Date: Dubai, UAE; September 13, 2020
- Global retail transaction value to grow from US$23.36 trillion in 2020 to US$25.04 trillion in 2021, according to Statista.com, a global market intelligence provider;
- The e-commerce market size is expected to reach US$19.7 billion (Dh72.29 billion) in 2020 in the GCC.
- Saudi Arabia is the largest market with US$8.3 billion (Dh30.46 billion) followed by the UAE with US$7.5 billion (Dh27 billion).
- The GCC retail sector is projected to grow at a CAGR of 4.0 per cent from US$253.2 billion (Dh929.24 billion) in 2018 to US$308 billion (Dh1.13 trillion) in 2023
Dubai, UAE: The COVID-19 pandemic has disrupted the retail sector and transformed consumers as it is rapidly changing the US$25 trillion global retail landscape, experts said at the Virtual Roundtable on Intelligent Orchestration of Retail Experience, organised by RetailME – the region’s only dedicated market intelligence provider for the retail sector.
“We have seen a paradigm shift in consumer behaviour towards the digital channel. A lot of consumers quickly embraced online shopping that put retailers under tremendous pressure to expand the digital channel,” said Hozefa Saylawala, Director of Sales – Middle East, Zebra Technologies, a technology enabler for the retail sector.
“During the initial phase of the pandemic and lockdown, a lot of retailers identified the gap as well as the opportunities. We have seen tremendous demand to engage with retailers keen to make the shift. Consumers are now asking for more self-service, contactless payment options for shopping.”
Global retail sales were projected to reach US$25.04 trillion in 2021 and US$26.7 trillion in 2022, up from approximately US$23.6 trillion in 2018, according to Statista, an online tracker of global economy and retail sector.
In 2019, e-retail sales accounted for 14.1 percent of all retail sales worldwide. This figure is expected to reach 22 percent in 2023.
The e-commerce market size is expected to reach US$19.7 billion (Dh72.29 billion) in 2020 in the GCC. Saudi Arabia is the largest market with US$8.3 billion (Dh30.46 billion) followed by the UAE with US$7.5 billion (Dh27 billion).
Justina Eitzinger, Chief Operating Officer of Images RetailME, said, “These statistics show that the potential for e-commerce in the GCC and the greater Middle East region is huge. Most people in the region are still brick-and-mortar shoppers. We believe, this is going to change fast, due to the current environment dominated by health and safety concerns and social distancing.
“Our Virtual Roundtable series provides very crucial insights into the digital landscape that helps retailers and consumers to understand the rapidly changing retail landscape that provides new opportunities. Retailers could gain important insights that could help them remain ahead of the curve.”
Most retailers who already had established their online channels, saw a massive jump in orders through their apps, experts said.
Adel Sajan, Director of Danube Group, said, “Online purchase had accounted for only 5 percent of our total sale before the pandemic. However, it jumped 500 percent to 25 percent of our sale during the lockdown, before settling at 10 percent currently.
“Since purchase decision on home furnishing takes time and consumers need to touch and feel the products, we initiated virtual meetings with our key customers and offered the products through a virtual tour of our stores in order to ensure the customer gets a good look at the product.
“Recently we launched a pilot project through which we despatch a wide variety of home furnishing products to the clients’ homes by our trucks and the customer can see, touch and feel the products. If they like, we install on site. So, instead of the customer coming to us, we are taking the store to the customers’ doorsteps.”
According to Alpen Capital, the GCC retail sector is projected to grow at a CAGR of 4.0 per cent from US$253.2 billion (Dh929.24 billion) in 2018 to US$308 billion (Dh1.13 trillion) in 2023. Retail sales have been under pressure in the recent years but are estimated to recover and grow through 2023.
Bhavna Buttan, Vice President – Market Place Transformation at Sun and Sand Sports, said, “COVID-19 is a blessing by default as it forced consumers and retailers to change behaviour fast. It also provided some good lessons for us in the last 20 years.
“At Sun and Sand Sports, we launched our digital sales channel six years ago, which consumers seldom used. However, COVID-19 pushed all of us into the digital space rapidly. We learned a lot and we also failed in a lot of areas. However, our online sales jumped 500 percent that more than compensated for the decline in the brick-and-mortar space.”
While fashion retail has transformed significantly, the biggest change is possibly being witnessed by the operators of grocery retail, supermarkets and hypermarkets where the jump in online orders forced them to undertake changes overnight.
Ashutosh Chakradeo, Head of Retail at Choithrams, said, “COVID-19 forced us to change fast within 3-4 months. We have made certain changes and upgradations in our systems to manage the increased demand in the online orders. While our online orders jumped 3 times, our existing capacity was good enough to handle only 50 percent jump. However, we managed to do some physical adjustment in timing as well as upgraded the technology to manage the rush.
Mark Thomson, Director – Retail and Hospitality, EMEA, Zebra Technologies, said, the challenge for the retailers would be to up the game and offer frictionless shopping experience to customers.
“How can we take the journey to the next level? Could data analytics help?” he asked.
Adel Sajan said, his company deploys artificial intelligence (AI) to interpret customer data analytics.
“Through the use of AI, we are able to zero-in our products to suit the customers’ taste. For example, our new sofa set range of 100 designs could take six pages long and a customer might not need to go through all of them.
“The AI tracks customers by their tastes and narrows down the list to suit their preference. In this manner, we are able to attract customers to products that they are really interested in.”
Hozefa Saylawala, Director of Sales, Zebra Technologies, observed, “A lot of retailers now use customer data analytics to make decisions. However, the same data analytics could be interpreted by different people in different ways within the same organisation. How could we solve this problem?
“Through prescriptive analytics, we are now able to receive automated action points for decision-makers, instead of people making personalised interpretation of the data analytics.”
Zebra’s retail technology solutions empower company associates to exceed customer expectations while boosting efficiency, productivity and profitability. From tracking inventory and orders to product lookup, point of sale and more, its retail solutions help retailers create better customer experiences where it matters most — at the front line of your business.