October 17, 2019

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UAE retail opportunities remain

by Stuart Wilson, Monday 30 March 2009

Research firm Datamonitor reckons that there are still huge opportunities for UAE retailers despite the current downturn, but only if they are prepared to implement best practice policies within their business. Datamonitor is advising retailers to focus on the whole retail experience and improve customer service levels to make it through the current market conditions.

Through in-depth interviews with industry leaders and direct consumer research, Datamonitor claims to have identified a number of industry best practice recommendations which retailers and manufacturers can implement to survive, and even take advantage of the current downturn.

Richard Adams, Datamonitor MENA’s consumer consulting analyst, stated: “Stressing a product’s value proposition - as opposed to cheapness - maintaining marketing budgets, better targeted product ranges, improving customer service levels and reinforcing the quality of products are all vital to building quality and maintaining margins.”

Datamonitor reckons that considerable opportunities exist for firms that focus on the whole retail experience. As consumers more jealously guard their wallets, the average number of retail experiences per week will fall, according to the research firm. This means each retail experience will have to be more impactful, and more fulfilling.

Retailers and product manufacturers that can build compelling experiences and value propositions can grow their market share significantly, which will hold them in good stead for the eventual economic recovery.

Imran Ahmed, Datamonitor MENA head of strategy and consulting, said: “For many years, manufacturers and retailers here have thought ’if I build it, they will come’. They boast year-on-year increases in sales, thinking this means they have got their strategy right. Well, now they’re realising that growth was easily explained by underlying demographic and economic growth.”

”They had no real insight, and they had built lazy, unsatisfactory experiences for consumers. Those forward-looking firms that put the consumer at the heart of their strategy will survive. The number of firms coming to Datamonitor and asking us to help them understand their customer psychographics and to help them optimise product development has never been higher,” he added.

Adams continued: “While the UAE economy is fundamentally robust, retail spend levels will fall in the household products, electronics goods, and ’aspirational’ luxury retail categories as rising unemployment, declining population levels, rising savings ratios and falling consumer confidence levels crimp sales.”

Datamonitor reckons that proactive retailers and manufactures can grow market share and improve market positioning during the present downturn. Adams explained: “Through a combination of increased advertising, strategic physical expansion and price leadership, retailers can emerge from the downturn as market leaders.”

”Moreover, if they follow Datamonitor’s recommendations and use the downturn to cut costs, they will outmanoeuvre rivals and emerge from the downturn as stronger, leaner, and more efficient entities,” he concluded.

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