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Innovation in retail to drive growth

Retailers in the UAE and in the region need to ensure that innovation is part of their strategy in the coming years, as it will be a key driver of the industry's growth, stressed David Macadam, CEO of the Middle East Council of Shopping Centres (MECSC).
Speaking at the RECon Middle East & North Africa 2016 Conference and Exhibition in Dubai, Macadam explained: "What is important for a retailer today is to have innovation in everything that you do in the retail world. This doesn't mean that you should be following the same old path, but that you should be trying new things, and if the worst happens, then you can get back up and start in another direction. Today, retail is all about trying something new; and this is how a retailer will stand out from his competition."
Jointly organised by the MECSC and the International Council of Shopping Centers (ICSC), RECon Middle East & North Africa 2016, brought together several shopping centre industry professionals, retailers, management and consulting companies, architects, design companies, entertainment and leisure companies, as well as product and service providers to the industry.
Speaking about the retail market in the region and in the UAE, Macadam added: "Now that we are in a mature retail market, whatever you do, you have to manage your expenses and your timeline of growth. As long as innovation is part of your strategy, then it will be significantly easier for you. Innovation takes courage, and being willing to take steps to be different, yet effective. Thinking outside of the box and delivering something innovative is what is needed to remain relevant in the retail industry today."
"Keeping relevant in the retail industry means taking risks and being direct in your actions. The biggest challenges retailers in the region will face in the future will be to remain relevant to your customer base. The best way to remain relevant is to stay connected to your customers in every way possible," he added. "The social media platforms are not going to disappear. As a retailer, to remain relevant today I would recommend that you either outsource the very best social media team or hire an inhouse team to join in the most innovative ways to communicate. Loyalty is earned by being a reliable and trustworthy partner over and over. No short cuts generally work. A consistent message delivered over works best."
The UAE and Saudi Arabia have recently been ranked at the seventh and the eighth positions respectively in A.T.Kearney's Global Retail Development Index 2016, which rounds up top retail markets around the world. According to A.T.Kearney, the UAE's $7,159 sales per capita is the highest in the region, but the market is heavily saturated and annual retail sales growth slowed from eight per cent in 2014 to six per cent in 2015. Disruptive global economic factors, particularly low oil prices and a decline in the value of the euro, have slowed economic growth in Asia and Russia, reducing tourism to Dubai and changing the tourist mix.
A recent analysis by the Dubai Chamber of Commerce and Industry based on data from Euromonitor International, reported that Dubai's retail market would surpass $52 billion in sales by 2020 with average annual growth of more than eight per cent. Another report by research firm Ventures Middle East estimates that retail sales across the GCC are set to grow at a compound annual growth rate of seven per cent until 2018, to reach $285 billion.
- rohma@khaleejtimes.com