Is the UAE’s Retail Sector at Risk of Losing its Competitive Edge?
With more than 80 shopping malls nationwide and an expected turnover of over US$51 billion by the end of 2021[1] in Dubai alone, the UAE’s retail sector is a mainstay of the local economy. Dubai in particular has become synonymous with retailing prospects. The emirate flies the flag for luxury brands and premium shopping malls, and is ranked amongst the highest in the world in terms of penetration by international retailers[2].
Stocking the latest, most fashionable, must-have items has been a priority for the country’s retailers in the past decade. However, as a result of economic globalization and evolving consumer habits, a course change is needed in order to futureproof an industry that contributes substantially to national diversification initiatives.
While the UAE’s retail environment is undoubtedly robust, physical storefronts are increasingly being challenged. The fact is that offering a wide range of products to UAE consumers is no longer enough to capture their interest. Consumer habits are also being reformed by the convenience and prevalence of online shopping options, which again, offer consumers an enormous wealth of brands from all over the world.
Local UAE retailers—especially those with a strong brick and mortar presence—urgently need to re-focus on wooing consumers through extraordinary customer experiences. Think of Amazon’s entry into the world of physical retail. Amazon Go breaks boundaries and bucks the trend of “going digital” by using smart technologies to deliver a truly exceptional in-store experience. It works because customers in a connected environment want more than the latest styles and brands. In short, they want to be wowed.
To avoid losing ground to other innovative retail capitals, UAE brands need to go above and beyond the expectations of customers by concentrating on exceptional service, personalization, and shopping spaces.
A Better Service
Service plays an undeniable role in creating a memorable customer experience. Going the extra mile with the provision of unbeatable service will therefore help to secure customer loyalty. Training UAE retail employees to deliver to the highest level can be a huge competitive edge.
Today, it’s essential to train staff to be able to read a customer’s needs. We’ve all been in a store where it feels like we’re being hassled by salespeople following us around. On the flip side of that, we’ve all been left stranded without an employee in sight when we’ve needed assistance. Getting the balance right is key to creating a comfortable atmosphere in which your team is on hand to help, without being too pushy or aggressive.
Empowering shop assistants with the tools they need to answer questions on the spot is key. Embracing technologies such as cloud-based applications on smart devices will give them a world of answers at their fingertips—whether doing a price check, surveying inventory, or referencing product features.
Personalization Through Data
A new generation of Customer Relationship Management (CRM) solutions are paving the way in creating a personalized retail journey through better customer data. These solutions can, and should, be spread throughout your operations to gain insight into customer’s preferences, purchasing habits, their interest in promotions, and more.
Even in physical stores, there are many ways to leverage this abundance of data. It can be used in-store through technologies such as near-field communications (NFC) to help staff identify shoppers and greet them by name. Such technologies can also be used to ping product reviews and tailored offerings directly to a customer’s phone depending on their location in-store and their purchase history. Data on purchasing habits can also be used to tailor loyalty programs, such as offering discounts on products you know they love, or updating customers on soon to be released items while they’re at the checkout till.
Creative Spaces
It seems basic, but not enough retailers are truly combining creativity and practicality in designing (or re-fitting) their storefronts. The physical environment has an enormous impact on the way that your customer feels and interacts with your merchandise. There is a wealth of information out there today on how lighting, sounds, textures, and even scents can bring people from a busy shopping mall into your own unique retail experience. Ultimately, creating an interior layout that is both inspiring and convenient will encourage more spending.
In addition to the physical layout, creating the right atmosphere is a top consideration. Companies need to build in features that complement their products, and that align with the lifestyle their customer is likely to lead – or that they perhaps desire. If you sell sporting goods, for example, incorporate active lifestyle elements with sports trainers on standby. If you’re catering to a youth demographic, integrate more innovative smart tech features throughout the store that give shoppers greater autonomy to browse products and search for recommendations on social media.
Moreover, retailers offering many different product categories need to ensure that there remains a single, consistent brand experience across the entire storefront.
Realizing Potential
?With its penchant for innovation, strong infrastructure, and global appeal, the UAE is the ideal place for taking brick and mortar outlets to the next level. Global brands think so, too. The UAE market has more than 56 per cent penetration from international retailers[3], with many using Dubai as a stepping stone to roll out new concept stores. In just two years’ time, 81 per cent of marketers say that they expect to be competing mostly or completely on customer experience[4]. One edge that local brick and mortar has over e-commerce is that it can deliver a physical experience not yet possible through digital channels.
As we head towards Expo 2020, when all eyes will be on Dubai, there has never been a better time for local retailers to put our best face forward.
[1] Dubai Chamber, ‘Dubai Retailing Sector’ report, April 2017
[2] https://www.cbre.com/research-and-reports/how-global-is-the-business-of-retail
[3] https://www.cbre.com/research-and-reports/how-global-is-the-business-of-retail
[4] https://www.gartner.com/smarterwithgartner/key-findings-from-the-gartner-customer-experience-survey/
HR Generalist & Talent Acquisition Leader | Diverse GCC Construction Experience | Building & Managing Teams for 5000+ Employee Workforces
5 年The main element due to which customers are shifting towards online platforms is "ease". The most important part of a website or an app design is UX Design (User Experience Design). Online shopping brings in a lot of ease but still when an online platform is developed they craft its UX design first, to make it more and more convenient for the customer. But this part is missing in retail fronts. Generally they don't focus on such customer experience. But there are things where physical stores are a step ahead. A physical trial which makes that particular product bespoke (in a sense) for that customer with an instant delivery, is something an online store can't achieve whether its Amazon PRIME or whatever. But what if after a day that bespoke experience reveals itself nothing but a rip off? A better experience and a better product is the key in my opinion.
E-commerce specialist with solid background in buying, sourcing, & product development for fashion apparel and accessories.Experience in B2B and B2C markets, emphasizing brand creation/management and P&L accountability.
6 年I think the above mentioned points are issues that have been discussed for a long time now. Don't see why and how things are any different. a sports store does give you the feel of a sports store ( at least the famous brands do) and yes every brand is trying to improve their adaptation to the latest in technology, but is that enough.. I feel the consumer has moved in a 360 degree angle.. time constraint, tough market is the reason for the change in consumer buying patterns ,, so what has to be done to make this scenario better?
Administrative & Operations Visionary | Transforming Business Processes for Optimal Performance Innovative Operations Manager | Enhancing Productivity Through Strategic Initiatives
6 年great article??
City University Ajman
6 年Great read....myself evaluating same lines....thanks for writing and sharing..I sightful