Omnichannel set to strengthen the UAE retail sector

As COVID-19 cases continue to decline in the country, residents regain confidence in in-store shopping. This is according to a Kearney study in which UAE respondents cite convenience (51%), enhanced shopping experience (49%) and competitive pricing (44%) as the main motivators driving them back to brick and mortar stores.

“Consumption habits have undergone a fundamental transformation in the past 18-months, where we saw a rapid acceleration in the adoption of online shopping and spending. While e-commerce has not slowed down, as retailers invest in creating a safe environment and competitive pricing of their goods and services, we see consumers returning to their trusted stores for an enhanced shopping experience,” commented  Debashish Mukherjee, Partner, Consumer and Retail at Kearney Middle East.

The study revealed that over the last quarter*, 34% residents have increased their spending on non-essential items by over 25%. This is compared to only 23% respondents who reported an increased spending in June. This increase echos the forecast issued by Dubai Chamber of Commerce and Industry earlier this year, which estimates store based retailing to grow at a CAGR of 5.7%.

The most popular categories for instore purchases were those which required physical inspection, including footwear (53%), home or casual wear (37%), and work clothing (35%).  When looking at motivating factors for online shopping, time saved (49%) was the largest driver. This was followed by ease of purchase (37%), COVID safety/restrictions (37%) and ease of delivery (37%).

“This year, we’ve seen online retailers start offering discounts as early as the second week of November with Singles’ Day sales, rather than the traditional kick-off on Black Friday. With online, in-store and omni-channel retailers going head-to-head for customer acquisition, building stronger brand connections will become integral. We expect retailers to start offering more in-store experiences; whether it is self or automated check-outs, click and collect, or store-in-stores concepts, consumers today are looking for new, more engaging ways of shopping,” concluded Mukherjee.

This research was conducted as part of a series of independent surveys by Kearney, the leading global management consultancy that explores trends in key sectors that contribute towards and support the region’s economic development.