Sajjad Ahmad, Gulf Today
The GCC retail sector was earlier projected to grow at a rate of 4.0 per cent from $253.2 billion in 2018 to $275.4 billion in 2020. WAM
Migration to the latest technology and digital transformation will play a crucial role in shaping the future of the $275.4 billion retail sector in the Gulf Cooperation Council (GCC) countries, retail sector officials and experts told thousands of audiences at a webinar organised by RetailME, the region’s only dedicated retail sector market intelligence provider.
Consumer behaviour in the GCC countries has seen a drastic shift towards online payment following the outbreak of the COVID-19 pandemic.
A recent survey conducted by Ernst & Young in May 2020 found that 92 per cent of the consumers in the UAE and Saudi Arabia have changed their shopping habits – including shifting to online purchase.
The GCC retail sector was earlier projected to grow at a Compound Annual Growth Rate of (CAGR) of 4.0 per cent from $253.2 billion in 2018 to $275.4 billion in 2020 and to $308 billion in 2023, according to a report published by Alpen Capital in 2019.
Data will not be oil, but soil for the retail sector, they say, as apps will track consumer habits to generate sales leads.
“Data will be the new soil – the new engine for growth in the retail sector,” said Piyush Kumar Chowhan, Group Chief Information Officer, Lulu Group International. “Technology will drive digital initiatives. Good customer experience will come from an innovation mindset, driven using different technology tools. How can data be used as the new soil in the digital transformation agenda is the big question, and technology will facilitate the process,” he added.
“In the coming days, customers will make purchase order based on experience. So, retailers need to ask how can they make data the engine for the digital transformation. Data and artificial intelligence will nurture the growth of the retail sector,” he said.
Ashish Panjabi, Chief Operating Officer of Jacky’s Retail & Jacky’s Business Solutions, said, “Business is being right-sized. A shrinkage now means in changes now but when things get better, we will surely re-think how we adapt to growth as we will make use of all available routes to market (online and physical) and maximizing our returns on it instead of over-expanding. This market had a massive over-supply of everything which is now being corrected.”
He said, “Changes that were long due had and will get accelerated. Technology will enable changes, but we also have to rethink the fundamentals of doing business. Technology adaptation and deployment of robots could be a game-changer in retail business. We might see this happening soon.”
The retail industry’s ability to adapt is the first step towards recovery. However, the road to retail recovery will need to pass through many signal posts. The Visa CEMEA Impact Tracker points to a shift to online commerce, with cash transactions being replaced by digital payments. The survey found many consumers in the UAE started shopping online for the first time, during the pandemic.
Two-thirds of UAE consumers (68%) surveyed said that COVID-19 led to their first online grocery purchase, while 70 per cent have made their first online purchase from pharmacies. In Saudi Arabia, Danube Online and the Danube App registered an increase in average daily sales by over 200 per cent and average order value was up 50 percent by end of March 2020, compared to February 2020.
Saudi Arabia’s Bin Dawood Group reported 400 per cent jump in app downloads while online sales jumped 200 per cent in just a few weeks! “Retailers have indeed faced different challenges during the pandemic but have found ways to adapt to the shifts caused by COVID-19. The smarter use of data and real-time analytics will play a leading role in optimising business processes and in delivering improved customer experiences,” states moderator Mark Thomson, Director – retail & hospitality, Zebra Technologies.
Retail is still an exciting industry despite COVID-19 that caused a sort of an “electric shock” over the past few months. Thomson feels. “But there is a positive amidst the challenges – COVID-19 might act as a catalyst for positive changes in retail.”
Justina Eitzinger, COO, Images RetailME, says, “At Images RetailME, we have closely monitored the impact of COVID-19 on the retail industry. The recent months are evidence of the industry’s ability to adapt, and in many ways, this has been the first step towards its recovery.
“Staying true to our mission to share retail intelligence and knowledge, we brought to the table an insightful and diverse panel of speakers from across the region. The panellists shared their experience on how to recover fast and prepare for both a more digitally connected and safer world.”