The rise in e-commerce, which has been accelerated hugely by the ongoing global coronavirus pandemic, has presented the region’s shopping malls with an opportunity to reinvent themselves.
Online retail platforms have largely gone from strength-to-strength over the past 12 months as various lockdown measures and curfews restricted movement, while general health concerns have led many to avoid shopping malls and retail outlets altogether.
According to a report by Kearney, the GCC’s e-commerce sector is expected to more than double to $50 billion in the next five years, up from $24bn last year.
On the other hand, on Wednesday, Dubai-based Majid Al Futtaim revealed a seven percent drop in revenue to AED32.6bn ($8.9bn) in 2020, while earlier this month Emaar Malls reported revenues down a quarter year-on-year and a slump in profits by almost 70 percent to $192m.
Mark Fiddes, creative consultant and former creative director of Havas, told the Arabian Business Forum: “I think it’s a great opportunity to redefine it because, given digital literacy has increased and that actually the quality of the data and relevance of the data that customers share with us has improved, there’s a massive opportunity I think for the malls to start thinking of themselves once again almost as tourist destinations and I think this is where tourism and retail converge.
Mark Fiddes, creative consultant and former creative director of Havas
“I think recreation steers us towards retailing that is much more active. You go to a mall for a purpose, not just to wander about like a sheep. You’re engaged.”
Online grocery delivery platform Kibsons is a huge success story from the pandemic. Founder/director Halima Jumani said: “We’re not really looking to move people away from brick-and-mortar, what we are here to provide is an option. I love that because I grew up in a place that gave me so many options and options is a valuable thing.
“From my e-commerce perspective what I would say is that tech usually adds another dimension to the customer in the sense that they are quickly able to get onto their phones and compare prices across multiple retailers and therefore make an informed decision to save money.”
Fiddes and Jumani were part of a panel discussion, alongside Ryan Den Rooijen, chief data officer, Chalhoub Group, at the Arabian Business Forum event, looking at how the UAE can meet the needs of the new consumer.
Halima Jumani, Director of Operations at Kibsons
Den Rooijen said: “I think the idea of physical retail solely as a transactional space, where customers are sold products, is arguably dead, or in the Middle East, dying, but I think that’s quite exciting.”
The Middle East’s largest luxury distributor, Chalhoub Group revealed recently that the company’s share of e-commerce increased from between six and eight percent to close to 20 percent.
The panel talked about the prominence of ‘clicks-and-mortar’ and the rise of ‘phygital’ – blending physical experiences with digital ones.
Den Rooijen added: “At the end of the day, if we’re truly customer-centric, we need to provide customers with a choice. You can’t be customer-centric by saying, this thing you did before, we’re never doing it again, we’re only going to do this new thing forever and ever. That’s very depressing.”
Ryan Den Rooijen, chief data officer, Chalhoub Group
Panellists also agreed that the coronavirus pandemic has led to a rise in the conscious consumer, with customers increasingly concerned, not just about product prices during the difficult economic climate, but also sustainability and brand purpose.
Fiddes said: “I think one of the discoveries early on from an advertising and marketing perspective was we saw all of the brands ‘care washing’ the public, telling them how much they loved mothers, fathers, frontline workers, but actually doing very little about it.
“I think those brands that have come through this, that have recognised the customer insight that people want genuineness, they want authenticity from their brands, those brands have actually done rather well and during this very difficult period have advanced their share of mind with their customers.”
Jumani added: “In 2020 it couldn’t have been more evident how people wanted to support the local industries and they wanted them to do better. There was certainly a surge towards that so they cared about that, from supporting the local industry, but also reducing their carbon footprint and that stems into the sustainability aspect of what people are wanting to do.”
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