If there’s one thing that has gained the maximum popularity during the lockdown triggered by COVID-19, it’s the ecommerce industry. Not only e-commerce platforms but online retailers have also witnessed drastic growth both in terms of their potential and profitability. The industry was already thriving prior to the novel coronavirus. However, now that people are confined to their homes and avoiding shopping malls, it has become a sort of need of the hour for them to opt for e-commerce platforms to shop for products they require.
Dubai Future Foundation (DFF) released a new report titled
“Life After COVID-19: Retail”.
In this report, they have discussed the impact of the global pandemic on the ecommerce industry and the potentials it holds. This report is a part of a series of reports launched by the Foundation. Each report in this series addresses new opportunities and challenges the region will face once this health crisis is over.
To support their argument in favour of the rise of online sales, DFF’s report cites multiple real-life examples with accurate statistics. They have talked about Majid Al Futtaim (MAF) a Dubai-based organisation that operates a total of 24 shopping malls including Mall of the Emirates, have also considered to step into the ecommerce industry. This organisation has witnessed a 59% increase in online sales in March 2020 as compared to the previous year. Similarly, BinDawood, a Saudi Arabian retailer, had a 200% hike in its online sales in recent times amidst the lockdown. The fear instilled by the COVID-19, coupled with the restrictions levied by the government, made people stay at home and shop online.
The findings of this report shed light on the growing trend of business entities shifting their operations to e-commerce platforms. For them, it can become an expensive and prolonged procedure to create a digital presence and shift their business online. Having said this, for retailers, the process can prove to be a rather inexpensive one. The reason is the availability of numerous pre-existing e-commerce platforms. They can utilize such platforms to make their products available to their customers. For instance, Emaar, a Dubai-based real estate firm, has launched a virtual version of Dubai Mall. It is available on noon.com. Numerous stores located in the mall are available on this simulated shopping centre, where customers can shop online.
The report also stresses the fact that this shift of masses on online shopping due to the global pandemic is not only noted in the UAE. It is a trend followed globally and ecommerce industry is benefitting from it. The closure of many outlets during the lockdown, across the globe, is another reason why people have shifted their preferences to online means. As of now, almost 630,000 outlets have experienced a forced closure. How many of them will resume their operations once the curve is flattened is also uncertain at this moment. However, what’s certain is the fact that major retailers, around the world, are going to experience financial distress.
While employees, working in different sectors, have been sacked from their jobs due to the organisations’ inability to pay them. E-commerce is one such industry that has seen a rise in the number of employees. To meet and accommodate the growing demands on online shoppers, Amazon hired 175,000 new employees. Other than this major name in the e-commerce world, many other e-commerce retailers are currently hiring more employees. For example, Instacart hired 300,000 employees in March 2020. This grocery delivery & pick-up service providing North American company also announced hiring 250,000 more manpower to meet the growing demand.
The new trend of relying on online shopping has not only created an array of opportunities for retailers but delivery and logistic services as well. Without the services of the latter, e-commerce companies cannot fully cater to their customers. For instance, companies that offer food delivery services have also seen a rise in popularity during the lockdown phase.
The latest technology has also impacted the real estate industry. The concept of virtual property viewing tours has now been introduced. Buyers can now take a close look at any shop for rent in UAE without having to step out of their homes. They can virtually tour the commercial property and decide whether they want to get it for rent or not.
This report also highlights the fact that banks can play an active role in the growth of the retail sector. They should restructure maturing loans so that companies that are already getting low revenues can continue their operations. Similarly, landlords can also play their part to provide a lifeline to this industry. They can waive rents to their tenants in the retail industry.
Although the lockdown restrictions have been lifted in major cities of the UAE, it is given that people won’t visit shopping malls the way they used to in the pre-COVID era. It is not only due to the fear of getting infected. The fact that online shopping habits will become more routine is going to become a major contributing factor in this regard. The convenience and comfort people derive by shopping online right from the comfort of their homes is a major factor that has led to the growth of online shopping even when the global pandemic hadn’t come into the picture.
As per the report, a way to bring people back to shopping malls, once the pandemic is over, is the introduction of tax-free shopping. This tax-free leverage should only be given to those who shop at malls. This will encourage more people to return to malls and help to increase the revenues of retailers. Another way to bring back more people to shopping malls is to certify them as COVID19-free. Authorities can test the malls thoroughly and disinfect it to term it as COVID19-free. Moreover, another practice that can be adopted here is to test each visitor when they enter the mall.
Shopping malls can also introduce the trend of touchless shopping experience. Shoppers can perform self-checkout procedures without having to get in contact with the touchscreens installed in the mall.
A clear picture of how things are actually going to unfold will be apparent only once the curve is flattened and the pandemic is over.