Brick-and-mortar stores and shopping malls will survive the rapid rise of e-commerce in the region as long as they adapt to changing consumer habits and offer personalised experiences, according to Retail Leaders Circle chairman Panos Linardos.
Speaking to Arabian Business, Linardos – who is also a founding partner of the New York Institute of Management – said he believes that “malls are very dynamic places and will continue to be at the core of retail in Dubai and throughout the region.”
“Despite the hype of e-commerce today, e-commerce penetration [in the region] stands at about 2 percent, and most retail is being done in stores,” he added.
“However, with fierce competition, the question becomes how both existing and new malls can catch customer attention and drive footfall.”
Linardos added that “mall operators desperately need to address in the future how fast changing consumer habits are changing the mall-operator model.”
When it comes to physical stores, Linardos said that many now face the challenge of turning their outlets to meet customer demands for “personalised experiences”.
“They are trying to use technology to turn the store into an immersive environment, re-imagining and re-inventing the store, turning into a community hub that creates a lasting emotion connection with brands,” he said.
According to BMI research, the e-commerce market in the Middle East will be worth $48.6 billion in 2022, up from $29.6 billion in 2018.
A recent Visa survey found that within the UAE, 66 percent of shoppers like shopping online, a figure that rises to 81 percent for UAE nationals.
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