UAE’s retail sales forecast to reach $58 billion mark in 2021

The UAE currently leads the Middle East and North Africa (MENA) region in terms of household spending on e-commerce at $2,554 per household, which is twice the value of the global average of $1,156, according to a report by Dubai Chamber of Commerce and Industry.

Retail sales in the UAE are expected to rebound and grow by 13 per cent to reach $58 billion by the end of 2021, supported by pent-up consumer demand in the second half of the year, COVID-19 vaccination efforts and Expo 2020 Dubai, new analysis from Dubai Chamber has projected.

A recent study found that companies with a $1 billion annual turnover can expect to earn an additional $700 million within three years of investing in customer experience.

The retail sector witnessed a massive transformation in customer behaviour during the lockdown. COVID-19 has accelerated digital transformation in the UAE and the MENA region – shifting from the traditional brick-and-mortar to omnichannel retail, like the rest of the world, while online shopping has picked up fast since the lockdown in March last year, said experts at a conference titled ‘Let’s Talk Shop’.

The event was organised by Images RetailME in association with Freshworks, a customer service and solutions software business that aims to create a customer-for-life engagement platform.

Shruthi Nair, Executive Editor, Images RetailME, opened the conference, saying, “The term ‘At your fingertips’ isn’t just a phrase anymore. We now have access to a lot of things at just the click of a button. As shoppers, we are spoilt for choice and channel, making the job that much harder for every brand and retailer to grab our attention and earn our money.”

He added, “This expanded choice landscapehas shifted customer expectations, resulting in a new type of modern buyer - one that is more aware and knowledgeable of their purchases, one that expects to be satisfied with not just their purchases, but also with their entire shopping journey and also one that is willing to pay more for a better experience.”

Freshworks recently surveyed 1500 CX professionals across the globe and released some of their findings.

Sanjay Kumar, Marketing Head, Middle East & Africa, Freshworks, said,“Customer expectations have increased last year. 63 per cent of the customers have seen a rise in expectation through the crisis, and this is very important. This is a number which is changing the whole scenario of how things are moving. Additionally, 56 per cent of customer service leaders have seen an increase in the budget compared to 2019.”

He added, “Take your service to the customer with “Digital CX” by adopting emerging channels SMS, Whatsapp, Facebook Messenger, Apple for Business chat etc. which allows proactive service delivery and ‘anytime engagement’. With increase in customer queries and expectations, “To Bot or Not” is not a question anymore. Bots are your great first line of defence and ensures 24/7 service availability.”

The analysis, based on recent data from Euromonitor, predicted that UAE retail sales are forecast to maintain 6.6 per cent annual growth in the medium term to reach $70.5 billion by 2025, with store-based retailing growth forecast at a CAGR of 5.7 per cent, while non-store retailing is forecast to grow at a CAGR of 14.8 per cent.

The grocery retail sector was under massive strain ahead of and during the lockdown period, which forced them to accelerate their digital adoption and omnichannel offerings to ensure that the essential supplies are reaching its customers without delay.

Ashutosh Chakradeo, Head of Retail, Choithrams said, “During this pandemic a lot of things just fast-tracked. It’s not like digitalisation was not part of our strategy from 2015 to 2019, but the pandemic escalated it.”

“Online business has jumped during the COVID-19 period, from say, 10 per cent to 50 per cent for some retailers” Toufic Kreidieh, CEO of BFL Group says that digital is the future of any industry and if retailers can increase online sales to up to 50 percent of their revenue, they will be on the right track. He said, “We upgraded the online business, which was already there before the pandemic and was only 8 per cent of our business, but today it’s 27 per cent of our turnover.”

“We were able to open 11 big stores during 2020. Now we have another 14 stores in the pipeline. We are extremely positive now as we know that revenge shopping, revenge spending, and revenge travelling is going to happen.”

Shehbaz S. Shaikh, CEO of Redtag, thinks it’s high time for brands to deliver an emotionally uplifting and memorable shopping experience where the customer feels that the brand is truly going above and beyond their expectations.

He said,“A big trend we’ve seen for sure is physical footprints are going down and the digital interactions are increasing. Earlier, customers used to step in the store, try their apparels before they make the purchase. But today, we are seeing a big shift towards digital experiences.