Real and virtual can mingle in retail
NATURE OF MARKET HAS MORE SHOPPERS BROWSING ONLINE AND THEN HEADING FOR STORES
Seventy per cent of UAE shoppers go online to check out product specs and prices … and then head to a brick-and-mortar store to do the actual buying. That’s the number retailers should focus on rather than obsess over the percentage of sales done purely online.
Because fact is “Online sales in the UAE still represent only 2-3 per cent of the total retail sector,” said Regis Schultz, President of Retail at Al-Futtaim. “Sure, online sales here are growing rapidly, but to me the more important number is how many customers prepare for their shopping trips by going online first.”
Latest estimates reckon that UAE consumer online sales would be about $2 billion. Now, if this is 2-3 per cent of total retail sales, there is still much to be done in the physical world.
But retailers cannot keep on adding stores wherever they can. “The market already has a lot of space — one needs to be careful opening new stores,” Schultz said.
Message for malls
It’s a message mall developers with brand new spaces to fill are hearing quite loudly these days. Any shopping destination that looks just like another one will find filling up difficult to achieve, with retailers and future shoppers alike.
“Today, the best customers are those shopping both online and offline … and they are the ones who spend more money than those who only do one or the other.
“This is a significant number, which is why online retailers in Europe and the US are opening physical stores or want to do so. There is a fusion of online and offline selling happening.”
Al-Futtaim’s retail operations are in both spaces, by operating the UAE online stores for Ikea, Toys ‘R’ Us, and Marks & Spencer, among other brands. “We are just following customers wherever they are,” said Schultz. “It’s clearly not about cannibalising sales that
happen at our physical stores, but providing more opportunities for shoppers to interact with the brands we have.”
Some of the more compelling reasons why shoppers head online — ease of use, easy on time, etc — are now being tested out in the stores. Al-Futtaim has just gone online with the scan and go option at its Toys ‘R’
Us stores, whereby shoppers can pick up what they want from the aisles, scan it with their smartphones and get the purchase done right then and there.
What this does is do away with queuing up at the tills. The same will then be rolled out at other mono-brand stores in the Al-Futtaim network.
One thing Schultz will not tinker with — now or later — is to sell all the brands in the AlFuttaim Retail under its banner. Instead, Ikea merchandise will continue to retail through its dedicated website, and the same goes for M&S and others.
“Those individual websites each offer a unique experience for the brands,” Schultz said. “Trying to sell toys along with furniture or clothes ends up spoiling it for consumers. And it will not be respecting what’s unique about each brand. Another thing we will not do is keep adding more brands to the portfolio. In some cases, having less is definitely more.”