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HOME FEATURES › INTERVIEW: Nadeem Khanzadah, Jumbo Electronics

INTERVIEW: Nadeem Khanzadah, Jumbo Electronics

by Stuart Wilson, Thursday 10 April 2014

Jumbo Electronics is recognised as one of the UAE’s leading retail and distribution operations. The company has been exclusive UAE distributor for Sony since 1974. Jumbo will join hundreds of the region’s top retailers and distributors at this year’s special 10th anniversary DISTREE Middle East retail channel event, which takes place from May 20th to 22nd 2014 in Abu Dhabi. Channel EMEA caught up with Nadeem Khanzadah (NK), retail head at Jumbo Electronics, to learn more about the company’s future retail plans.

Channel EMEA (CE): Where does Jumbo stand now in terms of its current retail operation?

Nadeem Khanzadah (NK): Jumbo Electronics was established in 1974, and is the UAE’s leading distributor and retailer for IT and consumer electronics. Since its inception, Jumbo has been the exclusive distributor of the iconic brand, Sony in the UAE. Jumbo is also a trusted distribution and retail partner for many of the world’s other leading brands including Acer, Apple, Asus, Blackberry, Brother, Casio, Dell, Dyson, Epson, Gorenje, HP, HTC, Lenovo, LG, Motorola, Nokia, and Samsung. Together with its extensive network of 24 retail stores and six service centres spread across the emirates, Jumbo is a formidable force in the industry and is presently enjoying a growing distribution and retail presence in Oman, Qatar, Bahrain and Kuwait.

CE: What are Jumbo’s three main reasons for attending DISTREE Middle East? What do you hope to achieve at the event?

NK: DISTREE Middle East is well -stablished on the regional calendar as one of the most important events for retailers, vendors and distributors. It is a great opportunity for us to network with partners and potential clients, strengthen existing relationships and forge new alliances. Relationships are very important in our business and DISTREE provides a great platform to develop them.

We also get a chance to observe industry trends and be ahead of the curve. There is a lot of information available at DISTREE and it provides valuable inputs that we can leverage strategically. This is also a powerful platform to showcase the strength of our ecosystem and highlight our key achievements and growth plans.

Multi-brand model

CE: Which product categories and business development opportunities represent the greatest opportunity for growth for Jumbo in the Middle East?

NK: Smartphones, tablets and 4K UHD TVs are among the hottest selling categories. Wearable technology is also catching on. Samsung, iPhone, Sony and HTC are the most popular smartphone brands and Apple Macs, HP and Lenovo are the most in-demand laptops. In the category of TVs, it’s Sony, Samsung and LG. And with tablets, it’s Apple and Samsung.

Until recently, Jumbo’s camera and television offerings were focused on just Sony products. Now, in a bold move that underlines Jumbo’s commitment to offering customers more choice, Jumbo has moved away from the single-brand model to offer several new brands across product categories such as flat panel TVs, DSLR cameras, mobiles and smartphones, tablets and laptops. This is supported by redesigned stores and key initiatives to provide an enhanced shopper experience.

Adopting the multi-brand model across additional product categories has been a significant move for us. We have always been the destination of choice for mobile phones, laptops and Sony consumer electronics and now we give our customers even more reason to shop at Jumbo as we offer the complete range of brands such as Samsung, LG and Sharp in TVs, Canon and Nikon in DSLR cameras, and Xbox and Nintendo in gaming. We have also introduced a new product category for wearable technology, which was a first in the region.

CE: What makes Jumbo’s retail operation stand out in the market? Why should vendors and distributors work with you?

NK: Jumbo has an experienced team of professionals who contribute to the decisions regarding the best products to offer customers – from category managers, to marketing and sales teams, in-store managers, and floor sales staff. We also monitor sales and product movement, including updates from our award-winning distribution and logistics divisions that ensure our stores are well-stocked based on demand volumes. Technology and market research also plays a key role in ensuring the accuracy of our information. Jumbo has invested heavily in state-of-the-art IT systems and specialised industry research to monitor sales and trends, which helps us predict consumer buying trends, hot product categories, and plan ahead to meet demand.

Our sales staff on-boarding programme includes joint training with the principal vendors. We also benchmark their scores and provide regular feedback sessions. We conduct regular third party evaluation through mystery shoppers who assess the stores, ambience, service levels and, ultimately, customer satisfaction.

In addition, we have stringent quality checks such as the Net Promoter Score, which is an internationally recognised brand satisfaction measurement tool that has been eagerly adopted by Jumbo customers at all touch points like the service centre, Jumbo portals, and customers’ homes during delivery and installation. The consolidated scores are taken as indicators of customer satisfaction and improvements are planned accordingly. There is also immediate interaction and resolution if and when there is any customer dissatisfaction.

Service and support

CE: How challenging is the margin situation for Jumbo’s retail business? What support do you expect and want from vendors and distributors?

NK: At Jumbo, we are able to leverage our vendor and distributor relationships to not only offer competitive prices, but also benefit from our relationships with several non-competing brands to offer bundle products with each purchase, which are often comparable to the value of the actual product on offer. That has worked very well for us, with at least 15% to 20% growth in sales year-on-year at Dubai Shopping Festival (DSF) 2014. However, the nature of the business is such that sometimes you need to act fast to change the offers, especially during peak times such as Gitex or the shopping festivals. Support and timely cooperation from our partners will help us continue to provide customers with innovative offers each time.

The current competitive landscape means that margins are indeed being reduced. We have to compensate for that by ensuring sustainable business growth through value-added offerings and services to our customer as well as vendors.

At the end of the day, when retailers cut costs to improve margins, they also cut back on services to the customer. So in the short-term it may appear as if the customer is the winner, but in the long-term the customer loses out. There are some retailers who build their business model on being low cost and bare bones in terms of other services, and there is a market for that, but only if nothing goes wrong with the product. On the whole, customers will not just compare price tags but also take into consideration what else they are getting, especially if they have had their fingers burnt previously. A negative brand experience impacts the vendor as well and damages customer loyalty to the brand.

The support we need from vendors and distributors is to realise the value of the additional support and service we provide customers and why that is an investment and not a cost.

CE: What have been the major developments for Jumbo in the Middle East in the last year? What do you have planned for full year 2014?

NK: At Jumbo we are committed to delivering the best and, in line with that, we have also embarked on a redesign of our stores and an enhanced shopper experience to support the greater product offerings that are now available in our stores.

Not only have key product categories been made more accessible, Jumbo has implemented various special services that are being hailed by customers as industry best practices.

These key new initiatives include the ‘Free Product Protection Plan’, which automatically covers all products over AED500 (US$136) for one year. This plan protects gadgets from theft, accidental damage, and other such risks.

A new ‘Jumbo Recommends’ section has also been introduced. As the name suggests, this highlights the top selling and trending products that Jumbo recommends across various categories. In addition to that, the ‘Jumbo Smart Buying Guide’ will be readily available in stores as a handy reference to help customers make the right purchase decision. Tained and knowledgable store staff are also always at hand to assist customers. Jumbo invests significantly and regularly to upgrade staff skills and knowledge.

These initiatives are being rolled out across key Jumbo locations. The initial customer response has been extremely positive as they now have the added benefit of more brands, great offers and service, and absolute peace of mind. Jumbo has more innovations planned for 2014 and will make several other significant announcements in the following months.

This year, Jumbo has lined up even more spectacular offers than usual as it gets ready to celebrate its 40th anniversary – a major milestone for the brand. For example, during DSF, customers won half a kilo of gold every week and gold coins every day, along with valued-added offers on all major categories such as tablets, smartphones, laptops, DSLR cameras and TVs.

At Jumbo we have a 360-degree approach to growth, and we have also reviewed our employee engagement model and made it far more inclusive. We relooked at our performance management system and our identification and treatment of high-potential employees was revised. We strengthened our training function with a renewed focus on e-learning.

Shopping experience

CE: How quickly is Jumbo’s business growing in the Middle East region? What market trends have you identified that are impacting your business segment?

NK: We need to differentiate ourselves by offering much more than low prices to ensure repeat customers. Why do people come to Jumbo? Because we offer tremendous support before, during and even after the purchase. Over the years our trained staff have developed a well-earned reputation of being trustworthy consultants rather than salespeople who will push a particular product on you. Our stores offer personalised attention which you may not get in larger stores. This is our competitive strength. All these factors contribute to our rapid growth, strong reputation and repeat customers.

In terms of market trends, the challenge of being in the technology and electronics industry is the rapid pace of change. We need to ensure we have our ear to the ground at all times. There have been some interesting developments such as the growth of phablets and bigger screens on one hand and wearable devices with their compact screens on the other hand. It isn’t so much about phablets vs wearable technology, as it is about those two collectively eating into the market share of tablets. A recent study by IDC predicts that growing competition from phablet and wearable devices is one of the reasons for the estimated 227.4 million tablets shipped worldwide in 2013, slightly down from a previous forecast of 229.3 million.

The two form factors complement each other rather than compete and we are likely to see growing integration of the two, such as the Samsung Note 3 and Gear combination or the recently announced Sony Xperia Z2 and SmartBand.

CE: What are the biggest issues and challenges facing the Middle East retail channel at present?

NK: There is a shift in consumer preference that one needs to be prepared for. Consumer demand for electronic devices has evolved over the last two years, with a marked shift towards portable devices that integrate into customer lifestyles. This has impacted the format and design of the store front as well.

Jumbo has helped address this by bringing in experts to assess buying patterns, consumer preferences and behavior, store layout and ergonomics, and on that basis there have been significant changes to the design and layout of Jumbo stores.

Shopping is a very personal experience; therefore it has to be personalised. With this in mind, we redesigned the stores and curated our product offering thereby making it easier for customers to find the right product they are looking for.

Consumer fatigue is another challenge with rapid-fire new product launches. We have tried to counter that by carefully selecting the right products for our stores and through in-store recommendations.

Channel EMEA is an official media partner for DISTREE Middle East 2014.

DISTREE Middle East 2014

Channel EMEA is an official global media partner of DISTREE Events, including DISTREE Middle East.

DISTREE Middle East is the ultimate professional networking event for senior executives from the consumer electronics, digital device and ICT products retail channel in the Middle East region. DISTREE Middle East is a focused event for retail executives based on the successful concept of bringing high-level buyers from emerging markets into productive contact with vendors.

Not only is DISTREE Middle East a powerful business platform, it is also an annual networking function allowing vendors to meet face-to-face with both existing and potential new retail partners from across the Middle East, plus North Africa and the CIS region.

DISTREE Middle East 2014 is scheduled to take place on May 20-22nd at Fairmont Bab Al Bahr Hotel, Abu Dhabi, UAE. or more information and to secure your place at the region’s number one retail channel event, contact quoting code DME14.

For retail executives, attending DISTREE Middle East is time well spent. In just three days you can hold dozens of face-to-face meetings with existing and potential new vendors, meet with your peers from across the region, find out more about the latest industry trends and market data. All this at one exclusive event: DISTREE Middle East - the ‘must-attend’ event for vendors and retailers associated with the region’s consumer electronics, digital device and ICT products channel.


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