Dubai: UAE shoppers are back at the stores – in the final two weeks of 2020, they are making their presence felt. Malls have recorded increased footfalls, stores are scoring with their offers, and shoppers are in the mood to spend.
They are spending on categories that had been relatively weak through the previous 11 months. Clothes, shoes and accessories have zoomed to the top of the charts in buyer picks this month after enduring wretched sales following the outbreak of the pandemic.
Electronic goods remain a consistent bestseller, with every household finding there is no option other than to invest in the latest laptop or tablet. Preferably, more than one while they are at it, as the tech gadgets category recorded its best year ever.
Retail therapy is having an effect. Abu Dhabi’s two-month long retail promotional blitz, which launched December 10, is turning out to be an instant hit, with discounts of up to 80 per cent lined up. This is Abu Dhabi’s first attempt at a sustained winter promotion across all its retail stores and malls. Likewise, in Dubai, the DSF 2021 started early and getting some encouraging numbers.
“Retailers are reporting levels of 70 per cent of what it was last year – that’s good in a year when everything was upended by COVID-19,” said the head of a leading retail group. “Now, 70% is the New Normal.”
At a subconscious level, COVID-19 is still shaping shoppers’ decisions. Many in the retail trade are talking about how there has been a sharp rise in visitor traffic and sales after the UAE confirmed vaccines had arrived.
Getting the hang of it
Retailers too were getting smarter at the game. Rather than let online shopping sites dictate discounts and offers, UAE’s brick-and-mortar retailers are now matching… and even bettering those.
“Many brands now use a more consistent and focusing on their own online sales so as to better manage the offers and pricing,” said the head of a leading value-for-money apparel brand. “What this means is the price difference between online and offline is no longer there.”
Apple as bellwether
If any single product/brand is being used to gauge consumer demand, then it has to be the iPhone 12. Before its launch in the UAE, there were many who felt that COVID-19 created circumstances would conspire against it. And not just iPhone 12, but all the latest versions of high-end smartphones.
That’s not how it is turning out to be – “We checked iPhone 12 Pro 128GB silver that costs Dh4,200 - there are two options if you want to buy from the online Apple store,” said Sandeep Ganediwalla, regional Partner at RedSeer Consulting. “You can book and get it in 2-3 weeks delivered to your home or every day at 6am, there are a few phones available that you can order and pick up from Apple’s store.
“And if you go online at 6:15, the daily stocks are generally gone – it’s crazy.”
Now, many will say that one brand or product does not set the trend for an entire retail season. But as an indication that there are more people out there willing to spend, the iPhone does offer an insight.
Retail industry sources say that more residents are by now fairly secure about their job status heading into the next year. Private sector job losses have been dropping since October, and if this trend continues, it should show up in more demand for shopping, be it on essentials or a bit of self-indulgence.
More residents seem to have decided that travelling or an overseas vacation is not on their immediate agenda, and that too is showing up in increased retail spending, market source say.
48 %That's the percentage of UAE shoppers looking for more offers and deals than before, according to Al-Futtaim Malls
All in the discounts
With less difference between online offers and what you can get at the stores, shoppers are going by what’s convenient to them. Plus, “Online channels are not always cheaper than offline because of additional discounts by stores to drive footfall,” said Ganediwalla. “In general, product prices are more driven by demand supply drivers rather than the channel of sales - especially for mature product categories.”
Vote of confidence
Play it well, and UAE’s brick-and-mortar destinations carry quite the punch. Sure, there’s diversion of sales to online, but more retail groups are getting the hang of mixing those experiences.
The Al-Futtaim Group certainly believes so, having just announced plans to create a luxury-focussed ‘outlet’ concept at Dubai Festival City. Set for launch in the first quarter of 2022, it will cover more than 10,000 square metres. Clearly, UAE’s brick-and-mortar retail is in fast-track evolution mode.
Shoppers will keep coming for the right mix of pricing and experience…