Digital transformation is expected to play a key role in restoring the GCC retail market, which has seen a drastic shift during the COVID-19 pandemic as customers in the region are shifting their shopping habits to adapt to the new normal.
At a webinar organized by RetailME, experts pointed out that data, artificial intelligence, e-commerce, and robotics are expected to drive growth in the sector. They stressed the vital role that technology will play in shaping the retail sector in the coming days.
The GCC retail market was expected to rise at a Compound Annual Growth Rate (CAGR) of 4% from $253.2 billion in 2018 to $275.4 billion in 2020, according to a study by Alpen Capital. Further, it was expected to reach $308 billion in 2023.
The months of lockdown resulting from governments around the GCC attempting to control the spread of the virus, however, has forced officials to update their previous forecasts. Consumers quickly put off making spontaneous purchases and spent more on their immediate needs, in the face of work losses and pay cuts.
After the COVID-19 pandemic outbreak, consumer behavior in the GCC witnessed a dramatic change toward online payment. 92 % of consumers in Saudi Arabia and UAE changed their purchasing habits – including moving to online shopping, according to a recent study by Ernst & Young.
Similarly, the Visa CEMEA Impact Tracker indicated a move to online commerce, replacing cash transactions with digital payments. The survey suggests that many customers started shopping online for the first time during this period in the UAE. Around 70% made their first pharmaceutical purchase online while 68% of them were led to their first online grocery purchase by the lockdown.
Mr. Piyush Kumar Chowhan, group chief information officer at Lulu Group International, said that data will be the new engine for growth in the retail sector. “Technology will drive digital initiatives. Good customer experience will come from an innovation mindset, driven using different technology tools. In the coming days, customers will make purchase orders based on experience. Data and artificial intelligence will nurture the growth of the retail sector.”
