The UAE Retail industry and Malls Think Tank's latest study highlights the issues facing the retail industry in UAE and proposes initiatives for a more competitive sector.
This includes a call to improve coordination between retailers and mall operators, to step up the digitalization of the retail industry in UAE, and to legislate to help shield firms and staff from potential disruption.
A think tank is a focus group of leading industry players brought together by Mashreq Bank and MEED from around the UAE retail and malls market. It aims to evaluate the issues outlined by Covid-19 in the UAE retail industry trends. Also suggest steps to address them.
Research from the study reveals that stores were still facing problems before the Covid-19 pandemic due to the increasing prevalence of online shopping and the over-supply of mall capacity.
Lockdown steps compounded the effect of current pressures to avoid propagating the epidemic, closing down sales sources as operational expenses continued.
In response, the think tank was set up. It was there to suggest steps that the sector should take to recover from the ongoing crisis. Five key issues on teamwork, development prospects, creativity, consumer and workers wellbeing, and possible retail industry news are discussed in the recommendations.
J.D Van Dusen, Head of Corporate and Investment Banking Division at Mashreq Bank, said “The innovation in the retail industry has been one of the drivers of the UAE's economic diversification strategy, supporting the Emirates' vision to reduce its dependence on oil.”
Although the Covid-19 pandemic has uncovered vulnerabilities in the market and brought fresh pains, huge value, and opportunity waiting to be captured by those who rise to the challenge remains to exist. And shopping sites and online portals are the top sector to stay.
Four trends from the study on Sustainability of Shopping and Malls:
* Cooperation between retailers and landlords needs to be improved. The two sides will benefit from a more holistic and mutually beneficial arrangement based on good cooperation and innovation in the retail industry. By transitioning away from the existing transactional approach, which is primarily governed by gains and losses, to a collaboration model.
Joint projects, developments in customer transport, marketing, and data sharing may be areas for collaboration suggested in the latest retail industry news.
* The need for a shared voice to represent the UAE retail industry trends to the government. The retail sector should consider creating an efficient model that provides the UAE government with a single viewpoint.
* It is essential that all aspects of the value chain are digitized by the market. Integrating creativity through supply chain management, consumer sales, and last-mile delivery. In projects that use technologies from the beginning to the end of the supply chain, the government and driving forces of the retail industry need to work together. The UAE government should implement more criteria for minimum technology specifications. This is required due to the UAE's retail infrastructure lagging behind China, the US, and Europe.
* More formal regulation is implemented to help protect the corporation from potential disturbances as well as workers who are driving forces of the retail industry. For starters, retailers should be forced by a new law to set aside a portion of their profits as cash reserves. Additionally, to protect missed profits against epidemics and pandemics, insurance plans should be re-written. Although costly, this might quickly become a must in the light of several recent global outbreaks, such as SARS, MERS, and now Covid-19.
Similarly, the digital trends in the retail industry are reeling under the influence of this recession. Also provide us with an analysis in comparison, and not unexpectedly. On the one hand, since February, non-food retail and restaurants have seen a downward trend in results. An increased doubt about when they will return to 'business as normal. ' Several popular non-food retail firms have shown that profits were down by as much as 50-60 percent in the first half of March compared to the same time last year. They foresee a further decline in results with mall openings and low volumes from online shopping platforms. However, on the other hand, supermarket and food retailing firms face a struggle to satisfy the increasingly rising demand.
Online retailers have seen exponential growth in the digital trends in the retail industry, particularly for food items. There is a waiting duration of two to ten days for orders, while minimum order volumes have been raised.
The road to sustainability and recuperation
To deal with the crisis and recover, what extra steps can brand, distributors and retailers take for online retail industry growth? We believe that there are various areas where retail companies can concentrate on preparing their business.
Planning for demand
The focus of the short-term plans of retailers in the retail industry should be to manage demand fluctuations. While some see demand falling and clients shifting channels, others face unprecedented demand spikes. It has never been crucial to be able to predict and manage these trends.
Reserves and liquidity of cash
Looking at the growing importance of retail industry enterprises should take a strong look at their current cash situations. They should develop scenarios for a prolonged period to test their financial stability and capacity to withstand the downturn. Given the high dependency of retail businesses on cash, it is increasingly important to assess the current. Also, focus on expected liquidity profile and potential changes in the dynamics of working capital. This may lead to conversations with banks and lenders that could probably hit by refinancing or amendments to financial agreements.
Digitalization
The shift towards technology and online channels for consumers has accelerated the crisis. Many of those who preferred shopping for brick-and-mortar were a move to adapt to online purchasing. This happened due to the growing importance of the retail industry. Retailers that have been slow to digitize and embrace the latest technology will now need to reflect this shift. They will have to develop an omnichannel strategy quickly for retail industry updates . This is the need for the hour. Those distributors who choose to ignore this risk of losing company and, more importantly, clients.
Managing the Crisis
Lastly, companies should consider setting up risk-prevention mechanisms in the long term for online shopping retail industry growth . To set up an emergency mechanism that can help protect businesses, as well as people's livelihoods. Also, to reduce the inventory backlog caused by such an outbreak, organizations need to collaborate with the government, communities, financiers, and other stakeholders for retail industry updates.