The retail industry in the region – especially in the UAE and KSA – has undergone massive changes in the last two years. Between 2011 and 2015, GCC retailers captured above-average revenue growth, margins, and returns, according to a McKinsey report.
However, due to the instability of oil prices, the introduction of VAT, and new labor localization laws, retailers have to pay more to survive while consumers are spending less and looking for ways to save up.
And so, in order to save the retail industry, UAE CEOs are looking to massively invest in tech-based offerings.
According to a recent survey by KMPG, 100 percent of CEOs in the UAE – versus 48 percent globally – will use tech solutions to enhance the retail store experience. Among these new technologies, VR and AI stand out with 40 percent saying they would harness AI in the next two years.
Even when it comes to the overarching theme of business transformation, 80 percent of UAE CEOs said they planned to prioritize it over the next two years versus 57.5 percent of CEOs globally.
As changing customer behaviors and shifting demographics contribute to sustained margin pressures, shorter strategy cycles and increased expectations from customers, companies are ramping up to embrace digital and AI technologies underpinned by data and analytics.
This shift is helping boost margins, customer centricity, agility and efficiency by replacing or augmenting some human activities with technology, and by shifting technology to the cloud.
Anurag Bajpai, head of retail, KPMG Lower Gulf, said: “We are envisaging a major push towards embracing technology to enhance the retail experience. The next few years in the UAE may see more brands adopt AI, VR and connected technology to transform the in-store experience and integrate online and offline experiences. The 2018 Top of Mind Survey finds an industry aggressively navigating a sea of change, where retailers and manufacturers appear to be radically rethinking their strategy, culture and processes and becoming more agile as they focus on growth.”