Massive ‘cross skilling’ and ‘up-skilling’ programmes underway to battle e-commerce threat to bricks and mortar retailers.
Many leading bricks and mortar (b&m) retail chains in the UAE and the wider GCC region are launching massive “cross skilling” and “up-skilling” programmes for their employees to battle e-commerce rivals in the new marketplace after coronavirus.
They aim to create a pool, tens of thousands strong, of “omni warriors” in a bid to transform into multi-channel companies to adapt to the new retail landscape, the HR head of a major UAE retail chain told Arabian Business.
“While hiring was an option, it was more expensive than retaining and training our very own (employees). More importantly, the speed to market and customer/product understanding was better with our existing staff,” said the HR boss, who wished not to be identified as the plans have still not been made public by the company.
“Since Amazon entered the market, many of the big retailers including us have started building robust e-commerce platforms – both for our brand products and independent set-ups. However, it quickly dawned on everyone in July that we are – or for that matter no one in our industry – are truly ‘omni-ready’,” the senior executive added.
However, retail industry experts have questioned whether upskilling existing staff is a better option than hiring new specialists.
Ashok Kapoor, a management expert and managing director of Dubai-based consulting firm Organisation Pivot, said: “Unfortunately given the speed of change, organisations do not have the luxury of re-skilling existing manpower but must hire subject matter experts who can drive digital transformation with utmost urgency and agility.
“To succeed in the ‘new normal’, capability in omni channels for established b&m retailers is no longer a ‘nice to have’ but a prerequisite for survival.”
Ashok Kapoor, managing director of consulting firm Organisation Pivot
Sameer Nagarajan, a Dubai-based retail and FMCG sector expert, agreed.
“Increasingly, with the pandemic continuing to keep the market uncertain, most of the big retailers have finally realised that they cannot depend on their b&m sales only,” said Nagarajan, who headed the HR functions of Unilever and Dabur International in the past.
Retail industry insiders said a recent market study showed that no one in the b&m segment was 100 percent ready to do the hard balancing act between online and offline store sales.
“More than processes, it was behaviour of the sales staff. Were they willing to ‘live for each other’ in the battle for customers footfall and mindshare? This was crucial for putting in place the omni-structure,” said a senior marketing executive in another UAE-based retail chain, who also asked not to be identified.
Al Shaya Group, Al Futtaim Retail, Majid Al Futtaim, Savola Group, LuLu Group International, The Chalhoub Group, Al Hokair and Landmark Group were among the largest retail chains in the Middle East in 2019.
Legacy vs Survival
The UAE-based HR boss also told Arabian Business that the retail industry as we know it is in for a big change.
“Retail in its current form can totally collapse and give birth to a new kind of hybrid retail – online driving the stores vs the other way round,” he said.
On the reskilling project, he said: “A root cause analysis was carried out and we discovered three pillars to build – people, omni process structures and fulfilment supply chain.”
“We did a full-scale skill audit on who’s ‘omni-ready’ across our retail store staff, managers and leaders,” he added.
According to industry insiders, the retail chain majors also worked on the reward structure for employees as part of this transformational project.
“The compensation packages – both fixed and incentives – are being redrafted in line with the current times. We understood our standard reward mechanisms were not going to work anymore. Market was changing rapidly and so was the talent pool,” said another senior executive.
Customer fulfilment is also a big part of the game being drafted by the retail majors. “The biggest issue we and all big retailers were suddenly facing was stock ageing. It was hard to predict when the stores will be fully open, when the customers’ footfall patterns will resolve and when e-commerce sales will flatten,” the HR head said.
To mitigate these challenges, retail chains resorted to automation – have machine learning bots observe demand cycle and help in predicting better.
“We are also working on putting in place robust supply chain systems so that there will be less dependence on third parties,” another retail company insider said.
“The role of a chief customer officer is evolving fast – who can look at data ferociously at all times to manage effective and agile product flow from factory to the right shelf – across regions, stores and demographics,” the executive said.