Which GCC city is defying the retail apocalypse?
Europe is known to be a top, perhaps leading, global retail destination, no questions asked.
Until Dubai came along and started proving otherwise.
Dubai placed No.1 on an international scale with 62% of the world’s retailers found in the city, according to a 2018 report entitled “How global is the business of retail?” published recently by CBRE, a prominent research company that provides market insights.
Who is in line to unseat Dubai?
A new retail leader
Through the comprehensive analysis of 47 countries and 123 global cities, CBRE report came out with the following rankings for the cities with the highest % of retailers:
The report said “Retailers are, and will always be, attracted to tried and tested locations; locations which offer a global audience, strong foot traffic, and an affluent local and tourist population. New and existing brands will continue seeking out these global cities for strategic expansion.”
For a retail monarch, this wasn’t enough, as Dubai also ranked 2nd on new entrants in the retail field.
Besides topping the list of the highest percentage of retail, Dubai registered 59 new retail entrants in 2017, which placed it 2nd on the list, after Hong Kong.
Here’s the complete list:
But with the emerging e-commerce and digital technology, isn’t retail dead?
Apocalypse, not now
Statista, a leading provider of market and consumer data, talked about some kind of “Retail Apocalypse” happening because of the e-commerce.
Statista shows that e-commerce sales reached $2.3 trillion in 2017, a 23.2% increase over the previous year.
Statista mentions a huge incline for in-store sales.
In fact, almost half of the brick-and-mortar businesses are expected to close by 2020 if they don’t improve their e-commerce game.
But retail is surviving
The CBRE report mentioned that retail remains one of the most exciting and dynamic areas in real estate today.
Retail continues to grow but at a slower pace; after analyzing 334 global retailers CBRE professionals found that expansion activity increased only marginally by 0.4% in 2017 compared to 2016.
The slow increase, in a large part, can be attributed to economic shifts and new technologies, resulting in caution amongst retailer to not over-expand, the report explained.
As technology continues to disrupt traditional models, retailers are becoming savvier in their strategic approach to growing their brands and with it their footprints, the report added.
In order to survive, retailers are prioritizing omnichannel strategies, in an attempt to provide the customer with a seamless shopping experience whether the customer is shopping online or in a bricks-and-mortar store.
The coffee’s smell will sell
The Coffee and Restaurant category was a key driver of global retail expansion in 2017, accounting for 25% of overall activity, up from 16% in 2016, according to CBRE report.
This has been driven by the evolution of consumer shopping habits that are increasingly blurring the lines between retail and leisure.
Food and beverage retailers are taking advantage of this shift, positioning themselves as destination-worthy venues in the overall retail landscape, CBRE explained.