiently, yet in a personalised manner,” Panjabi states. “Creating a blended retail experience is the way ahead, by leveraging inventory, people, location and data.”

“From the front-end to back-end, every touchpoint is e-commerce and fulfilment plays a key role in ensuring a great experience. When you deal with fulfilment processes, which are people-dependent, scalability of solutions becomes difficult. Here data will play a key role, and robotics can enrich the customer experience,” adds Chowhan.

“In many countries, we have seen empty shelves during the pandemic,” Thomson cites. “More than supply chain, was the real issue replenishment speed?”

“It was interesting to manage the supply chain, especially due to a surge in demand for hygiene products. We had to work closely with our suppliers; we re-evaluated the high-demand categories to ensure enough stock, for which we used BI (business intelligence) and analytics. We also linked online inventory with stores to facilitate product availability, while using stores as hubs for doorstep delivery,” Olama responds.

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 by the use of 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 introduce 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.”

 

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