Lubricating retail growth through healthy collaboration and cooperation

March 16, 2014 | By RetailME Bureau

Public-private partnership is one of the pillars of the UAE’s – and particularly Dubai’s – remarkable success in forging innovative initiatives that are a win-win proposition for all players. Harnessing technology for smart governance and e-transfo rmation, creating entertainment-cum-shopping infrastructure, devising attractive promotions and shopping events – all have contributed to the remarkable success of the country, which as one panellist puts it, defies the laws of economics.

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“The digital revolution is seeing the retail industry growing in not-so-conventional ways. The shift from an analogue to a digital environment is leading to a paradigm shift in consumer behaviour that can be a bit of a human paradox. On the one hand, the emergence of sophisticated gadgets and smart devices are making people reclusive. Yet, at the same time, they are omnipresent through social digital networks. This is making the buyer-seller relationship highly complex, with the disruptive nature of technology making the game even harder for the retail industry. Be it products and services or value perception, targeting consumersis getting more and more difficult,” observes Dr Ali M Al-Khouri, director general, Emirates Identity Authority (EID).

“Retailers are going global to capture a larger share of the $1.4 trillion e-commerce market. But to reap the benefits, businesses need to analyse changing consumer behaviour to put the correct market segmentation and strategies in place,” he adds.

Al-Khouri points

Al-Khouri points out that big data is lending support to businesses to explore new frontiers of innovation and increase productivity. But big data is also facing identity challenges, necessitating a more robust identity infrastructure in the retail industry. “Retailers will have to build a trustworthy relationship with customers who are driven by a set of emotional values. But it isn’t that easy to gain the trust of customers. Complicating the situation further is growing instances of identity fraud. People are being victimised by data breaches and the retail industry is doing little to prevent identity theft,” he elaborates.

Al-Khouri says it is in this context that governments the world-over are putting in place mechanisms to ensure a safer environment to support the retail industry. For example, the UAE government has recognised the need for a robust identity management infrastructure to support the retail industry and positively transform the overall business scenario. “We currently issue smart identity cards to both locals and expatriates residing in the country that use advanced technology to provide multifactor authentication while ensuring confidentiality and integrity. They can benefit not just the retail industry and e-commerce but e-governance initiatives as well. The technology, which provides higher level validation, verification and authentication of an individual’s identity, can be used by retail businesses to prevent fraud and put in place a seamless service delivery mechanism. We are also undertaking trials to see if the card can be used on mobile devices to streamline the authentication process,” Al Khouri explains.

According to him, this national validation gateway will make identification processes seamless, enhance service delivery and vastly improve business processes, leading to healthy bottom lines. “The benefits of e-tailing are huge. But less than 1% of retailers in the UAE are leveraging it. That’s why the EID is undertaking all measures to support and facilitate the transition to a digital retail environment,” adds Al-Khouri.

Another example of strong public- private collaboration is the shopping-cum-entertainment initiatives, especially in Dubai, to attract global tourist footfall to the country and cater to the resident population as well. One such immensely innovative concept conceived by the government to benefit the retail industry is the Dubai 24 Hours initiative started last year. This year, it ran for two days during the Eid Al Adha celebrations.

“The 24-hour shopping experience, surely a first-of-its-kind globally, turned out to be a huge success. One saw people walking around the malls in their pyjamas at midnight and even later. There was a plethora of activities – both in-mall and outside – to keep people entertained. Every emirate also ran promotional campaigns that saw consumers flocking to retail outlets day and night. Such initiatives clearly demonstrate the power of public-private collaboration,” points out Saeed Mohammad Mesam Al Falasi, director – strategic alliances division, Dubai Festivals & Retail Establishment.

“Take the example of the Dubai Shopping Festival (DSF), which has drawn 47 million tourists to the emirate since 1996, the total visitor spend being over $31.03 billion. Tourism has always been a driver of the retail sector in Dubai, a popular family destination. And we continuously work towards attracting more tourists to directly benefit the retail sector, offering shopping opportunities as well as new forms of entertainment that benefits residents as well,” he adds.

Avishesha Bhojani, group CEO, Bates PanGulf, quotes His Highness Late Sheikh Rashid bin Saeed Al Maktoum, who said if it’s good for business it’s probably good for Dubai. “That’s a testament to public-private partnership and the genesis of the DSF, probably the world’s greatest public-private partnership in the retail sector. Other initiatives followed, such as the Global Village, Dubai Summer Surprises (DSS) and the latest Dubai 24 Hours, an idea that took eight days to concretise. The government proactively innovated and branded the business model, supporting it with advertising dollars, the retailers on their part enthusiastically implementing each initiative through their participation,” asserts Bhojani.

He lists the factors behind the success of the home-grown business concepts – a government keen to enable and promote public-private sector collaboration; its wherewithal to innovate; public officials capable of speedy and efficient execution; faith of the private sector in the government; a private sector aiming for collective – not individual – benefit (for example forming the Dubai Gold and Jewellery Group), yet fiercely competitive; the ability of the public and private sectors to scale up and sustain – the Global Village being a classic example; and finally the ability to course correct. “The role of the government is to create opportunities and it’s for us to create economic value out of these opportunities,” Bhojani says.

Tom Miles, CEO – Saadiyat Cultural District retail management, Tourism Development and Investment Company (TDIC), has more to add. “People from all parts of the world travel to Dubai to savour a world-class shopping experience. It’s because we always try to innovate and do better. After every shopping festival we have a wrap-up meeting between the government and private sector representatives – including malls owners and retailers – to discuss the achievements, challenges and areas for improvement. That’s why we have a great deal of respect for a government that gives us the vision to go bigger and better,” he explains.

When asked if the UAE has enough malls, Miles counters with the thrust that the country, and especially Dubai, defies the laws of economics. “There’s been growth in population, rapid rise in tourist numbers and dramatic growth of gross leasable area for retail, which continues to rise. It doesn’t make sense but it works. Malls keep coming up. The emergence of The Dubai Mall forced the likes of Wafi and Burjuman to do some course correction, keeping in mind current market needs. But, undeniably, all of them are doing good business. Take the example of one of the oldest malls, Deira City Centre, which is doing great business even today. If we push this process of building more malls, it will only get better,” he concludes.



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