Digital Transformation within the UAE’s Retail Sector during the COVID19 Pandemic


With the rapid changes in the retail environment, there has been an urge to resort to new initiatives that enhances the value creation to customers and allows businesses to be able to sustain their performance amidst the fierce levels of competition. This is where the role of digital transformation comes into play; thereby, causing digital transformations to be an integral and business-critical strategy rather than a nice-to-have tactic to enhance business performance. The urge to digitalise the retail industry became more evident amid the COVID-19 pandemic. It has been observed that the retail sector is among the hardest-hit industries during the pandemic; where demand, supply and control risks were among the disruptions witnessed by retailers. Despite the wide momentum towards the investigation of the impacts of digital transformation on business profitability and productivity in other industries, including the manufacturing industry, such aspects have received little attention with regards to the retail sector. Furthermore, it has been evident that much attention is focused towards the investigation of changes in customer attitudes and behaviours towards e-commerce within the retail sector with no consideration to their shopping experiences. Therefore, this research aimed to bridge the existing gap in the literature through the investigation of the key impacts of digital transformation on three primary aspects namely, productivity, profitability and customer experiences within the UAE’s retail sector during the COVID-19 pandemic. In doing so, semi-structured interviews were conducted with six retail experts that are based in the UAE. The findings revealed that although profitability boosts were witnessed, they were not near the maximum profitability potentials of retailers as compared to their pre-COVID rates. Also, productivity gains have also been realised with regards to business performance and employees’ productivity; yet, it was associated with multiple challenges that also demonstrated adverse impacts on productivity levels. Finally, customer experiences have been augmented with enhanced convenience and personalisation levels. However, the lack of emotional aspect, interactivity and mistrust still possess threats that could adversely impact customer experience.

1.1 Introduction

This Chapter provides a brief introduction to the research’s topic, the existing gaps in the literature, the research’s question, aims and objectives and significance.

1.2 Background & Overview

With the rapidly changing business environment, retailers are no longer competing over prices and locations; rather, towards the creation of value to consumers (Hänninen, Smedlund and Mitronen, 2017). However, in today’s highly interconnected environment, linear value chains are insufficient in bringing about the expected value (Böttcher et al., 2021). Therefore, organisations are keener towards the deep understanding of product use, customer behaviours and system operations (Zarco, Basáez, Marić and Feijoo, 2020) to provide customers with a personalised experience; leading to the erosion of traditional institutional retailing (Reinartz, Wiegand and Imschloss, 2019).

 

This is where the role of digital transformation comes into play. As stated by Hagberg, Sundstrom and Egels-Zandén, (2016), “Digitalization denotes an ongoing transformation of great importance for the retail sector” (p. 694). As a result, firms are increasingly changing their business strategies, fostering innovation and novel business models and forming alliances and partnerships (Zarco, Basáez, Marić and Feijoo, 2020). Thereby, increasing their capabilities to deliver the desired standard of customisation, quality and value. In line with this, the digitalisation of the retail sector has evolved from being considered as merely a source of competitive advantage to a necessity (Baršauskas, Šarapovas and Cvilikas, 2008).

 

The innovations realised through digital transformation have led to the evolution of the entire business logic facilitating interactions and value-creations and causing millions of buyers and sellers to be connected. Accordingly, there has been a massive increase in the number of firms engaging in e-commerce (Falk and Hagsten, 2015). This is further strengthened by the enhancement of digital business solutions offered with the advancement of the IT industry (Lola, Bakeev and Manukov, 2019).

 

Although it is apparent that e-commerce has been widely used by large-scale organisations, it possesses huge potential when it comes to small businesses as well (Falk and Hagsten, 2015). Besides the attributed benefits, small and medium-sized retailers are also under enormous pressure to digitalise to ensure their sustainability (Gavrila and Ancillo, 2021). The urge to digitalise the retail industry became more evident amid the COVID-19 pandemic. It has been observed that the retail sector is among the hardest-hit industries during the pandemic (Beckers, Weekx, Beutels and Verhetsel, 2021); where demand, supply and control risks were among the disruptions witnessed by retailers (Remko, 2020).

 

Figure 1: Supply chain risks encountered during the COVID-19 pandemic. Source: (Remko, 2020).

1.3 Research Gap

The literature revealed that the effects on significant aspects such as productivity, profitability and customer experience are mainly assessed in relation to the manufacturing industry and supply chain management in general (Swanson, 2017; Remes, Mischke and Krishnan, 2018; Zarco, Lola, Bakeev, and Manukov, 2019; Basáez, Marić and Feijoo, 2020). Moreover, profitability and productivity issues are often discussed from an international perspective (Da Silva and Friberg, 2017; Tolstoy, Jonsson, and Sharma, 2016). Thus, assessing profitability in relation to broad aspects of digitalisation with no consideration to the specific context of digitalisation and e-commerce.

 

Similarly, the pandemic has caused a surge in the study of changing consumer behaviour and attitudes towards e-commerce  (Guthrie, Fosso-Wamba and Arnaud, 2021) with little consideration to customer experience. Although multiple crises have been witnessed previously (Guthrie, Fosso-Wamba and Arnaud, 2021), there is still a gap when it comes to the assessment of the impacts of digitalisation and e-commerce on the aforementioned aspects within the retail sector. Therefore, this research aims to bridge the existing gap in the literature by investigating the most crucial impacts of e-commerce during times of threats and uncertainty using a local perspective that focuses on the UAE.

1.4 Research Significance

It is evident that many other sectors are excelling with regards to their capitalisation of digital technologies (Gavrila and Ancillo, 2021); while the retailing sector seems to be lagging behind. Nevertheless, the significance of the retail sector towards local and international economies could not be overlooked. Accordingly, this research aims to act as the main driver for UAE’s local retailers to digitalise. Thus, with the increased levels of awareness of the associated benefits of e-commerce, specifically amidst the COVID-19 pandemic, local retailers would have a stronger basis to support their future digital transformation decisions.  Moreover, with the anticipated persistence of the shifts in consumers’ attitudes, the revelation of the associated benefits on productivity, profitability and customer experience is more relevant than ever to drive prompt actions that would positively contribute to the sustainability and growth of local retailers.

1.5 Research Question

What are the key impacts of digital transformation on the UAE’s retail sector?

1.6 Research Aims & Objectives

This research aims to investigate three of the most crucial impacts of digitalisation over the past two years in the UAE in an attempt to provide recommendations that would inform future decisions by local retailers. Thus, the research objectives are as follows:

  • To investigate the impacts of digitalisation and e-commerce on productivity rates.
  • To identify the effects of digitalisation and e-commerce on profitability.
  • To examine the changes in customer experience.
  • To provide recommendations that would inform future decisions and enhance the sustainability of local retailers.

1.7 Research outline

The outline of this research is as follows. Chapter 1 presents the background of the research’s topic along with the main aims and objectives. Chapter 2 provides a detailed description of the status quo of the literature in relation to digitisation. Chapter 3 illustrates the adopted methodology to answer the research’s question. Chapter 4 presents the findings and analysis of the results obtained; while chapter 5 discusses these findings. Finally, conclusions, recommendations and limitations are discussed in chapter 6.

1.8 Chapter Summary

This chapter provided a brief overview of the shift in trends towards digital transformation and the significance of digitalisation to the retailing industry in specific while highlighting the existing gaps in the literature.

2.1 Introduction

 

The following paragraphs shed light on the digital transformation initiatives  of the retail sector along with the main drivers, challenges and impacts of digital transformation.

2.2 The digitalisation of the retail sector

2.2.1 Background & Overview

As stated by Malenkov et al., (2021), “New digital instruments of retail ecosystems; Big data and cloud computing; Digital neuromarketing; Digital neural networks, Robotization and Artificial intelligence ” (p.18) are the main trends towards the digitalisation of the retail sector. Thus, it is apparent that digitalisation causes the retail industry to be data-driven causing radical changes to the logic of conducting business. As indicated by Hagberg, Sundstrom and Egels-Zandén, (2016), the digitalisation of the retail sector involves transforming retailing exchanges, offerings, settings; and the actors who participate in retailing (p. 694).

 

Figure 2: Conceptual framework of the digitalisation of the retail-consumer interface. Source: (Hagberg, Sundstrom and Egels-Zandén, 2016).

2.2.2 Offline and online digitalisation

Retail digitalisation could be achieved through both offline and online retailers. With regards to offline stores, digitalisation could involve technological innovations (Böttcher et al., 2021) including personal shopping assistants (Evanschitzky et al., 2014), e-receipts, virtual and augmented realities and smart shopping malls (Ameen, Tarhini, Shah and Madichie, 2021). On the other hand, online digitisation includes several innovations related to e-commerce (Falk and Hagsten, 2015). Innovations related to e-commerce include but are not limited to multi-sided digital platforms (Hänninen, Smedlund and Mitronen, 2017) and Omni channels that act as shopping centres (Lamba and Pollock, 2017).

Figure 3: Conceptual model of the retail ecosystem. Source: (Böttcher et al., 2021).

2.3 Drivers, challenges and drawbacks of digitalisation

2.3.1 The drivers for the digitalisation of the retail sector

There are many drivers towards the digitalisation of the retail sector. To start with, Reinartz, Wiegand and Imschloss, (2019) found that digital platforms serve as a value-creation approach bringing together consumers, providers and information. As a result, digitising gives customers more options to shop and interact with the retailers. Therefore, digital retail platforms play a critical role in creating an open infrastructure for finding the best match between demand and supply of various products and services.

 

Secondly, the increased levels of awareness of customers is another driver towards digitalisation. Digital tools enable modern customers to access more information making them more knowledgeable and empowered (Donnelly, 2020). As a result, customers, nowadays, are demanding high levels of personalisation (Gavrila and Ancillo, 2021). Thus, digitalisation ensures the retailers’ sustainability, growth and prosperity through the delivery of customised services and products.

 

Furthermore, the changing patterns in consumer behaviour also act as a driver for the digital transformation. Digitalisation enables retailers to have a better grasp of changes in demands through the collection and analysis of big data; the lack of which leads firms to have a reactive instead of proactive approach (Gavrila and Ancillo, 2021). This results in a slow reaction time that might not be noticeable by mere observations in offline retailing. Accordingly, the prompt reaction towards such changes acts as a driver towards digital transformation.

 

Moreover, having safer business operations is another driver for the digitalisation of retailing. To illustrate, Hänninen, Smedlund and Mitronen, (2017) found that new innovative platforms have shifted the risks from retailers to third-party suppliers, besides being less capital intensive; thereby, giving retailers multiple growth and profitability opportunities. Also, with the expansion of the delivery market, including companies such as Deliveroo and UberEats, retailers no longer need to worry about product deliveries (Beckers, Weekx, Beutels and Verhetsel, 2021). These factors collectively ensure that retailers continue to focus on customer value while mitigating potential risks through digitalisation. Other environmental benefits are also expected due to the reduction in generated wastes, energy consumption, etc (Gavrila and Ancillo, 2021). The pressure of which arises from the increased awareness towards the uptake of corporate social responsibility.

2.3.2 Challenges of digitalisation of the retail sector.

Unlike the manufacturing industry, the retailing sector is still lagging behind in digitalisation (Guthrie, Fosso-Wamba and Arnaud, 2021) as it includes massive amounts of small and medium-sized enterprises; where the associated costs, procurement, training, maintenance, and software compatibility issues impose severe financial and technical burdens (Gavrila and Ancillo, 2021). Hence, limiting the large-scale adoption of digital technologies within the industry.

 

Furthermore, Falk and Hagsten, (2015) found that legal barriers, manifested in aspects such as labour protection laws, are the main constraints for the shift towards a single digital market. Also, the better-positioned e-commerce platforms of mega-retailers is another challenge to small and medium retailers (Gavrila and Ancillo, 2021). Thus, factors such as the variety of choices, user interface, and platform attractiveness could hinder the progress of retailers towards digitalisation.

 

Other challenges that are attributed to changing consumer behaviours and attitudes are also likely. To illustrate, according to Donnelly (2020), understanding the modern-day customer is one of the main challenges faced by retailers. Customers’ behaviour has continued to change over the recent years, expressed by changes in their purchasing decisions, interactions with retailers, and expectations (Singh and Ramesh, 2020).

 

Evanschitzky et al., (2014) also found that consumers’ concerns over new technologies affect the continuous use of innovations during the digitisation process. However, Guthrie, Fosso-Wamba and Arnaud, (2021) found that due to the multiple imposed constraints, as a result of the COVID-19 pandemic, the perceived economic and environmental benefits of e-commerce have increased causing customers to cope and adapt. This shift in consumer attitudes and behaviours will probably last post the pandemic  (Guthrie, Fosso-Wamba and Arnaud, 2021) urging retailers to shift to online retailing platforms to meet the new demands of consumers.

 

Figure 4: Consumer behaviour framework during times of threats. Source (Guthrie, Fosso-Wamba and Arnaud, 2021).

2.3.3 Drawbacks of the digitalisation of the retail sector.

Digital transformation is also associated with multiple negative impacts. To illustrate, retailers play a vital role in maintaining attractive inner cities that attract tourists and visitors. Accordingly, digital transformation could dwindle such attractiveness (Reinartz, Wiegand and Imschloss, 2019). The impact of the digitisation of the retail sector on employment rates is also an area of huge debate. It is expected that most of the adverse impacts would be associated with unskilled and semi-skilled labourers (Falk and Hagsten, 2015). This is since most of the offered jobs require high levels of expertise and technical skills. As a result, employment rates could be negatively affected by the increase in e-commerce and the extinction of certain jobs such as salespersons.

2.4 The impacts of the digitisation of the retail sector

2.4.1 Effects of digitalisation on productivity

As mentioned above, the effects of digitalisation and e-commerce on the productivity of the retail sector is indirectly touched upon in the literature. However, it is comprehensively discussed in relation to other sectors. To illustrate, Baršauskas, Šarapovas and Cvilikas, (2008), found that the adoption of e-commerce in the management of supply chains was associated with higher efficiency rates. This is primarily attributed to lower ordering and inventory costs.

 

Besides, digitalisation allows firms to have deeper insights into demand patterns which reduces the distortion in projected demands  (Zarco, Basáez, Marić and Feijoo, 2020). The flexibility and stability maintained as a result could be associated with a positive impact on productivity levels. Through digitalisation, firms could better coordinate and manage their inventories and optimise deliveries (Zarco, Basáez, Marić and Feijoo, 2020) which in turn could yield multiple productivity gains.  Similarly, there is evidence that digitalisation aids in improving labour productivity rates (Falk and Hagsten, 2015).

 

Furthermore, the technological gap that exists in offline retailing creates a lack of data collection and data analysis leading to weak and costly decisions (Gavrila and Ancillo, 2021). Such uninformed decisions would definitely affect productivity rates as a result of the wastes generated in terms of time, cost and effort. The benefits of the enhanced collection and analysis of data is further realised with the internationalisation of businesses through e-commerce. This is due to the fact that digitalisation fosters the learning process allowing enterprises to take time and cost-efficient interventions (Hånell, Rovira Nordman, Tolstoy and Özbek, 2019).

 

Similarly, the enhanced levels of collaboration among employees in different physical locations, as a result of digitalisation (Falk and Hagsten, 2015), could aid in attaining higher productivity rates. This is since businesses could attain a more coordinated environment that eases the decision-making process and eliminates reworks, and time wastage; thereby, reflecting positively on productivity. Moreover, the formation of strategic alliances enhances the core capabilities of firms making them more capable of promptly responding to the changes in demands and consumption patterns (Zarco, Basáez, Marić and Feijoo, 2020) which again contributes to the productivity rates.

2.4.2 Effects of digitalisation on profitability

Similar to productivity, the benefits of digitalisation on profitability have been discussed with little direct reference to the retail industry. For instance, digitalisation allows firms to attain economies of scale (Zarco, Basáez, Marić and Feijoo, 2020) which leads to cost savings and enhanced profitability. This is further supported by an IBM study that revealed that the implementation of artificial intelligence could lead to a 7% reduction in operating costs and 10% increase in annual revenue (Lola, Bakeev, and Manukov, 2019).

 

Moreover, new earning models have been developed while inventory risks and supply chain integration issues have disappeared as a result of digitalisation (Hänninen, Smedlund and Mitronen, 2017). The mitigation of such risks enhances the resilience of firms augmenting their general performance and financial status. Also, the shift to more sustainable logistics has reduced the prices per shipment (Beckers, Weekx, Beutels and Verhetsel, 2021). Thus, reducing operating costs which could potentially affect prices and profitability rates.

 

Besides, the pressure to digitalise causes many firms to enter into strategic alliances with IT partners which enhances the bargaining positions of firms (Zarco, Basáez, Marić and Feijoo, 2020); thus, making them more capable of accessing more resources and gaining a competitive advantage over their rivals.

2.4.3 Effects of digitalisation on customer experience

When it comes to customers, it has been evident that the enhancement of customer experience through digitalisation is mainly associated with the integration of individuals, systems, products and services (Zarco, Basáez, Marić and Feijoo, 2020). This is because digital platforms play a key role in enabling retailers to offer omnichannel shopping experiences to their customers (Zhu and Gao, 2019, pp.33-37; Böttcher et al., 2021). The omnichannel model allows customers to purchase products and services from diverse sales settings, including online and social media, using their internet-connected devices (Lamba and Pollock, 2017).

 

Accordingly, Ameen, Tarhini, Shah and Madichie, (2021) found that the creation of Omni channels boosts personalisation and fosters innovation and creativity. This is further supported by the findings of Evanschitzky et al., (2014) who stated that digitalisation “enables conventional retailers to create an information-rich store environment” (p. 472) which enhances personalized services. Therefore, the integration of different retail channels such as stores, websites and mobile channels aids in providing higher value to consumers which augments their purchasing experience.  Besides, the improvement of the quality of e-services, the offering of a wide range of products, and the prompt responsiveness to customer expectations (Nisar and Prabhakar, 2017) leading to the enhancement of customers’ e-satisfaction rates.

 

There are many other innovations that are linked to the digitisation of the offline retail sector as well to enhance customer experience. In an attempt to further boost innovation, Ameen, Tarhini, Shah and Madichie, (2021) proposed a conceptual model that is based on the integration of physical and digital elements in smart shopping malls to augment customer experiences. Furthermore, the development of Self-service technology (SST) and Personal shopping assistants (PSA) enhances consumers’ trust towards the retail shop (Evanschitzky et al., 2014). Likewise, the incorporation of e-receipts allows for the digitalisation of business processes while collecting data in a more environmentally friendly way (Gavrila and Ancillo, 2021). This allows small and medium retailers to augment their customer experience by having deeper insights into their needs and demands.

 

Figure 5: Proposed model for the integration of personal interactions, the physical environment and the virtual environment in new smart shopping malls. Source: (Ameen, Tarhini, Shah and Madichie, 2021).

2.5 Chapter Summary

This chapter presented an overview of the main drivers, challenges, drawbacks and impacts of digitalisation on productivity, profitability and customer experience.

 

 

 

3.1 Introduction

This research’s methodology is primarily designed with reference to the research onion developed by (Saunders, Lewis, and Thornhill, 2007).

Figure 6: The research onion. Source: (Saunders, Lewis, and Thornhill, 2007).

3.2 Research philosophy

To start with, philosophical paradigms are based on two primary factors namely, ontology, and epistemology (Saunders, Lewis, and Thornhill, 2007). Ontology is based on the nature of reality  and answering the question “what is there in the world” (Eriksson and Kovalainen, 2015). There are two types of ontology: realism and relativism. Realists believe that there is only one truth that could not be changed and could only be discovered using objective measurements (Killam, 2013). Whereas, relativists believe that multiple versions of reality exist depending on the context and experiences of an individual  (Killam, 2013).

 

On the other hand, epistemology relates to the nature of knowledge and truth (Hetherington, 2012). It involves objectivism and constructionism. Objectivism takes an etic approach to maintain objectivity without disturbing the reality being studied  (Killam, 2013). On the other hand, constructionism takes an emic approach to research meaning that researchers integrate a subjective approach to reality through their interactions to find out the underlying meanings in the truth being researched  (Killam, 2013). Since this research aims to study the impact of digitalisation within the UAE’s retail industry that includes multiple parties and perspectives, a relativist ontology along with a constructivist epistemology is maintained.

 

Based on the aforementioned, there are two main types of philosophical approaches namely, positivism and interpretivism (Paterson et al., 2016). Positivism entails working with observable realities to generalise the research’s findings (Saunders, 2009). Accordingly, the gathered data is free from any forms of bias and values resulting from the integration of the researcher’s beliefs and interpretations (Ryan, 2018). Although this approach maintains a structured and replicable research, it fails to encompass social realities and meanings (Killam, 2013).

 

On the other hand, interpretivism acknowledges the subjective nature of the world. Interpretivists recognise that different meanings could be constructed with regard to a phenomenon (Saunders, 2009). Hence, the research becomes value-based research that allows for the integration of the researcher’s values, beliefs, explanations and constructions  (Paterson et al., 2016). Although data analysis could be challenging leading to false conclusions, the interpretivist approach allows researchers to investigate social realities considering the complexity and contextual factors (Killam, 2013). Since this research aims to investigate the impacts of digitalisation in different contexts involving multiple experiences, an interpretivist approach is adopted.

3.3 Research approach

There are two main types of methodological approaches: inductive and deductive (Paterson et al., 2016). The deductive approach is concerned with the testing of existing theories through the formulation of hypotheses. It draws conclusions based on verifiable means such as equations and statistical analysis (Kivunja and Kuyini, 2017). Whereas, the inductive approach is based on the formulation of new theories through the identification of patterns and trends in the gathered data (Ryan, 2018). Although deductive reasoning is conclusive and guarantees an accurate conclusion, it does not allow for the production of new information (Killam, 2013). Whereas, the main advantage of an inductive approach is that it allows the researcher to explore new aspects and dimensions of the study while examining multiple assumptions (Killam, 2013). Since this research entails the collection of facts through which patterns and trends could be identified to form new hypotheses, an inductive approach is used.

3.4 Research Design

3.4.1 Research Type

Two types of research exist namely, primary and secondary research. Primary research entails the gathering of original information that specifically addresses the main aims of the research (Adams, 2014). Nevertheless, this research type could be costly and time-consuming (Gideon, 2012). On the other hand, secondary research entails the gathering of secondary data that was collected by other researchers (Adams, 2014). It is considered a cost and time-efficient method (Gratton & Jones, 2010). However, since this research aims to investigate the effects of digitalisation within a specific context that relates to the COVID-19 pandemic and the UAE’s retail sector, primary research is adopted.

3.4.2 Data type

Data collected for primary research could be of two types: qualitative and quantitative data. Qualitative data is subjective in nature as it provides descriptions of aspects that could not be quantified such as behaviours, attitudes and characteristics (O’Gorman and MacIntosh, 2020). On the other hand, qualitative data is measurable data that is precise and accurate (O’Gorman and MacIntosh, 2020). This research adopts an interpretive stance that is based on subjectivism; therefore, qualitative data will be collected to aid the researcher in identifying several underlying factors that could not be captured using quantitative data.

3.5 Research strategy

As illustrated in the research onion, the relevant research strategies to this research are surveys, and case study approach. The case study research method is used when an in-depth investigation of a certain aspect is required; it aids the researcher in identifying the behavioural conditions through the participant’s perspectives (Zainal, 2007). Case studies could be a single-case study or a multiple-case study and could deploy both quantitative and qualitative data collection techniques (Pandey and Mishra, 2015). Nevertheless, it is often criticised for giving a little scientific basis for generalisation (Zainal, 2007). Since this research aims to investigate a real-life phenomenon where the effects of digital transformation on UAE’s retail sector is investigated, a multiple-case study design using four different UAE companies is chosen. This approach would provide a basis for the investigation of the different theories that exist in relation to the research topic.

3.6 Data collection

As mentioned earlier, a case study could involve both qualitative and quantitative data collection methods. Surveys are a more practical method that is widely used nowadays (Madsen, 2018). However, they limit the researcher’s interaction with the participants which might affect the results (Madsen, 2018). Although interviews limit the sample size (Madsen, 2018), they allow for the collection of in-depth and accurate data in relation to the research’s question. Since this research is based on a subjectivist view, interviews were chosen to gain insights into the different experiences and perspectives.

 

For this, a purposive sampling technique was used as it provided a  “non-probability sample that is selected based on characteristics of a population and the objective of the study” (Crossman, 2020). This was done using a homogeneous type sampling where experts with the same characteristics and expertise levels are chosen. A saturation sampling technique was used where more interviews were conducted until the researcher reached a saturation point where data gathered seemed to be repetitive to avoid over-processing and time wastage (Saunders et al., 2017). Therefore, 6 semi-structured interviews with experts working in four different companies that are based in the UAE were conducted.

3.7 Data Analysis Methods

Based on the researcher’s philosophy, qualitative data analysis could be of different types including  descriptive, exploratory and comparative analysis (Smith, 2020). The descriptive analysis type is the most relevant to the research’s aims and objectives. It could further be classified into content analysis and thematic analysis (Smith, 2020). Content analysis is primarily used for the decoding of large amounts of textual information; whereas, thematic analysis is used for the identification of common threads across an entire interview or a set of interviews (Vaismoradi, Turunen and Bondas, 2013). Although there are a lot of similarities between the two approaches, the content analysis approach provides a high opportunity for the quantification of results (Vaismoradi, Turunen and Bondas, 2013), which is not an aspect that is sought in this research. On the other hand, thematic analysis is more flexible and relevant to the research’s aims and objectives (Smith, 2020). Therefore, thematic analysis is conducted to identify patterns of meanings in the gathered data.

3.8 Time Horizon

According to Melnikovas (2018), time horizon refers to the period of a study; thus, forming either longitudinal or cross-sectional research. Longitudinal research is conducted over long periods while using the same sample group for the different phases of research (Rindfleisch, Malter, Ganesan and Moorman, 2008). While it normally provides more accurate and comprehensive results, it is often associated with multiple uncertainties and limitations (Rindfleisch, Malter, Ganesan and Moorman, 2008). On the other hand, cross-sectional research is conducted over a short period of time; thus, allowing a researcher to have deeper insights into a specific aspect in relation to a certain context (Rindfleisch, Malter, Ganesan and Moorman, 2008). The study of the impact of digitalisation is short-term because it focuses on the UAE’s retail sector during the past two years. Furthermore, a short-term time horizon has been selected to ensure that the findings are updated due to their evolving nature (Melnikovas, 2018).

3.9 Reliability and validity

According to Kitto, Chesters and Grbich, (2008), the quality and reliability of qualitative data could be assessed based on six criteria namely, (i) Clarification and justification, (ii) procedural rigor, (iii) sample representativeness, (iv) interpretative rigor, (v) reflexive and evaluative rigor and (vi) transferability/generalizability. Thus, all the aforementioned aspects were considered by ensuring the clarity and justification of the opted methodology, transparency and explicitness, and full demonstration of the collected data/evidence to enhance the consistency, trustworthiness and credibility of the research. Whereas, as stated by Leung, (2015), “Validity in qualitative research means “appropriateness” of the tools, processes, and data” (p.5). Therefore, the methodological choices done in this research enables the detection of findings/phenomena in the appropriate context, with due regard to culturally and contextually variable due ensure validity.

3.10 Ethical Standards

With regards to the adopted ethical standards, all necessary measures were taken to ensure that the best interests of the research participants were always protected. This research has considered the four ethical principles that were outlined by Bryman, (2015); these are harm to participants, informed consent, invasion of privacy and deception. In this study, only the participants who agree to participate in the research will be involved (Fleming and Zegwaard, 2018, pp.205-213). Also, all participants were informed about what they will be asked and how the data collected will be used. The participants will also be informed that their confidential details, such as names, will not be revealed without their permission. Finally,  this research conforms to the Race Relations and Equality of Rights Acts to eliminate the risk of possible discrimination.

3.11 Conclusion

This chapter presented a detailed overview of the adopted methodology for the conduction of this research along with the rationale behind such decisions.

 

 

4.1 Introduction

As aforementioned, six interviews with experts working in the UAE’s retail industry were conducted and a thematic analysis was performed. The following sections present the identified themes and sub-themes along with a detailed discussion of the identified results. It is worth giving a brief discussion about the realised trends with regards to digital transformation during the COVID-19 pandemic. As highlighted by all interviewees, the COVID-19 pandemic has witnessed an unprecedented surge in e-commerce demands. This conforms to the findings of a recent report published by Wamda – MIT Legatum Center, (2021) stating that countries in the MENA region, specifically UAE, Saudi Arabia, and Egypt witnessed a surge in e-commerce activities during the pandemic. Furthermore, there is a wide consensus from all interviewees that digitalisation has become a survival necessity for businesses.

4.2 Identified Themes & sub-themes

Based on the aforementioned, the key themes and sub-themes that were identified are listed hereunder.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 1: Identified themes and sub-themes.

4.3 Profitability

This subsection discusses the realised profits by business retailers as a result of digitalisation and e-commerce during the pandemic.

 

4.3.1 Impacts on realised profits

 

Table 2: Realised profits by UAE business retailers during the pandemic as a result of digitalisation and e-commerce.

 

From the interviewees’ comments, it is evident that there are two opposing views with regards to profit maximisation as a result of digitalisation and e-commerce initiatives.

 

To start with, all interviewees have indicated that they were capable of being somehow profitable during the pandemic; mentioning that the digital transformation is worth the investment to meet the long term goals and objectives of a business. This view is further supported by the response of interviewee 1 who quoted “I have a really aggressive kind of five-year plan to go into other parts of the world. So, for me to execute that plan requires this level of technology.” Whereas, interviewee 2 indicated that it was a necessity to capitalise on the shift in customer attitudes and shopping behaviours where he quoted “The consumer basically wants this new experience…”. Such capitalisation was the main driver to digital transformation as identified in the literature (Gavrila and Ancillo, 2021).

 

In relation to the sustainability aspect, digital transformation has aided business retailers in attaining resilience and ensuring their longevity which are essential elements for businesses’ growth and prosperity and hence, profitability. This is supported by the response of interviewee 4 who stated that  “we feel we are future-proof for the time being”. This conforms to the findings of Guthrie, Fosso-Wamba and Arnaud, (2021) who indicate that e-commerce is extremely beneficial in times of crisis. Therefore, the authors suggested that retailers should exert more effort towards enhancing the resilience of their e-commerce. While interviewee 5 stated that “if you want to be in that market space, and have longevity in your business to go into the future, then it’s a necessity in this day and age.”. Such longevity could be attained through the retention of market share as discussed by interviewee 4 and capitalizing on new customers as discussed by interviewee 5. Hence, it could be inferred that such outcomes could be associated with positive impacts on profitability rates.

 

Besides, there are multiple financial rewards to the digital transformation of retailers in the UAE. As indicated by interviewee 3, “it is proof to the fact that it has most definitely been worth it, and financially rewarding for the business”. Such rewards could further be attributed to the cost-effectiveness and enhanced efficiency of business processes as suggested by interviewee 1 “ One, it’s more cost-efficient, and two I think businesses are more conscious than ever”. These results align with the findings of the Blue Yonder Survey, (2020) that indicate a 33% increase in retailers’ revenues as a result of e-commerce. Similarly, although such rewards could have direct effects on profitability rates, such an effect could not be guaranteed without considering the broader context of business activities.

 

On the other hand, despite the realised profit, many of the interviewees indicated that the enhanced profitability rates were profoundly limited to specific sectors within the retail industry; more particularly, the sectors that sold basic human necessities such as food, medicine, hygiene products, etc. Interviewee 1 seemed to be a strong advocate for this notion which appeared from his words “I don’t think all e-commerce profited during COVID, I think particular pockets affected during COVID.”. Similarly, interviewee 6 had underlined the increase in demands for  “masks, sanitisers and anything related to COVID.”. This case is supported by the findings of a recent report investigating e-commerce activities in the MENA region during the pandemic where it was proved the e-grocery was growing twice as fast as the e-commerce market (Wamda – MIT Legatum Center, 2021).

 

However, a few of the interviewees declared that they were not near the maximum potential of profits as compared to pre-COVID profits. This is attributed to several reasons, one of which is the associated costs. This is further magnified by the lack of firm understanding of all the other costs that are encountered regularly. As indicated by interviewee 2, “ I don’t think those costs have been fully understood from a retail perspective”. Sections relating to the costs incurred are discussed further in detail in the following paragraphs.

4.3.2 Factors affecting profitability

The following paragraphs provide a discussion of the different factors affecting profitability.

 

4.3.2.1 Development and building costs

Table 3: Development and building costs as factors affecting the profitability of UAE retailers.

In relation to the development and building costs, there were also two opposing views varying from the development phase being extremely capital intensive to being very affordable.

To start with, it is evident that intensive capital is required by business retailers to develop and build their own specialised e-commerce channels along with the required infrastructure as indicated by interviewees 1, 2, 4 and 5; thereby, potentially leading to severe implications on the profitability of business retailers. What further magnifies the impacts is the lack of immediate return on investment. As stated by interviewee 2, “Because the shift also takes a long time to build in all of these new infrastructures”; thereby, causing retailers to wait for years to be able to witness a tangible effect on profitability.

 

The development costs are further inflated with the development of e-commerce channels that stand up to the quality that is maintained by mega-retailers to appeal to customers as indicated by interviewee 5. The case is further supported by interviewee 1 who stated “I’m sure the big sites that have come before us, and not on the first iteration of their website”.  Thus, it could be inferred that such levels of quality and design required high expertise levels to meet the customers’ expectations which again, could have cruel impacts on profitability levels. These findings comply with the findings of Gavrila and Ancillo, (2021) who state that user interface and platform attractiveness could hinder the progress of small and medium-sized online retailers.

 

Besides the aforementioned, it has been acknowledged that such technologies are prone to obsolescence causing retailers to perpetually invest in new technologies to keep up to date. As interviewee 2 indicates, “The one thing you learn about technologies, it never stops. It keeps continuing,… so that continuous investment is always required..”. Moreover, such investments are crucial to standing out against the fierce levels of competition from globalisation and enhanced access to different retailers across the globe. This view is supported by interviewee 5 who quoted “Obviously, there are brands who are already online, and they are spending even more because they want to cement their position”.  Hence, causing businesses to encounter more frequent developmental costs which adversely impacts their profitability rates.

 

Other interviewees have indicated the affordability of e-commerce and going online through different existing omnichannel platforms such as Spotify or while using social media platforms such as Instagram, Facebook and Twitter.  These correspond to the findings of Hänninen, Smedlund and Mitronen, (2017) who indicate the affordability of Omni-channels to business retailers. Furthermore, it was found that several Omni-channel platforms such as NAMSHI, NOOM, and Talabat have facilitated the build on the necessary infrastructure for e-commerce in the MENA region (Wamda – MIT Legatum Center, 2021).

 

This case is further supported by interviewee 6 who stated that “But in terms of building an online store, initially the stores on Shopify are great and have a great system built from the ground up”; thereby, only attributing the initial costs to legalities and taxation costs conforming to the findings of Falk and Hagsten, (2015). Nevertheless, the same interviewee showed that costs could also accumulate while using Omni-channels’ paid plans. However, it is worth mentioning that all interviewees shared the same concern in relation to high operating costs which is discussed in the following subsection.

 

4.3.2.2 On-going and operational costs

Table 4: Operational and ongoing costs as factors affecting the profitability of UAE retailers.

Several interviewees, while acknowledging the cost efficiencies that could be achieved as a result of digital transformation, indicated their concern with ongoing and operational costs.

 

Starting with the cost efficiencies, they were primarily attributed to enhanced logistic fleet and deliveries. To illustrate, interviewee 1 indicated that the use of robots within the logistics of the retailing business could significantly reduce labour costs, specifically in the UAE where business owners have to pay several additional charges including residency visas and employee insurances.

 

Whereas, interviewee 6 highlighted the cost reductions that could be attained by reducing the costs associated with physical stores by stating “you don’t have to worry about a physical store as much as you can even downsize and save more money.”; thereby, decreasing the costs of sold goods and positively impacting the profitability. This conforms to findings of the literature as Beckers, Weekx, Beutels and Verhetsel, (2021) found that pure online retailers were the biggest winners during the COVID-19 pandemic as they were not forced to pay rents during the lockdown period. Further cost efficiencies attributed to enhanced productivity levels are discussed in the productivity section.

 

Moving on to the opposing perspective, several other interviewees raised their concerns about the high operational costs that are associated with digitalisation. To start with, it has been apparent that most of such costs are manifested through the intensive maintenance and updates required for such systems to ensure prompt responsiveness to the changes to the external environment. This perspective was endorsed by interviewee 1 who stated “it requires a development team to fix things, and update things…… you’ve got two problems once that’s costly, and two, it’s time-consuming”. Interviewee 2 also quoted “And I think that’s probably the biggest challenge at the moment. It’s not about building an E-commerce site…, but then it’s the operational side of them”. These findings comply with the findings of Gavrila and Ancillo, (2021) indicating procurement, training, maintenance, and software compatibility issues are amongst the greatest barriers to digital transformation. Thus, shedding light on an ongoing cost to be incurred by businesses retailers in an infinite cycle; thereby, affecting their profitability rates.

 

Besides, it has been evident that most of the interviewees have partnered with third parties to ensure the security of their online platforms; as indicated by interviewee 3, “We have a number of tech developers that are working on this on a daily and weekly basis”. At the same time, interviewee 4 declared having such partnerships which are apparent from his quote “the agency that’s looking after our site has put many security measures in place to make sure none of the data gets into the wrong hands.”. Where such partnerships have been perceived to enhance the business’ competitive edge through better access to needed resources (Zarco, Basáez, Marić and Feijoo, 2020), the extra costs associated with such partnerships could be easily inferred along with their direct effects on the profitability levels.

 

Another interesting aspect that emerged from the analysis in relation to operational costs, and was not identified in the literature, are hidden costs. These costs are often materialised with the inefficiencies sustained as a result of the surge in demands. In support of this, interviewee 3 stated that “Because when it comes to e-commerce, it is very easy to burn money, if you’re not time efficient….”. Some of such costs are also inevitably encountered due to the physical challenges that are encountered during increasing demands as experienced by interviewee 4 “there were a lot of physical challenges due to the changing environment that happened due to COVID.” These costs are often minor costs that are not usually noticed by business retailers; however, upon their accumulation on the large scale, could lead to massive reductions in the retained profits. As the CEO of MUNCH: ON, a UAE-based restaurant platform quotes “A lot of the platforms were not able to react quickly to handle this cost increase, and those who could not make it efficiently work by mapping the drivers’ supply with the demand were really harmed financially.” (Wamda – MIT Legatum Center, 2021).

4.3.2.3 Competition

Table 5: High competition level as a factor affecting the profitability of UAE’s retailers.

The increase in competition levels also appeared to be a factor that influenced profitability. As indicated by interviewee 3, it was amongst the strongest drivers towards the digital transformation of business retailers in the UAE amid the pandemic. Thus, the targeting of being ahead of other competitor retailers through digital transformation has aided UAE retailers in more effectively maintaining their current customers and increasing sales,  as indicated by interviewee 4, while increasing the average order value, as declared by interviewee 6. Such consequences could be directly related to profitability.

 

In line with this, Beckers, Weekx, Beutels and Verhetsel, (2021) found that during the pandemic, consumers were forced to experience local vendors giving rise to more expansion opportunities to small and medium-sized enterprises. This is further supported by interviewee 5 who indicated that the lack of digitalisation amidst the high competition levels could cause businesses to lose their market shares. Similarly, Goldmanis, Hortaçsu, Syverson and Emre, (2009) found that e-commerce leads to a reduction in the consumers’ search costs causing a shift in equilibrium prices and market shares.

 

The strong competition levels have also elevated the performance of retailers in relation to several aspects. For instance, interviewee 3 shed light on the negative impact of transparency witnessed through digital transformation. As he stated, “For example, something as simple as non-availability. So, one of our sites might have unavailable flags up and it can make the site look obsolete”. Thus, it could be inferred that such aspects could shift customers’ focus towards competitors with a wider range of offerings and better availability of products; thereby, affecting the profitability of the business. In that sense, interviewee 5 highlighted the increase in business’ ability to capitalise on new customers by “making sure that the product offering is very strong on the digital platform”.

4.4 Productivity

The following sections discuss the impacts of digitalisation on employees’ and business’ productivity levels.

 

4.4.1 Impacts  on business’ productivity

Table 6: Impacts of digital transformation on the productivity of UAE’s business retailers.

There has been a wide agreement on the enhancement of business productivity. This could be attained through the abolishment of stress points in business operations (interviewee 2), the enhanced communication levels (interviewee 4), and the enhanced monitoring and tracking of business processes (interviewee 6); leading to higher productivity rates. These findings align with findings from the literature as it was proved that enhanced coordination as a result of stronger communication systems could lead to higher productivity rates (Falk and Hagsten, 2015). Similarly, the enhancement of data capturing and data sharing capabilities that are realised as a result of digitalisation leads to enhanced efficiency levels within retail stores (Ameen, Tarhini, Shah and Madichie, 2021).

 

Similarly, the enhanced business productivity levels were primarily attributed to the digital transformation of logistics and supply chains. Such efficiencies are attained with faster handling of received orders. As indicated by interviewee 1, “Additionally, our robots can pick and pack in less than four seconds. No human can ever do that.”. While interviewee 2 stated that “ Supply chain is the hardest thing in any retail. And if your supply chain is maximized to its absolute nth degree, then yeah, absolutely.”. This view is consistent with the view of Baršauskas, Šarapovas and Cvilikas, (2008) that acknowledges the realised efficiencies as a result of the digital transformation of supply chains. Other efficiencies that could aid in enhancing productivity levels include the optimisation of delivery routes as declared by interviewees 3 and 4. Yet, other productivity improvements achieved through enhanced flexibility and stability and the formation of strategic alliances were not discussed by the interviewees (Zarco, Basáez, Marić and Feijoo, 2020),

 

On the other hand, it was acknowledged that the productivity levels could also be adversely impacted. Interviewee 2 states that “Can they maximize their efficiencies in a much more stringent manner? Yes, providing the right providers”. As identified in the literature, Managers must understand cutting-edge technologies in the retail industry to adopt, implement, and support their use effectively (Queiroz et al., 2019). Such providers are usually manifested through the use of the right technologies that would aid a business in meeting its demands while paying attention to its specific context. This is since the increasing level of demand is often associated with multiple challenges as expressed by interviewee 5 “So, the mass overload of deliveries and orders were definitely something that we hadn’t prepared for.”. Interviewee 6 further added, “The big issue, though, with that is that a lot of systems are not capable of handling the pressure.”.Therefore, it could be inferred that the utilisation of the right technical and digital providers are crucial for the enhancement of business productivity,

 

 

4.4.2 Impact on employees’ productivity

Table 7: Impacts of digital transformation on the productivity of employees.

In agreement with some of the comments made in the table above, interviewee 5 outlined, “with any kind of online platform and getting things right, which initially would not have been very productive.” However, the same interviewee also stated that “if we can serve more customers on a daily basis, then we are increasing productivity as a company, and therefore so are the employees.” This aligns with the findings from the literature review. To demonstrate, through their study of 14 European countries, Falk and Hagsten, (2015) found that there is a significant strong positive relationship between e-commerce activities and labour productivity.

 

Interviewee 4 made a different argument saying, “when we have a very high number of orders within a short period of time and this puts a lot of pressure on our staff from both the teams. So, I would say, the platform hasn’t helped our employees increase their productivity.” This aligns with the views from Interviewee 1, where she presents her views on the people who are in their 60s and 70s. She quotes “it’s affected negatively to the people in that age gap and their productivity has decreased significantly.” Interviewee 3 also stated that “In terms of employees, it has put a lot more pressure on them”, agreeing to the fact that digital transformation has put a lot of pressure on the employees and has reduced productivity. This denotes that the initial adaptation of online platforms was a lot more stressful and does not fit well with certain views from the literature review where it indicates that digital transformation has improved the productivity of the employees (Falk and Hagsten, 2015).

 

However, Interviewee 1 emphasizes that gen X and gen Y have utilized digital transformations positively as they know “how to make use of the technology and get things done quicker” and that has led to an increase in productivity. Interviewee 2 also quoted “I think the team’s adapted really well and caught up to the changes.” This relates back to the literature review which indicates that digital transformation would have an adverse effect on employees who are unskilled, semi-skilled and haven’t adapted well to fast-evolving digitization (Falk and Hagsten, 2015).

 

This appears to be quite a unique theme that’s been identified. Research done by Bohnert and Gracia in 2020, indicates that 88% of the children born in 2008 and onwards have access to digital technology than the children that were born a decade earlier. This could mean that the new generation is very well skilled to make use of digital technology and this could be a reason for the millennials to be more productive than the older generations.

 

 

4.5 Customer Experience

4.5.1 Impacts on customer experience

4.5.1.1 Enhanced convenience

Table 8: Enhanced convenience as a direct impact on customer experience.

There has been a wide consensus from the interviewees that the enhancement of convenience was amongst the most influential factors affecting customer experience in e-commerce as indicated by interviewees 1, 2, 3 and 4. To illustrate, interviewee 2 stated that “I believe that’s probably one of the few pain points you have within a supermarket is the queuing” which is avoided through e-commerce to enhance convenience. This is further supported by the views of interviewee 5 who stated that “being able to shop in the comfort of your own home and get things so quickly is really helpful”.

 

A primary factor that acted as a driver to seek such convenience is time limitations as indicated by interviewee 1 and interviewee 6 who stated “Because people can just buy things online more conveniently, without having to worry about taking the time from their day”. Such convenience was further attributed to the increasing utilisation of social media platforms as interviewee 2 indicated “Social media is probably enhanced even further with the availability of everything at your fingertips.”

 

The pandemic was another factor that accelerated the need for such convenience where people found it as their only source of leisure (interviewee 5), were forced to adapt to e-commerce due to the restrictions in movement (interviewee 4 & 3), and to maintain social distancing as interviewee 1 indicates”.

 

Another element of enhanced convenience could be associated with the enhanced variability provided to customers in terms of comparisons of prices as indicated by interviewee 5 “because they can normally compare the prices and get a better deal easily”, get cheapest deals as indicated by interviewee 1 “But then they go home and search online to see where can they find it the cheapest, and then they order that.” and having a return option (interviewee 5). In support of this, Nisar and Prabhakar, (2017) found a strong positive correlation between customer e-satisfaction and customer spending for e-retailers. Whereas, Wiegand and Imschloss, (2019) found that it enhances customers’ interactions with retailers.

 

4.5.1.2 Enhanced personalisation

Table 9: Enhanced personalisation as a direct impact on customer experience.

The enhanced level of personalisation was another factor that was inferred to be associated with enhanced customer experience. As seen from the quotes, the interviewees indicated that they could offer a personalised shopping experience based on customers’ purchase behaviours (interviewee 2, 3 & 6); where specifically tailored campaigns that match their taste could be launched to enhance their shopping experience and provide them with products that match their unique tastes. This conforms to the findings of the literature that indicate that customers, nowadays, are demanding high levels of personalisation which is manifested in the characteristics of the sold goods and services as well as in the delivery timing (Gavrila and Ancillo, 2021). Besides, interviewee 1 indicated that personalisation could also be achieved through communication and greeting messages. Thereby, augmenting the customers’ experience. This is further supported by his quote “(user experience) can then be improved massively. If we’ve got that level of personalization.”.

4.5.2 Factors affecting customer experience

4.5.2.1 Lack of emotional aspect and interactivity

Table 10: Lack of emotional aspect and interactivity as a factor affecting customer experience.

The interviews further revealed that the lack of the emotional aspect and interactivity within e-commerce is another concern that has the potential to adversely impact customer experiences. This is attributed to the heart of physical shopping (interviewee 1), the reliefs gained by customers due to physical shopping after hectic working days (interviewee 2), and the physical testing and trying of products (interviewee 5). Interviewee 4 further adds to such perspective by indicating the lack of quality as a result as he quoted “sometimes the product that gets delivered isn’t the freshest milk because maybe they’re picking the one that is oldest that is easier to sell to get rid of.”

4.5.2.2 Anxiety and mistrust

Table 11: anxiety and mistrust as a factor affecting customer experience.

Moreover, the lack of trust and high level of anxiety experienced by customers within the UAE could impose threats to the user experience. Such threats have been manifested through potential hacks (interviewee 3), forgery and fraudulent activities (interviewee 5), and data leaks (interviewee 6); thereby, causing trust issues with existing and potential customers causing them to be hesitant to pay online (interviewee 1). Similarly, a recent study found that the decrease of cash on delivery in the MENA region required an enhanced level of customer trust (Wamda – MIT Legatum Center, 2021). Thus, indicating adverse impacts on their shopping experience. This is aligned with the findings of Evanschitzky et al., (2014) who indicated the negative impacts of rising consumers’ concerns over new technologies.

4.6 Chapter Summary

This chapter presented a detailed analysis and discussion of the findings of this research in relation to the key impacts of digital transformation on UAE’s retail industry.

 

 

 

 

 

 

 

 

To conclude, it has been evidenced that the e-commerce activity of UAE’s retail sector has flourished amidst the pandemic. Apart from such facts that have been extensively studied in the literature in relation to digital transformation of retailers, this research has successfully shed light on three of the most crucial factors that gained little attention during the pandemic. Therefore, the key impacts of digital transformation of the UAE’s retail sector on three primary aspects namely, profitability, productivity and customer experiences  are summarized hereunder.

 

To start with, concerning the profitability of business retailers, this research provides a proof of the boost in profits realised as a result of e-commerce activities in the UAE where all interviewees indicated that higher profits were attained. Nevertheless, it was acknowledged that the enhancement of profitability rates were particularly limited to specific sectors during the pandemic, the ones that primarily dealt with basic human necessities such as food, medicine and COVID-related products.

 

The increase in retailers’ e-commerce activities during the pandemic was further associated with the attainment of the long term goals and objectives of retailers including expansion and growth, enhanced sustainability and longevity and the capitalisation on the shift in consumer behaviour. Although such outcomes could be directly related to positive impacts on profitability rates, it is not guaranteed and is limited to the specific particularities of different business retailers.

 

In light of the aforementioned, while there seemed to be a consensus that digitalisation and e-commerce had assisted business retailers in retaining their profits amidst the pandemic, such consensus was not achieved in relation to profit maximisation as compared to their pre-pandemic profitability rates. The reasons for such perspectives were primarily bound to the high development costs and operational costs along with the increase in competition levels; thereby, limiting and restraining the maximisation of their profitability rates.

 

Similarly, there was a wide consensus with regard to the enhancement of both business’ and employees’ productivity rates as a result of the retailers’ digital transformation initiatives during the pandemic. The enhancement of business productivity rates were attributed to several factors including enhanced efficiencies of business processes, coordination and communication, and monitoring and evaluation activities.

 

Nevertheless, it has been also acknowledged that the increasing levels of demands are imposing multiple challenges that could threaten the productivity levels given that the right technical providers are not appropriately utilised. Furthermore, the huge boost in productivity levels were primarily associated with the digital transformation of the logistics sector. The case was quite similar in relation to the employees’ productivity rates. This is since it has been recognised that, despite the high potential of boosting employees’ productivity rates, the increasing challenges and stresses as a result of the increasing demands could adversely impact the employees’ health and productivity rates.

 

Finally, moving on to the customer experience, this research proves that such experience has been elevated as a result of enhanced convenience levels that were afforded by e-commerce retailers amidst the restrictions imposed during the pandemic along with the enhanced variability and multitude of choices provided through the increased access to a wide range of retailers.  This was further driven by the reinforced personalisation levels that are offered to customers using e-commerce channels. However, it was also evidenced that two primary factors could impose threats to the customer experience in the UAE namely, the lack of emotional aspect that result from the lack of interactivity and physical experiences and anxiety and mistrust of online retailers.

 

Therefore, in conclusion of the previous discussion, this research has indicated that the digital transformation initiatives of UAE’s business retailers could be associated with several boosts to their profitability, productivity and customer satisfaction rates. Therefore, the high level of embracement of such technologies from retailers was captured. Nevertheless, there has still been a consensus over the persistence of the human element to attain maximum efficiency and benefits from digital transformation.

5.2 Recommendations

Based on the aforementioned, the following recommendations are presented for future research.

  • While this research provided an insight into the impacts of digital transformation on UAE’s business retailers, it is recommended that such impacts should be studied with regards to the different business sectors within the retail industry such as food and fashion sectors. This would provide a more detailed understanding of such effects while considering the context of the business.
  • Similarly, this research provided a general perspective of the key impacts of digital transformation on profitability, productivity and customer experience. Yet, it is acknowledged that such impacts could differ with the differences of many other factors including the size of the business, its history, expertise level, and reputation. Therefore, it is recommended that future research consider such aspects to avoid misleading generalisations.
  • Furthermore, the impacts on such factors should be investigated in association with several mediating factors such as top management’s support, leadership styles, anticipated resistance to change, types of employees’ commitment levels, etc.
  • Moreover, it was evidenced that all interviewees have expressed their digital transformation journey as a “learning curve” and one that is filled with learning opportunities. Therefore, it would be interesting for future research to investigate the effects of such learning opportunities on profitability, productivity, and customer experience.

5.3 Limitations

The following are the main limitations of this research.

  • The sample size acts as a main limitation of this research; thereby, limiting the generalisation of the findings. Therefore, it is recommended that this research is repeated using a larger sample size that is representative of the population to be able to obtain more concrete and comprehensive conclusions that could be generalised.
  • Furthermore, the lack of specific evidence pertaining to the effect of the digital transformation of the UAE’s retail industry acted as another limitation. This is due to the lack of supporting arguments and findings that would have aided in enhancing the reliability and trustworthiness of the research’s findings.

 

 

This study had assisted the researcher in having a deeper and more insightful understanding of the wide range of complexities, uncertainties and challenges that emerge from the incorporation of digital transformation initiatives in the retail sector in general and UAE’s retail sector in specific. This is primarily attributed to two main reasons.

 

The first is associated with the dynamic nature of the retail industry along with its interdependence on several other factors pertaining to its internal and external environments. These include the complexity and changing trends in customer attitudes and behaviours, the increasing levels of challenges and competitions, the dependencies on several partners in the logistics and supply chain, the changes in the political, environmental and social factors, etc.

 

This has created an urge for the increase in flexibility and resilience of businesses to be able to promptly respond to any witnessed changes. Therefore, causing the digital transformation initiatives to be a business-critical strategy rather than a nice-to-have tactic to influence sales, profits, productivity and customer satisfaction. Yet, the retail industry is still under the severe pressure that emerges with regards to the persistence of existing customer behaviour towards e-commerce and online retailing.

 

From these issues, it was evidenced to the researcher that an efficient management system along with a novel leadership style are essential elements for retailers to determine the success of digital transformation. This is since such leadership is capable of fostering innovation and creativity, fostering a business culture that promotes and embraces change, and enhancing the efficiency and work processes of the business; thereby, allowing retailers  to be equipped with all the core competencies and skills required to enable them in having a resilient, stable, strong infrastructure yet flexible enough to adapt to all potential challenges and changes.

 

The second reason is directly related to the operational complexities and the technicalities of the different digital transformation solutions that are available in the market. This has forced retailers to rethink their business models, have detailed cost-benefit analysis of the different solutions,  and incorporate major structural changes that are compatible with the introduced transformation.

 

The effects of such complex changes are further compounded with the rapid evolution and advancement of technology which entails consistent major and minor changes to the operations of retailers. Thus, besides effective leadership styles, it was also evidenced to the researcher that strategic alliances with other business partners have become crucial for the successful implementation of digital transformation initiatives. This is since the field is quite new for the retail sector with rapid expansion and evolutionary steps; thereby, creating the need for knowledge sharing and the access to a wider range of resources and capabilities which could be attained through such partnerships and alliances.

 

Furthermore, it has been perceived that the UAE’s retail sector is bound by many limitations; thereby, demonstrating varying impacts of digital transformation on profitability, productivity and customer experience as compared to other countries. This is due to its specific workforce nature that is dependent on cheap immigrant labourers, its cultural diversity and touristic nature causing retailers to face several challenges while harmonising a retailing strategy that appeals to an extremely wide range of tastes.

 

Moreover, despite the rapid growth of UAE’s e-commerce sector, it has been evident that its the starting point of an exponential learning curve to business retailers. Thus, it could be inferred that UAE’s business retailers have not yet had a full grip on the several factors that might have an impact on profitability, productivity and customer experience. Such learning is further dependent on the changes in customer attitudes given the fact that it is not quite clear whether customers would tend back to physical stores post the pandemic. This primarily emerges from the fact that malls constitute an integral part of UAE’s social fabric. This has caused retailers, including the research’s interviewees, to perceive future digital transformation initiatives to physical shopping in shopping malls through the incorporation of novel and creative models that would aid in elevating productivity and profitability while providing customers with unique shipping experiences in physical stores.

 

Finally, the researcher has also touched upon the essence of interactivity and the human element within the UAE’s culture. Therefore, while the UAE’s retail industry seems to be welcoming and supporting digital transformation initiatives, it is still reluctant to totally dismiss the human element from its operations based on the acknowledgement of their essential role in business operations and a form of social responsibility towards such employees. Rather than the total displacement of the human element, UAE’s retailers perceive that the digital transformation could open up several skilling-up opportunities for employees.

 

 

 

 

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Appencies 1 (interviewee 1)

Interviewer

  1. How do you think digitisation affected the physical stores after the introduction of online shopping platforms? In your opinion, do you think more people are shopping online rather than going to retail store?

 

Interviewee 1

I mean, I can only obviously talk from my own personal experience in terms of how I shop online but then, obviously the beauty and wellbeing space, and I would say for sure, you still have traffic to malls, particularly in this part of the region, but the traffic is people going into coffee shops for cinema, it’s become a social experience to go to the mall, and it’s not to shop. So you find people are going into the mall, they’re looking in the windows they’re seeing what they, they take a lot of pictures, they then share it on groups so it’s all about peer to peer recommendation they want everybody’s opinions, and then they go home and purchase it online. So, they’re still going to the malls like into the retail stores, to look particularly in beauty and wellbeing, people always want to try things first put it on their hands smell it, etc. But then they go home and search online to see where can they find it the cheapest, and then they order that.

 

Interviewer:

  1. Do you think more customers are shopping online and do you see a reduction of customers in physical stores after the launch e-commerce platforms? What are your thoughts?

 

Interviewee 1

100% I think that is actually all generations. I don’t think it’s just Gen X, which is this new very cool generation attached to their telephone, I think, I think all generations now are doing things online, particularly because a COVID I think that’s really driven people to be online, because they don’t want to be in stores, they don’t want to touch people and touch things, and again, reference to my space, which is beauty and wellbeing testers are no longer available, so what’s the point of going into a store. So, 100% More and more people are shopping online, and that’s only going to get worse. I say worse because I think it’s sad for those in retail, because the heart of shopping is no longer that.

 

Interviewer

  1. Do you think e-commerce platform were more profitable during the COVID-19 pandemic, and can you think of any challenges your employees/co-workers faced during this period?

 

Interviewee 1

That’s a difficult question, no, I don’t think all e-commerce profited during COVID, I think particular pockets affected during COVID. So for example, in beauty and wellbeing, that did exponentially well, Because people were at home, they were on the zoom all the time so they were seeing themselves, and so they were like, Oh my God, I need a facial, oh my god I need to do my nails, I want to blow dry my hair. So, beauty did phenomenally well it was like an unbelievable growth, because women and men were ordering things where they normally go to the hairdresser’s or they’d normally go to the nail salon, just ordering those goods online and having them shipped to themselves. So that’s an industry that did incredibly well. But then let’s take something like, you know, men’s apparel, nobody was going out. I was locked down, so why would anybody have needed to buy clothes, or going out clothes or something of that nature. Why would anybody needs buy motocross equipment, you know there were so many industries that didn’t do well.Because the whole world came to a standstill. But then if you look at things like beauty and well-being, or FMCG stuff you know deodorant toilet rolls, everyday goods, those guys, I mean profits skyrocketed so it would be unfair in my opinion to say everybody benefited from COVID. Not that we should use COVID and benefit in the same mind, but it wasnot a global thing I think there were certain pockets of the industry that benefited. Also, it drove businesses to really quickly get online, so those that didn’t have an omni channel approach and were just doing business very casually, were like “Oh, we’ll get to e-commerce later, it’s not a priority for us because people come in store”. These people very quickly put a massive team together, and were like, we need to be online quickly.So, I’m sure Shopify saw the most profits during COVID.

 

Interviewer

  1. In future, do you think a fully digitised logistics fleet would be more efficient than humans? How do you think this will affect the existing employees?

 

Interviewee 1

That’s an easy one for me to answer because we use a robotics, warehousing system. Yeah, so our warehousing system is pure robots, we have no human interaction in our housing system outside of the quality control.So, once the robots have pulled it, packed it and picks it before it gets handed over to the driver for delivery. That’s the only point we have a level of human interaction which is for somebody to check everything that’s in the box is what’s according to the order and then they seal the box.I think everybody will start using robotics because of two reasons. One, it’s more cost efficient, and two I think businesses are more conscious than ever, and helps with carbon emission carbon footprint and sustainability. Additionally, our robots can pick and pack in less than four seconds. No human can ever do that. So, when you scale, and let’s say you’re doing supermarket goods and things like that where you need to do things quickly. The robots are absolutely genius. Additional to that storage space, we pay for robots that have like 600 skews in every box, and they stack on top of each other. Yeah, so I don’t pay shelf space, because it’s all in robots, and those that aren’t selling well goes to the bottom, and my best sellers go to the top. It’s far more cost effective in terms of humans and paying hourly salaries. I don’t have to pay insurance; I don’t need residency visas; I don’t need all of these extra things. I just have robots. But then my question would be, if it all broke down tomorrow, which might happen at some point, what happens then? So, I’m still not 100% sure that we can move fully into that as the world, I think we will need humans to make sure the technology is working. So, I think this will be the direction people move in.

 

Interviewer

  1. How did this digital transformation affect the existing employees and their productivity within the physical stores and other departments?

 

Interviewee 1

I can only summarise from what I see and hear from talking to brands. I think that we’ve lost a lot of the older generation, working in stores. because say, on Instagram, Tik Tok, Snapchat, you know, when people are coming in they’re like, do you have this, I searched on this and I found it this way and this influencer is using it, and I think that’s a too fast thought process for somebody who’s maybe in their 60s 70s.A lot of people who retire, go to work in retail at 60s or 70s to keep themselves busy and occupied. And I think the digital world has moved way too fast for them. So, I think from that perspective, it’s affected negatively to the people in that age gap and their productivity has decreased significantly. But I think if you’re Gen X and Gen Y, then the opportunity for you is unbelievable. You know how to make use of the technology and get things done quicker, so for the people from those generations, productivity has increased tremendously. I also think, there will come a point where I’m not even sure you’ll have physical stores. I think everything will be on iPads, you’ll use your phone, it’ll get dropped off to your house and that’sthat, which I think has already started as we’re seeing all these pickup and drop-off services and everything like that.

 

Interviewer

  1. Did you/managers have to train the existing employee’s new skills to make use of these new technologies and how well did they respond to this change?

 

Interviewee 1

Yeah 100%, There’s eight of us in the team. I’d say five of us have never worked in e-com. So it was, including myself, was a whole learning experience for all of us, and we didn’t just go onto something like Shopify, which has a variety of self-help videos and guides and so on and so forth. We raised capital in order to build our own custom site. So, we’ve had to be taught on a complete web build of what that looks like to go in the back end and not blow things and change things and pull things and mess orders.So, it’s been a huge learning curve for everybody. Yeah, and I would say, it’s nowhere near as easy as it looks, ever I mean we’re 10 weeks into being live, but 10 months into the project, and every day we’re learning. So, definitely, we all had to learn something. Now for the one who does our content, she came from e-commerce. So she was a lot more familiar with it, but again, It’s a Python systems our site was built on, not something she’s familiar with, so she’s had tolearn a thing here or there, that’s not the same as what she was used to previously. So there’s been a lot of learning.

 

Interviewer

6.1 How did they respond to this change?

 

Interviewee 1

Because I think we all realize, you know, again, I’m from the music industry, I’m not from the retail industry, and I think that for me, I’ve had to learn all of it.But the guys who’ve come from from the retail space, they realize that the next wave is all on e-com, so they know that if they want to progress in their career, whether it’s with our Project Byouty or on to the next phase to be able to go there, having been part of a start-up, from the ground up,watching the site being built, learning the site and the back-end, that stands them in better positionsinstead of the candidates that’s going to come behind them with no e-commerce experience. So the response has been a very positive one.

 

Interviewer

  1. Amazon’s first checkout-free grocery store opened few years back, if someone passes back through the gates with an item, his or her associated account will get charged. Do you think your stores will move on to a similar human-less platform in near the near future? If yes, why? If no, what is the reason?

 

Interviewee 1

You know, I don’t know enough about it, but what I will say is that if that happens, I think that’s really sad. And I think we have to do is you know, it’s all good and well that we’re all digitalized and we’re in the e-com industry and everything’s moving quickly.But the mental health crisis is at a bigger crisis than it ever has been before. And the only thing that’s come into play since statistics were measured is social media is the digital space, and we now have less and less people interacting than ever before. So, I think we have to look at whilst that might make sense. What responsibility do we have to the future generation What responsibility do we have to mankind and if you take jobs away from people, how do they pay for their families how to pay for school fees, how do they pay for clothes, how do they pay for food. So, I’m interested in a lot of people saying you know what complete sustainable business. But if we take this part of the world, for example, you only want let’s say recycled glass to build something in your store, and you go to a warehouse in Sharjah, and you are met by a guy in his shorts and flip flops, working on a broken glass mound. Where’s the health and safety responsibility there, right, so then therefore where’s the human responsibility to his family, so therefore how sustainable actually is it?It’s sustainable on the top and it’s sustainable from a media aspect, and from a commercial standpoint, but How sustainable is it from a commercial from a humanitarian standpoint? So, I’m probably varying slightly off topic of your question but my answer is, I fear that we may go that way. I hope we don’t, because I think these big corporations actually have a responsibility to humans, way before they have a responsibility to the bottom line.

 

Interviewer

7.1 Were you selling on social media platforms before launching the website?

 

Interviewee 1

No, purely because the law here dictates that we need a trade license, and so on and so forth. Perhaps if that were if I were in the UK, I probably would have gone straight to social media first, and then I would have built website. Because I think, even now, our sales was minimal because we’re astart-up, predominantly coming from Instagram shop. Yeah so I think that, on reflection when it comes to raising investment, etc, people don’t actually need it like they needed it before because you could have just done it through social but this country doesn’t allow you to so that’s why we had to build a site.I think from what I can see the customer journey and the UX (user experience) of doing it via Instagram is just so easy. It’s straight on, you click and you check out. There’s nothing else to navigate. Yeah, so if you know what you want, it makes perfect sense.

 

Interviewer

  1. What information do you capture from your online audience and how do you use them to boost sales?

 

Interviewee 1

I think was, we’re probably still too early to tell you that factually, I can tell you strategically,we collate literally just for now, obviously male or female, and what language they want to be spoken in and spoken to in, and the reason for that is, that allows us to personalize further communication so that way we send them an email or the way we send an SMS, the way we greet them when they jump on the website. If they’ve chosen Arabic, We know them, we should only ever speak to them in Arabic, if it’s English so on and so forth. When it comes to beauty and wellbeing, there’s a lot that we can take, we can explore. So, what are their shopping habits in terms of skincare do they always shop for dry skin, in which case, let’s show them just dry skin stuff because we know that’s what they’re interested in.Do they only shop for haircare? okay let’s make skin not the premium category for when they jump on the site but instead, we’ll make it haircare. So, our goal is to capture all that sort of information. In time, the thing here as well as e-com for all it’s worth a lot of money is still very new and we’re getting people who still pay cash-on-delivery here and we don’t do that anywhere else in the world. So, it goes to show people’s anxiety in and around still shopping online here. So, we have to be very careful to not turn the site on and ask somebody 30 questions before they’ve been allowed to purchase something. So, I think our strategy currently is just get their age range, their male, female, their language preference, and then once they trust us, we can be like hey you know we help us fill out a survey that will help us make your journey on the site better. Yeah, but we’ve got their trust by them. So, we can’t do it to stop, but it’s definitely a huge part of our strategy because like I said, the UX (user experience) can then be improved massively. If we’ve got that level of personalization.

 

Interviewer

What are the drawbacks of this online platform and are there any security concerns related to the customer data that are being stored in your servers?

 

Interviewee 1

We don’t share our data, we don’t do anything like that and so yeah it’s all kind of the same from our payment gateway, everything is protected, as far as I understand. For the negatives, it requires a development team to fix things, and update things, and it will be on reflection, much easier if it were way more when I say user friendly. I mean, usas the company that we could jump in and fix things and change pictures and move pages around and redesign things instead of always having to go back to a development team from a start-up perspective, you’ve got two problems once that’s costly, and two, it’s time consuming, so I can’t react as quickly as I would like to, to the issues I’m seeing. So, for example, we’re seeing with the heat maps that people aren’t dropping below a certain point of the site, which I thought might happen now waiting for it all to be changed. I can’t do it myself. I have to wait for our dev team, and that dev team is not my own dev team, so there are other clients, so I’m on a board of jobs waiting to be done. So, I just kind of have to sit and wait, which can be incredibly frustrating when you are a start-up you want to react, you want to show people that you’ve heard them you’ve understood what their difficulties are and you want to make changes. So, I would say that’s definitely a major frustration, although you know, I’m sure the big sites that have come before us, and not on their first iteration of their website, I’m sure they’re on the fifth and sixth re-design by the time they get to year two. So yeah, frustrating from the standpoint that I would love to see us be able to do a lot more, but not frustrating in terms of what it’s delivering, No.

 

Interviewer

Right, okay. So, you do still need some human interatcion to get these things done from time to time?

 

Interviewee 1

100%. I’m not an advocate for removing humans. I think humans bring ideas creativity, ingenuity, you know, particularly when you bring them from all over the world. I think when you start taking that away, how does any business grow?Not just mine, anybody’s you know, you have to give employees room to have an idea and not see it work, because if they just think well I can’t say anything anyway, then what’s the point right? How do you guys do business? so I’m not a fan of taking humans away I think we all need to be surrounded by more humans no less. Especially you know in the beauty and wellbeing space, that is an emotional journey, somebody could have really bad acne, that’s dramatically affecting their life, they need to go on a site that they trust that they feel educated by that they believe what’s being said. And if I take all of that away, it just becomes transactional and beauty and well-being will never be transactional, there will always be emotion.

 

Interviewer

Was it costly to build your business online and was it worth it?

 

Unknown 20:37

Yes, very much, but right now, in the early phases of astart-up, you think, my goodness, should I spend the funds somewhere else?Should I have gone on Shopify?For example, that’s, $60 a month or whatever it is, could I have just built on Instagram. It depends, I think if you are unable to raise investment, particularly a seed round. This level of technology is probably not needed, but I was able to raise investment, and I have a really aggressive kind of five-year plan to go into other parts of the world.So, for me to execute that plan required this level of technology. So, if I look purely at numbers, Yes, I probably could have made some different decisions, but if I stay true to where I’m going, then no I absolutely made the right decision.

 

 

Appencies 2 (interviewee 2)

Interviewer

How do you think digitisation affected the physical stores after the introduction of online shopping platforms? In your opinion, do you think more people are shopping online rather than going to retail store?

 

Interviewee 2

whilst I feel the stores, experience is, is enhancing. I just don’t think the digital capabilities are quite there to make it a non-friction capability, whilst we talk about cashless and we talk about, you know, zero check out. We’re not quite there, and I don’t think he will be there for at least another five to seven years in my honest opinion. Whilst I believe that the capability will be there, I just don’t think the technology is quite at that level yet, so I still think we’ll have conventional stores operating the way that they are for the foreseeable future. And I guess it’s people like us who will try and enhance that experience over the next sort of five to seven years really.

 

Interviewer:

Do you think more customers are shopping online and do you see a reduction of customers in physical stores after the launch e-commerce platforms? What are your thoughts?

 

Interviewee 2

Yes, with the Internet, it was inevitable. It’s all about convenience. We live in a society now that is time poor cash rich, so they’re wanting everything now. Social media is probably enhanced that even further with the availability of everything at your fingertips. So, whilst I feel that the, the brick and mortar is somewhat changed. I don’t think it will ever be eradicated. I think the way that we potentially shopping in stores will definitely change and our habits will change, and I still think in certain aspects of retail like fashion, the touch, the feel, the size and the trying on capabilities is always going to be there.As much as online has enhanced the availability side of things that you can get things when you want as quick as you want. I don’t think we were quite over that impulse part of it, and I think brick and mortar, certainly provides an escape from day to day chores and allows you then to browse around more malls or shops.So, I don’t think that part will ever be eradicated I just think it will be slightly different offering that you’ll see within stores. I think the digital transformation within store will happen a lot more aggressively over the next sort of three to five years, and online will slowly start to build momentum but we will inevitably end up in an e-com generation.

 

Interviewer

Do you think e-commerce platform were more profitable during the COVID-19 pandemic, and can you think of any challenges your employees/co-workers faced during this period?

 

Interviewee 2

Yeah. As you know we went through some major experiences during COVID.Is it profitable? I don’t believe it’s more profitable than a brick and mortar model. There’s a lot more cost involved, because essentially whereas once upon a time, there were a funnel point with a store, so everyone would come in to the store at that one location. Now you go out to all the different locations. So obviously that increases the cost of operations, you have logistic costs, you have fulfilment costs a lot of these things that I think retailers have fully understood, and how to implement them into the best practice. And I think that’s probably, probably the biggest challenge at the moment.It’s not about building an E-commerce site. I think that’s relatively straightforward, but then it’s the operational side of them, maintaining the website itself. I think that’s probably been their biggest challenge. I see that there’s major challenges in terms of cost, and I don’t think those costs have been fully understood from a retail perspective.But COVID has certainly enhanced the digital offering, and it’s probably has fast forward 10 years. In that sense, without COVID I don’t think the shift would have been so dramatic, and a dramatic shift has happened. And I think the retailers have another chance to really be able to embrace the digital transformation. And they’re really now starting to understand the complexities, the importance and I think it all goes into the general offering of what e-com is.We’ve been fortunate enough to be able to profit during that period, but we only provide one single service within that whole ecosystem. So, for me, the retailers have a lot of work to do, and I think they really need to understand how the customer transition is happening and how to then appease a new generation of customers. I think it’s probably their biggest challenge.

 

Interviewer

In future, do you think a fully digitised logistics fleet would be more efficient than humans? How do you think this will affect the existing employees?

 

Interviewee 2

Of course, I read an interesting article and they were saying that about 95% of jobs that we have today won’t exist, and then 95% of new jobs will exist moving forward. So, with any evolution, there is a change and a shift. There’s automation which will allow businesses to be more profitable, absolutely. Does that mean the workforce that we have now will change?Yes, it will. But that doesn’t mean that the workforce now will not be trained or skilled enough to do the new jobs that are required moving forward. It’s just part of evolution of life. I think if we go back to the 60s and 70s, and even further back those jobs that they were doing, then I’m pretty certain that they wouldn’t be doing today. So, evolution tells us one thing, whilst there are other opportunities in automation and digitalization and robotics, it doesn’t necessarily mean that there’s not a requirement for an individual.Because who builds the vehicles? who builds the automation sensors? who builds the robotics?So, there will always be a human element to all this. So, I believe that this will lead to a more skilled society. Moving forward, which I believe will spearhead us even further. As humans we do evolve and it is part of our DNA. And I hope that a lot of these improvements that we make actually allow people to be able to profit from it. Also, in the sense that their lives become better, because obviously having the privilege of being able to travel the world you see that there is a lot of underprivileged people. So, getting these people to work and train new skils is a general reform we have to do as human beings. So, I don’t believe that this will make up a larger unemployed society, I think it’d be a more skilled employee society.

 

Interviewer

Did you/managers have to train the existing employee’s new skills to make use of these new technologies and how well did they respond to this change?

 

Interviewee 2

I believe embracing digitalisation is a part of our businesses and has been the forefront. It’s not been a general requirement like we woke up one day and realized we want to go all digital. We saw the shift in the industry. We understood, we enjoyed and we liked it.When design is the forefront of any business, then the technology will automatically follow on, because it’s the natural evolution to a business. So yeah, I think the team’s adapted really well and caught up to the changes.Yes, there’s been a shift in mentalities and people working within the digital environment. I believe it’s led to a better working environment and increased, because, you know, your revenues are up and salaries are up. So, ultimately everybody’s morale goes up when things are on time and people are happy.

 

Interviewer

Amazon’s first checkout-free grocery store opened few years back, if someone passes back through the gates with an item, his or her associated account will get charged. Do you think your stores will move on to a similar human-less platform in near the near future? If yes, why? If no, what is the reason?

 

Interviewee 2

Yes, I believe that technology adoption will be there. I believe that’s probably one of the few pain points you have within a supermarket is the queuing, and you could be queuing there for quite a while. But you have to understand is that if you remove the cashiers, you’re still going to need people to replenish the, the shelves. So, the, the evolution of that experience,yes, it’s good to get out the door quicker, because ultimately, that means more people can come through the front door. So ultimately, you’re going to need more people to be able to replenish the shelves, you’re going to need more people in logistics, you’re going to need more people in fulfilment. So actually, it’s not about removing an aspect; it’s removing a stress point within a particular experience. Again, it has its own drawbacks, security is a big issue for me. You know, being able to manage baskets and, you know, the opportunity that that presents itself in other areas is a concern. But will it improve? yes it will. Will it be fully adopted? I wouldn’t thought so in the next sort of five years, cause people will still require the human touch, and some people prefer human touch, what you have to understand is that digital is not to remove the human element. It is simply to improve the efficiencies within a store. And I think if you can combine the two, you can have a really effective business.

 

Interviewer

Has digital transformation helped the stores to maximize profit, compared to the time without any online presence?

 

Interviewee 2

The honest answer is a tough one. No, because I don’t believe that, I believe the cost of the technology at the moment is very expensive. So, tosimply integrate all these new systems and technologies comes at a cost. And ultimately that’s going to affect your bottom line. The requirement of that is being dictated by the customer and the consumer. The consumer basically wants this new experience which is dictating the experience to the store. So, the store has to implement all these additional technologies in order to be able to keep up with the demands was Yeah, and the demand.Demand is a simple philosophy of economics. So, is it more profitable for the stores?No. Can they maximize their efficiencies in a lot more stringent manner? Yes, providing the use the right providers. And can it approve those efficiencies over a longer time period? Yes. Supply chain is the hardest thing in any retail. And if your supply chain is maximized to its absolute nth degree, then yeah, absolutely. You can you can maximize it but the cost to the retailer itself is a huge investment.  So, it’s not an investment you’re going to see the immediate benefits of it will be a three to five orten, fifteen years to maximize your profits and your efficiencies.Because the shift that also takes a long time to build in all of these new infrastructures and you need a different skill set, that skill set, you need to train people so. So going back to yourprevious question, yeah I believe that this will lead to a more skilled society, and I hope businesses will adopt and take unemployed people and then put them back to work in a more skilled manner, because I believe this is for the greater future humans.

 

Interviewer

What information do you capture from your online audience and how do you use them to boost sales?

 

Interviewee 2

So, this is a one where I’m sometimes morally conflicted, in terms of how we proceed and how we collect data. To me, I’m probably done from the old school that, you know, privacy is important. And we’ve probably been successful enough not to necessarily have to go to the, to the nth degree to get the maximum profit out of every single deal. I certainly have a, a moral compass that would certainly not allow me to, to overstep the mark. Whilst I know other people will flow across the line from time to time in terms of information that they’re collecting and what they’re extracting from the individuals. But this is where we need to be very careful in the digital landscape. There’s lots and lots of data, and lots and lots of information that’s being provided on a day to day basis. I think there still needs to be an element of privacy. I certainly don’t like being spammed continuously, as a, as a consumer, not as a business provider. And I don’t believe that you should or you should have to do that, providing your product is at the at the forefront. So, for me it’s a very, very difficult question to answer in the sense, I try to utilize the basics, as opposed to collecting data that’s not necessary.

 

Interviewer

Would you use customer buying patterns and behaviours to boost sales?

 

Interviewee 2

Yeah, we certainly look at the patterns and the behaviour within the e-com store.Based on the product purchasing patterns we can profile the customers or personalise theirexperience in different ways. We kind of extrapolate and look at the data actually within the store, not the individual, and where they’re going. Yeah, so we don’t necessarily track them, and like other large marketplace websites we simply look at the, the audience that we have on our systems, and we look at how we profile those audience to look for like-minded audiences.

 

Interviewer

What are the drawbacks of this online platform and are there any security concerns related to the customer data that are being stored in your servers?

Interviewee 2

yeah, it’s to me this is probably the biggest concern or issue that I have with the digital transformationand the lack of understanding of what to do with that data is a big concern for me.Because I’m not aware of the data that is being shared, because there’s a lot of sensitive information that can be captured and morally, that is a concern for me as a human being, not as a, as a business provider.Because we can take the stance as the business, not to look at certain aspects of that data, but we understand the information is pulling out is, there is a lot of sensitive information in there that can be used within the wrong hands that can be manipulated in a more detailed manner. So, for me, the. That’s why I will say I’m morally conflicted about data, and the way they are handled.

 

Interviewer

Was it costly to build your business online and was it worth it?

 

Interviewee 2

It’s a very good question, and one that’s probably got multiple answers in multiple different scenarios. Yes, I’ve beenprobably one of the more fortunate people that I saw this shift happening a long time ago. I kind of almost understood probably 15 years ago that this was going to happen, and it was about positioning myself in that position, to ensure that we could capitalize on that shift. Have we capitalized on that shift?absolutely. You know withKMMRCE in its valuation that we see in today’s market of 1.7 billion. It’s impossible for me not to say that we haven’t profited from that. Has it been a, an interesting journey? for sure. The one thing you learn about technologies, it never stops. It keeps continuing, and whilst you think you may be in front. Tomorrow you wake up and you’re behind so that continuous investment is always required in your product, and in your services. and, you know, whilst people think they’re experts, I generally don’t know what an expert looks like. Because for me, people are changing the landscape on a day to day basis, technology keeps evolving Yeah, again like humans, and I think the only thing with digital is actually evolved a lot quicker and what we do, how we embrace it, how we deal with it and how we protect it. I think that’s something that, as business owners and business entities. We should be very aware, because I think we, we sit with a very strong power that can change and shape, you know futures, and I think there is a there is a moral obligation there to make sure that we, we do the right thing, and we operate in the right manner. So back to the question, it was it was it was it costly. Yes. Is its continuous? Yes. Is it enjoyable? Absolutely.Because, you know some of the things that we’re able to achieve now that in five years ago we couldn’t achieve. Yeah, I mean it’s ground-breaking and I look forward to the next five years because it will be you know a learning curve. That will be a wonderful experience I think e-com generally now if you look at retail, not just in retail but GE commerce, you know, the way that systems, the way the government’s the way that the whole landscape is changing, you know, it only leads to a better society. I believe. So, long way to continue.

 

 

(Appendices 3, Interviewee 3)

Interviewer

How do you think digitisation affected the physical stores after the introduction of online shopping platforms? In your opinion, do you think more people are shopping online rather than going to retail store?

 

Interviewee 3

to what we found, as we work within the grocery sector is that, there’s most definitely been an impact on the physical stores. They’ve been hit by the fact that more people have changed their shopping habits to shop online, and what we have found that, whilst there was a trend going that way, we found that some late adopters have been somewhat forced, into that change, especially when the pandemic hit and there was no other options.You’re in lockdown and things of that nature. So, there’s definitely been an impact in terms of a down weighting of consumer shopping in store. And what is most interesting is when we talk to these retailers,their goal is to make e-commerce that biggest store, above and beyond than any of their brick and mortar stores, so it’s not only are there changes now, as even the aspirations of the retailer themselves, to maximize those revenues from e-com to make them their biggest store, butbeyond looking towards the future.

 

Interviewer:

Do you think more customers are shopping online and do you see a reduction of customers in physical stores after the launch e-commerce platforms? What are your thoughts?

 

Interviewee 3

Yeah, yeah absolutely like we just touched on with question one, there’s 100% more and more consumers shopping online. I think those that adoptedit anyway, findingit easy and convenient, especially in terms of the new generation that’s coming through. I’d even take mymother as an example, who’s not even a texter; and now she tells me living in the UK she shops online from Tesco.So, that goes to show that even the generation above 65 years oldhave also adoptedto these new technologies. So, most definitely, there are more people shopping online and that trend is set to continue.

 

Interviewer

  1. Do you think e-commerce platform were more profitable during the COVID-19 pandemic, and can you think of any challenges your employees/co-workers faced during this period?

 

Interviewee 3

Yeah, absolutely. Well, that’s an interesting question, and for us it was very interesting the COVID-19 pandemic because we work across three supermarket chains,Choithrams, Waitrose and Spinneys.When the COVID pandemic hits Spinneys and Waitrose weren’t on e-commerce and they were purely brick and mortar, the impact that COVID-19 had on E-commerce was so profound that it accelerated their requirement to move online. Choithrams, in terms of online sales went through the roof during that period. And like I say their competitors Waitrose and spinneys had to dive online to catch up and match their competitors. In terms of challenges, most definitely there were, I would say most of the challenges revolved around logistic deliveries, and having to handle the increased number of orders, and making sure that we had the fleets to deliver the orders, making sure that drivers planning of routes was absolutely on point to make sure you can you can maximize the number of orders that can be delivered within a tight one hour schedule.So, they were two of these huge things and in fact we had to develop technologies to manage the picking packing and delivering of these orders to see out the demand.

 

Interviewer

  1. In future, do you think a fully digitised logistics fleet would be more efficient than humans? How do you think this will affect the existing employees?

 

Interviewee 3

think we are certainly moving in, in that direction where, where technology is somewhattaking the role of some laborious tasks if you will.However, I think that always be an element where human interaction is needed. I know for one for me as a regular user of E commerce, particularly when I’m purchasing food and particularly when I’m purchasing fresh foods that delivery can be somewhat,let’s just say whether when I’m ordering a steak or I’m ordering milk, sometimes the product that gets delivered isn’t the freshest milk because maybe they’re picking the one that is oldest that is easier to sell to get rid of. Maybe they’re not selecting the best the best steaks, so I feel like that human interaction is important because I think ifeverythinggets digitalized and only be about profit, there wouldn’t be good qualityproducts. So, it’s important to have that human interaction, to make sure that the selection process is on point.

 

Interviewer

How did this digital transformation affect the existing employees and their productivity within the physical stores and other departments?

 

Interviewee 3

In terms of employees, it has put a lot more pressure on them. To be honest, it’s like we’re adding an additional store in terms of this e-com platform. So, the pressure on them was quite extensive. What we also had to do was, was to retrain some staff to improve their efficiency. Because when it comes to e-commerce, it is very easy to burn money, if you’re not time efficient. So,making sure that the employees are trained well is very important. Also, to train them well to make sure that the shelves are fully stocked. Also, making sure new employees that you’re bringing onto the company are trained well and making sure that they’re brought up to speed as quickly as possible to make sure it’s efficient.Because the minute that you start not been able to deliver the maximum number of orders, and your cost per transaction goes through the roof in terms of your margins these things are critical. So, I would say training and workload has been the biggest impact on existing employees.

 

Interviewer

  1. Did you/managers have to train the existing employee’s new skills to make use of these new technologies and how well did they respond to this change?

 

Interviewee 3

yeah, there have been some new technologies, particularly in the application that we built for, for picking and packing in terms of the logistics around the store. So that was something that was quite new for a lot of the staff.Most Probably towards some of the older staff, and they were a little bit hesitant towards new technology.But I think, in all honesty, what we’ve also found was that during the pandemic, particularly, a lot of people unfortunately lost their jobs. So, I think that also made the workforce, more and more willing to accept the dynamic changes going on in our industry and accepting the fact that this technology isn’t anywhere. So, our employees were keen to learn these technologies, because they were concerned about the job security.

 

Interviewer

Amazon’s first checkout-free grocery store opened few years back, if someone passes back through the gates with an item, his or her associated account will get charged. Do you think your stores will move on to a similar human-less platform in near the near future? If yes, why? If no, what is the reason?

 

Interviewee 3

I think there’s certainly that capacity, and interestingly also we had a conversation with a with a tech supplier in the US, who was working with Walmart in terms of efficient carts.So, if you would come into store with your with your order or your phone, you would you’d plug into the cart anyway, it would map out the route throughout the store for you to pick up your products, which is something that we were quite interested in doing. I think things will go that way. I think for it to go that way, I think there would need to be money invested in, in stores. It’s things that we’re looking to you know we’re thinking about and looking at doing in terms of the cost of behind it. I think it could go that way. I don’t know whether or not they would, I don’t know whether or not all stores would go that way, but I think we’re moving towards a direction where you need to have multifaceted solutions for our consumers. So, do I think it would take away the entire human factor within stores? Definitely no. But I think most definitely that those options will be there, good for consumers in the not too distant future.

 

Interviewer

Has this digital transformation helped maximise profits compared to the time without any online presence?

 

Interviewee 3

I would say most definitely, I think in this world, I’ve been in the in the advertising game now for about 20 odd years and I think, gone are the days now when I first moved into this industry, there was a case of, if you had a good brand that had a good had a good circulation of good readership, brands would want to come on board just to be associated with your brand. In this day and age now, it’s all about return on investment and accountability. And I think what online does is provide you that accountability and it provides you the ability to provide reports and, to give an accurate scale in terms of exactly what that return on investment has been.So, I would say, it allowed us to maximize our profits and profitability because we’ve been allowed to display with great transparency and how we’ve been performing, and, and it’s been very interesting to see portray the data from before we launched a campaign, during the campaign, and post campaigns; you can really explain to brands, exactly what their presence on our E-commerce platform has done for their for their products right.

 

Interviewer

What information do you capture from your online audience and how do you use them to boost sales?

 

Interviewee 3

We don’t capture quite enough. In terms of what I use personally for data in terms of increasing sales is purely the sales data and how our products performedduring the time we run an advertising campaign. How was the sales performance performed during that advertising campaign? What I would like to have, and what we and what we are trying to build is more of a behavioural analysis of consumers and understanding better, where we get our consumers from, are they are withdrawn from Instagram are we drawing them from Facebook? Are we drawing them from a partnership that we might have done withanother brand, where are they coming from, where they go on from there, what sites are they looking to go to after our sites, what are their common interests?These kinds of things would be very interesting to me and I know that we’re in the process of building these technologies to collect data to understand our consumers demographic profile. So at the moment, understanding the age demographic of people, their salary income bracket and what sort of jobsthey’re doing are done via survey reports, and we do this every 6 to 12 months or so to get a better understanding of our audience but I do think there’s a lot more that can be done. I do feel the more we understand about the behaviours and habits of our consumers, the more we can tailor our offering towards them and do specific campaigns that might be tailored towards them. So, it’s more work to be done, but we’re certainly moving in that direction.

 

Interviewer

What are the drawbacks of this online platform, and are there any security concerns related to the customer data that are being stored in your servers?

 

Interviewee 3

There’s a couple and you know each platform works in a different way, I thinkI’ve said in a previous answer that you know that transparency is great and we can we can boost sales.Transparency, also has its negative sides, you know, For example, something as simple as non-availability. So, one of our sites might have unavailable flags up and it can make the site look obsolete. So that’s been a drawback, as it’s something that draws an advertiser’s eyes sometimes with their product not being available within our store. That’s been an an irritant for me and it’s something that we may we may need to kind of move away from. And the second part of your question, security concerns, yes, that’s something for someone like myself who, doesn’t have a massive tech background, that’s something that I’ve raised with Bob Wood my CEO my boss in terms of how secure is the data that we hold. And I know that in terms of what we do and thetechnology we use, that it’s incredibly secure in terms of holding that data and making sure that any potential hacks into the server, doesn’t put our customers data at danger but it’s an ongoing concern. We have a number of tech developers that are working on this on a daily and weekly basis, making sure that we’re consistently up to date with the latest security protocols. Because of course you know, not only within our sector, but even within things like cryptocurrency and all sorts of sectors security is always is always a problem and always a concern so it’s something that we that we consistently investing in something that’s a consistent concern, and something that’s going to be a consistent challenge for as long as we’re in this business and something that we will never take our eyes off.

 

Interviewer

Okay, so you’d say, it’s a yes and a no there, there will, there’s always that gap in between?

 

Interviewee 3

Absolutely, it’s everything.Something that you feel that you fix today, in a month’s time could be a problem because, you know, people are always evolving and hackers keep getting evolved. So, we need to be persistent and developing to keep ahead.It’s something that will always be a challenge and one that we were fully aware and is never going to disappear

 

Interviewer

Was it costly to build your business online and was it worth it?

 

Interviewee 3

I would say, it depends on who you ask. I feel like the you know the foot soldiers on the ground that were helping to get it together may say it wasn’t worth it.But as a as a manager, as a business owner, I would say most definitely it was worth it.

 

We launched Choithrams supermarket online about eight years ago or so now. Being based in Dubai, the great things about this region is when you perceived to have an expertise in a, in a particular field, opportunities arise, and, for us, doing short jumps has directly led to us now working with two other major supermarket chains, Spinneys and Waitrose. And furthermore, we’ve been approached by Choithrams sister chains in Bahrain and Qatar to launch their e-commerce platform as well.So most definitely have been worth it. It was costly to do, but I think in terms of what we’re getting back in return and all the additional work, it is proof to the fact that it is most definitely been worth it, and financially rewarding for the business.

 

 

 

(Appendices 4, Interviewee 4)

Interviewer

How do you think digitisation affected the physical stores after the introduction of online shopping platforms? In your opinion, do you think more people are shopping online rather than going to retail store?

 

Interviewee 4

As I can see, people who have not digitalised their store would be actually losing their market share as e-com has become an inevitable part of your brand offering. Then there’s that question, how can you do it, how you’re going to have a team and all those things. But it has become vital part of within the industry today. So, you either move on to a digital platform, or you will be diminished in the long term.

 

Interviewer

How did it affect the physical stores, like for example, did you see an increase number of people or decreased number of peoplewithin the store? or did they start shopping online instead?

 

Interviewee 4

Okay so, the last two years have been tougher and difficult withthe restrictions of movement. So, there weren’t an influx of new people coming in, so it’s very hard to answer that question.But I we look at the pre COVID conditions, because COVID came up in 2020 March, so,according to the journey we had from 2017, I can say e-commerce had no significant growth for anybody. It was an additional challenge for your existing customers. The only advantage we had was, we launched our e-com platform earlier than anyone else in the region, so, we had the advantage of retaining our existing customers more effectively.

 

Interviewer

Do you think more customers are shopping online, and do you see a reduction of customers in physical stores?

 

Interviewee 4

I’d say that retailers are facing the reduced basket sizes in brick and mortar stores, which is a very unhappy site for bricks. Okay. All right. Everybody thought when people shop on our digital platform, they will have a smaller basket. Yeah, but on the contrary, my learning, including me, is that online customers are buying a bit more. Because they’re buying in a comfortable space on the digitalized platform, they feel the shopping can be much easier for them.

 

Interviewer

Right, okay, so you’re saying people are buying more stuff online rather than they’re buying from the shops?

 

Interviewee 4

Absolutely! Same as earlier, the assumption was people buy online, they will buy specific items.Most of the players and seeing their online basket size is much bigger than in stores.

 

 

Interviewer

Do you think e-commerce platforms were more profitable during the COVID-19 pandemic, and can you think of any challenges, your employees face during this period?

 

Interviewee 4

There was an unexpected surge and demand on oure-commerce site. I think it’s not because people love to go on e-commerce platforms, but because of the restriction in physical movement, it led to a huge spike in online sales. But we weren’t able to stay in service as we expected due to the limitations from the delivery location, not due to lack of staff or delivery capacity.It’s because some buildings don’t want us to go inside the building, instead they want us to give a call to the customer and ask them to come down and collect the order. But some customers understandably did not want to come down. So, there were a lot of physical challenges due to the changing environment that happened due to COVIDeven though there was a huge demand for products.

 

Interviewer

So, do you think the employees were stressed during the COVID pandemic?

 

Interviewee 4

Employees were not affected; however,they became a primary contact in COVID related incidents, in fact, we had to quarantine 10 of our employees. Every day was a new challenge for us andit was exciting on one side and we did our best.Even some customers came back with some kind words saying thank you to us, which gave energy to keep going.

 

Interviewer

In your opinion, do you think, in future, a fully digitized logistics fleet would be more efficient than humans. How do you think this will affect the existing employees?

 

Interviewee 4

Okay, I have been in the retail industry for the last 30 years. I always learned that the US market is different from GCC market.In GCCyou’re getting cheap labour on a contractual basis. So, in this region there will always be a human element and human interaction in the logistics field. I’m sure that we will go through a lot of experimentation in this specific topic, but I don’t think we will be able to completely remove the human element from it. So, to answer your question, I don’t think it will affect the existing employees anytime soon. Would it be more efficient? Yes, absolutely. I’m sure it will be more efficient. If you take a fleet of trucks that are fully digitised, they will be able to find the best route to deliver the products in real time, and communicate with our fleet managers and planners more efficiently, so, in return, there will be more informed driver.

 

Interviewer

How did this digital transformation affect the existing employees and their productivity?

 

Interviewee 4

Right so, there are multiple scenarios in this situation. Wehave exclusive team dedicated for e-commerce, and a separate team for brick and mortar. Our e-com customers have access to a wider range of products, so due to the demand, our brick and mortar staff wasn’t able to fill the shelves properly and this was affecting the pickers from our e-com team and the in-store customers. This situation is very common when we have a very high number of orders within a short period of time and this puts a lot of pressure on our staff from both the teams. So, I would say, the platform hasn’t helped our employees increase their productivity.

 

Interviewer

Did you have to train your existing employees, new skills to make use of these new technologies? how well did they respond to this change?

 

Interviewee 4

Training our employees was a mandatory part of the digital transformation process. None of our staff has worked on any sort of online platforms when we first launched in 2017. So, the company we hired to build our e-com platform sent some of their experts three times a week to help us learn the platform in detail. So, it was pretty tough in the beginning, but we caught up to it and learnt everything that was there. To be frank, the team was very excited to learn about it, because it was something new for us and I can say they were willing to learn without any hesitation. They knew it was helping them to move their performance to the next level. I also want to say, in the first couple of weeks, we did make many mistakes and things broke here and there, but eventually we caught up to it all and now it’s a very simple thing for all of us.

 

Interviewer

Amazon’s first checkout-free grocery store opened few years back, if someone passes back through the gates with an item, his or her associated account will get charged. Do you think your stores will move on to a similar human-less platform in near the near future? If yes, why? If no, what is the reason?

 

Interviewee 4

In near future, it won’t be, but in the next three to five years, we might slowly transition into it. Because the that technology is still very expensive. Yeah, and for customer base, I don’t think it is a top priority either. Currently, the primary focus is on the quality of the product, the experience in the digital model and the fact that someone will deliver it right, is what works well at the moment. I don’t think this checkout-less model will work well in bigger stores, it will only work in smaller scale, for example, the store they opened in the Dubai mall. To me, having a higher footfall in our stores is more important than trying to reinvent the wheel. It doesn’t mean that we will never do it, but with time, we will see where the market is going and evolve with it.

 

Interviewer

So, goes to my next question. Has this digital transformation helped maximise profits compared to the time without any online presence?

 

Interviewee 4

No, it hasn’t helped maximise profits. It is still very expensive. I can confidently say that none of the other competitors have better profits from their online platforms than their brick and mortar stores. This is because our existing customers still prefer shopping in-store rather than online most of the time. For example, if there’s a store near your house and you want something delivered urgently, you wouldn’t order it online and wait for an hour or two till it arrives. You will instead go to the closest store and buy it yourself.

 

Interviewer

What information do you capture from your online audience, and how do you use them to boost sales?

 

Interviewee 4

We do collect very small amount of data, but none of these are being converted into actionable intelligence. That’s all I can say about this.

 

Interviewer

What are the drawbacks of this online platform, and are there any security concerns related to the customer data that are being stored in your servers?

 

Interviewee 4

So far, in this part of the world getting customer data and use that to monetize your business is pretty tough. Because every organization has got its own working pattern. Just collectingthe customers data will not help.Anyway, going back to the question, yes, according to my understanding, there are many security concerns related to customer data. If they fall onto the wrong hand in any way, there can be some really negative effect to our brand image. Data getting leaked is a very common thing you hear on news these days, so absolutely, there are risks. But then again, the agency that’s looking after our site has put many security measures in place to make sure none of the data gets into the wrong hand.

 

Interviewer

Was it costly to build your business online and was it worth it?

 

Interviewee 4

I think it was an initial expense, I would rather put it that way. It was very costly to get going as we had to build it from ground up. But it was a necessary investment. So yes, it was 100% worth it and we feel we are future-proof for the time being.

 

(Appendices 5, Interviewee 5)

Interviewer

How do you think digitisation affected the physical stores after the introduction of online shopping platforms? In your opinion, do you think more people are shopping online rather than going to retail store?

 

Interviewee 5

Normally, I go online to purchase a product. I know when I was working in London, that with something like Black Friday which traditionally drove a lot of people into stores, after a lot more stores went onto e-commerce, there was one Black Friday that you didn’t see anybody in store, everybody was just doing online. It was all over the newspapers and were showing images of the empty stores. Because that’s was the number one day for all selling, buying and everyone was doing it online.

 

Interviewer

Do you have any idea about how the community in the UAE is using these online shopping platforms?

 

Interviewee 5

I would say it’s a lot similar, but then again, people in here go into store to experience the goods and what’s available, or see the offers and maybe if it’s a product that they need to test out or try, they will do that in store. But then, they will use online platforms to do the purchasing, because they can normally compare the prices and get a better deal easily.

 

Interviewer

After the launch of ecommerce platforms, do you think more customers are shopping online, and do you see a reduction of customers in physical stores, what are your thoughts?

 

Interviewee 5

Yes, I thinkdefinitely being able to shop in the comfort of your own home and get things so quickly is really helpful. I would say, the UAE is kind of had to come on a little bit more recently in recent times, is with returns. Because with online platforms you have to offer returns, and that’s not always something that you can do in shops to get your money back. So, I think that that has probably helped people to shop more online here because they can obviously try things and then they can send them back, easier than they can instore.

 

Interviewer

Do you think ecommerce platforms were more profitable during the COVID-19 pandemic and can you think of any challenges, your employees faced during this period?

 

Interviewee 5

Yeah, I think, e-commerce platforms massively benefited from a worldwide pandemic, because for lots of peopleit was the only thing that they could do at home.It was a way of being outside of the home but while they were very much inside the home. Especially, even like grocery shopping became something that was seen as a highlight of the week, and not so much of a chore. And I know that in that marketplace of e-commerce and co-workers, and our employees struggled to get goods from where they would normally get goods from; like the suppliers were running out of things so we had to then look for alternative sources to bring those into the region to cater for the demand that was happening. So, the mass overload of deliveries and orders were definitely something that we hadn’t prepared. During that time, I know one instance where there was an outbreak of COVID-19 at one of the delivery stores that we use, and then the store had to be closed and all the deliveries had to be shifted by a day or two. So, then that obviously had a knock-on effect to when people could get their groceries.

 

Interviewer

Was this because of the employees not being able to deliver them?

 

Interviewee 5

It was just the sheer volume of deliveries, people were buying in bulk, worried that they weren’t going to be able to get food. A lot of peoplehad storedproducts like powder and rice in their homesand they kept constantly buying. Which made stores very busy, very hectic for the staff in the stores and then there’s an outbreak or suspected outbreak or something like that and it has a huge knock on effect to everything.

 

Interviewer

In future, do you think a fully digitized logistics fleet would be more efficient than humans. And how do you think this will affect the existing employees?

 

Interviewee 5

Yeah absolutely, I mean I think with any industry when they become more computerized and more digitalized, you’re going to have to cut back on staffing costs, which in return will impact the employees. However, I think you, you still need a certain element of humans in a place like that, because, you know, it depends how intelligentthese machines are. For example,you know that humans can think on the spot a solution for a problem, especially when they’ve got years of experience working in a grocery store or being in a big retail outlet, they have that experience for them. So, I think, you only have to look at the way the world’s going and how it’s moved on. There is already acutback on employees in these areas.

 

Interviewer

How did this digital transformation affect the existing employees and their productivity within the physical stores and other departments?

 

Interviewee 5

Yeah, I would say there was, there was ateething problem as you would expect with any kind of online platform and getting things right, which initially would not have been very productive.Especially not having things listed correctly on the website and customers complaining about what they were getting delivered, but overall if we can service more customers on a daily basis, Then we are increasing productivity as a company, and therefore so are the employees.

 

Interviewer

Did you or the managers have to train existing employees, new skills to make use of these new technologies?

 

Interviewee 5

Yes, Absolutely.There was a huge amount of training that went on and upgrading staff within the business. So, for example, our pickers had a more advanced area to learn.They knew the business really well and went into e-commerce and then they have to deal with things like substitutions and things so they had to know the portfolio and the platforms we built better and how to manage that properly. So yeah, they did have to have learn and acquire new skills.Because quite often they hadn’t been used to dealing with computers and looking at delivery orders and so forth. And then with, you know, any platform we had to tailor it a bit more to make it easier for them and to make sure that it worked well for them.

 

Interviewer

Amazon’s first checkout-free grocery store opened few years back, if someone passes back through the gates with an item, his or her associated account will get charged. Do you think your stores will move on to a similar human-less platform in near the near future? If yes, why? If no, what is the reason?

 

Interviewee 5

I think potentially it will. ButI think there’s probably some obstacles as a business that needs to look at, more of like what if it doesn’t work properly? What if the system malfunctions?those kinds of things. So, a huge amount of testing would have to go into it. I find it quite daunting when I think about it myself. But yeah, I think it will definitely go that way, but I don’t think in the near future, maybe in the distant future we will see more of that integrated into the shopping experience. I also think, you can’t fully remove the human aspect of it, because you will still need humans to repair this hardware that will be used, or even security to watch out for any theft within the store, or pack all the products that you buy. So, yea, I think the old jobs will evolve in to new jobs, but I really don’t think we will be able to fully replace humans.

 

Interviewer

Has this digital transformation helped maximise profits compared to the time without any online presence?

 

Interviewee 5

I think with this question, it’s a bit difficult to answer, especially in the early stages as its just been in place for just over a year. Make sure we haven’t cannibalized the customers who are going into the bricks and mortar store, but a lot of this comes down to making sure that the product offering is very strong on the digital platform, and therefore you may capitalise on new customers that you may get from a competitor. When they see that you have a better offering, and they don’t have to travel so far to access your store and it can be delivered at home. So, I think that’s one of the reasons Spinneys have worked really hard to, really increase their product offering because they have most supermarkets have a variation across all their stores, they will have more products in an area that they know work well for their audience in that area. So, obviously by having a fuller and a wider range, you can potentially reach other people that may not travel to go to your store but or get delivered online.

 

Interviewer

So would you say that this wider offering has helped to increase the profits?

 

Interviewee 5

Yeah. Absolutely.

 

Interviewer

What information do you capture from your online audience and how do you use them to boost sales?

 

Interviewee 5

So the information that we kept from our online audiences is kind of your basic, you know, locations, so geographically being able to target people in communities that you know, more family orientated so therefore you cater for them with campaigns such as back to school, if you know they’re in a school catchment area. Again, age is something that, that we can look at and the idea is over time, we start to see what people are buying on a regular basis, and then we can push products to them either through our email marketing, or on the homepage at certain times around seasonal trends.

 

Interviewer

What are the drawbacks of this online platform, and are there any security concerns related to the customer data that are being stored in your servers?

 

Interviewee 5

I think with any online business,no matter what you are, there are always certain security concerns about storing people’s information. And that’s why we just have to be extra vigilant make sure we’ve got everything checks out, and make sure that we stay on top of any forgery, if there’s a fraudulent activity that we think might be happening.We try to aim at it straight away, so that we can minimize any risks, attached to that.

 

Interviewer

Was it costly to build your business online and was it worth it?

 

Interviewee 5

Yes, it was costly to build the business online, because we wanted to come to the market with something that was advanced and look and felt good for from a consumer point of view. And yes, it is worth it because if you want to be in that market space, and have longevity in your business to go into the future, then it’s a necessity in this day and age.

 

 

(Appendices 6, Interviewee 6)

Interviewer

How do you think digitisation affected the physical stores after the introduction of online shopping platforms? In your opinion, do you think more people are shopping online rather than going to retail store?

 

Interviewee 6

Well, it’s definitely taken away footfall to some degree. Because people can just buy things online more conveniently, without having to worry about taking the time from their day to physically get into a car or take transport and get to the shop to buy things. So, whatever they can get online without having to worry about doing too many comparisons, asking too many questions, handling the items, they can just do them online.But whatever they physically need, they will need to go in to the store.So, it’s saving people a lot of time, it’s a lot more convenient, and you spend a lot less or less time worrying about physical marketing because you will focus more on online marketing and the way you approach that is different.But ultimately, yes, it’s a lot more convenient, people can spend less, they spend less time in the store, because they spend more time online and they buy online, so it’s more convenient, but there are elements in a physical stores that you really can’t replace or aren’t easily replaced cause of online. So that’s a big difference.

 

Interviewer

How did it affect the physical stores, like for example, did you see an increase number of people or decreased number of people within the store? or did they start shopping online instead?

 

Interviewee 6

Definitely. But I think we’ll never see a full reduction of people shopping in physical stores or them becoming redundant. But in some cases, you might that you might need to downsize, because wouldn’t need as much inventory.So, you probably might need to worry about, say offsite inventory, so maybe you’re storing your products with a logistics provider in a warehouse somewhere, so you might have to increase space there in case you’re not getting stuff shipped out of your store. So, every online platform works differently because some platforms will ship out products out of their actual physical stores and some will ship out of warehouses. But definitely the moment people can choose to buy online what they could also get in store, they’re just going to go online because a lot more convenient.So, yes it will definitely will take away number of people visiting physical stores.Grocery is a really big thing as well. People often can just get them online, they don’t need to physically be in store to buy these things.

 

Interviewer

Do you think e-commerce platforms were more profitable during the COVID-19 pandemic, and can you think of any challenges, your employees face during this period?

 

Interviewee 6

I’d say definitely profitable, because the stores had a lot more orders, and a lot higherdemand for items such as masks, sanitizers and anything related to COVID. Even in places where people were selling medication or things related to health, the prices were up due to the supply and demand. So, I’m sure profit margins would have definitely been higher. The big issue, though, with that is that a lot of systems are not capable of handling the pressure.Because suddenly you have increased demand, websites were a lot more under pressure, your deliveries were a lot more under pressure and you have a lot of people visiting the site, making more orders for maybe bigger amounts.So, you’ve got to worry about making sure you are able to fulfilthese orders in a timely manner.Which then comes into aninconvenience forthe customer service people and put them under a lot pressure. Because people are like, well, where’s my order, it should have been here by now. Ordinarily, you’d be able to deliver it on time, but now you’ve got a lot more orders which had been doubled, tripled and 10 times the number of orders. So that was the biggest issue.Although it was profitable, you then suddenly had to think quickly about how do you fulfilthese orders quicker. How do you handle customer service because you have a lot of people complaining about a lot more other issues? There’s a lot of moving parts or something like this, so that would be the main issues. So, obviously yes, there was a lot more pressure on the staff and the employees, and on yourself as well.Because you worry about maintaining people’s health, but you also want to fulfilthe orders, and you’re trying to balance it out so that can be quite complex.

 

Interviewer

In your opinion, do you think, in future, a fully digitized logistics fleet would be more efficient than humans. How do you think this will affect the existing employees?

 

Interviewee 6

I think if I was a logistics employee I’d be concerned about the future because, you know, obviously you’re worried about things like drone delivery or having some other ways of automation.But I think that these systems aren’t designed to replace humans,they are designed to make your life easier. So, for example, when one person can handle multiple drones at a time to make multiple deliveries, that is great, whereas normally, you’d have one person or multiple people that need to go to locations one at a time, whereas in this instance you able to handle things better, you don’t have to worry about traffic.This is a scenarioconcerning drone delivery and small parcels, because you don’t have any issues in the air. Obviously, the weather might be an issue time to time, but you don’t have to worry about traffic.How often have you gotten someone telling you, it’ll be there within the hour but then they’ll delay due to an accident on the road? So yes, a fully digitised logistics fleet would definitely be more efficient, cause there’s a lot of things that get in the way of human beings physically, like you can’t get to places or find locations and so on. There are other issues that come across by being human.But when you have robots or automated or digitized fleets, those human issues are won’t be there. I mean this has come with their own challenges as well, because, you know, if someone wants a washing machine delivered, we can’t use a drone for that; you’ll need humans for that. Also, having a fully digitised logistics fleet means that you have a better tracking and you can monitor where things are in real time, much more efficient and effective way of seeing where things are at, and being able to manage things a lot more easily. So, you’re not tied to the typical problems that you would have from a non-digitized fleet.

 

Interviewer

Do you think this will take away the human element completely?

 

Interviewee 6

So, yes, you might have robots doing a delivery for you within like a physical robot or like a drone, but you still need a human being to control this, you need a human being to program this and to monitor this process. There’s going to be cases where machinery and things don’t work out and will need repairs replacements. So, you still need a human being for that. Also, at the same time, when you’ve got robots delivering and ultimately, these systems are still in the infancy, and we’re not worrying about them becoming self-aware and taking over the world and replacing human beings. So, we still need humans, and it actually gives humans a great opportunity to upskill and learn about AI, coding, machine learning and data analysis and so on. So, human beings are not going to be replaced anytime soon. So, I wouldn’t be threatened if I was in that space. I see it as an opportunity to upskill and make life more efficient and more convenient for everybody.

 

Interviewer

How did this digital transformation affect the existing employees and their productivity within the physical stores and other departments?

 

Interviewee 6

I think there’s a lot more stress, because suddenly they had to do a lot more order fulfilment, and people were doing things that they weren’t necessarily responsible for. So, they had to replenish the shelves a lot more often. So, they had to hire more people to replenish the shelves and more delivery people to fulfil all the orders that came from online. So suddenly you had to hire more staff, because it was all been done through the physical stores.We suddenly started adding more staff to the warehouses to manage logistics. So, it was a lot more pressure, because suddenly you have a lot more orders. I mean 10 times the case. So, a lot of pressure, a lot of stress.Also, again, a lot more concerns because you’re worried about COVID at the same time while you’re trying to get things done. But at the same time there’s a lot of excitement because people were doing things that they weren’t maybe aware of before. So, a lot more awareness part of building the business works. So, people are now, not just confined to one element of the business, they can do more things. So, I think definitely it was more stressful, but a lot more interesting in how the business was as whole, and lot more productive because people had a very physical, tangible impact on the business, and I think they made it. So, definitely, I think people feel a lot more involved.

 

Interviewer

Did you have to train your existing employees, new skills to make use of these new technologies? how well did they respond to this change?

 

Interviewee 6

So,we definitely had to train them, because a lot of people working on things that don’t involved in their day-to-day job, had to learn how to handle order fulfilments. Packing and making sure things are packed in the correct way, managing customer service, because suddenly they have very different queries that you wouldn’t normally have to deal with. So, there’s a lot of sort of change with that.But I think because it’s an entirely new skill, people looked at it as an opportunity to upskill. Very few people looked at it as a case of,why am I doing this? and this is extra work for me. I think it should be more like, hey I’m helping the business and I’m more productive right now. Also, I think there’s always a genuine concern, that with the pandemic and there were issues of cost cutting and, in some businesses, loss of jobs.Then people were very concerned, but obviously in a case like this, you have a lot more work to do and people are being utilized, even more so. So, this is a bit of stress level, extra work to be done, but as a whole, people were happy enough to upskill and learn more things. And that’s part of the digital transformation.

 

Interviewer

Amazon’s first checkout-free grocery store opened few years back, if someone passes back through the gates with an item, his or her associated account will get charged. Do you think your stores will move on to a similar human-less platform in near the near future? If yes, why? If no, what is the reason?

 

Interviewee 6

I think there will come a time when there will be a lot less paperwork in these stores. Thebiggest issue I find is that trying to overcome the human element of trust, because that’s the biggest problem. Big retailers have invested a lot into loss prevention methods, like security and other things in place. Then again, people also have to learn how to trust people to buy things and do the right thing and people have to learn to trust the system that, when they buy from the store, they’re not feeling criminalised. So, there’s a very big mindset change that has to happen, you got to really shift your perspective on how it works. Yes, I mean right now you can do that. So, you can scan and let people in, then you know who are in your store and what they’re buying. But I don’t think this is going to be nearly as widespread. To me,having the idea of this kind of a process in a massive grocery store is complex. We’ve seen over time in some countries like Australia and New Zealand, where you have someone workingas the cashier register and you have someone packing the bags for you. So that stoppedand eventually they said person who’s at the cashier register has to do the bag packing as well. Similarly, with this, will we have human-less check out grocery stores? In some cases, yes and I think they will be in smaller scale. But I think when you got higher number of items, it can be more complex and getting over that that trust barrierwould be the biggest issue. However, I think it’s very promising,because it has already happened with Carrefour in Mall of the Emirates,and that’s definitely a big step in the right direction. But it comes down to your local population, your target market and do they understand how it works? Can we get over the trust barrier? So, I think it’s still in its infancy, but it’s definitely promising. But at the same time, just because itshuman-less store, doesn’t mean that somehow you don’t have people to actually monitor it. So, from a security point of view, you’re still going to need for humans.Even if not necessarily physically working in the store as your traditional role, cause the roles might change and I think that’s the biggest difference.

 

Interviewer

So, goes to my next question. Has this digital transformation helped maximise profits compared to the time without any online presence?

 

Interviewee 6

It’s definitely given a boost to profits because people are online a lot more they’re choosing to buy online more, as opposed to physical stores.The one thing that can eat away our profits, and is eating away, it’s not necessarily the worst thing, is that because now everyone is moving online, there’s a lot more competition.There are businesses who previously weren’t online that are now online.So,you can compete with them in Google and Facebook all these different platforms. Obviously, there are brands who are already online, and they are spending even more because they want to cement their position. So, this is something that can and is affecting profits, because the online space is more competitive.But at the same time yes, we are overhead and ahead of the competition, so we get more orders coming through and the average order value is increasing. So, there’s definitely an increase in profits. So yes, definitely a big difference with this transformation.

 

Interviewer

What information do you capture from your online audience, and how do you use them to boost sales?

 

Interviewee 6

So, with their consent is the email address and their name.Because when they sign up to this to the store, online, they need an email address and the name to checkout and we use them to send them marketingemails. So, what we then typically do is that, often people will sign up and they won’t make a purchase, but we have the email address on stored.So, we’ll send them an abandoned cart emails, reminding that this is what they have in their cart. If you have anyquestions about what they were buying and why didn’t they buy, you can ask them why they didn’t.So yes, email is the best way, because you can control your own list and you can email people at any time, and it’s the best way to stay in touch with people. Often when they’ve liked certain items or they’ve bought certain things, we send them emails based on their purchase behaviour and purchase history.It’s more like,you bought this in the past and we have similar items that are now in stock. We’ve got a new brand that you might like. So, this is a way of boosting sales well, it’s about relevancy, with the content with the messaging.So, it’s relevant to what they were buying or have bought, or going to buy and using email which is just a very great underutilized, underappreciated platform.

 

Interviewer

What are the drawbacks of this online platform, and are there any security concerns related to the customer data that are being stored in your servers?

 

Interviewee 6

So, there’s always going to be concerns, because no systems perfect.Your emails could get hacked. But in the event that you do have a breach, the next best thing you can do is, first, let the cut the customers know as soon as possible. So, they do appreciate transparency, honesty, and then take steps to secure and make sure this doesn’t happen again. When you say online platform, I mean, the drawback with an online store is just that there are certain human elements that are always missing from the interaction with the customer. It can be touch and feel and just physical questions. Because sometimes it’s better to explain a question in person than it is on chat. I do like how IKEA has an option to call and speak to someone directly from your computer or your phone.Yes, you can use a chatbot, and you can send pictures on via chat bots, but you know,there’s certain things that you will miss out on, if there’s no human interaction, and you really need that. So, there are big steps being made by other big brands and providers to overcome this.But the issue of being online is that, people can’t physically see and touch. So, you can probably get a lot more questions from the customer, because they will have to make sure that they’re making a good purchase.But generally speaking, going online is never really a bad thing, in the grand scheme of things.This is where we’re moving in more conveniently, it’s better because your costs are going to be lower, you don’t have to worry about a physical store as nearly as much as you can even downsize and save more money. So, there’s a lot of, I think more positives, but there’s also going to be more security concerns. Some people don’t want to pay online, they want to cash on delivery. That can be a problem sometimes. And that’s the typical sort of drawbacks with a system like this.

 

Interviewer

Was it costly to build your business online and was it worth it?

 

Interviewee 6

The cost comes more with legalities and taxation and worrying about making sure you’re operating legally as a business. But in terms of building an online store, initially the stores on Shopify are great and has a great system built from ground up, like, out of the box it works. So, there are customizations you can make to the site, you can buy add-ons that will make the user experience better. And a lot of these add-ons tend to have paid plans or they have a paid version of it, which, after a while can add up. But the costs to go online is so much lower now.It’s never been quicker, easier or cheaper to go online and sell. Obviously, you have to spend a bit of time and invest in customizing the experience and making sure it’s fantastic, but to go online with a basic product inventory, it’s pretty straightforward. You can literally be online within a day, if you really push yourself.Obviously if you have a lot of products, you still need pictures and so on but to set up an online store, it doesn’t take nearly as long as people think it does. It’s really about time, and about knowing what you want, and then going from there. Was it worth it?It’s definitely worth having an online platform, no regrets.

 

 

 

 

Table 1: Identified themes and sub-themes.

Themes Sub-themes
Profitability
Impacts on realised profits
Factors affecting profitability ●       Development and building costs.

●       On-going and operational costs.

●       Competition.

Productivity
Impacts on employees’ productivity
Impacts on business’ productivity
Customer Experience
Impacts on customer experience ●       Enhanced convenience

●       Enhanced personalisation

Factors affecting customer experience ●       Lack of emotional aspect and interactivity

●       Anxiety and mistrust

 

 

Table 2: Realised profits by UAE business retailers during the pandemic as a result of digitalisation and e-commerce.

Theme/Sub-theme Quotes
Impacts on realised profits ●       “Is it profitable? I don’t believe it’s more profitable than a brick and mortar model. There’s a lot more cost involved, because essentially whereas once upon a time, there was a funnel point with a store, so everyone would come into the store at that one location. Now you go out to all the different locations.”

 

(Interviewee 2, Appendices 2)

 

“And I think what online does is provide you that accountability and it provides you the ability to provide reports and, to give an accurate scale in terms of exactly what that return on investment has been. So, I would say, it allowed us to maximize our profits and profitability….”

 

(Interviewee 3, Appendices 3)

 

●       “No, it hasn’t helped maximise profits. It is still very expensive. I can confidently say that none of the other competitors have better profits from their online platforms than their brick and mortar stores.”

 

(Interviewee 4, Appendices 4)

 

●       “It’s definitely given a boost to profits because people are online a lot more they’re choosing to buy online more, as opposed to physical stores.”

 

(Interviewee 6, Appendices 6)

 

 

 

 

 

 

Table 3: Development and building costs as factors affecting the profitability of UAE retailers.

Theme/Sub-theme Quotes
Factors affecting profitability/ development and building costs. ●       “In the early phases of start-up, you think, my goodness, should I spend the funds somewhere else? Should I have gone on Shopify? For example, that’s $60 a month or whatever it is, could I have just built on Instagram.”

 

(Interviewee 1, Appendices 1)

 

“So, it’s not an investment you’re going to see the immediate benefits of it will be a three to five orten, fifteen years to maximize your profits and your efficiencies.Because the shift that also takes a long time.”

 

(Interviewee 2, Appendices 2)

 

●       “I think it was an initial expense, I would rather put it that way. It was very costly to get going as we had to build it from the ground up. ”

 

(Interviewee 4, Appendices 4)

 

●       “Yes, it was costly to build the business online, because we wanted to come to the market with something that was advanced and looked and felt good from a consumer point of view..”

 

(Interviewee 5, Appendices 5)

 

●       “But the cost to go online is so much lower now. It’s never been quicker, easier or cheaper to go online and sell. Obviously, you have to spend a bit of time and invest in customizing the experience and making sure it’s fantastic, but to go online with a basic product inventory, it’s pretty straightforward.”

 

(Interviewee 6, Appendices 6)

 

 

 

 

 

 

Table 4: Operational and on-going costs as factors affecting profitability of UAE retailers.

Theme/Sub-theme Quotes
Factors affecting profitability/ on-going and operational costs ●       “It’s far more cost effective in terms of humans and paying hourly salaries. I don’t have to pay insurance; I don’t need residency visas; I don’t need all of these extra things..”

 

(Interviewee 1, Appendices 1)

 

“And I think that’s probably, probably the biggest challenge at the moment.It’s not about building an E-commerce site. I think that’s relatively straightforward, but then it’s the operational side of them, maintaining the website itself…”

 

(Interviewee 2, Appendices 2)

 

●       “Because the minute that you start not being able to deliver the maximum number of orders, and your cost per transaction goes through the roof in terms of your margins, these things are critical. ”

 

(Interviewee 3, Appendices 3)

 

 

●       And a lot of these add-ons tend to have paid plans or they have a paid version of it, which, after a while can add up.

 

(Interviewee 6, Appendices 6)

 

Table 5: High competition level as a factor affecting the profitability of UAE’s retailers.

Theme/Sub-theme Quotes
Factors affecting profitability/ Competition ●       “And like I say their competitors Waitrose and spinneys had to dive online to catch up and match their competitors. ..”

 

(Interviewee 3, Appendices 3)

 

●       “We launched our e-com platform earlier than anyone else in the region, so we had the advantage of retaining our existing customers more effectively. ”

 

(Interviewee 4, Appendices 4)

 

●       “..and therefore you may capitalise on new customers that you may get from a competitor. When they see that you have a better offer, and they don’t have to travel so far to access your store and it can be delivered at home..”

 

(Interviewee 5, Appendices 5)

 

●       “Yes, we are overhead and ahead of the competition, so we get more orders coming through and the average order value is increasing.”

 

(Interviewee 6, Appendices 6)

 

 

Table 6: Impacts of digital transformation on the productivity of UAE’s business retailers.

Theme/Sub-theme Quotes
Impacts on business’ productivity ●       “we could jump in and fix things and change pictures and move pages around and redesign things instead of always having to go back to a development team from a start-up perspective, you’ve got two problems once that’s costly, and two, it’s time consuming”.

 

(Interviewee 1, Appendices 1)

 

●       “you’re going to need more people in logistics, you’re going to need more people in fulfilment. So actually, it’s not about removing an aspect; it’s removing a stress point within a particular experience.”

 

(Interviewee 2, Appendices 2)

 

 

●       “Yeah, I would say there was, there was a teething problem as you would expect with any kind of online platform and getting things right, which initially would not have been very productive.”

 

(Interviewee 5, Appendices 5)

 

●       “Because you worry about maintaining people’s health, but you also want to fulfill the orders, and you’re trying to balance it out so that can be quite complex.”

 

(Interviewee 6, Appendices 6)

 

Table 7: Impacts of digital transformation on the productivity of employees.

Theme/Sub-theme Quotes
Impact on employees’ productivity ●       “If you’re Gen X and Gen Y, then the opportunity for you is unbelievable. You know how to make use of technology and get things done quicker, so for the people from those generations, productivity has increased tremendously.”

(Interviewee 1, Appendices 1)

“I believe it’s led to a better working environment and increased productivity, because, you know, your revenues are up and salaries are up.”

(Interviewee 2, Appendices 2)

●       “The pressure on them was quite extensive. What we also had to do was to retrain some staff to improve their efficiency.”

(Interviewee 3, Appendices 3)

●       “This situation is very common when we have a very high number of orders within a short period of time and this puts a lot of pressure on our staff from both the teams. So, I would say, the platform hasn’t helped our employees increase their productivity”

 

(Interviewee 4, Appendices 4)

 

 

 

Table 8: Enhanced convenience as a direct impact on customer experience.

Theme/Sub-theme Quotes
Impacts on customer experience/ enhanced convenience ●       “ I think from what I can see the customer journey and the UX (user experience) of doing it via Instagram is just so easy. It’s straight on, you click and you check out. There’s nothing else to navigate. Yeah, so if you know what you want, it makes perfect sense.”

 

(Interviewee 1, Appendices 1)

 

●       “Yes, with the Internet, it was inevitable. It’s all about convenience. We live in a society now that is time poor cash rich, so they’re wanting everything now…”

 

(Interviewee 2, Appendices 2)

 

●       “I think those that adopted it anyway, finding it easy and convenient, especially in terms of the new generation that’s coming through. I’d even take my mother as an example, who’s not even a texter; and now she tells me living in the UK she shops online from Tesco..”

 

(Interviewee 3, Appendices 3)

 

●       “Because they’re buying in a comfortable space on the digitized platform, they feel the shopping can be much easier for them.”

 

(Interviewee 4, Appendices 4)

 

Table 9: Enhanced personalisation as a direct impact on customer experience.

 

Theme/Sub-theme Quotes
Impacts on customer experience/ enhanced personalisation ●       “..and what language they want to be spoken in and spoken to in, and the reason for that is, that allows us to personalize further communication so that way we send them an email or the way we send an SMS, the way we greet them when they jump on the website.”

 

(Interviewee 1, Appendices 1)

 

●       “Based on the product purchasing patterns we can profile the customers or personalise their experience in different ways. ”

 

(Interviewee 2, Appendices 2)

 

●       “I do feel the more we understand about the behaviours and habits of our consumers, the more we can tailor our offering towards them and do specific campaigns that might be tailored towards them”

 

(Interviewee 3, Appendices 3)

 

●       “We send them emails based on their purchase behaviour and purchase history.It’s more like,you bought this in the past and we have similar items that are now in stock. We’ve got a new brand that you might like..”

 

(Interviewee 6, Appendices 6)

 

Table 10: Lack of emotional aspect and interactivity as a factor affecting customer experience.

 

Theme/Sub-theme Quotes
Factors affecting customer experience/ lack of emotional aspect and interactivity ●       “I say worse because I think it’s sad for those in retail, because the heart of shopping is no longer that..”

 

(Interviewee 1, Appendices 1)

 

●       “I don’t think we were quite over that impulse part of it, and I think brick and mortar certainly provides an escape from day to day chores and allows you then to browse around more malls or shops….”

 

(Interviewee 2, Appendices 2)

 

●       “but then again, people in here go into store to experience the goods and what’s available, or see the offers and maybe if it’s a product that they need to test out or try, they will do that in store”

 

(Interviewee 5, Appendices 5)

 

●       “but there are elements in physical stores that you really can’t replace or aren’t easily replaced cause of online. So that’s a big difference”.

 

(Interviewee 6, Appendices 6)

 

Table 11: anxiety and mistrust as a factor affecting customer experience.

 

Theme/Sub-theme Quotes
Factors affecting customer experience/ anxiety and mistrust ●       “we’re getting people who still pay cash-on-delivery here and we don’t do that anywhere else in the world. So, it goes to show people’s anxiety in and around still shopping online.”

 

(Interviewee 1, Appendices 1)

 

●       “making sure that any potential hacks into the server doesn’t put our customers’ data at danger but it’s an ongoing concern”.

 

(Interviewee 3, Appendices 3)

 

●       “…there are always certain security concerns about storing people’s information. And that’s why we just have to be extra vigilant make sure we’ve got everything checks out, and make sure that we stay on top of any forgery, if there’s a fraudulent activity that we think might be happening.We try to aim at it straight away, so that we can minimize any risks, attached to that..”

 

(Interviewee 5, Appendices 5)

 

●       “The Biggest issue I find is trying to overcome the human element of trust, because that’s the biggest problem. Big retailers have invested a lot into loss prevention methods, like security and other things in place”

 

(Interviewee 6, Appendices 6)

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