– The pandemic prompted a massive increase in online distribution
– Brick-and-mortar retail stores remain popular despite capacity restrictions
– Retail businesses have adopted a blended, omnichannel approach
– Malls are increasing their emphasis on entertainment offerings
In Qatar, retailers that have successfully weathered the Covid-19 pandemic are now committed to a blended, omnichannel distribution strategy, which involves boosting and expanding their digital offerings while at the same time maintaining a brick-and-mortar footprint.
The pandemic gave rise to a massive increase in online shopping, to the extent that many observers predicted that brick-and-mortar stores would be phased out.
However, instead of closing physical branches, many retailers – which may have lacked the capacity, motivation or know-how to scale up their digital platforms – have partnered with major e-sales platforms and delivery companies.
“The future of traditional players in retail will be in omnichannel in terms of their reach,” Mohamed Althaf, director of Lulu Group International, told OBG.
“While there was certainly an increase in e-commerce for groceries during the pandemic, numbers are now returning to the pre-pandemic average. In part, this is because consumers still value the ‘touch and feel’ experience of brick-and-mortar stores, even while some have maintained a preference for e-commerce."
A recent report by international consultancy KPMG notes that stores now need to be adept in areas such as online fulfilment, data analytics and process automation.
Another consequence of the pandemic is that retailers are increasingly seeking to differentiate themselves through their value addition. Whether this is by way of a brand’s aim to promote corporate social responsibility, for example, or the ease and experiential richness of the on- and offline shopping experience, retailers are needing to do more than simply provide goods and services.
When non-essential stores were shuttered at the outset of the pandemic in March last year, the authorities moved quickly to facilitate the expansion of digital options.
This was facilitated by an existing predisposition to digital methods among the population. According to the Ministry of Transport and Communications, 60% of consumers in Qatar expressed a desire to shop online in 2019.
One entity that leveraged the increase in digital shopping was EButler, a one-stop services platform which recently raised a total of QR3.4m ($934,000) in seed funding, according to local media reports. The platform has helped a range of businesses adopt an omnichannel approach to providing goods and services, and now represents over 300 merchants.
Although the country is seeing a second wave of Covid-19 cases, as well as the consequent reimposition of various lockdown measures, as of April 7 shopping malls were permitted to remain open at 30% capacity. Looking ahead, the ongoing rollout of the vaccination programme has led many to anticipate that virus could soon be brought under control despite the current surge.
While consumers continue to use digital platforms, offline shopping remains popular. Industry insiders anticipate that this trend will continue as retailers adapt their in-store offerings to meet evolving consumer tastes.
“Sustainability, particularly through the application of circular economy principles in product design and shopping processes, should be the central thrust for innovation in food retail; artificial intelligence and big data have proven to have less disruptive potential than previously expected. On the contrary, an increased reliance on the 'just in time' supply chain model has proved detrimental to the supply chain,” Althaf told OBG.
Sustainability and the circular economy are policy priorities in Qatar at present, particularly in light of the nation’s commitment to organise a sustainable FIFA World Cup in 2022.
The retail panorama in Qatar is notable for its preponderance of malls: super-regional malls take up 52% of total gross leasable area in the country.
This has heightened the need to drive a return to offline shopping.
“In the GCC, malls are a central cultural and social component of the community,” Emile Sarkis, general manager of Mall of Qatar, told OBG. “As a result, there is a strong case for shaping the retail environment so that offline and online channels coexist in a mutually reinforcing way.”
Prior to the pandemic, there was already a move towards introducing new food and beverage concepts and entertainment options, to draw more footfall to malls.
In line with the broader drive to enrich the offline shopping experience, this tendency is set to expand going forwards.
“Malls can only differentiate themselves through entertainment. At the end of the day, the brands and shops found in the malls in any given market are very similar; a diverse shopping experience and entertainment offering, particularly one catering to both kids and adults, must therefore be a fundamental pillar of the strategy,” Sarkis told OBG.
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