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RLI RETAIL INSIGHT
The Future of

Retail

Retail as we knew it continues to evolve following two years of
unprecedented disruption in the industry because of Covid-19, here,
Farah Thalji, Director at Simon-Kucher & Partners Dubai takes some
time out to discuss how sustainability will soon become the biggest purchasing factor for
consumers and what this will mean for the sector.

With 86 per cent of the region’s population now connected, online of shipments or store deliveries made to individual consumers’
product information has significantly changed product awareness and residences. Tailoring the stock take of products high in customer
purchasing behaviour. Consumers worldwide continue to demand a demand - as dictated by online analysis - can consolidate the
sustainable, socially conscious, and personalised lifestyle following the number of shipments needed to both stores and consumers.
events of the pandemic. Purchasing habits, such as seeking out more Thus, reducing the number of carbon emissions from the fossil
sustainable and philanthropic brands, have become a more prevalent fuels used to power them.
consumer trend.
Consequently, retailers are being held more accountable than A potential pitfall
ever before for not meeting consumer expectations. Simon-Kucher The majority of sustainable, eco-friendly products bought
& Partners cites two areas of focus following The Retail Summit in new are an investment that often times come with a premium.
Dubai: building brand value through sustainable investments and Consumers have to decide whether they are willing and able
redesigning loyalty programs to meet consumer needs. to pay it, and Simon-Kucher and Partners’ study indicates that
Millennials and Gen Z are more likely than Gen X to do so. The
Core sustainable investments escorting the demand study also shows a willingness to pay for sustainability is highest in
The ongoing sensitivity behind global demand for sustainable Consumer goods (38 per cent).
and ethical brands is based on cultural and societal values. GenZ will be used as a long-term indicator for retailers and
Around 80 per cent of global consumers place importance manufacturers, despite their not yet growing purchasing power.
on environmental sustainability and aspire to lead more eco- Companies will aim to offer products at competitive prices in order
friendly lives, according to Simon-Kucher & Partners’ 2021 Global to meet acquisition targets. As an alternative to cutting prices,
Sustainability Study. One in four UAE citizens has made significant sustainable brands should create customer loyalty programs to
changes to their buying behaviour to make it more sustainable shore up their customer base.
in the last five years, and one in three even report a willingness
to switch to sustainable solutions when they are available. Personalisation also has a part to play
Improving the customer experience can strengthen loyalty, and
Here are the core sustainability trends to invest in: such loyalty programs geared towards personalisation have been
Opt for selling ‘pre-owned’ goods found to be the most effective. More than ever before, consumers
Consumers now have a better understanding of their options have an expectation of personalisation across touchpoints with
thanks to e-commerce. Think with Google research shows that companies, e.g., product recommendations, promotions, and
74 per cent of in-store buyers searched online first for in-store- direct communication. Personalised communications can make
related information, such as store locations or what was in stock customers feel valued (i.e. they feel valued when messages are
near them. tailored to them). This can significantly contribute to building
The luxury online fashion platform Farfetch, for instance, offers a customer relationships.
‘pre-owned’ section in its store. Start-ups like Shift Eco are taking 72 per cent of connected consumers in the UAE subscribe to
this one step further in the UAE. By pre-identifying an entire range at least one loyalty program and 40 per cent subscribe to multiple
of eco-friendly products, it serves as a curated marketplace to programs, according to our findings. It is almost a given that loyalty
ease the process of buying sustainable products. programs are offered, and UAE consumers are more likely to
spend their money on an e-commerce platform that personalises
Reduce the amount of paper and packaging offers and discounts and continuously engages them. These
Retailers can make the post-purchase part of the transaction more services will undoubtedly become a fundamental way to drive
sustainable. The less single-use packaging in circulation, the less energy both awareness as well as conversion.
is consumed to handle and process packaging waste. Using less paper GCC consumers are willing to go the eco-friendly route.
and packaging for shipments and returns contributes significantly to However, there is still work to do to provide sufficient options
both cost-efficiency and greening operations. at affordable prices. While retailers have managed to make
shopping safe and convenient throughout the pandemic, it’s
Consolidate shipment numbers now time to iterate on those processes and keep up with
The same Think with Google research also shows 70 per cent customer demands.
of shoppers said the ability to buy a product from a physical store By developing a value model that aligns with the changing demand
was important to them. If indeed using online search to check for in the region while incorporating loyalty programs, companies will
stock at their local stores, this can significantly reduce the number ensure their customers are well taken care of along the way.

34 RETAIL & LEISURE INTERNATIONAL APRIL 2022