By Alicia Buller
The UAE’s plethora of glitzy malls have proved to be a huge draw for its millions of annual tourists who are seeking luxury bargains. However, in the coming years, with the rapid advance of augmented reality (AR), virtual reality (VR) and artificial intelligence (AI) technologies, the country’s immersive retail experience is set to become even richer.
A favourable demography, high per capita income and an active tourism industry are all factors that have helped to cement the UAE’s status as a global shopping hotspot. According to research firm Euromonitor, non-food retail sales are anticipated to grow at an annualised rate of 5.3 per cent between 2016 and 2021 in the UAE and the wider GCC, driven by a growing contingent of youngsters and expats, who are propelling demand for innovative, trend-driven consumer products.
Rabia Yasmeen, a research analyst at Euromonitor International, says that retailers are keen to keep up with the young and trend-driven market by providing entertaining ways to shop involving the use of AR and VR.
Yasmeen tells GMR, “Artificial intelligence and virtual reality experiences have already emerged in to the malls in the UAE. Due to smart city government initiatives and its growing tourist turnover, the UAE has become the region’s representative for leading artificial intelligence take-up.”
In line with soaring virtual reality usage growth rates globally, research firm IDC reports that annual spend on augmented reality and virtual reality in the Middle East and Africa is set to top $6 billion annually by 2020. Yasmeen notes that customers in the UAE are particularly receptive to AR and VR and have reported a “very positive response to various VR products, such as Samsung Gear and Zeiss VR”
M R Raghu, head of research at Markaz in Kuwait, says that many GCC organisations are strategically planning to get ahead of the curve by investing in the virtual reality space. “VR has many potential uses across various sectors, beyond mere gaming. AR/VR could be used to deliver “on-the-go information” on daily purchases, discounts and coupons, for example, thereby offering a more refined retail experience,” he says.
Yasmeen says that UAE mall developers in particular are “keen to invest in AR and VR experiences and technologies to enhance footfall in the malls”.
As Wes Schwalje, COO of research firm Tahseen Consulting notes, “The GCC is already seeing some larger companies pioneer the use of VR and AI.”
A notable example is Dubai-headquartered Mashreq Bank, which announced this year it will reduce its headcount by 10 per cent due to its investment in AI. Rival local bank Emirates NBD followed by introducing an artificial intelligence humanoid robot to greet and understand customer needs at select branches. Recent months have also seen Jordan-born logistics firm Aramex launch an AI-enabled bilingual chatbot on Facebook Messenger and Dubai Electricity and Water Authority become the first government entity to launch an online bilingual chatbot. .
Schwalje says, “The GCC retail customer experience is ready for disruption and as one of the premier shopping destinations in the world, GCC retailers and consumers will likely play a key role in defining the retail store of the future.”
Schwalje says, in the near-term, GCC retailers will begin to implement AI solutions to help segment customers, enhance online shopping experiences, and facilitate customer purchases.
The COO expects to see more GCC retailers using VR in virtual showrooms, which enable customers to experience retailers’ offerings without actually visiting stores.
Schwalje explains, “AI and VR enable retailers to use the shopping experience itself to facilitate purchasing decisions, derive insights to provide personalised shopping experiences, and implement social commerce strategies. In the near future, we will witness GCC retailers beginning to make their mark on global retail by transitioning from innovation acquirers to innovation originators.”
Ashish Panjabi, COO at UAE-headquartered consumer electronics chain, Jacky’s Retail, tells GMR that he expects to see more movement in the AR space initially. He explains, “VR generally means having to wear glasses, whereas most AR technologies work straight off your smartphones.” The COO says he has already personally downloaded a local furniture store app that allows him to see how a piece of furniture would look in a room of his choice. “I’m sure many more creative applications will emerge going forward,” he predicts.
Panjabi adds, “As far as AI goes, a lot of innovation will probably come from loyalty schemes that retailers run or online through e-commerce stores. This is because – for AI to work – there needs to be enough data about the consumer. Monitoring patterns within a retailer store and obtaining rich data usually comes off a loyalty card, credit card or an e-commerce platform.”
Euromonitor International’s Yasmeen agrees that the UAE, in particular, is set to see more players in the services sector integrating VR experiences in areas such as product demonstration and customer engagement. “Considering the growth of online retailing in the country and wider region, emerging VR and AI provides mall operators and retailers in the country with an avenue to develop greater customer engagement, generate footfall and increase the average time spent in store, which increases the chance of sales for the retailers.”
Karim Philippe Saad, who is the founder of UAE-based VR start-up Gigaworks, says that VR and AR will transform the UAE’s shopping landscape in the very near future. “It will all happen sooner than anyone thinks,” he says. “We are currently working with one of the local malls on a special project. We offer tailor-made solutions specifically for malls and shoppers. AI and VR are set to change the way we look at malls, and in a very positive way. Sales will hit the roof and it will never be the same again.”
He adds,” We are heading into a fast-paced living mode, where people won’t have the time to go to a mall and try clothes on. Instead, they will rely on AI, VR, and AR to try and buy. At some point, consumers will stop going to malls and will just shop from home or the office.”
The article appeared in the November 2017 issue of Gulf Marketing Review.