{"id":13901,"date":"2024-05-27T15:28:25","date_gmt":"2024-05-27T15:28:25","guid":{"rendered":"https:\/\/www.gzjyws.com\/?p=13901"},"modified":"2024-06-27T11:41:22","modified_gmt":"2024-06-27T11:41:22","slug":"navigating-the-gulf-retail-landscape-in-the-age-of-ai","status":"publish","type":"post","link":"https:\/\/www.gzjyws.com\/id\/navigating-the-gulf-retail-landscape-in-the-age-of-ai\/","title":{"rendered":"Navigating the Gulf Retail Landscape in the Age of AI"},"content":{"rendered":"

By Mohammad A. Baker, Deputy Chairman and CEO of GMG<\/i><\/span><\/p>\n

The Gulf retail landscape is in the middle of a dynamic transformation fuelled by globalisation, the surge of e-commerce, a shifting digital landscape, and renewed demands for more sustainable operations. These forces present new challenges for the industry but are also opportunities for growth for innovative players.<\/span><\/p>\n

Growing up in a family-owned retail business within a Khaleeji retail context, I’ve witnessed the sector’s legendary innovation and agility to meet evolving customer expectations. In the early years, mega malls and online stores were non-existent. Instead, people relied on local shops, markets, and souks for their retail needs. <\/span><\/p>\n

In 1977, my father, Abdul Aziz Baker, who founded GMG, ran Dubai\u2019s first gourmet butcher shop close to Jumeirah Beach, and there was an open space close to his shop where young men often played football. He was watching a game one day and witnessed a player’s sandal flying off while attempting a free kick. Right there, he saw a new opportunity to serve the growing UAE sports community. Back then, high-quality international sportswear brands weren’t available locally. People would either bring a sports kit from abroad or purchase it at exorbitant rates from the few options available here. Thus, in 1979, he launched the first Sun & Sand Sports store in Dubai to offer international sporting brands to UAE customers.<\/span><\/p>\n

Today, the rapidly changing operational landscape calls for regional retailers to rethink operations. Faced with a highly competitive, borderless, and digital-centric retail environment, there’s a need to adopt new strategies to leverage their strengths and meet customer expectations.<\/span><\/p>\n

Elevating Customer Experiences<\/strong><\/span><\/p>\n

Having travelled extensively to all major shopping hotspots worldwide, I can confidently say the experience that Gulf retailers offer is a class apart. Besides the extensive choice of brands, personal attention, and customer service we offer, we are always looking to elevate the shopping experience for our valued customers. GMG operates Nike\u2019s largest store in the MENA region<\/a>, launched six years ago in Dubai Mall. The store offers a dedicated customisation space to personalise Nike apparel and sneakers, a Nike women\u2019s salon and a small basketball court as a trial space \u2013 all inside the store!<\/span><\/p>\n

The commitment to personalized experiences stems from first – hand observations of how they drive customer loyalty and increased revenue. We recently introduced the global Nike membership program in the region and observed that 75% of our revenue was generated through Nike members in the first month of the launch. Such initiatives align with our strategy of elevating customer engagement while prioritising their consent and data privacy.<\/span><\/p>\n

Over the past five years, we have witnessed the e-commerce boom, which has affected both consumers and retailers. This impact stems from the convenience it offers and how it has seamlessly integrated with the region\u2019s robust brick-and-mortar retail, resulting in a unique \u201cphygital model\u201d. Unlike the West, where online shopping has been increasingly becoming the preferred way of shopping, physical stores are still an integral part of the regional cultural fabric. <\/span><\/p>\n

Retailers should strive for a seamless omnichannel experience, which integrates the entire customer journey seamlessly \u2013 whether they are in-store, using click and collect or self-service kiosks or shopping on an app. Their experience should be supported by high-quality customer service through in-store staff, chatbots, or live agents.<\/span><\/p>\n

Enhancing experiences and operations through AI<\/strong><\/span><\/p>\n

Today, no dinner or boardroom conversation is complete without a discussion on the latest from the world of Artificial intelligence (AI). Recent data<\/a> indicates that in the GCC, AI adoption is the highest in the retail and consumer packaged goods sector, with 75 per cent of respondents stating that their companies have adopted the technology in at least one business function.<\/span><\/p>\n

AI will transform our industry like never before. Thanks to the massive amounts of data at our disposal, AI can help retailers optimise operations and decision-making. By collecting and analysing data from both online and physical store interactions, retailers gain deeper insights into customer behaviour, preferences, and needs.<\/span><\/p>\n

The UAE has seen a large influx of tourists, with Dubai exceeding pre-pandemic numbers by welcoming 17.15 million visitors in 2023 \u2013 19.4% higher than in 2022. This presents a great opportunity to utilise AI to cater to a diverse set of people. AI can help many retailers & companies with simple things like how to address people in different languages, as well as solving the issue of understanding how customer tastes and preferences are influenced by social media. This creates a solid emotional connection with customers, making them feel seen and heard. <\/span><\/p>\n

For AI use cases to work, the most important element is gathering data in a secure way and with a consent framework in place. At GMG, we’re investing in creating a unified system. With a single view of inventory, enterprise, and customer, this backbone unlocks numerous current and future use cases. It enables us to better serve our customers in target markets.<\/span><\/p>\n

One of the use cases where AI is going to contribute is on the logistics efficiency topic; i.e., optimising our logistics operations by leveraging data. For example, how can we serve customer location blocks? What are the nuances in high- and low- order density regions? What is the data telling us? What should be our efficiency rate and cost to serve these regions? AI algorithms can then help us on many topics, such as streamlining delivery routes, factoring in traffic, and order priorities to reduce costs and improve efficiency. <\/span><\/p>\n

Our logistics operations rely on interconnected digital applications, workflows, and tools working together to enable a seamless flow of goods from the Jebel Ali port to our JAFZA warehouse to stores across the UAE and directly to our customer’s homes. This optimised on-time delivery performance has enabled us to reduce our fleet size by 7%. <\/span><\/p>\n

We expect to see multiple customer journeys, including customers warming up to utilising the click-and-collect facility, where customers order products online and pick them up at a nearby store offers. A recent PwC report indicated that nearly half of regional customers said that they find click-and-collect services appealing. Hence, click-and-collect can offer another opportunity for personalisation as it gives customers the experience of in-store staff recommendations and the possibility of cross-selling and upselling in stores.<\/span><\/p>\n

Building on our observations of post-Covid-19 trends, the role of social commerce and live shopping is strengthening \u2013 something that has been performing extremely well in the Eastern markets. We can confidently predict that these can and should be introduced to Gulf consumers, especially with social media platforms evolving into comprehensive shopping eco-systems. Retailers must tap into this trend, recognising the spending power and preferences of the digital-native generation. <\/span><\/p>\n

However, the integration of AI poses ethical challenges, especially regarding data privacy and consent. As AI relies on extensive data collection, retailers must ensure they protect customers’ personal information from cyber threats and comply with regulatory standards. Balancing the trade-off between offering enhanced shopping experiences and respecting customer privacy will be a focal point for discussions in 2024. <\/span><\/p>\n

Engaging with the future generations<\/strong><\/span><\/p>\n

One of the major shifts we have noticed, especially from being present in 12 global markets, is the rising spending power of younger consumers, adding a new layer to retail dynamics. Snapchat research estimates <\/a>Gen Z commands over $450 billion in spending power globally \u2013 an average per consumer of $8,894. This age group is much more socially conscious than older generations. Therefore, for retailers to be successful with younger shoppers, they must align with social causes, which includes implementing measures such as greening the supply chain and demanding sustainability credentials from suppliers. <\/span><\/p>\n

Retailers who have adapted to Gen Z also find themselves at an advantage in reaching Gen Alpha, with whom they share numerous characteristics. Gen Alpha (those born after 2010) are even more immersed in digital technology, having been born into a time when smartphones, tablets, and other digital devices were already a part of life. Retailers who want to delight this demographic must prioritise user-friendly, intuitive and secure online shopping platforms. Features such as one-click purchasing, personalised product recommendations, and interactive catalogues can enhance the online shopping experience. <\/span><\/p>\n

Regional retailers aiming for optimal performance should align their objectives with these technological advancements while considering the ethical implications associated with increased data collection. Gulf retailers will thrive if they embrace these opportunities and adapt to an evolving marketplace.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

By Mohammad A. Baker, Deputy Chairman and CEO of GMG The Gulf retail landscape is in the middle of a dynamic transformation fuelled by globalisation, the surge of e-commerce, a shifting digital landscape, and renewed demands for more sustainable operations. These forces present new challenges for the industry but are also opportunities for growth for… Continue reading Navigating the Gulf Retail Landscape in the Age of AI<\/span><\/a><\/p>\n","protected":false},"author":14,"featured_media":13902,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[63],"tags":[69,74,79],"class_list":["post-13901","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-articles","tag-digital-transformation","tag-people","tag-retail","entry"],"yoast_head":"\nNavigating the Gulf Retail Landscape in the Age of AI - GMG<\/title>\n<meta name=\"description\" content=\"By Mohammad A. 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