People shop at a supermarket in Riyadh. File/Reuters
More than 300 retail industry experts will convene at the 11th Middle East Retail Forum (MRF) which takes place at the Jumeirah Beach Hotel on November 15, 2022 to tell their stories, discuss the opportunities and assess their learnings and challenges in the Middle East’s vibrant retail sector, which saw cash payment declining to 20 per cent last year, down from 70 per cent in 2017, according to a recent report by Statista.com.
The size of the GCC retail sector is expected to rise to $308 billion in 2023 at a compound annual growth rate (CAGR) of 4.0 per cent from $253.2 billion in 2018. Retail sales are likely to rebound and rise by 2023, led by the projected increase in population and international tourist arrivals.
The e-retail industry in the region has been expanding rapidly over the past couple of years. The value of e-commerce transactions was forecasted to reach around $27 billion by 2022 in the UAE. The UAE ranks first in the Middle East and North Africa (MENA) region in the UNCTAD E-commerce Index, followed by Saudi Arabia.
As per CNNB Solutions, MENA e-commerce sales will grow to $50 billion in 2022. Around 91 per cent of customers in MENA have become digital converts and will continue to buy online, with 73 per cent shopping more online since the pandemic. MENA shoppers are looking for safe and secure online payments – over 60 per cent of people believe secure checkout is fundamental for a good online shopping experience.
Payment through credit card jumped from 16 percent in 2017 to 38 per cent in 2021. The new trend emerging in the retail landscape is: Buy Now, Pay Later (BNPL) – a new buying power.
The Middle East Retail Forum (MRF) has become the most sought-after annual congregation for the top retailers in the Middle East who set the trends in the industry. A must-attend event for the industry leaders, CEOs and other C-level professionals, it gives new direction to the retailers on the changes, challenges and the opportunities. The MRF conference concludes with the annual Images RetailME Awards that recognizes the best performing retailers in different categories.
A prominent ecommerce brand launched its first ‘Phygital’ store, while several physical retailers created more fulfilment centers as opposed to new retail outlets. With consumer behavior constantly changing, retailers are constantly improving their omnichannel presence and turning to data and technology to reach and delight their customers.
“The overall environment in the retail sector is changing. While new jobs are being created and some roles becoming redundant, retailers are investing in their people and their purpose. Sustainability and DEI is now more in focus than ever before. Brands are at a new trajectory of growth and it is incredible to see these stories unfold at MRF,” Justina Eitzinger, Chief Operating Officer of Images Group Middle East, organiser of the Middle East Retail Forum and Images RetailME Awards.
“Retail business is gradually being transformed into logistics operation, as home delivery has become the key to success. That way, Amazon has become the world’s largest logistics company – delivering essential goods to consumers all across the world.”
“MRF and the RetailME Awards have become the industry benchmark convention and annual awards that everyone in the retail sector relate to and take pride in participating. It has become a matter of pride not only for the retailers, but it firmly has re-positioned the region in the global retail map.
“This year, I am happy to announce that we have brought back our retail start-up section where start-ups will pitch their ideas to a panel of industry experts serving as jury – that might see UAE’s home-growth start-ups get partner support and mentorship from the Forum.”
In the Middle East, over 50 per cent of consumers prefer spending money on experiences rather than things, compared to 44 per cent globally, according to Euromonitor International’s Voice of the Consumer: Lifestyle Survey, 2021. Moreover, 65 percent of consumers seek curated experiences, much higher than 58 per cent of consumers globally.
At the same time, they want to engage more on a personal level, whether through social media, or talking directly with customer service assistants. For example, 65 per cent of those in the Middle East prefer speaking to a human than a chat bot, compared to 58 per cent globally. Therefore, as retailers in the region devise strategies, digital technology must combine with customer engagement, an engagement that still believes in a “real” and “human” experience.
In the Middle East, physical retailing remains stronger compared to other regions, although e-commerce is making strides, according to a report by Euromonitor. In 2020, the penetration rate of e-commerce in the region rose to 8 percent from 4 percent in the pre-pandemic period. Thus, while there has been a strong boost in e-commerce, store-based sales dominate the region’s retail landscape. Local consumers are expected to spend an average of over $2,400 via physical stores in 2025, up from nearly $2,000 in 2020, compared to only $295 online the same year.