CBRE and Roland Berger have published a co-written report "Trends in the GCC Retail Market". The report looks at the retail industry today in the GCCregion andprovides an outlook onits likely development in a post-Covid-19 world.
The global economy is experiencing an unprecedented impact amid the outbreak of Covid-19: dramatic changes in consumer behavior and a widespread spending freeze require various industries to operate in crisis management mode as result of significant loses. Due to its interconnected nature, the retail industry is particularly vulnerable to the effects of this pandemic and leaves retailers uncertain on how to respond to the current state of the retail market, as well as about their future in a post-Covid-19 world.
The GCC Retail Market report takes a longer-term view and outlines the trends impacting the retail industry in the GCC, driven by technology, changing consumer demands and evolving operating models.
Gabriella De La Torre, Director Consulting at CBRE, commented, “Retailers with a successful online presence have been able to minimize the impact, and in some cases even managed to driveprofits as a result of stronger online consumption. Our report takes a long-term view on the opportunities in the retail industry in a post-COVID-19 world, driven by the growth of e-commerce, an increasing focus on experience, and the incorporation of new technologies.”
Key trends:
- Landlords and tenant alike can benefit from flexible structures, with the former maximizing their occupancy rates and returns, and the latter given greater room for innovation and growth.
- Experiential retailing continues to push retailers to create a unique experience for itsconsumers.
- There is also no longer a dichotomy between online and offline retail, since the two are increasingly converging to maximize customer experiences. This trend has gained traction worldwide but has yet to fully unfold in the GCC.
- Many small online-only retail brands are seeking greater access to consumers and in the US a new concession-based model provides small flexible physical spaces for online-only brands.
- The region may not be ready for “Just Walk Out” technology, but it is beginning to see an uptake in RFID tags and in a post COVID-19 world, where social distancing may become the norm, we expect to see further adoptionof this technology.
“Moving forward, retailers will have to reimagine their current strategies not only to keep them relevant in today’s retail sector, but also to anticipate the future of the industry toensure long-term success,” commented Dr. Johannes Distler, Partner at Roland Berger. Virtual fitting rooms could for exampleallow customers to try on clothing before purchasing online. Customized on-demand apparel, offering customers a personalized experience fitted to their exact requirements,could also become standard. Using AI, retailers canengage with their customers at a conversational level providing more personalized experience. And autonomous last-mile delivery may increasingly become a reality with use of delivery robots and drones.