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Delivery takes centrestage in retail’s makeover

Not just for e-commerce, traditional retail will need to accommodate the transition

Gulf News

The way we think of an average shopping experience in the UAE is changing dramatically. Crowded mall visits and an endless wait for online deliveries are no longer mandatory downsides to going shopping.

Today, I can order my purchase with a few clicks and have it delivered the same day — a concept introduced last year in Dubai by Souq.com and with plans to expand the service to other cities in the future. When announcing the next-day service, Souq.com cited a global survey from online transaction security firm Trustev that found 56 per cent of consumers aged 18-34 years prefer a same-day shipping choice, while a similar survey by Coldwell Banker Commercial Affiliates found 64 per cent of millennials are more likely to make an online purchase if same-day delivery is an option.

The move is the latest example of evolution in the region’s retail sector, and a reflection of the changes in our shopping behaviour, largely driven by the rapid rise of e-commerce and last mile logistics coverage. According to Frost & Sullivan, the consultancy, the e-commerce sector in the UAE alone is expected to grow to a whopping $10 billion (Dh36.73 billion) in 2018, a huge increase compared to just $2.5 billion in 2014.

So how does this growth impact the wider retail sector? According to new research by Honeywell, the change is overwhelmingly positive — 83 per cent of surveyed retailers in the UAE believe that e-commerce will drive continuous improvements to the shopping experience they offer their customers.

With greater internet penetration and the availability of more seamless logistics, shopping from the comfort of home has become increasingly attractive. Customers welcome faster deliveries and better services such as cash-on-delivery options.

While this sounds like a brilliant option for buyers, this inevitably means increasing pressure on retailers and supply chain managers to efficiently store, sort, dispatch and deliver products. To achieve this, retailers need to ensure that they are equipped with the right tools at the front- and back-end to optimise the customer experience, as well as significantly streamline operations and achieve better bottomline results.

For example, internet retailers are rapidly leveraging data, software, voice-directed technology and automation solutions to serve more people, create efficiencies in their logistics operations and ensure accurate and timely delivery. Brick-and-mortar retailers are also streamlining their operations using much of the same technology as they look to offer a better in-store experience by having the right product in the right place at the right time.

While retail’s front of the house is usually shiny and slick, what many don’t realise is that some of the most advanced operational technologies are in fact deployed out of sight, in the distribution center.

According to the Honeywell survey, 38 per cent of UAE retailers believe that warehouse automation will play the most significant role in the future of retail. This is because the growth in omni-channel operations have had the most impact at the distribution centre end of the operations and this link in the supply chain plays a crucial role in getting goods out to customers in a timely, efficient, effective manner.

It is also because, by design, distribution centres are more capable of having repeatable processes put in place to increase efficiency, productivity and accuracy. As a result, technologies, automation and processes are now much more advanced at the distribution centre level compared to retail stores.

Our region is typically not dragged down by legacy technology that is common in other markets. UAE businesses are deploying internet of Things connectivity, cloud solutions and automation throughout their entire supply chain to stay competitive in meeting growing e-commerce and consumer demands. In fact, almost nine out of 10 of UAE retailers claim they have already seen an impact on productivity since implementing technology solutions.

The digitalisation of the supply chain is going to change our lives at home and at work. Having access to the latest technology allows those working in supply chain management to plan better, run multiple operations and drive collaborative decision-making, and therefore improve customer satisfaction through better delivery and response times.

Ultimately, this will prepare retail businesses to take on the competition and come out ahead in the world of e-commerce.

— The writer is General Manager at Honeywell Safety and Productivity Solutions for Middle East, Turkey and Africa.

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