The global COVID-19 pandemic has shaken nearly all industries, but the retail sector was hit particularly hard by the measures put in place by governments to curb the spread of the coronavirus.
While the grave economic crisis that ensued gave rise to a fear of losing revenue, occupancy, and cash flow, the sudden uptick in e-commerce has induced some to worry or even project that customers have settled on online shopping, forever.
As a cyclical industry, retail is no stranger to periods of boom and recession resulting from economic expansion or contraction.
Retailers around the world have seen a rebound in consumer spending after they reopened after weeks or months of store closures. Retail sales surged 10.7 percent in the US in March this year, although partly driven by stimulus checks. In Saudi Arabia, malls have witnessed a promising recovery with a steady increase in in-store purchases.
No substitute for in-person retail
There is no denying that COVID-19 has altered consumer behaviors substantially with emerging economies witnessing substantial growth in online shopping. However, online shopping is not an alternative to in-person retail yet. There are many elements of brick-and-mortar shopping that cannot be replaced by online — spontaneous purchases, the ability to evoke experiences and sensations, meaningful engagements, and of course, being able to physically handle the products.
Brick-and-mortar businesses can create greater and even more engaging retail experiences if they incorporate digital technology into their physical store environments and serve the customers’ need for convenience.
Digitization not a threat but an opportunity
Both online and offline marketplaces can meaningfully and coherently exist. Kinan, a Saudi closed joint stock company that develops residential communities and operates malls in the Kingdom, partnered with the region’s leading e-commerce player Noon to provide pickup services for its shopping centers’ online clients. “With this new feature, we are presenting them new possibilities of retailing by linking digital and physical shopping, while continuing to offer in-store experiences enriched by a strong human connection,” said Konrad K., chief operating officer, malls, Kinan.
New future demands better
The post-pandemic consumer’s appetites and behaviors mean that malls have to be elevated further into experience centers and multi-purpose destinations. They can bring back their customers by introducing diverse and extensive retail, leisure and food and beverage offerings.
“In 2020, we made it a priority to identify gaps in the offerings at Kinan Malls. In line with our exclusive insights into the future of retail, we developed strategies and executed projects that would create the best possible retail presence and value for our shareholders, visitors and partners. We have long identified that the redevelopment of our assets would eventually result in higher footfall and spending,” said Konrad.
“Realizing that proximity to home continues to positively influence people’s decision when choosing a mall, we have built a strong footprint in Saudi Arabia. With 10 malls across six different locations, Kinan Malls is currently one of the largest mall operators in the Kingdom.”
He added: “Despite mobility restrictions, supply chain disruptions, and labor shortage, we have managed to deliver a positive financial year in 2020 with a net profit.”