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 moderator Katia Kachan, general manager, Brandquad. It points towards the need for businesses to swiftly ramp up digital transformation initiatives if they were not 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 the 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 Smith. “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 adapt to new waves of change creatively,” shares Abulhoul.
“Digital forms the backbone of our business,” observes Ohan. “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 Masri.
Hybrid is the future
If anything, COVID 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 allowed us to reskill brand and store teams, involving them in our e-commerce operations – as the stores were temporarily closed. However, our network of over 700 stores will be as much important for an omnichannel experience.”
“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.”
“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.”
Commenting on the region’s readiness in e-commerce adoption that has 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. It 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, while improving service level at our stores.”
Strengthening digital capabilities
After almost three months of anti-pandemic measures, several brands may not survive the current crisis. Digital capabilities will be critical for those that will, Kachan opines.
“Digital transformation is an operating system for an organisation, which goes beyond ROI. It gives us a choice, increases agility and helps to become data-driven in order to evolve. Having a strong customer service team is also crucial,” says Masri.
“Communication will be pivotal, particularly for e-commerce. Customer behaviour has changed rapidly, so carefully listening to them 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 helping other businesses transform digitally through our platform and letting them use our virtual kitchens,” cites Ohan.
“Technology is a means to an end. No amount of digitalisation will help if you do not have the right product for customers. 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 has not changed much,” Abulhoul observes.
In summation, Kachan says, “Digital is no longer only a sales channel – unlike e-commerce. It can help businesses to adapt cost structures and make each step of the value chain better, faster and cheaper.”
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