{"id":3691,"date":"2021-05-05T14:14:52","date_gmt":"2021-05-05T14:14:52","guid":{"rendered":"https:\/\/wordpress.technoarray.com\/retailleaderscircle\/?p=3691"},"modified":"2021-09-03T08:01:48","modified_gmt":"2021-09-03T08:01:48","slug":"the-disruption-and-reinvention-of-the-grocery-industry","status":"publish","type":"post","link":"https:\/\/wordpress.technoarray.com\/retailleaderscircle\/the-disruption-and-reinvention-of-the-grocery-industry\/","title":{"rendered":"The disruption and reinvention of the grocery industry"},"content":{"rendered":"\t\t
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What is the state of e-grocery today and how has this evolved in Saudi Arabia? These were amongst the questions discussed between Cyrille Fabre, RLC Senior Partner from Bain & Co<\/strong> and Ahmad BinDawood, CEO Bindawood Holding<\/strong>, during the 7th<\/sup> RLC MENA Summit that took place virtually in March 2021.<\/p>

The changes in the market <\/strong><\/p>

Cyrille Fabre started the session by explaining that apart from the quarantine, there were a lot of qualitative changes that affected the grocery market<\/strong>. For example, consumers seem to spend money only on things that give them satisfaction while they were looking for good deals. Additionally, in the UAE, there was growing interest in homegrown concepts<\/strong> in F&B which has been accelerated during the lockdown. Other factors that had an impact on the sector were Saudization and female employment.\u00a0<\/p>

Mr. BinDawood continued by analyzing the quantitative and qualitative changes he located in 2020 and the beginning of 2021. Technology developments and innovation play an important role in consumer behavior shift. Today, customers are willing to use some digital platforms that are available for them<\/strong>.\u00a0 Whether it is a web app or an interactive tool within the stores, they complement the journey and experience for the customers. As he noted, all these changes made omnichannel practices necessary to improve customer service.<\/p>

Automation was another must for supermarkets.\u00a0 Things that require the best technology are crucial to maintaining retailers\u2019 cost so they can even provide the best prices to their consumers. Given the disruption in the market, retailers need to take advantage of the opportunities that arise, adapt the changes and quickly scale up their business<\/strong>, as in the cases of international players like Amazon or Walmart. Walmart became one of the largest e-commerce grocery platforms around the world just because they leveraged their brick-and-mortar stores to quickly scale up their operations online and to be closer to their customers.\u00a0<\/p>

Female empowerment <\/strong><\/p>

Female empowerment has changed a lot in Saudi Arabia over the last few years<\/strong> with the number of working women increasing every day.\u00a0 What impact does this have on the grocery market?<\/p>

As BinDawood explained, when it comes to FMCG shopping or grocery shopping in supermarkets, almost 65% of the decisions are being made by females and housewives<\/strong>. Therefore, retailers need to understand their mentality to make the shopping experience convenient to them. This is another reason why Bindawood Holding has significantly increased the number of its female employees in the last few years. Incorporating women empowerment initiatives in its strategy, the company has a more stable workforce and the opportunity to come closer to its consumers.\u00a0<\/p>

New market trends <\/strong><\/p>

Commenting on the impact of the VAT hike in July 2020, BinDawood said: \u201cIt put some pressure on the spending power, but it also gave us the ability to come up with ideas or new ways on how to increase our footfall and responding quickly to the change and demands that happened with the customers\u201d. He continued: \u201cIn BinDawood Holding we are usually focusing a lot on the customer experience, and this is particularly important to us as a business. We are paying attention to the details, like the shopping environment, the products we have, the service of our staff to the customers, the accessibility. Yes, perhaps there was a slight decline after the implementation and that could also be because of the stocking that happened prior of implementation of the new VAT, but we have quickly seen that the number is improving and FMCG responded quicker than perhaps other sectors have when it comes to customers coming back to the stores.\u00a0 We became innovative with our services, our products and how to be where the customers are\u201d.<\/p>

Apart from the VAT, he also noted that new trends emerged reflecting consumer behavior shifts; for example, customers are buying organic food, they want to buy more healthy food, and they are looking for more quality products.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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\n\t\t\t\t\t\t\t\u201cCustomers today are becoming more conscious about their time and how to utilize it.\u00a0 That is one of the main reasons why they are pursuing that channel to do their grocery shopping\u201d.<\/span>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Ahmad BinDawood<\/strong><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The state of e-grocery <\/strong><\/p>

BinDawood continued by sharing his thoughts on consumer behavior and the reasons why customers increasingly order online. As he characteristically said: \u201cCustomers today are becoming more conscious about their time and how to utilize it.\u00a0 That is one of the main reasons why they are pursuing that channel to do their grocery shopping\u201d. Then it is the online experience. Consumers see online different details about the products or information, they can compare prices, ingredients, they want to see how to utilize the products in the best possible way.<\/p>

And what about business? Having an online channel firstly helps retailers to adapt these changes, and secondly, it is efficient in terms of stock. Store the products in one place, getting these orders and then shipping them it is beneficial for the businesses.\u00a0\u00a0<\/p>

BinDawood also explained the philosophy of his company and how they succeeded in scaling up an e-commerce channel following the pandemic. \u201cWhen we started online four years ago, everyone was sceptical about it and even some so much so that they did not think people would ever buy their groceries online, and that it was always going to be limited, since customers wanted to come and feel their products.\u00a0 But you have the global trend that is happening, and people are adapting to that change.\u00a0 I think the secret here is that you need to put the customers at the center point of what you are doing as a business, and then design everything around then and you will see them respond immediately to it.\u201d<\/p>

The state of Saudi Arabia <\/strong><\/p>

Last but not least, following up to the fact that global players like Kroger and Walmart have achieved a sophisticated growth because they invest a lot in R&D and they are the ones that set the trends BinDawood commented that: \u201cWhen it comes to the new trends, when we are talking about FMCG and such trends that are happening globally, we are talking about the size of the market and what sort of impact we could bring to the world.\u00a0 It also depends on what our strength is as a country, or maybe as a population as well. If something that is happening worldwide, let us say in the US, used to take around six to seven years to happen in the region but now we see that it is happening fast and that is because the accessibility of the information is becoming easier than ever before, for example through social media\u201d. And he concluded by saying: \u201cLots of developments are happening today in the capital market in Saudi. So, all that is encouraging and is going to force the ideas to flourish, and you can see the impact even in the region and around the world\u201d.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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An interesting analysis of the state of e-grocery today and how it has evolved in Saudi Arabia.<\/p>\n","protected":false},"author":1,"featured_media":3677,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[7,11,8],"_links":{"self":[{"href":"https:\/\/wordpress.technoarray.com\/retailleaderscircle\/wp-json\/wp\/v2\/posts\/3691"}],"collection":[{"href":"https:\/\/wordpress.technoarray.com\/retailleaderscircle\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wordpress.technoarray.com\/retailleaderscircle\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wordpress.technoarray.com\/retailleaderscircle\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/wordpress.technoarray.com\/retailleaderscircle\/wp-json\/wp\/v2\/comments?post=3691"}],"version-history":[{"count":0,"href":"https:\/\/wordpress.technoarray.com\/retailleaderscircle\/wp-json\/wp\/v2\/posts\/3691\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wordpress.technoarray.com\/retailleaderscircle\/wp-json\/wp\/v2\/media\/3677"}],"wp:attachment":[{"href":"https:\/\/wordpress.technoarray.com\/retailleaderscircle\/wp-json\/wp\/v2\/media?parent=3691"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wordpress.technoarray.com\/retailleaderscircle\/wp-json\/wp\/v2\/categories?post=3691"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wordpress.technoarray.com\/retailleaderscircle\/wp-json\/wp\/v2\/tags?post=3691"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}