The research shows that technology will play a significant role in helping merchants reach and exceed their growth expectations.
Sajjad Ahmad, Deputy Business Editor
The UAE retail sector has shown tremendous resilience despite the Covid-19 challenges and performed well during the pandemic comparing to the global trends. Retailers in the country are optimistic about their sale growth for 2022 as the overall global business environment is improving after the easing of restrictions, a research revealed.
The research was released by Adyen, the global financial technology platform of choice for leading businesses, in Dubai on Monday.
According to the research figures more than three-quarters (84%) of retailers expect to grow by 20% or more in 2022 and with so many planning to invest further, that number could be even higher. Last year, 73% of UAE businesses grew in revenue by 20% or more, across the retail, food and beverage, and hospitality sectors, which is more than the 67% growth witnessed at a global scale. It shows how focusing on digital transformation would help accelerate retailers’ growth and customer loyalty.
Adyen commissioned Opinium LLP to poll 1000 consumers and Censuswide to poll 200 businesses in the United Arab Emirates, and economic modelling by the Centre for Economic Business Research (Cebr).
The research shows that technology will play a significant role in helping merchants reach and exceed their growth expectations. When businesses incorporate technology across their functions, linking operations with payments and customer experience, the proportion of UAE businesses expecting to grow by 20% or more increases to 84%. Additionally, Cebr’s economic modelling found that accelerating digital transformation would add an additional 4.7 percentage points to the UAE’s retail sector’s growth rate over the next five years.
The technology opportunity to improve operations and the customer experience is significant for retailers and something consumers have come to expect. The majority of UAE consumers (83%) say they are more likely to shop with retailers that use technology to improve the customer experience. In fact, 61% of shoppers said they would be more loyal to retailers that let them buy things online and return them in store.
However, the data shows that merchants are not fully ready to capitalise on this opportunity. Only 23% of UAE merchants allow customers to easily return items purchased online at their physical stores. Customer expectations are higher in the UAE, highlighting a huge opportunity for the brands that get it right.
Although the UAE is on the forefront of innovation with 66% of UAE businesses having invested in digitizing their operations to improve operations during the pandemic, which is 20% higher than the global average. There’s still room to improve because 86% of UAE consumers expect businesses to use technology to make their loyalty programs easier and more effective moving forward.
Sander Maertens, Head of Middle East for Adyen, said: “Despite challenges as a result of the global pandemic, our research shows that UAE retailers have performed remarkably well compared to their global counterparts. Digital transformation and streamlined operations via improvements in online, in-app and in-store payments channels, along with supply chain and inventory management improvements, resulted in enhanced business performance, which drove up sales by 54%. UAE retailers are confident for future growth, but to keep the momentum going, they will have to deliver cohesive cross-channel payments experiences to their customers.”