How has Covid-19 altered the retail landscape in the Middle East?
Over the last few couple of years and including the pandemic, I think businesses have gone through many challenges, whether it’s digitalisation, whether it’s Covid-19, or climate change. But this has also created a lot of opportunities.
What we have seen is everyone was stuck at home, but then the evolution of e-commerce has seen a significant rise over the last couple of years whether you look at MENA or you look at the wider global market. I will take China as a classic example and then we will come back to MENA, e-commerce has become so prominent in that part of the world.
If you look at it from a Middle East perspective, the thrust of how e-commerce has taken over in the last couple of years, along with the expansion of digitalisation from an omnichannel perspective, has seen a lot of potential for retail businesses.
So businesses have needed to adapt quickly to this change, bring in the experience and the innovation from an omnichannel perspective, and connect the brick and mortar with your e-commerce platform. I think it has provided a much bigger opportunity for the retail businesses.
How did you adapt to this omnichannel perspective?
So GMG has been running with its digital strategy for a number of years, I would say Covid-19 just accelerated it. So from an omnichannel perspective, we have been investing heavily in our backend, as well as our frontend, wherein we have been able to link both the backend and the frontend systems and deliver a much more immersive customer experience to the wider public.
So this has helped us in not only evolving the brand portfolio in terms of brand enhancement, but also bringing that right customer experience into a wider group. Customers are not here just to shop for a particular product, they’re looking to have that right experience, to be able to look and feel.
So what we as GMG have been able to provide is that when they go to our online platforms they will be able to find that product, look and see what that product is all about, and then they come to our stores and we can deliver that experience to them where they are able to feel the product, and then we are able to have those customers on board.
Brick and mortar has historically been the heart and soul of retail, but that’s no longer the case with the rise of e-commerce, which brings with it questions around distribution and logistics. What opportunities have cropped up in terms of improving these?
Distribution and logistics are a very important prominent part for any sustainable business to grow. It’s not just about them leading as a separate profit centre or a cost centre, it’s a holistic approach, which you need to have in mind. So GMG has taken this on board and through our logistics division, which is Trilogi, we have expanded our logistic facilities to be able to take care of end-to-end logistics and distribution for not only our own brands, but our brands which we partner along with.
As GMG and through our logistics division, we are able to cater to various verticals, whether it’s food, whether it’s sports, whether it’s pharma. We have built an infrastructure which is able to provide a seamless service across all these verticals, you can talk about chilled, ambient, frozen categories, you can talk about medicines, controlled medicines, we are actually a very unique company from a logistic perspective and we have invested a lot in that.
As GMG, if I look from an overall logistic experience, we as a company are not only able to pick up a pair of socks and deliver it to a customer, but, at the same time, pick up the heavy equipment, deliver it at the right time to the customer. So from a wider logistics and distribution experience and infrastructure, to deliver the product, the right product, at the right place, at the right time, is the onus, and that’s what we are working on.
What sectors are you looking to for growth?
So GMG through its verticals, which are GMG Food, GMG Sports, GMG Health, and GMG Consumer Goods, is expanding across the board. We see opportunities across all levels. I’ll take GMG Sports as a key parameter. Expanding our omnichannel strategy, expanding geographically, bringing more lifestyle, and wellbeing as part of our global experience, is something that we are working on across the board.
We have recently launched our new Sun & Sand store in The Dubai Mall. This is primarily taking care of the new Generation Z. If you look at Generation Z, the people born between 1990 and 2010, this workforce has become not only our customer, but also our employees. This workforce is very well educated, has got all the technology and information available to them, and they are focused in terms of wellbeing.
So through this store we have been able to promote that wellbeing and love for sports – basically fun and play – that’s what we are promoting. In addition, we have also launched our sustainable store which is called Make A Difference (MAD) in Dubai Mall. Again, if you look at this generation, they are very focused in terms of wellbeing and sustainability, so we are evolving along with how to support them.
A recent survey done by research from Savanta shows that 57 percent of Gen Z’s are looking at happiness as the first criteria, then it comes to wellbeing, and then it comes to actual money. So as GMG, by promoting those wellbeing products through our GMG Sport vertical, we are able to cater to this.
The next is GMG Health. We are providing a 360 degree holistic overview from a customer need perspective, whether it’s vitamins, whether it’s medical, day-to-day medical needs in terms of vitamins, or your consumption of medicines, as well as your prescriptions. We have expanded significantly on GMG Health, and, in 2022, we see ourselves acquiring more than 40 percent of additional retail space just in GMG Health itself.
The third very important vertical is our GMG Food. We are continuously looking at expanding the horizon of wellbeing and providing nutritious foods to our customers. In 2022, GMG will be coming online with five new factories. Up to last year we had one factory, we are now expanding our manufacturing footprint by adding another five more factories.
We are going into meat, we are going into salt, spices, as well as other products which are going to be manufactured locally and distributed globally. If you look at the Middle East, especially UAE, and many other economies, most of the products are being imported. We want to change that perspective. We want to manufacture and not only use that for the local production in the right quality, right product, but also expand that horizon globally.
Our Asia expansion has also helped us to take our homegrown Sun & Sand Sports brand across the globe. What we are seeing is people are hungry for these concepts. As a philosophy and as a value, we are not only looking at promoting the local production and local brand while taking those outside the GCC or the MENA framework.
How are you addressing the question of sustainability?
Sustainability is a very important value and I think if you look at organisations globally they are following the principles of ESG as one of their main verticals. GMG is also taking that very seriously. The launch of our first sustainable store, MAD, which happened a couple of months back, only lays down the philosophy and the principles of moving towards that direction. Food manufacturing, where we are coming into in terms of factories, gives us another important part to play in terms of sustainable products.
We not only control the sourcing of those, but also produce those products in a way and in an environment which is more sustainable – in addition to looking at the packaging, and then looking at the circular economy. So I think it’s an evolution which GMG is working out both from food as well as from a sports perspective.
How will further technology development impact the future of retail?
GMG’s digitalisation strategy was adopted much earlier than what we have seen in terms of the push because of the pandemic. Our data strategy has been consumer driven, which is very focused in terms of how we see the consumer evolving and embracing our products.
We have invested a lot in terms of a backend and frontend to bring that omnichannel experience with the use of data analytics, and other technologies, such as artificial intelligence, to be able to bring that customer experience to the forte.
One of the key things which we are working on is zero friction retail. When I say zero friction retail what I mean is that the customer gets a very immersive experience, with a less number of clicks, and more detail. So a contactless retail experience which embraces the use of AI, as well as machine language in terms of loyalty programmes, and enhancing the CRM database.
I think it’s a mix of things which we are working on. If you look at a lot of concepts that are actually going on in the market, people are talking about NFTs, people are talking about metaverse, but I think the most important part at this stage is to see how you are able to evolve and help the consumer get that experience.
So if you’re able to provide that zero friction retail experience by way of an integration of your backend and your frontend, bringing that omnichannel strategy to the forte. That’s where the change and evolution is going to be. GMG is an evolving company, that’s in our DNA, one family, with that evolution helps us in embracing that, and bringing it back to the customers.