Digital transformation to drive recovery of GCC retail sector post-Covid-19
Dubai - The GCC retail sector was projected to grow at a Compound Annual Growth Rate of (CAGR) of four per cent from $253.2 billion in 2018 to $275.4 billion in 2020, and then to $308 billion in 2023.
Digital transformation is set to play a key role in the recovery of the GCC's retail sector, which has seen a dramatic shift during the Covid-19 pandemic as consumers in the region alter their shopping habits to adapt to the new reality.
Highlighting the future of the sector, and the role that technology will play in shaping it, experts at a webinar organised by RetailME, pointed out that data, artificial intelligence, e-commerce, and robotics are expected to drive growth.
According to a report by Alpen Capital, the GCC retail sector was projected to grow at a Compound Annual Growth Rate of (CAGR) of four per cent from $253.2 billion in 2018 to $275.4 billion in 2020, and then to $308 billion in 2023. However, the months of lockdown resulting from governments across the GCC trying to contain the spread of the virus, has led to officials revising their earlier estimates. Faced with job losses and salary cuts, consumers quickly put off making spontaneous purchases, and spending only on their immediate needs.
Ashish Panjabi, COO of Jacky's Retail & Jacky's Business Solutions, noted that business is being "right-sized."
"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."
Consumer behaviour in the GCC saw a drastic shift towards online payment following the outbreak of the Covid-19 pandemic. A recent survey conducted by Ernst & Young found that 92 per cent of the consumers in the UAE and Saudi Arabia have changed their shopping habits - including shifting to online purchases.
Similarly, the Visa CEMEA Impact Tracker pointed to a shift to online commerce, with cash transactions being replaced by digital payments. The survey found that many consumers in the UAE started shopping online for the first time, during the pandemic. Around 68 per cent of UAE consumers said that Covid-19 led to their first online grocery purchase, while 70 per cent have made their first online purchase from pharmacies.
Piyush Kumar Chowhan, group chief information officer at Lulu Group International, said that data will be the new engine for growth in the retail sector. "Technology will drive digital initiatives. Good customer experience will come from an innovation mindset, driven using different technology tools. In the coming days, customers will make purchase order based on experience. So, retailers need to ask how they can make data the engine for the digital transformation. Data and artificial intelligence will nurture the growth of the retail sector."
"Our sector has been highly resilient through the pandemic," said Waleed AR Bin Dawood, CCO at BinDawood Holding. "During the lockdown, there was huge demand as customers stocked up and prepared food at home. Our online platforms - both BinDawood and Danube Online - saw huge traction, so much so that we had to expand the capacity of operations. We have also leveraged our mobile apps, coupled with the store network to meet the surge in demand. We have used our wide store network as warehouses to support our online sales. We are constantly enhancing the seamless experience through product availability, pricing and delivery."