When Dubai overtook London as the world’s most important shopping destination according to CBRE’s 2018 ‘How Global is the Business of Retail?’ report, few were surprised. The emirate had been threatening to supplant the UK capital for several years.
Today, some 62 per cent of global retailers are present across the city’s growing number of malls and shopping destinations. But while there is no doubting Dubai’s position as an international hub for retail, the retail sector itself has been the subject of heated debate, as the market evolves to meet the needs of a new, digitally-savvy generation of customers.
Today’s average consumer is more educated, less loyal, more demanding and more connected than ever before. This presents a major challenge for retailers as they attempt to engage customers in a meaningful way.
Headlines lament the death of the high-street. However, more shopping malls and physical stores continue to be built, particularly in the Middle East. What we are now witnessing is the death of mediocre retail.
So what does this mean for the future of shopping?
Developing a memorable, differentiated proposition that holds the consumer’s attention in today’s incredibly competitive marketplace is one of the most pressing challenges in retail today. What is apparent is that the best-in-class retailers are excelling on multiple fronts.
Brands such as Huda Beauty are examples of how to connect with your audience in an authentic, meaningful way. Huda Kattan created and launched a business that became an overnight success thanks to her understanding of how to harness social media and its impact on her target audience.
The team there have done a great job in sticking to its principles, retaining a laserlike focus and relentlessly cultivating the relationship it has with its customers.
We’re now also witnessing a high volume of innovation from Asia, with companies such as the South Korean marketplace Coupang combining data with a strong logistics network in a really smart way to meet customer needs offering by an individualised delivery experience. And eyewear brand Gentle Monster, also from Korea, has designed stores that truly embody the company’s spirit and ethos.
Consumers want ethical business practices and accountability from retailers. They demand a unique, memorable experience during each interaction and won’t engage unless they have a meaningful relationship with the brand. As such, we’re seeing a spike in ethical initiatives and retailers curating compelling, differentiated in-store experiences.
One thing is certain: retailers can no longer afford to go to market with a run-of-the-mill proposition. The stakes are too high, and the consequences too grave.
Gary Thatcher is CEO and co-Founder of The Retail Summit, which will be held in Dubai on February 13 and 14.