Wednesday 28 October 2020

$25trn global retail sector ‘disrupted by pandemic’

DUBAI, September 13, 2020

Global retail transaction value is set to grow from $23.36 trillion in 2020 to $25.04 trillion in 2021, said experts citing a report from market intelligence provider, adding that the Covid-19 pandemic has disrupted the retail sector.

The retail industry leaders were speaking at the Virtual Roundtable on Intelligent Orchestration of Retail Experience, organised by RetailME – the region’s only dedicated market intelligence provider for the retail sector.
“We have seen a paradigm shift in consumer behaviour towards the digital channel. A lot of consumers quickly embraced online shopping that put retailers under tremendous pressure to expand the digital channel,” said Hozefa Saylawala, Director of Sales – Middle East, Zebra Technologies, a technology enabler for the retail sector.
“During the initial phase of the pandemic and lockdown, a lot of retailers identified the gap as well as the opportunities. We have seen tremendous demand to engage with retailers keen to make the shift. Consumers are now asking for more self-service, contactless payment options for shopping.”
In 2019, e-retail sales accounted for 14.1 percent of all retail sales worldwide. This figure is expected to reach 22 percent in 2023.
The e-commerce market size is expected to reach $19.7 billion (Dh72.29 billion) in 2020 in the GCC. Saudi Arabia is the largest market with $8.3 billion (Dh30.46 billion) followed by the UAE with $7.5 billion (Dh27 billion).
Justina Eitzinger, Chief Operating Officer of Images RetailME, said: “These statistics show that the potential for e-commerce in the GCC and the greater Middle East region is huge. Most people in the region are still brick-and-mortar shoppers. We believe, this is going to change fast, due to the current environment dominated by health and safety concerns and social distancing.
“Our Virtual Roundtable series provides very crucial insights into the digital landscape that helps retailers and consumers to understand the rapidly changing retail landscape that provides new opportunities. Retailers could gain important insights that could help them remain ahead of the curve.”
Most retailers who already had established their online channels, saw a massive jump in orders through their apps, experts said.
Adel Sajan, Director of Danube Group, said: “Online purchase had accounted for only 5 percent of our total sale before the pandemic. However, it jumped 500 percent to 25 percent of our sale during the lockdown, before settling at 10 percent currently.
“Since purchase decision on home furnishing takes time and consumers need to touch and feel the products, we initiated virtual meetings with our key customers and offered the products through a virtual tour of our stores in order to ensure the customer gets a good look at the product.
“Recently we launched a pilot project through which we despatch a wide variety of home furnishing products to the clients’ homes by our trucks and the customer can see, touch and feel the products. If they like, we install on site. So, instead of the customer coming to us, we are taking the store to the customers’ doorsteps.”
According to Alpen Capital, the GCC retail sector is projected to grow at a CAGR of 4.0 per cent from $253.2 billion (Dh929.24 billion) in 2018 to $308 billion (Dh1.13 trillion) in 2023. Retail sales have been under pressure in the recent years but are estimated to recover and grow through 2023.
Bhavna Buttan, Vice President – Market Place Transformation at Sun and Sand Sports, said: “Covid-19 is a blessing by default as it forced consumers and retailers to change behaviour fast. It also provided some good lessons for us in the last 20 years.
“At Sun and Sand Sports, we launched our digital sales channel six years ago, which consumers seldom used. However, Covid-19 pushed all of us into the digital space rapidly. We learned a lot and we also failed in a lot of areas. However, our online sales jumped 500 percent that more than compensated for the decline in the brick-and-mortar space.”
While fashion retail has transformed significantly, the biggest change is possibly being witnessed by the operators of grocery retail, supermarkets and hypermarkets where the jump in online orders forced them to undertake changes overnight. – TradeArabia News Service



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