WEBINAR 5

The new age of digital retail in light of the pandemic

Organised by: In Strategic Partnership with:

Whitepaper13 OCTOBER 2020

A G E N DACovid-19 has dramatically disrupted the retail sector, causing a remarkable shift towards e-commerce that may linger well after social distancing policies are gone. In the UAE, consumer demand for e-commerce services jumped by 300% in the first five months of 2020, while in Indonesia, the world’s largest Muslim country, e-commerce gross merchandise value is expected to reach $40 billion this year, the third highest globally.

With 75% of millennials and 53% of Gen X shoppers buying goods online during the pandemic that they’d never bought before, this unprecedented spike shows just how much lockdowns have expedited the trend towards e-commerce. According to an Adobe report released in June 2020, the pandemic has massively accelerated e-commerce growth - it would have taken between four and six years to reach May’s e-commerce heights if growth continued at the same levels of the past few years.

As consumers continue to use online shopping as their main retail channel, e-commerce businesses need the right knowledge, resources, and tools to capture their own portion of the market. With online shopping at all time high globally, how prepared is the retail sector to capitalize from the corona virus-driven boom in online sales?

M O D E R ATO RPETER GOULDFounder & Chief Design Officer, Gould Studio

S E S S I O N PA R T I C I PA N T SSARAH ANSARICEO, Artizara, Inc.

MUHAMMED MEKKIFounding Partner, AstroLabs

LAYAL AKOURIRegional Director, MENA, USA and Europe, Modanisa

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S U M M A R Y P O I N T S• To thrive on the retail rollercoaster, digital retailers need to

reflect on why they are on this ride in the first place and try to differentiate themselves from the faceless giants of e-commerce.

• The pandemic has distanced many people from the communities that they were a part of; therefore, any online experience moving forward will have to incorporate a human connection.

• For online retailers to succeed in a world dominated by giants, they will need to understand and satisfy the five basic human needs in more than a superficial way.

• Large corporates that had already expanded online are focusing more on efficiency in terms of marketing spend as many players have entered the e-commerce space, making it more competitive to get ad viewability and traffic.

• Retailers are now thinking about how they are designing their online experience in order to convert visitors into buyers in a more efficient way.

• Achieving logistical efficiency has also been a challenge for online retailers, especially those dependent on third-party logistics providers, who have been crushed under the weight of explosive demand. Companies that have taken the time and invested into building their own infrastructure have benefitted because they were able to deliver a great customer experience even with the rising demand.

• The more online retailers localize and personalise their experience, and the more they stay focused on their targets and business model, the higher their chances of succeeding in the crowded e-commerce market.

• One of the best ways to build trust with e-commerce shoppers is to have an open-door policy in terms of returns to ensure a risk-free shopping experience.

• In online fashion retail, a major shift has been observed in consumer behaviour. While previously, people were shopping for work, school, events, and weddings, they suddenly started to shop for homewear, choosing essentials over fancy items.

• With the unfortunate losses in employment, many people have migrated back to their countries, yet they still have the necessary experience for certain positions and markets. These individuals can be hired to work remotely, and they would do a great job because they would be in their comfort zone.

W E B I N A R D I S C U S S I O N

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Covid-19 has forever changed the way consumers buy goods, causing a dramatic shift from in-person to online shopping and accelerating retailers’ plans for digital transformation.

The huge rise in digital commerce, especially among new or low-frequency consumers, is likely to continue post-pandemic, recent studies have found.

At the heart of this new digital retail era is the idea is that everything can be digitized. Our physical traits, likes, dislikes, thoughts, and feelings have all become bits of data that can be disassociated, parsed, and atomized, and then sold to the highest bidder, according to Sarah Ansari, CEO of Artizara, a U.S.-based art-centric Islamic fashion and lifestyle brand.

T H E R E TA I L R O L L E R C O A S T E RTo thrive on this retail rollercoaster and create a memorable legacy, retailers need to reflect on why they are on this ride in the first place and differentiate themselves from the faceless giants of e-commerce. Speaking about her own journey with Artizara, Ansari said: “There’s something magical about creating beautiful things and something natural within our souls that makes us appreciate us beauty. The new digital age has not changed our analogue love for beauty. My love for creating beautiful things goes back to when I was a little girl watching my mom bend over her sewing machine making clothes. Every colourful scrap of fabric in her sewing basket was full of possibility.”

Ansari believes that the Covid-19 crisis has given retail companies the time to reflect on why they chose to do what they do today. If they can figure out the “why” of things, then the “what” and “how” will fall into place. The pandemic has also led people to spend more time at home with their families and loved ones, helping them focus on what is important. At the same time, it has distanced people from other communities that they were a part of. Therefore, any kind of online experience, retail or otherwise, will have to incorporate a human connection.

“It is said that Amazon perfected the art of buying but killed the art of shopping. It is massive, it is standardized, and it is superbly convenient. We all shop on Amazon, but when was the last time buying something on Amazon gave you a warm feeling in your heart?” asked Ansari.

For online retailers to succeed in a world dominated by giants, they need to understand and satisfy the five basic human needs in more than a superficial way. If they can address the following areas, they will be poised to not just survive but thrive in the new digital age:

1) Recognition: Human beings have unique identities - the opposite of bits of data. What does that mean for us as businesses? Are we making our customers feel valued and respected?

2) Connection: Customers need to be part of a community. Are we making them feel part of something bigger?

3) Intimacy: Customers have a deep need for personal relationships. Are our interactions with them personal enough?

4) Beauty: Humans have a natural affinity for beauty. Are our customers experiencing beauty when they interact with us with our online presence or products?

5) Meaning: Customers need a bigger purpose in life. What is our bigger mission as businesses and how does that align with our customers?

Muhammed Mekki, founding partner at AstroLabs, said that his company has been involved over the last seven years with the entrepreneurial technology ecosystem in the Middle East and North Africa (MENA) region, through their coworking spaces in the UAE and Saudi Arabia and through the training programs that they run. The Dubai-based company works with businesses of all sizes, from startups that are trying to access the market to large corporations that are tackling their digital challenges.

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“I have seen how this year has impacted both sides of the spectrum. Many people have been thinking about how they’ve always wanted to start something but have never had the time or taken the initiative to do so. We’re seeing a lot more interest in starting up companies,” said Mekki, who is also cofounder of Dubai-based Namshi, one of the largest e-commerce companies in the MENA region.

To cater to the growing interest in digital business, Astrolabs started an e-commerce launcher course on a virtual platform that covers everything from marketing to logistics. The course attracted a cross section of participants, from university graduates to experienced individuals.

Since the outbreak of Covid-19, Mekki has observed several high-level trends among startups and large organisations in the region that want to take advantage of the new online mode of existence.

When it comes to large corporates that were already online, the pandemic has been a jolt to the system due to the significantly higher demand that was suddenly happening. This has led to a larger focus on efficiency in terms of marketing spend as many players have entered the e-commerce space, making it more competitive to get ad viewability and traffic.

Because of these developments, retailers are now thinking about how they are designing their online experience in order to convert visitors into buyers

in a more efficient way. As a result, conversion-rate optimization has been a growing trend and businesses are looking for ways to do more with the money they are spending.

Achieving logistical efficiency has also been a challenge for online retailers, especially those dependent on third-party logistics providers, who have been crushed under the weight of explosive demand. Companies that have taken the time and invested into building their own infrastructure have benefitted because they were able to deliver a great customer experience even with the rising demand.

As for traditional retailers that were not online, many of them have been scrambling to get online. The ones that have been more successful seem to have understood that it was about getting something up and running rather than perfecting things and worrying about the technology.

“It’s not so much about the tech. You can take something off the shelf, use a standardised system that you don’t need to spend months or years on building in order to at least start, and then be able to sequentially build up from there. This is more effective than taking time cooking up a product and waiting until it’s perfected before bringing it to market, all while losing on demand,” explained Mekki.

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C H A N G I N G C O N S U M E R B E H AV I O U RClearly, the pandemic has sped up the transition to a more digital world and triggered changes in online shopping behaviours. According to Layal Akouri, regional director for MENA, USA and Europe at Modanisa, a Turkey-based online modest fashion retailer that ships to more than 130 countries, many people who had never shopped online were suddenly forced to do that, and those who were barely shopping online had to do so more often. The growing appetite for e-commerce has raised the bar for the retail industry, pushing companies to offer an improved digital experience for customers.

“Obviously, the pandemic has been catastrophic for some businesses – but for others, it has been a good opportunity because they were ready for this scalability. For Modanisa, there was a major shift in consumer behaviour. People were previously shopping to go to work and school, and for events and weddings, were suddenly shopping for homewear, so we had to expand our catalogue very quickly,” explained Akouri.

Another change in shopping behaviour was that people started to shop for essentials rather than fancy items. Although many people had lost their

jobs, they still needed essentials. This shift was important to observe for Modanisa, as the company does not merely want to be commercial but is also keen to help people overcome these challenging times.

According to Akouri, the e-commerce ecosystem was not ready for such rapid changes and many companies struggled to adapt to the higher demand. Facing lockdowns, closure of airports and aircraft limitations, Modanisa was able to continue serving its customers worldwide by using passenger aircraft to ship products. The company also communicated with customers about the disruption of services, and looked closely at the data to see where its shoppers were located and what they were viewing to make sure that the platform was ready to respond to the increasing demand.

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L A U N C H I N G O N L I N EFor companies looking to start an e-commerce business or expand online, Ansari said the most crucial element was to start small and test things. This approach would allow such companies to mitigate some of the risks whilst giving themselves the chance to try things and iterate, until they get to a place where they have a great product that they can scale.

Mekki cautioned against taking too much time in building up a product. He said that a common mistake among entrepreneurs is that they often waste time trying to create a perfect version of their product, then after a long period of time and lots of investment, they take it to market.

“You’re supposed to go and speak to customers early, but no matter how much one repeats that, it’s still the most common mistake we see. Many entrepreneurs do too much baking in their ‘mind oven’ and they don’t go and test their product to see if anybody wants the cookies. You have to fashion a test that’s easy, that you can move quickly with, and that tests your thesis. That’s the single biggest piece of advice I would give,” said Mekki.

Focusing on the tech aspect and website features is important but should not come at the expense of the user experience. Mekki gave the example of a large traditional retailer that recently launched an e-commerce platform for home appliances. The retailer was simultaneously running a marketplace where they were facilitating small sellers on their platform as well as their own products, which caused the experience to fall apart and led to a shaky shopping experience for visitors.

“More important than the tech platform and specific filtration features is thinking about what the end user experience is, given what I’m trying to achieve. Maybe in their case for instance, they shouldn’t have simultaneously launched a marketplace feature plus their own, without nailing either one, and sequentially building the platform for an amazing experience. Because that in the end is what leads to more sales. You need the referrals and the engine to work,” advised Mekki.

The speakers acknowledged that it can be difficult to stay competitive in today’s crowded online retail market, where hundreds of entities are fighting for dominance. However, in niche markets like modest fashion, for example, consumers are more interested in platforms that will give them the biggest variety in terms of categories and items. This puts e-commerce giants in a secondary position.

According to Akouri, the more online retailers localize and personalise their experience, and the more they stay focused on their targets, the higher their chances of succeeding in the crowded e-commerce market. While it is important to monitor competitors closely, it’s also important to look at one’s own brand, where they want to reach, and how they are customising their customer experience. By staying focused on their business model and optimising it further, even with the presence of e-commerce giants, newcomers can thrive with their business.

The discussion moved to the topic of increasing trust in e-commerce, which is often a challenge given that people are buying things sight unseen, and since goods might be landing halfway around the world. Therefore, retailers have to take customers for their word.

According to Ansari, one of the best ways to build trust and loyalty with e-commerce shoppers is to have an open-door policy in terms of returns to ensure a risk-free shopping experience. Reviews are also crucial as people like to hear from others who have experienced a service or product.

She said that mistakes are bound to happen because nobody is perfect. What matters is to quickly rectify them, take ownership, and treat customers the way one wants to be treated in such a situation. Getting into a back and forth with a customer, even though the retailer might be correct, would be a losing proposition in the long term.

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N E W S E N S E O F T E A M W O R KIn addition to consumer behaviour, the pandemic has drastically changed working environments and the daily lives of employees, forcing people to collaborate more remotely to limit the spread of the virus.

Akouri recalled how frustrating the company’s first online meeting was in terms of keeping the motivation up among the team members and engaging them, especially as they were close to each other and the social aspect was important to them.

However, Modanisa’s team was able to adapt to the situation by swiftly transitioning to remote working, reaching out to suppliers, and making sure that all customers had access to what they needed. The teams’ adaptation was vital, being the driving force behind the company’s success.

She explained: “This pandemic has shown everyone that you can do the job anywhere. We are no longer linked to an office or a certain country. We have great talent across the globe. At Modanisa, we have started to operate a more remote-working environment,

where people from the US, Europe and MENA can apply and work for any market if they have the right skill and talent.”

“This is a great time for people to hire remotely and work remotely. With this new environment, I would advise everyone to make the most of it, because it’s not the office presence that matters anymore. You just need to be highly motivated, spend time on learning about the different areas of the business, and have weekly one-to-one catch ups with colleagues to keep yourself in the loop,” said Akouri.

She concluded that companies have a big responsibility to ensure that their employees adapt to this new working environment. With the unfortunate job losses across the industry, many people have migrated back to their countries but still have the necessary experience for certain positions and markets. These individuals can still be hired to work remotely, and they would do a great job because they would be in their comfort zone.

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Organised by:

In Strategic Partnership with:

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