Malls and retail stores in the GCC are slowly opening up, and there are plenty of predictions in the market about the speed of recovery, and changes in consumer response. But let’s be honest – no one has the answer. The one certainty is that at some point, there will be an after. And we believe our industry should tune out all the prognosticators and focus on the pragmatists. We will return to work. Consumers will start shopping in stores and eating out. Malls will fill up again, pilgrims and holiday makers will come back. Predicting when and how fast is a fool’s errand, but we are seeing too many companies gripped in the paralysis of unknown variables. The fact is, it would be easier to try to solve a Rubik’s cube blindfolded than plan in-store comps for the fourth quarter. This does not mean we should do nothing. It does mean that we should stop focusing on what we cannot control.
Now, the industry stands at an unparalleled juncture, with the economy expected to contract by ~3% in the UAE and KSA according to the IMF. More specifically, according to this Bloomberg article, "Saudi Arabia is will need to take “painful” measures and look for deep spending cuts". As a result, retail is facing more change, uncertainty, and risk.
Even today, without a single known variable, pragmatic and experienced crisis managers can create a set of action-reaction-adjust cycles for all operational levers needed to restart our businesses. Over the next several weeks, we are going to tackle one set of operational considerations at a time. We will offer in-depth and pragmatic answers to the “how”, the “what”, and “what if”. There are hundreds of questions that need an answer, and we understand that can feel exhausting to even contemplate. By breaking the areas down, one at a time, we want to help our industry focus attention in a way that will help accelerate hands-on progress. These are some of the kinds of questions we will tackle:
- How do you plan for the phased opening of stores, especially as the role and configuration of the store will change based on government policies (Case in point: Dubai Government’s issued guidelines and protocols for reopening), and customer receptivity? What do you do if traffic is slower? Faster? Non-existent? What happens if you must close again?
- How do you plan for the safety and security of your store staff, but also plan to return to profitable – or nearly profitable – four-wall operations?
- What factors need to be considered as retailers embark on stabilising and enhancing ecommerce capabilities while maintaining margins and optimising operations? How can you leverage stranded in-store merchandise to fulfil online demand? How can you do all this in a practical, realistic, rapid way?
- How can you create forecasting and manufacturing agility to support merchandising and product-development efforts with pragmatic actions?
- How do you do that while considering product and channel mix changes? How do you plan a season with no hindsight?
- How will retailer-brand-vendor-manufacturer-landlord relationships need to change to cope with ongoing needs and economics? How much more difficult will it be in light of the actions taken in and the potential erosion of trust caused by the last six weeks?
- How can retailers stay more in tune with their consumer? How can they engage and communicate with customers to better understand motivations and meet needs while also helping shape behaviours and outcomes?
Over the last several weeks, our industry has raced to navigate and confront the crisis and made herculean efforts to support employees and customers. The weeks and months ahead will be similarly challenging, but the winners will be the planners and pragmatists, not the strategists and soothsayers.