While online sellers have enjoyed unprecedented business as a result of customers stuck in their homes, their brick and mortar rivals haven’t had it as easy. In fact, many stores, malls, and others physical shops have seen their footfall drop, either due to COVID-19 restrictions, or due to decreased business. Regardless, the situation has been highly problematic, putting many out of jobs and threatening many businesses both small and big with closure.
Emaar Malls, one of the largest retailers in the region, for example, disclosed a 69% drop in profits for H1 2020.
So, how can retailers adapt to an evolving shopping experience given increasingly digitized consumer experiences? What about the cybersecurity risks that come with them? AMEinfo spoke with Wissam Acra, Regional Sales Manager of Genetec, an IP-based security solutions provider who helps retailers secure their digital operations, to learn more.
1. Can you discuss how you’ve supported brick and mortar retailers in the Middle East in previous years before COVID-19 struck?
Genetec showcased high-end security and surveillance systems in 2017 in the Middle East at Intersec. The Genetec Retail Intelligence application filters and analyses incoming video surveillance data to produce actionable intelligence about store operations, buying patterns, and trends.
Data gathered by the platform aids the marketing, operation, and merchandising staff of boutique-style stores or large multi-site retailers to improve their customers’ experiences and boost in-store profitability by increasing consumer engagement.
The platform also helps retailers analyze and correlate information gathered from multiple sensors such as video surveillance cameras and point-of-sale systems.
Moreover, when it comes to today’s solutions, physical security solutions like video surveillance systems are absolutely essential in today’s retail environment and have been for some time. These tools help loss prevention departments protect people, property, and merchandise from the slew of threats retail establishments face on a daily basis: property theft, slips and falls, money handling, suspicious activity, and so much more. Security Center Federation allows retailers in the region to centrally manage physical security, including cameras, access control, video analytics, and intercom, across multiples site.
2. Fast forward to today, these stores have been devastated by decreased spending, lockdowns, and growing pressure from their online rivals. What is Genetec’s ‘diagnosis’ of this situation?
Retailers, particularly brick and mortar, are facing challenging times today. We have seen a drop of profits for large shopping centers in the region. Other retail groups with several outlets across the Middle East have closed a percentage of their stores to invest more in remaining shops.
While the COVID-19 pandemic slowed down the norms of retailers, it also simultaneously speeded the digital transformation in the region. According to the International Data Corporation, public cloud spending in the Middle East, Turkey, and Africa (META) region will rise to $2.8 billion this year and top $6.5 billion in 2024. The digital transformation is the diagnosis for retailers.
When it comes to security operations however, retailers can try to do more with less. In a survey conducted by Genetec, ‘Managing costs’ is the biggest concern for retailers . One way to do this is through centralizing security operations in their current stores. What this means in practical terms is fewer personnel monitoring security for hundreds of stores. Instead of having someone in every store sitting in an office watching video from surveillance cameras, a unified platform allows retailers to centralize security across all stores in hubs, security operations centers, or investigation centers. With centralized locations for monitoring, reporting, investigating, and granting access, fewer security personnel are required to watch all activity at multiple stores. In this way, centralizing operations acts as a force multiplier.
Deploying a unified platform like Genetec Security Center for example, can reduce the expense associated with having dedicated personnel in each store without compromising on security or loss prevention.
3. The good news is that COVID-19 has inadvertently accelerated digitalization journeys, encouraging laggard brick and mortar retailers to finally explore e-commerce options. In your opinion, are we already seeing such a shift today in the MENA region, or are retailers remaining stagnant?
Retailers in the UAE are definitely moving toward frictionless shopping, for example, Majid Al Futtaim launched carrefouruae.com 8 months ago to drive Carrefour online sales in the UAE. After stores were closed in March, Carrefour witnessed a boom in daily online sales of 50%, compared to the same period in February.
Moreover, a huge market in the retail that finally transformed to being more digital is the luxury retail market. Before COVID-19, most luxury retailers were hesitant about going online as it would dilute the brand image and remove the sense of exclusivity for their niche markets. After COVID-19 however, this completely changed and luxury retailers are finding new and creative ways to move to online ecommerce.
4. How can retailers effectively adapt in your opinion, and how can Genetec help in this regard?
The increase of frictionless shopping in the region can present new challenges in terms of store monitoring and loss prevention. Another factor for retailers to consider is that budgets are being cut every year to stay competitive, which has caused them to think differently about their business strategies.
When it comes to security operations however, retailers are trying to do more with less. One way to do this is through centralizing security operations by deploying a unified platform like Genetec Security Center for example. This reduces the expense associated with having dedicated personnel in each store without compromising on security or loss prevention.
What this means in practical terms is fewer personnel monitoring security for hundreds of stores. A unified platform allows retailers to centralize security across all stores in hubs, security operations centers, or investigation centers. With centralized locations for monitoring, reporting, investigating, and granting access, fewer security personnel are required to watch all activity at multiple stores. In this way, centralizing operations acts as a force multiplier.
5. Beyond the pandemic, what are the greatest challenges facing the sector?
Because of the shift’s retailers are making towards becoming more digital, the top problem that retailers are facing is the eCommerce competition. The DED Trader license in Dubai, which supports the growth of UAE e-commerce, has seen an increase in applications – 943 licenses were issued to new businesses in the first three months of 2020 (a 179% increase from the first three months of 2019).
These statistics tell a clear and positive story in the UAE it highlights how E-commerce is here to stay, develop and grow, and so will the competition between retailers.
6. Where do you see the retail sector going in a year or two, as COVID-19 hopefully begins to subside, given that digitalized retailers will become more common?
After COVID subsides, we see retailers make their sales through a hybrid of traditional and online channels. The reason it is not majorly shifting towards ecommerce is due to the “mall-centric culture” engrained in the Middle East. That sentiment probably explains why Majid Al Futtaim, for example, recently confirmed that it is going ahead with its plans to open the City Center Al Zahia mall in March 2021.