The retail industry is evolving rapidly driven by changing customer preferences and tech revolution leading to multidirectional innovation, therein driving growth.
Retail is Full of Possibilities
In the current age where today’s technology and innovation quickly become tomorrow’s stale news how are businesses building a strong relationship with customers – Rupkatha Bhowmick’s exclusive interview with technopreneur Vic Bageria, Founder & CEO, Xpandretail powered by Sàvant Data System.
Growing up in India in the late-80s I’ve had first-hand experience of the significance of the neighborhood grocery store for the community. These used to be the hub of community interactions. People discussed so many things from the price of rice to football matches and everything in between.
Back then the grocery store owner used a large hardbound notebook where he diligently maintained a record of purchases made by every family to be paid off usually by the end of the month. There was no automated inventory management system or artificial intelligence (AI) based tools, yet the grocers knew when a customer will need which items and in what quantities. They hardly ever faced a stockout situation. Where did they store all that customer data – I wonder!
“That was the era of one-to-one relationships which made these traders thrive,”. The 80s retail landscape wasn’t much different in the UAE either, Bageria added who grew up in Dubai and hailing from a business family got an insider view of what drove the retail industry.
Traditional, small format, neighborhood stores or popularly known as bakalas dominated the scene. People shopped at standalone stores that sold fashionable, but non-branded, clothes, he recollected.
“Back in the days people like my father were called traders, not retailers,” he pointed out. “They operated based on their gut feeling backed by a deep knowledge of the market. Customers were loyal, albeit shopped less frequently but never went home disappointed even though the choice was limited.”
Evolution of Retail Technology in UAE
In the early 80s (1981 to be specific) Al Ghurair Centre, UAE’s first large-format shopping centre opened, which was a major milestone for the regional retail industry.
Come the 90s and the UAE retail landscape started evolving rapidly with the emergence of malls such as City Centre Deira (known as Deira City Centre at that time) and large format hypermarkets like Carrefour.
The introduction of Carrefour was a major pivot point in the UAE retail landscape. It changed many rules of the game as Carrefour offered access to a wide selection of products at lower price points compared to the traditional grocery stores which instantly attracted the local and expatriate population. You could buy everything from rice to electronics under one roof.
It was an “aha” moment for consumers and businesses, but one that came with a trade-off – the retail model evolved from “one-to-one to one-to-many” losing the personal touch to a certain degree.
Then came the 2000s era when the UAE, particularly Dubai, started evolving as a global retail hub with the opening of super-regional malls including Dubai Mall, Mall of the Emirates, and Ibn Battuta Mall offering a wide range of international brands. Until then the availability of international brands was limited although the appetite existed.
The evolution continued through the first and second decades of the 2000s with the emergence of multiple online platforms, some major names including erstwhile Souq now Amazon, noon, Namshi, and many more.
Back to the Future with Smart Retail Solutions
With every era as the retail landscape evolved so did access to technology making functions from supply chain and inventory management to heat mapping and checkout smarter, smoother, and more accurate. As shoppers went from corner stores to malls to hybrid and now the metaverse – digitisation became non-negotiable.
However, interestingly, the rules of retailing seem to be going back to the basics as every retailer is keen to know how many times a customer shop at their stores or online, what they like buying, and how often to create a tailored experience.
Essentially it’s everything that our favorite corner store owner did the only difference is now we leverage specific technology to get these details. The big question is in the current age where today’s technology and innovation quickly become tomorrow’s stale news how are businesses building a strong relationship with customers?
We are catering to an ever-evolving consumer but that doesn’t change the essence of retail in its core. People might be buying online or at a store or via an app but that doesn’t change the fact that retailing is still about buying and selling goods. Importantly, it’s all about meeting consumer demands and needs, solving their pain points, and delighting them at every touchpoint.
Having said that one of the biggest challenges that retailers are facing today is the erosion of loyalty. Earlier we trusted the grocery store owner to sell quality products at fair price points. The competition wasn’t as intense as it is today. Consumers didn’t have access to so many channels to purchase goods from. Today the challenge is to offer an integrated and delightful shopping experience to increase the base of repeat customers.
The Science Behind Customer Retention in the Age of Excess
How frequently customers visit their store is a crucial question in the mind of every retail business,
rendering the role of solutions such as people counting, heat mapping, and consumer behavior analysis so significant. Areas that Xpandretail specialise in and has been reinventing over the past two decades.
Today we go beyond just offering basic footfall data, dwell time, or occupancy level. We are now able to predict the future and prescribe solutions based on the power of our AI platform. These crucial insights
including staff scheduling, demographics, repeat customers, and cross-movement within the store enabled through heat mapping help to segregate ‘cold’ and ‘hot’ areas which play a pivotal role in in-store merchandising.
Another challenge that businesses face is cart abandonment, online and offline for a different set of reasons. Online it could be due to the shipment cost, complicated checkout process, and more. In a brick-and-mortar environment when a customer leaves a grocery store after filling up a cart holding goods worth a few hundred dirhams common reasons include long queues and inefficient checkout process.
To prevent such loss of business Xpandretail has created an end-to-end solution that not only counts people at the store entrance and heat maps the store but also counts people at the checkout counters. Through this solution, Xpandretail provides businesses with real-time insights on queue building, if more checkout counters, including self-checkout – must be opened if there are enough people available to handle additional cash tills during peak hours to increase the operational efficiency of the store, reduce the service time and cart abandonment instances.
While the example is from the grocery retail segment, the problem cuts across industries and relates to almost every environment from airport immigration and big sporting events to luxury department stores. Efficient traffic management is nothing short of a science that can make or break a shopping experience.
Xpandretail AI-Based Solutions
Our AI-based Xpandmall solution provides a crucial path to purchase insights into malls which helps them to understand tenant performance while retailers can get access to traffic versus conversion data.
Interestingly, Xpandretail developed this integrated solution almost two decades ago and tested it in partnership with an international retailer. In the Middle East, interest in this solution has seen traction only in the past couple of years.
Why did the adoption take such a long time in the region is the obvious question! Is the region lagging in tech adoption?
For a long time, the trading mindset of buying in bulk and selling on paper-thin margins was hard to shed. It required a significant generational shift in culture and a rather long time to move from a gut feeling based to data-driven decision-making.
To a degree, tech adoption has been slow but generalisation would be unfair, he added. Especially since the public sector in the UAE has typically been more innovation-driven compared to the private sector often leading the tech adoption race. Often private sector entities are catching up and going from slow to exponential.
Yet another challenge is the lack of transparency in terms of data sharing between facilitators like us and businesses, an area that will require more work and collective action. Big businesses are particularly not comfortable sharing data.
But data sharing can be empowering. For example, our AI-based Xpandmall solutions provide a crucial path to purchase insights for mall operators which help them to understand tenant performance. At the same time, retailers stand to benefit as they get access to crucial traffic versus conversion data.
Future is full of Possibilities for Retail Technology
Asked what excites him the most about the future of retail. Something that always excites me about the retail industry is the fact that it’s full of possibilities. The industry is evolving rapidly driven by changing customer preferences and tech revolution, which is leading to multidirectional innovation, therein driving growth.
Despite the rise in competition, there are endless opportunities for businesses willing to embrace change through the adoption of new technologies to engage with customers in different ways, exciting and delighting them at every touchpoint.
Importantly, there is a clear shift towards sustainability and ethical practices, one that’s here to stay.
People Counting and Footfall Solutions – Xpandretail