Retail to see bigger draws in 2021, experts say
Enhancing customer experience and attending to customers’ needs is a key driver for growth within the UAE retail sector
The UAE’s retail sector will see increased investments in 2021, driven by a growing volume of sales in the e-commerce segment, experts said.
Kalika Tripathi, head of Marketing for the Mena region, Visa, said that as much as 90 per cent of companies surveyed by Visa in the UAE expect that business will return to normalcy in 2021. “Almost 60 per cent of businesses in the UAE are adapting to a changing environment, our research shows. And that goes back to the fact that it's not a one-time change. It’s a step change and it’s going to take time to really get to where the customer wants us to, and the moment we get there, they will want something more, so it’s a continuous investment.”
She added that 41 per cent of businesses surveyed in the UAE said that they plan to increase the investment in 2021, even though most of them don't expect to get it back to pre-Covid levels. “So, it's going to be a year of investment in new digital payment technologies; that is one of the big trends.”
According to Alpen Capital, the GCC retail sector is projected to grow at a CAGR of four per cent from Dh929.24 billion in 2018 to Dh1.13 trillion in 2023. Retail sales have been under pressure in recent years, but are estimated to recover and grow through 2023.
Nour Sleiman, co-founder and CMO at Cartlow, said that the retail industry has witnessed growth as more retailers have shifted their business models to become e-commerce enabled. In return, consumers have adapted and became more reliant on online shopping.
“There has been a huge impact on user behavior in the past year,” she said. “While consumers are choosing to shop from the safety of their own home, they have also become more price conscious. At Cartlow, we ensure that we are always on track by supporting and providing consumers with affordable pricing and high-quality products, and have therefore witnessed an increase in engagement, conversion and more adaptation for the re-commerce business model.”
As retailers continue to adapt to change, the growth will continue, she said. “Companies will overcome the current situation and be on the path of profitable growth since the pandemic has urged many businesses to shift online, and in the long-term enabling future growth by digitising and adapting to technology. Enhancing customer experience and attending to customers’ needs is a key driver for growth within the UAE retail sector.”
Abu Dhabi-based fintech enterprise, PayBy, recently found that the majority of consumers in the UAE have pivoted to cashless payments as a more hygienic, safe, and secure option in the pandemic environment. Across cohorts, the major spends of monthly income were on groceries, house rent, utilities, and eating out. The PayBy study found that cashless methods were by far the preferred option to pay for these major expenses: 72 per cent of respondents used cashless methods to pay for groceries, 74 per cent for utilities and 72 per cent for eating out. Housing, however, was a notable exception, with 55 per cent of respondents paying their rent in cash.
“Companies that have managed to break down old barriers between functional units, collaborate closely with external partners, and create cultures that attract top talent tend to outperform their industry peers. Using digital, data-driven technologies to respond dynamically to customer demands is key to the success for retailers globally,” added Edward Cone, editorial director at Oxford Economics.”
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