The global economy is deep into the worst economic crisis of the last 100 years. Across the Middle East and North Africa, the economic outlook is perhaps even more severe than elsewhere, as the region faces unprecedented dual shocks from COVID-19 and the collapse in oil prices. With malls closed and social distancing in place, consumers are simply not spending money like before. As retailers, this change in consumer behaviour places enormous pressure on our industry. However, as the global economy slowly restarts, we must be ready for the new normal. Emerging consumer demands are showing a rising desire for a better ‘everything’ – circular supply chains, quality over quantity, local economic commitment, local knowledge transfer, and a solid commitment to sustainability. The successful companies of tomorrow are undoubtedly the ones that address these demands now and in the mid-to-long term.
The silver lining
It is no surprise that economists at the World Bank expect the output of the MENA region to decline in 2020. However, it is encouraging to see examples of how retailers are evolving and reinforcing their operations to prepare for a post-COVID-19 retail industry. While these retail examples at present are mostly insufficient to cope with the sweeping changes that are coming, it is reassuring to see companies moving in the right direction and making the necessary steps to begin this vital journey towards renewed prosperity.
Implementing new ideas for a better tomorrow
Carrefour strives to be at the forefront of this retail evolution, ensuring that we, along with our stakeholders, can rebound when conditions improve. That is why we decided to accelerate the launch of our online marketplace through carrefouruae.com, providing Majid Al Futtaim’s shopping mall tenants and other businesses across the UAE with a new e-commerce channel to reach their customers. The marketplace on carrefouruae.com currently lists more than 250,000 products, with sales increasing by more than ten times in the last ten weeks. Furthermore, the platform now logs over 1,300 average daily orders and represents an opportunity for businesses to continue reaching their customers at this time. It also has the potential to enable significant growth for businesses looking to begin or expand their online offering and reach a much larger customer base.
Accelerating the digital transformation is a core step in preparation for the future of retail post-COVID-19. The utilisation of blockchain technology is playing a fundamental role in this transformation. For example, the automation of serialised product data exchange using blockchain technology has the potential to eliminate the need for time-consuming audits. Furthermore, it can ensure increased productivity and efficiency of the supply chain, while allowing the consumer full traceability of each item in the store – from farm to basket. While most brick-and-mortar retailers remain behind when it comes to the adoption of blockchain technology, a shift in technological thinking is taking place. This shift is one which could lead to numerous benefits, including fraud prevention, efficient management of loyalty points, accepting cryptocurrency payments, inventory tracking, admin automation and much more.
Similarly, supply chain is also undergoing its own transformation. We are witnessing new collaborations between different members within the retail sector by pooling orders to benefit from economies of scale, while minimising the risk of supply disruption during uncertain times. This method of securing supplies benefits from cheaper rates, less fragmentation, more effective distribution, and reductions in inventories. Although it is a familiar concept, supply chain collaboration has taken on a much greater urgency and importance during these challenging times. Capable of delivering significant improvements over the long-term, particularly while pricing is under pressure, I believe this to be another positive idea for a better tomorrow.
In anticipation of future challenges
While we all hope there will not be another crisis of this magnitude for another century, we can take away valuable lessons from this global health crisis that will steer us through future challenges. We will continue to support each other and share our insights so that when the economy reopens, all necessary preparations are in place for the retail sector to rebound with vitality. Until then, we hope to see – and engage with – further innovations from across the MENA region, demonstrating our unique ability to weather the storm and prepare for brighter days to come.
Written and contributed by:
Majid Al Futtaim – Retail