The private and public sectors in the UAE have once again collaborated effectively, with an aim of reigniting retail in Dubai, with the on-going Dubai Summer Surprises (DSS) 2020. This is the first big festival in the UAE after the COVID-19-related great lockdown. As such, DSS 2020 has pulled all the stops – including the launch of digital raffle draws promoting contactless – to reinvigorate retail, a sector that contributes significantly to the country’s GDP.
The UAE retail market is expected to show signs of resilience despite challenges, and is set to grow by 0.4% in 2020, as estimated by GlobalData. Even as COVID-19 might have wiped AED13.5 billion off the original 2020 forecast growth of 5.8% in the UAE, the market is expected to perform better compared to its MENA neighbours.
DSS is different this year, admits Ahmed Al Khaja, CEO, Dubai Festivals & Retail Establishment (DFRE), “It is more about bringing life back to the city, despite the challenges. DSS goes much beyond retail promotions this year; it is more about activating the city, the shopping malls, the retail stores and encouraging people to gradually regain normalcy.”
Importantly, the UAE, and particularly Dubai, has invested heavily in ‘smart’ strategies and digital economy, which are further catalysing the revival process.
“We are seeing a new kind of living, shopping and distancing,” adds Tawhid Abdullah, chairman of Dubai Gold and Jewellery Group (DGJG). “Amid this new normal, the private-public partnerships have played a key role in reviving businesses post-lockdown, which is very comforting. We have already seen a steady rise in business transactions since reopening. The months of June and July have been positive, almost comparable to the same period in 2019 – taking into account domestic purchases. Once the tourists are back, sales numbers will improve further.”
At a time, when gold price has touched $1,935 per ounce today (July 27), Abdullah still feels the yellow metal is a “safe” investment. Gold continues to be the “superhero” in the commodities market. “DSS has added further fillip to gold and jewellery sales, which has increased from 60% to 80-85%. This is despite the gold price being at an all-time high. People are investing in the yellow metal – gold bars over jewellery for now – owing to the low interest rate, coupled with the chance of winning additional prizes. Moreover, consumers are keener to buy gold here, as it is 10% cheaper compared to other parts of the world.”
Abdullah feels that there could be a 12-13% correction in gold prices in the coming few weeks. At the same time, he also thinks that the price of the yellow metal may surpass $2,000 in the coming months.
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“Over 35 brands with more than 120 stores are participating in the ‘City of Gold Jewellery Surprises’ during DSS 2020. More activations will happen during the Eid Al Adha holidays,” shares Laila Suhail, board member & chairperson – marketing for DGJG and CEO – strategic alliance and partnerships sector, DCTCM and Entities. “While planning the Retail Calendar, we are fully aligned with DGJG to make the promotions and prizes highly attractive for shoppers. This year specifically, we have carefully considered the terms of promotions and offers for participating jewellery retailers, as they have suffered over the past few months due to temporary store closures.”
Owing to the challenging climate, two major UAE-based jewellery retailers have undertaken corrective approach towards future expansion, while also shuttering non-performing stores. But Abdullah feels this isn’t indicative of negative sentiments. “There has been no shut down, as such, beyond the due course of every year.”
Shopping of gold and jewellery still predominately happens at brick-and-mortar. Of course, some jewellery retailers have ramped up online presence. However, it has been seen that consumers might browse online but prefer to buy gold and jewellery in the store. Going forward, while some experiences – like raffle draws – will be digitised, the experience of buying jewellery at brick-and-mortar is hard to replace, Suhail states.
Since businesses have reopened, jewellery retailers as well as DGJG are undertaking all mandatory measures at the brick-and-mortar stores so that consumers are assured of safety.
“Beyond DSS, we have several other activations lined up for the rest of the year – Back to School, Dubai Home Festival, Dubai Fitness Challenge and more. All these initiatives will go a long way in reigniting retail in Dubai and the UAE,” Al Khaja concludes.