Dubai: UAE shoppers are now easily shifting between online and offline purchases for the best deals, as the price differences and discounts between the two have become non-existent in most categories.
If at all there are differences, it’s of a few percentage points. “On mobile phones, prices on platforms such as Amazon and noon continue to be more aggressive than offline, by 7-10 per cent on average,” said Sandeep Ganediwalla, Regional Partner at RedSeer Consulting.
“But then you have tablets, where the offline prices on ‘Back To School’ promotions are more aggressive than online marketplaces. Customers are becoming channel “agnostic” and brands are trying to have parity between online and showroom prices.”
We see UAE retail activity increased in past few weeks compared to the lockdown, but still not at the same levels as pre-lockdown. Part of this could be that the number of kids physically going to school will be a fraction of the total kids attending
So, for the best prices, UAE shoppers do need to look around, and not just limit themselves to one retail form or the other.
Earlier, depending on the category, online price points always had an advantage over physical stores, often by as high as 20 per cent. Now, after the crisis COVID-19 brought on the retail sector, major retail chains dependent on brick-and-mortar have finally realized those price differences cannot continue.
And it means that there are “more instances” of even the latest season products now tagged with discounts, according to Ganediwalla.
It has also led retailers to upgrade the look and feel of their online platforms. While it may not be possible to recreate all of the features that an Amazon or noon can offer, traditional retailers are giving it a good try. Going forward, it’s not just about getting their brands to sell through third-party online marketplaces – it’s about attracting enough shoppers to come directly to them.
“Surely, every retailer has embraced the online platforms that exist,” said Ashish Panjabi, Chief Operating Officer at Jacky’s Group. “If the customer is online, we need to be there as well.
“As we've seen the economy open up again and events re-start, the priority is to keep focus on planned for promotions - but at the same time have the flexibility to adapt to changing situations.”
The IPL promise
As far “changing situations” go, India’s decision to shift its domestic cricket tournament IPL – and one of the most watched sporting events in the world - to the UAE couldn’t have come at a better time for the retail sector here, or at least parts of it.
“With the IPL, we anticipate a surge in television sales,” said Panjabi. “Several smartphone launches are also due to happen in the last quarter, including the Samsung Galaxy Z Fold 2 and the new iPhone, which we can expect to be in strong demand during the seasons of Diwali and Christmas.”
For now, there’s BTS
The last two weeks have seen selective rise in retail activity… anything connected with Back To School promotions is getting shoppers’ attention. Tech gadgets are getting most of that attention, while uniform stores less so given that a sizeable number would have opted for virtual learning experiences to be on the safe side.
“We've seen a far larger surge in laptop sales than in the past because most schools are now mandating the use of laptops or tablets,” said Panjabi. “Globally, there is a supply shortage, and with this typically being the season when model changes happen, we should see some fresh supply come in soon.
When the full intensity of the pandemic was felt by the retail sector, it was felt that retailers would have no choice but start dumping whatever inventory they had into stores and online platforms to get people to shop again. Thankfully, for the industry, those heavy price slashing to clear stocks have not materialized. In fact, the inventory situation has been managed well.
“When shops re-opened, most retailers chose to try and sell them through their stores rather than dump online at whatever price they could get,” said Vijay Samyani, Chairman of Concept Brands Group. “If they had chosen to dump, it would have cleared their stocks… but at a steep cost for the entire UAE retail industry. Instead, the stock clearing was done through the one-off promotions in tandem with Dubai Festivals & Retail Establishment (DFRE).
“Those one-offs, where discounts of up to 90 per cent were offered, did their part.” (This weekend, Dubai malls and stores are having one such promotion as part of the ‘Final Sale’ campaign.)
Dubai's 90 per cent discount campaigns have helped with clearing stocks... and shoppers too have benefitted
One less worry
Panjabi agrees that the inventory situation was quickly brought under control.
“The impact of lockdowns across most parts of the world meant that most supply chains slowed down, as factory lines were either not working or with lower levels of output,” he said. “And logistics were hampered, so many goods didn't reach here on intended dates.
“Coupled with the fact that demand rose in many key categories such as laptops, tablets, televisions and home appliances, we actually had a bigger challenge in securing enough stock.”
So, as the new season starts in Dubai, the retail sector will still have multiple challenges to confront and try and overcome. Sub-sectors such as automotive will still have issues of demand to deal with, and shopper activity will be dictated by steep discounts and promotions.
For the moment, retailers have raised their game – the price gaps between online and offline is shrinking. Shoppers’ mindsets too have changed in these past months – they are no longer deciding between whether to shop at a store on hit the online.
These days, it's about where they can find the best deal…