Arabian Reseller speaks to Wissam Acra, the Regional Sales Manager at Genetec, about the impact of COVID-19 on the retail sector, the state of online shopping in the region, and digital transformation for retailers
What sort of impact have COVID 19 and the related lockdowns had on the retail sector in the region?
Due to COVID-19, retailers, particularly brick and mortar are facing challenging times since online shopping has caused major disruption and is putting pressure on everyone’s ability to be profitable. We can see a drop in profits for large shopping centers in the region. Emaar Malls in the UAE for example, revealed a 69% drop in profits for H1 2020, which makes it harder for retailers to operate costs 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.
Has online shopping increased during the COVID 19 pandemic?
Online shopping has definitely increased during the pandemic. We are seeing an increase in the number of retailers moving toward frictionless shopping. Majid Al Futtaim for example, 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.
Do you believe COVID 19 has enabled for a digital transformation for retailers?
Before the pandemic, retailers were already slowly going for a digital transformation however, COVID 19 speeded up the process not only in the region, but globally as well. Other than huge retailers expanding onto omnichannel, a finding by the International Data Corporation shows that 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.
How can brick and mortar retailers transform themselves to ensure business continuity? Do you think omnichannel is something they need to consider now?
Brick and mortar retailers should consider expanding through omnichannel since the increase of frictionless shopping in the region can present new challenges. Another factor for retailers to consider is that budgets are being cut every year to stay competitive, which can cause them to think differently about their business strategies and consider omnichannel as an opportunity.
When retailers view expanding onto omnichannel as an opportunity, it allows them to gain more profits by targeting consumers online who are unwilling to physically go to their stores. When it comes to security operations however, retailers can try to do more with less. 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 their 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.
What sort of suggestions do you have for retailers to cut down on their costs?
Deploying a unified platform can reduce the expense associated with having dedicated personnel in each store without compromising on security or loss prevention. By migrating to a cloud-based VMS that records video directly to the cloud, retailers eliminate the need to keep recording hardware on-site.
On-premise hardware can be costly to maintain, update, and replace. When deploying a true cloud solution, video captured in-store is recorded directly to the cloud and then federated to an operations center. This has the desired effect of eliminating all costs associated with on-premises hardware.
Reducing hardware is one of the main drivers in the decision to move to the cloud. First, it eliminates the upfront costs associated with purchasing and installing physical infrastructure in all stores. Additionally, migrating to the cloud reduces the long-term costs of having to maintain and update that infrastructure. This can include the labor and logistics of sending personnel to maintain, fix, and replace servers.
Even when servers are in good working condition, they still require personnel to ensure that systems are up to date and compliant with IT requirements and other regulations. With a cloud-based VMS, retailers not only eliminate the hardware kept on-site and all associated costs, but they also save money by delegating software updates and maintenance responsibilities to the vendor.
Some retailers also keep servers on inventory to ensure that they always have backup equipment available in case of malfunction. However, this requires that they store multiple—sometimes hundreds—of servers in warehouses. The cost of purchasing and storing backup servers can be significant. By deploying a true cloud-based VMS, retailers eliminate inventory costs since video is sent directly to the cloud.