Bricks and mortar retail still popular with UAE residents

David Macadam, CEO of MECSC, noted that consumer behavior has changed in recent years.

Still viewed as a social time with friends and family, traditional bricks and mortar retail remains by far the largest and most successful form of retail, noted David Macadam, CEO of the Middle East Council of Shopping Centres (MECSC).
Speaking to Khaleej Times ahead of the RECon Middle East & North Africa 2017 event, Macadam highlighted some of the key challenges faced by retailers in the region. Jointly organised by the MECSC and the International Council of Shopping Centers (ICSC), RECon 2017 brings together shopping centre industry professionals, retailers, management and consulting companies, architects and design companies, and service providers. The event has returned for its 23rd year to Dubai, and will run until October 31, at the Ritz Carlton Hotel in DIFC.
"Consumer behavior has changed in recent years," Macadam said. "These consumer changes are varied depending upon the country and market. In the US retail market, online retail has become more popular. Representing only nine per cent of the retail sales in the US, online sales have garnered the majority of the headlines in the retail industry. Amazon, the market leader in online sales has an average profit margin of 2.7 per cent over the 400 million products offered online."
He observed that online sales in the UAE represent a reported less than three per cent of all retail sales; and that the UAE and other GCC countries have a distinctly different approach to traditional bricks and mortar shopping trends.
Macadam further revealed that omnichannel and predictive analytics are two terms, which are in the minds of successful retailers.
"By focusing on data accumulated in the customer store visits, retailers are able to use predictive analytics to become more efficient in creating more sales," he said. "Omnichannel as a topic has been around for many years. Linking the online world seamlessly with the traditional bricks and mortar retail is the goal. Few retailers have been truly successful in linking omnichannel experiences for the customers. With the increased use of high tech interfaces, increased customer service education, and new ways for displaying and delivering products, the ominchannel world will become stronger."
Asked if the Internet of Things (IoT) has the ability to improve customer experiences, Macadam replied that cloud computing may help to facilitate IoT by having the capacity to link everyone and everything together.
"IoT is very immature in its execution although the term was coined in 2013. There is a value to be derived from collected data of IoT, which will see economy of scale in many aspects of our lives. Within the next eight years, Cisco believes that IoT will become a multi-trillion dollar business. At risk perhaps will be the protection our personal identity. Most certainly IoT will have the ability to improve customer experiences due to the accumulation of vast amounts of data on our personal preferences which will be met daily," he said.
Elaborating on concerns about data and privacy, Macadam noted that many customers share their personal details with the understanding that they will not be contacted for anything besides what they have specified, such as sales and special offers.
"However, there have been concerns stemming from cases where retailers misused that information," he agreed. "Privacy of personal content on the Internet has always been a contentious matter. Major institutions including the governments of leading countries have had privacy intrusions which have caused problems with personal data breeches. These data breeches will likely continue into the future. Retailers are perpetually at risk of losing personal data on their customer profiles and data bases. I believe that misuse of personal data will continue to be challenge not only for retailers but also for large corporations and governments of all countries in the world."
- rohma@khaleejtimes.com