Did COVID-19 speed up the final days of Bricks and Mortar (B&M) as we know it? Curated ME interviewed Ayse Arel, Founder of Dubai-based online marketplace, Maison Orient, for her opinion on the future of e-commerce in the GCC post COVID-19.
Flashback to 2017 before ‘COVID-19’ even existed in our vocabularies, Gulf Business noted that already “e-commerce is set to position itself as the key driver of growth regionally (GCC) for retail, contributing 39 per cent in 2017, and expected to cross 50 per cent by 2020, according to Bain & Company’s report E-commerce in MENA: Opportunity Beyond the Hype revealed.” It’s no surprise that e-commerce is popular due to the “the region being broadly ‘cash rich and time poor’” according to Gulf Business. Imagine what the growth projections would have been had we known about the Virus?
To garner real-time feedback, Curated ME interviewed local E-commerce Expert, Ayse Arel, Founder of online marketplace, Maison Orient to hear her thoughts on how e-commerce supports our new socially-distant lifestyles.
CME: In your opinion, in general, how has online purchase behavior changed since the COVID-19 broke out?
AA: The pandemic created so much economic uncertainty that people are afraid to shop at the moment. However, with all the lockdowns and encouragements of staying home, people turned to online shopping for their basic needs such as home supplies and grocery shopping.
Like most people, I believe that COVID-19 will change the future of many industries and many consumer habits. Even people who were hesitant to buy online are shopping on websites now so I think once the people experience the convenience of getting everything delivered to their doorsteps, they will continue to do it.
CME: How might e-commerce companies make up for sales hits during this time?
AA: I think this is a very sensitive time, I personally don’t see it as a marketing opportunity so I am trying to be very careful about the communication despite the fact that I must continue to generate sales in order to survive and make the brands that are within Maison Orient survive. Ensuring that all measures are taken and that brands are abiding by the rules is one way to make consumers feel safer and encourage them to shop.
CME: In this state of uncertainty, how will consumer shopping habits change regarding investing in ‘luxury’ products online right now?
AA: As life slowed down, we all started appreciating what we currently have much more than before. I believe that this notion of slowing down and consuming less will stay with many people. Sustainability will be even more important than before and luxury brands will incorporate this into their production while consumers will shop less. Buying a luxury product is an investment in a way and people use that product for a long time instead of using and discarding it the next season. People will shift away from fast fashion and buy less with more meaning.
CME: What can e-commerce companies do to engage with hesitant shoppers during this time?
AA: I think price reductions or discounts will encourage people to shop now. Shopping is a way of therapy for most people but it might feel like an unnecessary spending at the moment in light of all the economic uncertainties. The wheels need to keep turning, brands need to keep selling to survive. Surviving is the key word here so instead of adding high margins, fair pricing might be a way to keep people shopping.
Another element is hygiene, people worry about deliveries and packages so reassuring them of the necessary steps being taken and contactless deliveries are a good way to engage hesitant shoppers
CME: Is e-commerce the future?
AA: Yes, it always has been, but now with this pandemic changing the world and resetting systems, it will definitely be the future. Retail must survive and one must feed the other but for retail to survive especially during the upcoming aftermath of COVID-19, they must shift the way. People will move and travel less for a long while, but they will go back to their needs and habits of shopping. Instead of going out to shop, they will purchase online. E-commerce will be the center of retail and will need to be implemented into the retail strategies. This current forced way of living will be the natural way of living for most people in the world. Just as people who never shopped online started getting all their needs there, they will continue to do so even for their leisure needs.
Overall, to combat consumers’ hesitations and challenges when it comes to transacting, GCC brands are finding ways to appeal to multiple needs. For example, Ounass is now offering contactless deliveries to alleviate the chances of infection while physical outlets such as Dubai Mall are leveraging Noon.com’s delivery resources to reach consumers during COVID-19. Finally, local gyms are even renting out their equipment to keep their clients fit while at the same time make up for their losses.
Physical brands who normally wouldn’t have had a chance to reach consumers during COVID-19, now do through virtual platforms. Mumzworld, the leading baby e-tailer in the region has just witnessed a 800% sales growth from January to March 2020 due to rising demand, according to Mona Ataya via Arabian Business. “Now you have a sudden acceleration of online, so those who liked it, didn’t like it, or never even tried it, are now all coming online,” she believes.
If virtual transactions continue to be successful, brands may not want to keep operating from physical outlets which require paying extra staff, covering overheads and wasting energy. One could argue that physical stores appease the traditional shoppers who have opted for the in-person shopping experience over online. However, recent AR and VR tech developments have transformed a screen-based 2D dimensional experience to one that comes quite close to real life. The National forecasted “AR and VR will together pump $4.1 billion into the UAE economy by 2030.” Richard Boxshall, senior economist at PwC Middle East adds, “In UAE, these technologies can deliver experiences unlike any other and will make businesses thrive with the right adoption.” To no surprise, AR and VR technology are slowly being adopted by more retail brands globally in order to provide consumers the most realistic service from afar. Determined to create the most realistic experience, IKEA has recently announced its acquisition of AI Imaging startup, Geomagical Labs, to enhance on their previous Apple AR Development kit which enables users to test out virtual products in the comfort of their own living rooms.
With the rate that COVID-19 is peaking, retail brands around the world will eventually follow in IKEA’s footsteps.
CURATED ME’s Take:
COVID-19 has forced consumers to embrace technology to fulfill their needs. If medical consultations, e-learning and in-app deliveries are the new norm then grocery store visits and social mall outings are on their way to becoming obsolete. For the start-ups or niche brands who do not have the capital to transfer operations online or to implement AR, consider cost-cutting and/or applying for external funding. The time is now to act proactive rather than reactive so that when COVID-19 does subside, brands have already found ways to adapt to new lifestyles.
About Maison Orient:
Maison Orient is a curated e-commerce platform for brands, designers and artists from the ‘Orient’ with a mission to tell their stories and introduce them to a wider global audience. We want to connect creative talents from different corners of the world with consumers who are looking for quirkiness and authenticity.