The future is still bright for bricks and mortar retail despite the impact of the global coronavirus pandemic, according to a senior executive of UAE-based Gulf Marketing Group (GMG).
The Gulf’s retail sector has recorded a string of positive gains over recent quarters, suggesting continued momentum behind post-pandemic growth – especially in brick-and-mortar retail, said Mohammad A Baker, CEO and deputy chairman of GMG, and who is also a member of the advisory board of Dubai Chamber.
“The Covid-19 pandemic did initially impact the physical retail landscape, both locally and globally,” he said. “A drop in consumer footfall coupled with social distancing measures, international travel restrictions, and a wider macro-economic slump put pressure on the sector.”
In the UAE alone, studies estimate that the pandemic cut AED13.5 billion in sales in 2020.
A surge in e-commerce helped to offset the initial pandemic shocks, with a much faster rate of digitalisation expected in the Gulf both this year and in the years ahead.
“There is massive potential in the region’s eCommerce space, no question. But that’s only one part of the story,” said Baker (pictured below). “Brick-and-mortar retail should not be overlooked.”
“Consumers today are not looking for products when they come to a store – they are looking for an experience. Many of these experiences are based on personalised, in-store engagement, and that is what is being delivered,” he added.
He said all of GMG’s flagship brands located at the Dubai Mall has already welcomed over 2.4 million customers this year — a double-digit percentage rise year on year.
“Brick-and-mortar has long been a pillar of national economies throughout the region across nearly all segments. It still accounts for the lion’s share of all retail transactions,” Baker stressed.
“Now is actually the ideal time for us as retailers to push ourselves to go beyond what we thought possible.”
The inaugural State of the UAE Retail Economy report released in June further suggests that there are clear signs of optimism returning to the region’s consumer market, and that the UAE is predicted to have the fastest growth within the GCC in 2021.
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