The retail sector is one of the biggest growth drivers for the region’s economy as it finds itself closer to the much-awaited Expo 2020. According to an analysis by the Dubai Chamber of Commerce and Industry, retailing in the UAE is expected to reach Dh 200 billion by 2017, an average growth of five percent each year. It further states that “consumer spending is also predicted to continue rising in the medium-term, with growth rates projected to stabilise at about 4 percent on average per year leading to a total spending of more than Dh 750 billion by 2017 across many categories.”
Based on data from Euromonitor, information from an ATKearney Research study and other sources, the Dubai Chamber analysis indicates that consumer confidence in the country has not been negatively impacted by expectations of decelerating economic growth in the region. As per the report, data for retail sales and consumer spending shows that the retail sector is growing faster than the UAE economy as a whole.
These findings do not come as a surprise, considering the number of new malls on the rise and extensive plans for expansion for the existing ones in UAE. Also against this backdrop, specialised trade show organiser, Virtual Info Systems (VIS), held the inaugural edition of ‘Smart Stores Expo 2017’ last month in Abu Dhabi. The show explored retail technology and was aimed at bringing together buyers, manufacturers, retail professionals and visitors from across the globe.
One of the exhibitors at the show, Prashant Menon, Director Projects, iSolve IT, believes regional retailers, although a long way off from being at the same level as their global counterparts, are definitely showing interest in advance retail-specific technologies to improve the efficiency of their businesses.
Provider of smart solutions for retail, hospitality, queue management and security solutions, iSolve IT is enabling retailers to offer a better customer experience.
Menon says, “Retailers need to first assess their requirements in line with their business objectives. They are looking towards application intelligence with emphasis on analytics. Smart solutions such as Electronic Shelf Labeling (ESL) can help save time and cost for a retail business.”
Analytics in retail can be a game changer, if utilised correctly. Based on the insights gained from predictive analytics, retailers can turn around their business and effectively create customised marketing messages and unique experiences for their customers. But how much of these technologies are actually being implemented in the region?
“It is not being implemented at all,” says Reshmi Raj, Managing Director, INFO Quest. “Today in retailing, creating unique customer experiences is the single-most important factor and technologies such as traffic intelligence solutions, can help with that. However, the region is yet to fully embrace such tools.”
According to Raj, retailers are in the process of understanding customer needs and their own budget limitations.
She says, “We are finding that retailers are enquiring and considering such technologies seriously but haven’t taken the next step. Whereas we see this happening in other global markets such as Europe and USA.”
The biggest challenge for any retailer in the region is staying ahead of the fierce competition. “How do you retain your customers and sustain in the market? The only answer to this is by creating innovative customer experiences across all platforms. You have to strive to be different always,” says Raj.
Agreeing, Taiyab Ghafoor, Country Head of Retail, AXIOM Telecom, adds, “As a retailer, you need to see how you can differentiate yourself and make customers realise why they need to shop with you.”
“Another challenge for retailers,” Menon adds, “is to keep up with the rapidly evolving technology.”
While keeping up with technology is certainly difficult, sometimes players do not maximise the solutions they have implemented or the information they have gathered from their customers. It is important to optimise customer feedback and constantly engage the customer.
“Do retailers know why their customers exchange certain products? How do they use that information to better their operations or offerings? Retailers have to action the data that they have to see significant improvements,” Raj says.
Ghafoor says, “Retailers definitely need to focus on data. Because that allows them to understand who their shoppers are and what they want. Profiling your customers, especially in a place such as GCC, where there are many different nationalities, is crucial to understand them. This will enable you in the future to tailor propositions based on the different customer demographics. Beyond data, it is about measuring customer experience. Making unique experiences for customers is absolutely key.”
But how can retailers innovate and create those unique experiences for customers?
According to Ghafoor, services can be an important factor in differentiating your offerings.
“If you can understand what customers are saying about your service and if that’s the reason they keep coming back, then it shows the value you offer. Retail has always been about service and that will continue to be so. At the end of the day, it is all about playing to your strengths,” he says.
Over the next few years, we will see the region’s retail sector growing exponentially and technology will have a big role to play, whether it is enhancing services or enabling omnichannel experiences.
“Retailers, who take on board that they need to change and constantly evolve, are the ones who will rise to the challenge,” says Ghafoor. “Service and innovative seamless customer experience enabled by technology will be key to distinguishing yourself from competition.”