Ayad Nahas, Communications Strategist, shares his take on the new shopping trends and what this means to the retail sector.
Digital payments have become the new normal in the world of retail. Economies globally and in the Middle East have adapted to this trend, which has completely altered the way people shop. Retailers in the GCC and Levant regions are rethinking their strategies in light of this drastic shift in shopping habits, and many retail executives believe that the lion’s share in retail will be conducted online, going forward.
The fact that people in the Middle East, especially in the UAE and Saudi Arabia, are among the most connected and digitally savvy in the world had a substantial role in the drastic shift to digital economies. Leading senior retail executives from within the Middle East believe that, with 70% internet penetration in the region, the world of e-commerce is set to experience exponential growth in the next five years.
It is important to remember that one of the main factors that helped in this e-commerce surge is the rapid growth of the younger sector of the population in the region. The MENA region is home to the largest number of young people in the world, with more than half of the population under the age of 25 according to a recent study by the UNDP.
In the GCC, mass internet adoption has resulted from a combination of digital infrastructure and eager consumer adoption of technology-driven solutions, such as social media and extensive use of smartphones by peoples in respective countries. Shopping from a smartphone is set to increase by more than 50% in 2021 in the Middle East according to multiple sources in the retail industry.
It is clear that consumers who were previously resistant to using mobile payment channels discovered that purchasing goods and services on their smartphones was not only easy but convenient too.
It is expected that the e-commerce as a whole will grow by 600% in 2021, according to Kearny Middle East, a leading consultancy firm. Globally, retail sales are projected to reach $25.04 trillion in 2021 and $26.7 trillion in 2022, according to Statista, an online tracker of global economy and retail sector.
Retailers seeing the biggest jumps in demand during the COVID-19 crisis include grocers, household stores, and pharmacies, reflecting the fact that people are spending more time at home and are focusing on staying healthy. The imperative for companies now is to future-proof their business models by boosting online capabilities.
The coming years will witness the expansion of voice-activated payments, biometric payments, cryptocurrencies, and transaction by facial recognition. Many countries in the GCC are eager to adopt and roll out these digital technologies, which will be regarded as a game-changers for the world of retail.
As the world goes through this drastic shift in shopping trends, it remains to be seen how global retail is going to look like in the future. What is clear is that we are witnessing history and there are extremely exciting times ahead.
