For retailers around the world, transforming the way they deal with consumers has become an existential challenge as the coronavirus crisis tests business continuity, pliability of the digital environment and supply chain flexibility.
In fact, all businesses have been forced to transform to stay afloat in the present scenario. So how has Covid transformed the retail landscape in the UAE?
The UAE’s grocery sector saw a major leap in digital demand in the wake of social distancing and movement restrictions. Grocers put plans in place that have been developed, refined and tested
over the past decade. As the pandemic slows, grocery will gradually shift back to more normalised shopping patterns, but an increased revenue shift to digital channels is here to stay.
“The first time we actually felt the impact of Covid was in mid-March. There were many things suddenly thrown at us,” says Rajiv Warrier, CEO of Choithrams.
“One was that customers were panicking over the shortage of food and there was a rush at stores. Our challenge was to see that the supply chain was not disrupted so that there was no shortage at any of our stores. We also had to ensure the safety of our employees and customers. We responded quickly and responsibly by creating a Covid taskforce with people from primarily quality control, human resources and retail.”
Being one of the first players to get into e-commerce in 2016, Choithrams was able to deliver without any delays or problems.
“The surge in sales has now settled down because the initial impact of Covid has started to ebb,” says Warrier. “The six month period between March and August saw a big surge in sales. Business has been good for us and we see a lot of change in customer habits. Before the crisis, online shopping made up 5 per cent of our total business; it went up to 10 per cent during the pandemic. It has been about 8 per cent in the last three months and this trend is likely to stay. We have seen a lot of first-time shoppers online.”
The company plans to launch its own app next month. “We want to serve customers through as many channels as possible — through our stores, website, app and our partners. Everyone has been talking about taking the omnichannel strategy for the past 10 years, but we are now applying it in a big way.”
While the grocery sector got back on its feet, apparel and specialty stores saw a drop in revenue during the initial eight weeks of the crisis before staging a partial recovery.
Uptick in consumer habits
As consumer habits accommodate more discretionary spending, with an emphasis on omnichannel experiences, these stores will begin to see an uptick in revenue.
“E-commerce is not new,” says Shubhojit Mahalanobis, General Manager, Danube Home. “What’s new is the shift in customer mindsets in terms of buying habits and expectations such as faster delivery, easier navigation, contactless payment and delivery options.”
As face-to-face sales was not an option during the restrictions, Danube Home started virtual selling where customers could book an appointment with the sales team on Zoom and check out products in real time. “These initiatives helped us survive, sustain and grow during this unprecedented time,” says Mahalanobis.
Danube Home revamped its online store Danubehome.com. The website now features the UAE’s first virtual showroom. “This is integrated with our e-commerce site allowing customers to buy the product they like,” says Mahalanobis. The website also offers 48-hour delivery, easy payment plans, web exclusive products and affordable options.
The pandemic posed a greater challenge for retailers dealing in lifestyle products as they simply couldn’t move at the pace their customers needed them to. “We are not a necessity, but a luxury,” says Abdulla Ajmal, Deputy COO, Ajmal Perfumes. “Fortunately, in the UAE, there is a huge demand for fragrances so we can call ourselves borderline necessity.”
Despite the challenges, Ajmal Perfumes did not take drastic steps to curtail damages. “This is the first time Ajmal Perfumes has seen a situation like this in many years,” says Ajmal. “The most significant achievement for us is being able to retain every single employee. It has increased the faith people have in the management that we are not here for only profits.”
Once business resumed, the perfume company saw a footfall in stores, but it is nowhere close to pre-pandemic levels. “We have beefed up our online business and it has grown 15x,” says Ajmal.
“We are now looking at our omnichannel strategy for marketing and distribution. Every crisis leads to a big shift in the industry. We had to relook at our 70-year old retail strategy carefully and it is having a positive effect.”