How to build a competitive retail brand in Dubai and the UAE
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Bypassing Dubai is difficult when we mention the United Arab Emirates (UAE). And as customers and tourists, Dubai reflects in our minds majestic shopping malls, luxury cars plying on broad and shiny roads, evening glitter of the city lights, and storefronts of big brands lined up on both the sides of the market streets and an uber and cosmopolitan aura. We would not be wrong because Dubai is regarded as one of the finest shopping and tourist destinations in the world.
What keeps fuelling the appetite of the retail industry of the UAE, and especially Dubai, is a growing customer base, an unflinching cosmopolitan nature of the city, a pro-business environment, free trade zones, and an impressive per capita income. That was brick and mortar. On the eCommerce front, Dubai is poised to do even better. Thanks to the unparalleled internet and Smartphone penetration in the country and a high proportion of online shoppers among the populace. The UAE’s eCommerce industry is the best performing in the region.
But the moment we start thinking as businessmen and entrepreneurs, we begin to realize the tough challenges ahead. This question should also ring loud when someone contemplates starting a retail business in Dubai and the UAE. Let us quickly go through the significance of building a competitive retail brand in the country. And if it is applicable anywhere in the UAE, it is most applicable in Dubai.
Competing in a high-income region
No matter what retail vertical you touch, intense competition is extremely likely to be already there. For instance, in fashion retail, you get to face brands like Gucci and Chanel. In FMCG and grocery, there is Carrefour, Lulu Hypermarket, and others. In certain verticals, you may not be competing for head-on with the big brands. But you must bear in mind that we are talking about a region with a high per capita income. Customers are likely to choose quality and luxury over freebies and economy. There is no room for ordinary retailing in Dubai and the UAE.
Competing against eCommerce retailers
Despite the dominance of traditional retailing (hardly traditional in Dubai), brick and mortar retailers cannot afford to turn their heads away from eCommerce. The online shopping trend is on the rise in the country and to stay aligned with the market realities, physical retailers need to adapt their businesses accordingly. By adopting a suitable Omnichannel strategy, brick and mortar stores can tap on the growing prowess of eCommerce and make their brands more competitive.
Delivering superior customer experience
We reiterate here that there is no room for ordinary retailing in Dubai and the UAE. One of the reasons we say so because of the high customer expectations from retail and eCommerce brands. High-income levels, high literacy rates, uber lifestyle among the majority of people, presence of global brands already delivering superior services, etc. makes it mission-critical for both online and offline retailers to comprehend consumer behaviour and set out a robust platform for delivering a superior customer experience.
Talent acquisition and retention
A strong brand not only helps in customer acquisition but also in attracting and retaining talented and productive employees. Your team or workforce runs your business internally. They also talk to your customers and deal with them. And employees prefer to work for and stick to companies and businesses that have a strong reputation in the market. For some, it is a matter of pride. For some, it is about learning and growth in their career by working in a professional working environment.
Work with better vendors and service providers
Even if you are a new player in the market and your marketing and advertising efforts are good, your brand is going to get noticed not only by potential customers but also by vendors and service providers who look forward to working with brands that are recognized as competitive and professional. This is when the market begins to perceive your business’s potential to become one of the successful retail brands in Dubai and the UAE.
How to go about it
In general also, as retail and eCommerce consultants for Dubai and the UAE, we often encounter questions on how to start a retail business in Dubai and the UAE or how to build a successful retail brand in Dubai and the UAE. There is no easy answer to this but a proven, curated, systematic, and insightful approach helps. We have highlighted four important actions below.
Research properly
A good market research is critical to gauge the waters you are taking your business into and also draw actionable insights from it. Despite having a strong business idea, it may just fail to make a place for itself in the target market. Competition could be too intense. The market size may just not be enough for too many players. The distribution/delivery channel you chose may not be popular with the target segment. A market research should be able to help you read the market on various grounds and also assist you to make more effective, informed business decisions.
Develop a strong business model
Whether it is brick and mortar or eCommerce, finding the right niche and UVP is essential for a retail business to remain floated and sustainable in Dubai and the UAE. That very much constitutes a part of your business modelling stage where you will also have to map how you are going to create that UVP to build that niche position in the market and deliver the intended offering to your target market. Apart from strong business acumen and knowledge and understanding of consumer behaviour in the country, you will also need a comprehensive market research report.
Sort out finances
From capital investments that you expect to write off in 5 or 10 years to operational costs and profitability, you must have all the necessary financial forecasts on your desk before you spark the engine and hit the road. Although these would be only forecasts and projections later they can serve as inputs or a roadmap for your further financial planning and decision-making. A systematic and pragmatic approach for arriving at these assessments is critical while avoiding any emotional drag on either side.
Lay down the operational framework
Your business relies on how you run or operate it in the levels of execution. In an unplanned working environment, your business is dependent on vague ways of working. In a planned, defined working system, your business operations are more likely to achieve the targeted output and the chances of mistakes and deviations drastically go down. And the answer to master at mapping business operations is SOPs (Standard Operating Procedures) that can help your retail and eCommerce enterprise become process-driven, serving as an operational roadmap to employees, simplifying supervision, and achieving consistency and customer delight.
We say this again that there is no room for ordinary retailing in Dubai and the UAE. Customers have high expectations. Retail presence is fiercely competitive. So, not only a competitively value-based offering will be required but also an affirmative roadmap to deliver the same.