By Scott L Ellis, Retail and Consumer Industry Lead of IBM Middle East and Africa

Being based in Dubai, it can be challenging to engage with my parents back in Ireland. After juggling the commitments of work and family, you then have to contend with the time difference and a dissimilar working week. Although digital platforms exist, I would need to resort to a phone call as my mother resisted all means to embrace technological advancements. It was like this for years, and then suddenly something changed – Covid-19.

Scott L Ellis, Retail & Consumer Industry Lead at IBM MEA

Forced to join family discussions over whatsapp and Zoom Mum got used to reading our comments, and then partaking in the group chats. Two weeks in, Mum became proficient in leaving voice notes, sharing emojis, and using gif responses as scathing putdowns. I’m not saying she is a digital advocate, but because it is the only way to engage her kids, she has overcome her previous resistance and embraced it. Needs must.

This all stood out in my thinking when considering how MENA retail will change post-pandemic. Even if it completely goes away, shopping will change beyond recognition. There were already people like me who make 90% of their retail spend online. Now there are people like my mother who having seen the efficiency and even enjoyment of it, will migrate 50-60% of spend to online. In MENA, there are people who may choose never return to our famous malls. The experience of digital – good or bad for them – will outweigh health and safety risks associated with visiting spaces where the masses may congregate.

So what does this mean for retail brands looking to succeed in the new normal? The collapse of brands like Oasis and Warehouse in the UK show how tough the fashion sector already was and the variety of mid-market clothing brands will reduce. Clothing giant Primark who notoriously resisted ecommerce as a channel, has gone from making £650m in sales a month to nothing showing how important online channels are.

In MENA, big retail franchise operators are busy scrutinizing their brand and store portfolios across malls. Consumer discretionary spending will fall in light of the pandemic and operators will need to bet on winning brands only. One CEO told me that they will no longer work with one particular leading global brand not because of its attractiveness to consumers, but because the crisis highlighted their inability to manage their own supply chain and their willingness to cancel critical orders with minimal notice.

Beyond changes to how brands embrace malls and renegotiate rental terms, there are increased challenges imposed by social distancing in store layouts. Much time must be given to rethink and revaluate the role the physical venues plays – something I cover in a separate thought piece. In the short term, Digitalisation and Artificial Intelligence can respond to these challenges without adding headcount (which limits the number of customers in a store).

AI-enabled cameras can count people in communal areas, malls and stores. Brands need to support safe navigation of stores by decreasing rails and displays. Innovative use of space with more stock to back of store and clever visual merchandising or use of digital (either endless aisle or on customer devices) can maintain an engaging experience. 

Digitalisation does not mean we remove the human element. Conversation is key to strengthening the relationship between brand and customer, to help ensure they come back when you need them most. In Tommy Hilfiger’s London flagship store, a virtual mirror reads what you pick up and upsells by making style suggestions of what accessories should be paired with it.

Department stores can deploy personal stylists via digital channels to curate a collection of outfits for customers to suit their style and shape to serve the customer. The stylists can also act as models and videographers, working remotely with sophisticated content and inspiration for high spending customers, without increasing headcount in store.

With the increase in migration of retail brands in MENA to digital channels, incumbents will need ensure that the last mile fulfillment match their glossy brand and messaging. Those dependent on the store to act as a communication channel will have to look at how to reengage with the customer during social distancing, as it may stay in play for some time. As an example, UK luxury gym wear brand Sweaty Betty has been working alongside fitness enthusiasts and influencers to bring consumers a daily Instagram TV video of an at-home workout and nutrition advice. They are keeping thousands of their followers motivated and connected with free exercise routines and daily challenges.

People are still spending money, but the way they are spending has changed and will continue to in the future. To be successful, here is a survival kit of considerations retailers need to take:

  • Some customers can’t – or at least won’t – visit stores. To gain their custom, it’s essential for brands to provide digital ordering whether that’s ecommerce, partnering on platforms, adding Facebook and Whatsapp for Business … or best, all the above. If you disagree, you need to consider whether your brand has the appetite to challenge in the new normal.
  • People are shopping online more frequently. This is less anonymous than in-store shopping, and much easier to measure at a customer level. Brands can learn about behaviours and make offers that motivate typical brick-and-mortar customers to maintain shopping online.
  • Trying on clothes and returning them has become harder and stressful. Don’t let strict return policies put customers off shopping with you. Making them more lenient and it will not only encourage customers to continue to place orders, but engender positive feelings about your brand.
  • With fewer opportunities for customers to utilize loyalty points or vouchers, many are likely to expire during this period. Delaying expiration dates is a small way to show your customers empathy and build goodwill long after the pandemic.
  • Finally, it’s crucial to keep customers engaged during this period. Think about ways to engage your customers directly or through brand ambassadors on social media that are authentic, relevant and meaningful to your customers.