Technological Advancements Shaping UAE Retail

Photo by Tima Miroshnichenko from Pexels
Photo by Tima Miroshnichenko from Pexels

UAE retailers were hit hard by the pandemic, as consumers were restricted from the previously populous malls which later translated into massive online shopping and interaction in 2020. However, the retail market is expected to rebound as the country successfully merged into the digital world of demands. 

Read more about how the UAE retail industry employs progressive technologies to accommodate consumers pre and post-pandemic, leaving them with innovative and fulfilling shopping experiences.

Written by: Reefaya Noortaj

The future of retail in the UAE holds a vision of permanently integrated technology into our daily lives. Times have rapidly changed since COVID-19, the pandemic has since changed our personal and work lives, as well as consumer habits. Although the coming future looks bright for bricks-and-mortar stores, with a soaring growth of 13% to reach $58 billion by the end of 2021 (Arabian Business), the pressing demand for an immaculate online experience is still highly preferable. With ever-evolving technology and uniting marketplaces, the retail environment is undergoing instrumental transformations in terms of price, speed and connectivity. Digital evolution continues to sharpen retail experience to host seamless and immersive proficiency for consumers. With digitization taking over the retail sector in the Middle East, retailers are realizing the significance of improving their overall online customer experience as it has become a top destination choice for consumers in recent years. 

The impact of the Coronavirus on the retail industry in the MENA region forced consumers to shift towards e-commerce platforms for their necessities, which led to a substantial rise of e-commerce platforms across the region. The UAE, specifically, endured the most hit as malls became void of physical consumers in March 2020. It can be assumed that pre-Corona, the country’s main revenue came from bricks-and-mortar stores and tourism, however, the UAE was swift enough to implement e-commerce platforms and omnichannel experiences a few years before the pandemic arrived.

The UAE retail market is expected to reach a market value of USD75 billion by 2025 due to tourism industry expansions, the rising expatriate population, high-tech modern infrastructure developments and retail omnichannel developments. Augmented Reality (AR) and Virtual Reality (VR) are solutions retailers are adopting for simulated visualization for consumers. AR and VR solutions in the UAE, aim to meet customer service experience necessities, employing advanced graphical visualization and simulation technologies. Retailers are now pressured to integrate AR and VR solutions into their internal structures to satisfy consumer demand. For instance, there has been a recent rise in competitive AR and VR related job titles in the UAE, scouted by top MNC’s. Further, VR technologies also paved the way for safely training employees while simulating real-life environments–saving time and money for retailers. Another technology the UAE market has adopted is automated engagement and operations with robotics, now seen at the current Dubai Expo 2020 (Gulf News). These new tools and technologies have enabled retailers to accomplish substantial savings with reduced labor costs, administrative errors, stock-out shortages and losses. To put this into perspective, an AI-enabled robot can guide tourists and/or offer personalized product recommendations that are driven by collecting consumer data to boost profit and improve shopping experiences.

Photo by Obi Onyeador on Unsplash
Photo by Obi Onyeador on Unsplash

Voice-assisted (VA) shopping is another popular technological solution that enables customers to make purchases from online platforms such as at McDonald’s drive-through spot on Garhoud Road in Dubai. Voice-activated devices’ sophisticated functionality allows improvement in Natural Language Understanding as the country is a prime hub for expats and tourists of different nationalities. Customers are then able to communicate smoothly through a VA device if a physician assistant is absent and have a smooth shopping experience without needing physical sales people to guide them. VA are being installed in various retailer points to avoid long queues outside stores which have been happening during COVID when stores were implementing limits on the numbers of people allowed in stores at once. 

Further grocery retail in the UAE accounted for only 5% of e-commerce sales but during the lockdown, the figure rose to 24% as everyone turned to online shopping. UAE grocery retailers such as Noon Daily, Spinneys, and Carrefour were quick enough to improve and invest in digital sales, developing a catalogue of online products and services catering to customer needs. Third party delivery services, such as KITOPI are enabling restaurants and grocery stores to scale up on delivery services. In fact, grocery retails witnessed a 70% increase in app downloads and a 50% increase in daily orders from February to March 2020. So, does this mean physical supermarkets and departments will be a thing of the past? We think not, as consumers still want to see and feel certain goods in person.

COVID-19 proved to be a trying opportunity of learning for retailers. While the idea of shopping at brick and mortar stores will never be forgotten, recent e-commerce and tech trends are gaining momentum among consumers who were once hesitant to adopt such virtual technologies, leaving the UAE as one of the main hubs for retail growth in MENA.  

About The Editor

Born in Bangladesh and raised in the Middle East, UAE and Bahrain, Reefaya is a postgraduate from The London School of Economics in U.K. and an undergraduate from Sussex University. Reefaya has an immense love for sustainable fashion, social development and art.