June 24, 2024

Navigating Through The Evolving Trends in the Retail Technology Landscape

Last Updated on June 10, 2024 by newseditor

Andreas Hassellof, CEO at Ombori

The UAE retail market is projected to grow at a robust 6.2% CAGR until 2029, undergoing a dramatic transformation propelled by rapid technological advancements and evolving consumer demands. With the e-commerce market anticipated to exceed Dh48.8 billion by 2028, traditional physical retailers face immense pressure to adapt swiftly and innovate to maintain relevance in an increasingly competitive landscape.To thrive in this new era of retail, businesses must embrace technological innovations, harness the power of data, and prioritize customer experience above all else.

1. Embracing Technological Transformation:

Since 2020, there has been a 140 percent increase in monthly e-commerce shoppers in the UAE. The rise of e-commerce has fundamentally altered the way consumers shop, putting immense pressure on traditional retailers to keep pace with the changing times. As 49 percent of UAE consumers plan to increase their online shopping in 2024, retailers are expected to meet the evolving needs and expectations of today’s tech-savvy consumers. This necessitates leveraging cutting-edge technologies like artificial intelligence (AI), the Internet of Things (IoT), and data analytics to deliver personalized, seamless, and engaging shopping experiences.

Through the adoption of digital retail solutions such as Phygrid, retailers can access a suite of powerful tools and applications that enable them to streamline operations, enhance customer engagement, and stay ahead of the competition. Phygrid’s platform offers a wide range of functionality, from self-checkout and endless aisle solutions to smart fitting rooms and interactive digital signage, empowering retailers to create immersive and memorable in-store experiences.

2. Retail’s Bottom Line: Navigating Margins, Loyalty, and Operational Efficiency

In the face of ever-shrinking profit margins, retailers must prioritize operational efficiency and customer loyalty to maintain profitability. By leveraging data insights and advanced analytics, retailers can gain a deep understanding of consumer preferences and behaviors, enabling them to make informed decisions that optimize inventory management, pricing strategies, and promotional campaigns.

Moreover, by implementing store digitalization solutions, retailers can streamline workflows, reduce labor costs, and improve overall productivity. Phygrid’s self-checkout and mobile checkout apps enable customers to quickly and easily complete transactions without the need for traditional cashiers, freeing up staff to focus on higher-value tasks such as customer service and sales.

3. Tech Adoption: Overcoming Integration, Resistance, and Talent Shortages

While the benefits of technological adoption are clear, retailers often face significant challenges when it comes to integrating new systems and processes into their existing operations. Managing and unifying the large amounts of customer and product data spread across multiple channels and platforms is a significant hurdle for retailers.

 Currently, only 11% of Middle Eastern executives report having trained more than a quarter of their workforce on GenAI tools.

Additionally, resistance to change within organizations can hinder the adoption of new technologies, highlighting the need for strong change management strategies and effective communication to gain buy-in from stakeholders at all levels. Moreover, the shortage of talent and expertise in AI and GenAI has emerged as a significant challenge for executives in the Middle East. Only 6% of companies have succeeded in training more than 25% of their workforce on AI tools , while the majority have only provided training to 1% to 10% of their employees. This shortage of skilled talent underscores the importance of investing in workforce development and training programs to ensure that retailers have the expertise needed to fully leverage these powerful tools.

4. Emerging Trends: AI, Voice Commerce, Blockchain, and Beyond

As the retail landscape continues to evolve, several emerging trends are poised to reshape the industry in profound ways. AI is already revolutionizing retail by enabling predictive analytics, personalized recommendations, and automation of routine tasks. Artificial Intelligence has become the forefront of MENA’s digital transformation with many businesses already leveraging the advantages of incorporating it to enhance in-store customer experiences. For Instance, Tally is an AI-based robot incorporated by Carrefour in the Mall of the Emirates, UAE. This automated kiosk uses Artificial Intelligence to scan shelves and promptly identifies discrepancies such as misplaced, unmarked, or absent products. The robot assists in inventory checks and stock errors, thereby easing the workload for store staff.

Voice commerce, meanwhile, is another emerging game-changer, offering consumers a convenient and hands-free way to shop from the comfort of their own homes. For instance, Majid Al Futtaim retail stores in the Middle East have launched Omega, an AI-powered voice assistant to assist shoppers in stores. Blockchain technology also holds tremendous promise for the retail industry, with potential applications ranging from supply chain transparency and traceability to secure payments and customer loyalty programs. As retailers seek to unify online and offline channels and provide a seamless omnichannel experience for customers, the need for robust cybersecurity measures becomes paramount to safeguard sensitive customer data and protect against cyber threats.

5. Embracing the Future

As digital transformation becomes the forefront of retail, utilizing store digitalization platforms like Phygrid can help retailers gain access to the tools and resources needed to innovate, differentiate, and succeed in an increasingly competitive landscape.

While the journey of digital transformation is not without its challenges, retailers that proactively adapt and strategically plan for the future will be better equipped to overcome obstacles, delight customers, and thrive in the years ahead. Therefore, by embracing change, experimenting with emerging technologies, and staying ahead of evolving trends, businesses can maintain a competitive advantage in the marketplace.

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