With the consumer shopping routine changing, how can offline retailers keep up?
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New studies have found that e-commerce is experiencing exponential growth, affecting the offline retail sector as the world turns to digital platforms since Covid-19. Dubai CommerCity expects the e-commerce market to reach Dh16.88 billion in the UAE. According to an Unctad report, e-commerce sales due to the Covid-19 outbreak will increase this year as this crisis has created a cope for digital solutions. Logistics intelligence platform ClickPost has noted that most people will turn to online payments due to Covid-19, and this will result in a reduction of cash-on-delivery in the UAE. As offline businesses move online, they are reskilling their employees and training them to perform other tasks due to the changing nature of the job. As per the Dubai Future Foundation's post-Covid-19 report, consumers have widely avoided visiting offline stores. As a response, retailers are gearing up to move their business online. However, not all retailers are able to achieve such a digital transformation in a short time, creating scope for the government and e-commerce platforms to provide support. DFF has also said that several offline retailers are at risk as to the pandemic results in their closure. It suggested that if new and existing e-commerce platforms provide access to these retailers to sell their products online, they wouldn't have to spend on investing in moving their business online. Certain points outlined by DFF:
- Testing of every visitor before entering the shopping mall and increased popularity of touchless shopping experiences with self-checkouts will also benefit the shopping malls in the country.
- There's an opportunity for governments to ensure that their smaller retailers with limited online presence are not left behind by providing them with an e-commerce platform of their own. This will help smaller retailers survive the pandemic and aid them in the long term as consumer shopping habits change.
- In the short term, banks should restructure maturing loans in the retail sector, providing a lifeline to an industry suffering from low revenues.
- Shopping mall landlords should offer waived rents to retail tenants during the lockdown.
- Reshuffling the employees, allowing growing sectors to manage the surge in demand, and preparing employees for new roles.
The original article was published in Khaleej Times on May 31, 2020. You can find it here.