Dubai — Retailers in the Middle East must understand regional consumers and adapt their models to generate unique experiences. Current brick-and-mortar retailers are at risk of losing market share to online retailers if they do not change their strategies and offer multiple channel experiences, says a recent PwC survey titled ‘Retailers and the Age of Disruption’.
The survey polled 19,000 shoppers in 19 countries on six continents, and in the Middle East, 1,001 individuals were surveyed across the UAE, Saudi Arabia and Egypt. PwC believes there are four key areas of disruption facing all retailers, regardless of where they operate: mobile technology, the proliferation of social networks, demographic shifts and the evolving role of the store.
“Transition is never an easy thing. The report indicates that increasing digital encroachment into consumer trends is not simply a phase, but rather a real and relevant threat to retailers who choose to ignore it. And as the buying power of tech-savvy youths increases, these companies risk being marginalised,” said Norma Taki, retail and consumer partner at PwC.
Regional retailers need to develop a local online presence tailored to the diverse local population in countries around the Middle East. There will be challenges, given the preferences by international brands to control the online world from a central location. But based on the survey findings, there is growing consumer desire to browse and purchase items from a local online platform.
For instance, 33 per cent of respondents in the Middle East prefer online shopping because they are able to shop 24/7. And 29 per cent of respondents prefer it because it is easier to compare and research online — indicating an increasing preference to use social media to track existing brand preferences, as well as seek out new brands.
However, a large portion (40 per cent) of Middle East consumers have concerns about the security of online shopping. This is evident for smartphone users, where 40 per cent of survey respondents expressed that the main reason they don’t use their phones for shopping is security. A large portion of respondents indicated that they had broadband connectivity issues preventing them from accessing online stores from their phones, such as a lack of a data plan or Wi-Fi connectivity.
Nonetheless, data suggests that the retail outlet is here to stay. More than half of global and ME respondents indicated that they still shop in-store. In the ME, this is even more powerful considering the strong role of the mall as a ‘go-to’ destination. In every retail category apart from books, music, movies and video games, and consumer electronics, more than 70 per cent of shoppers globally still prefer to buy those goods at a traditional retailer.
In ME, every retail category apart from books, music, movies and video games (28 per cent) and toys (36 per cent), still prefer to buy goods at a traditional retailer.
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