Dubai, UAE – Will the development and advancement of online retail surpass traditional retail and transform the region’s consumers’ shopping experience? According to PwC Middle East’s latest report, released today, Retail Disruption - what’s the outlook for the Middle East?, the sector is witnessing game-changing developments with industry players coming into the Middle East’s retail market.
The report interviews over 24,000 people across five continents in 30 countries. In the Middle East alone, PwC surveyed over 1,000 online shoppers across the UAE, Egypt and Saudi Arabia about their shopping behaviours and expectations.
Norma Taki, Retail and Consumer Partner at PwC Middle East, commented:
“Our findings tell us that the face of Middle Eastern retail is indeed changing and it is a ripe market full of opportunities. The appetite for investing in online retail continues to grow with high profile acquisitions from heavyweight players such as Amazon and Souq.com and JadoPado.com, along with the anticipated launch of Noon which is due to have a big impact on the region. With the online retail landscape changing on a daily basis, retailers and investors need to truly understand the dynamics behind these changes. We are seeing an increase from 23% (2013) to 29% (2016) of consumers shopping online on a monthly basis.”
According to PwC, there are several reasons why consumers prefer to shop online, survey respondents indicated they were mainly because of lower prices (40% regionally vs. 36% globally), product selection (31% regionally vs. 21% globally), and convenience (17% regionally vs. 36% globally). Retailers are learning to navigate what is one of the most competitive landscapes in decades, with preferences shifting to online shopping.
The report outlines five key investment areas which PwC says will be top of mind for Middle Eastern retailers making investment decisions in the near future:
The use of mobile as a shopping and purchasing device continues to surge in popularity. 56% of shoppers using their mobile device as their main tool to purchase items. 43% like to use it to compare prices with competitors, while 33% checked reviews about products and retailers which is up 11% from 2016. Those seeking to grow their online retail presence need to optimize their mobile offering by focusing on designing mobile sites that can be easily navigated to make online mobile shopping an effortless and enjoyable experience.
For years, large multi-national retailers have been using a variety of technologies to gather data on customer movements in-store. And yet, social media is vastly becoming the most attractive tool for online engagement. Social media is in fact driving customer behaviour with 48% engaging in online promotions and 52% using social media channels to check product reviews.
The risk of cyber breaches and data hacks are affecting all industries across the globe. Online safety continues to be a concern with 62% of consumers worried about having their personal information hacked via their mobile device and 60% only shopping online with companies they feel they can trust. Providing secure platforms for any touch point with customers is a must for retailers. Investing in technology, enhancing security systems, providing maintenance and updates is a crucial element for successful online retail.
Customer loyalty is a key priority for any retailer but it is not without it’s challenges. The evolution of the retail sector means that customers have a vast array of choices when it comes to purchasing products online. 32% of online shoppers remain loyal to their favourite retailers because they trust the brand whilst 48% cite good prices for their repeat purchases.
The region is seeing the rise in online shopping as an attractive and easy alternative to shopping in-store. For luxury goods, 42% of consumers want to see and touch products preferring to buy high priced items in-store, valuing experienced sales associates with deep knowledge of in-store product ranges.
Taki ended: “The disruption of online retail is revolutionising the way we shop in the region and therefore must feature heavily at the top of local retailers’ boardroom agendas. The investment areas identified are critical for any retailers looking at their long-term retail strategy and they must quickly learn to develop omni-channels to ensure that both their online and offline strategies are not only aligned, but monetised. In doing so, retailers will be able to create real synergies with their customers exceeding their expectations no matter how and where they shop.”
Norma Taki, Retail and Consumer Partner at PwC Middle East
At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 223,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.
Established in the Middle East for 40 years, PwC has firms in Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Oman, the Palestinian territories, Qatar, Saudi Arabia and the United Arab Emirates, with around 4,000 people (www.pwc.com/me).
PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
© 2017 PwC. All rights reserved