Retailers ready for Black, White, and Yellow Fridays

Dubai: Which “colour” would you prefer in the next few days?

Online shoppers in the UAE and Gulf will have as many shades as merchandise to choose from competing end-of-November mega-promotions by Amazon, noon, Namshi and others.

There’s Amazon with White Friday, noon’s in yellow, and fashion portal Namshi is sticking with black.

And despite the "Friday" reference, the promotions actually last one full week!

If shoppers in the UAE and Saudi Arabia get enthusiastic about the deals, this month’s online sales could generate between $360 million to $380 million in Gross Merchandise Value (GMV), according to RedSeer Consulting.

That compares with the $230 million to $250 million last year’s November campaigns generated from the two markets.

Gross Merchandise Value is the key measurement used in the online shopping business, which is the total value of merchandise sold over a given period of time through a site.)

If the forecasts prove right, it does seem local shoppers are ready to have some fun after spending less on non-essentials through the better part of this year.

The discounts on offer in the next seven days should help them decide. The latest gadgets such as the iPhone 11 listed at 8-13 per cent off street price.

On slightly older models, this year’s discounts go up to an impressive 25-30 per cent, according to RedSeer.

Up to 70 per cent off

Amazon and noon could take in around 70 per cent of overall sales during the upcoming promotions.

This is where discounts matter, because buyer decisions are made — or unmade — by those few percentage points.

“We’ve got discounts that reach up to 70 per cent on some consumer goods; on electronics a little less,” said Ronaldo Mouchawar, Vice-President at Amazon Mena. “Many of the brands and partners value our White Friday as a way to get exposure to their items and sales.

“This year, we’ve got Visa offering a 10 per cent cashback, and 15 per cent when payment is made with a Visa card from Emirates NBD or Emirates Islamic Bank.”

Mouchawar declined to say whether online sales in the UAE faced as much of a drop as brick-and-mortar did in the year-to-date. Industry sources estimate the decline in the physical retail could be over 20 per cent year-on-year.

“In May, we switched from Souq to Amazon.ae and in June, launched our Prime programme and we have had good engagement because of that,” the VP added.

“For White Friday, Prime members get early access and free shipping. And we keep having many of the big offline retailers/distributors selling via Amazon in the UAE — this way, we store goods on behalf of these partners in our warehouses and thus ensure speedy delivery.”

Get back those shoppers

Shopping portal sources in the UAE say that everything hinges on what happens in the next seven days. If shoppers are still hesitant despite the offers and discounts, it would mean the gloom in the retail sector is not going away any time soon. But if the numbers come anywhere near the $360 million plus RedSeer is forecasting, it would give the sector some much needed breathing space.

And not just for online retailers.

“In addition to joining online promotions, brick-and-mortar retailers are working on creating their own sales events and providing omnichannel experience online players cannot provide,” said Sandeep Ganediwalla, Managing Partner at RedSeer.

“Keep in mind, online retail is still only a single-digit contribution to the overall UAE retail sector. The majority of sales still happens at brick-and-mortar outlets.”

When in the mood, UAE shoppers tend to splurge; an average transaction could be in the region of $756 (Dh3,077), according to Simon-Kucher & Partners, a consultancy.

“This is almost three times more than the budget that consumers in other countries allocate for the main shopping event,” it added.

|For example, in Turkey, the average planned budget is $294 (Dh1,197), slightly higher than the budget of $253 (Dh1,030) in the US.”

Awareness

Interestingly, the Simon-Kucher findings suggest online retailers could do more to raise awareness about their (add-a-colour) Friday promotions in November.

“In the UAE, only 36 per cent of respondents have heard about White Friday,” it said.

“This is far less than the 99 per cent of those who are familiar with the Dubai Shopping Festival. (And) only 45 per cent of respondents showed an interest in buying during White Friday.”

That’s surprising, given how the various upcoming Friday and weeklong promotions have been plastered all over the city, the air waves and in the digital world.

A consumer will not be able to make a turn or switch onto a social media platform without coming across the white, yellow or black promotions.

‘Need to be there’

There’s no denying that brands big and small all want to be there for the November high jinks.

But it’s not as easy for a brand that is still building its way into consumer attention and sales numbers.

“Whether it’s Amazon or noon, there are so many boxes to tick to be listed,” said Anita Guliakina, founder of a eponymous swimwear brand.

“A new business will have to provide the TRN (Tax Registration Number) and show poof that it has or can generate a certain level of sales.

“Even then, the portals can charge a hefty share of future sales done through them — for a small business, that can be too high.

“But new brands need to be on these portals and especially during the White/Yellow Friday campaigns. It’s one way to get discovered.”

The coming week will decide whether UAE shoppers are back in the business of brand discovery in a big way.