Which Player Will Survive the Struggling Retail Industry?

Published August 30th, 2020 - 06:30 GMT
Which Player Will Survive the Struggling Retail Industry?
Jumbo Group CEO using 'new normal' to bring company closer to customers. (Shutterstock)

An industry veteran believes only omnichannel players will survive the ever-changing retail landscape, while companies depending on either online or brick-and-mortar concepts will face a survival challenge in the times ahead.

"There is an evolution that is only a few years old called omnichannel. We believe for long-term players, there is only omnichannel. There is no one channel retailer who will survive. Even Amazon is becoming omnichannel as it is acquiring retailers; it recently acquired Whole Foods. I won't be surprised if online-only players buy brick-and-mortar retailers, and brick-and-mortar retailers who don't have an online presence will not survive," says Arvind Agrawal, CEO of Jumbo Group.

Prior to Covid-19, online retail was doing very well but it is grew exponentially during the pandemic, he added.

"There was a month when online sales were growing 100 per cent because brick-and-mortar stores were closed. That momentum is continuing. We are currently running at 150-160 per cent over and above our past year's online revenue," Agrawal told Khaleej Times in an interview.

"Earlier, online was mainly phones and wearables, but now it is IT and networking. The amount of television and entertainment products purchased online in the last three months is amazing," he added.

'New normal', new opportunity

After joining in 2017, Agrawal has been leading the over-40-year-old Jumbo Group from the front and is using the "new normal" to bring the company closer to its customers.

"Post-Covid-19, we looked at major industries like hospitality, education, healthcare, government and small businesses to see what the 'new normal' is. So we came up with a solution for each industry to deal with the 'new normal'. One of the interesting things that we started is outsourcing services for customers who want to release cash that is trapped in their IT assets," Agrawal said.

"For example, schools need to enforce safe distancing, deliver online lecture and use a different system to evaluate students, while students need to record lectures and be able to retrieve them later. Now all these put pressure on the company's network infrastructure and existing ones don't support it. Then there is the pressure of cash flow on schools due to non-payment of fees. So, we would buy back their IT assets and release it to them along with services. Schools can focus on their core business and we will take care of their IT infrastructure. Similar things for IT, hospitality and others as well."

In addition, Jumbo Group is also assisting firms to go paperless in line with the Dubai government's strategy.

Massive digitalisation

Thanks to massive investments made in digitalisation, Agrawal revealed that Jumbo has reached its pre-Covid growth.

"We are back to pre-Covid. If there is no second surge in Covid cases, then we are doing better than last year. In August, our forecast is that we may exceed last year's August sales as we are acquiring market share because we went through a massive digitalisation transformation process in the last two years. We were lucky to finish it before Covid."

He added that firms playing by the book are doing well as inherent demand is not dead and there is good demand from the locally-dominated population.

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