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Concept retailers enjoy significant gains in GCC

ACNielsen report finds strong consumer demand for ‘shoppertainment’ facilities in the Middle East.

In a major boost for Saudi Arabian and UAE-based consumer electronics retailers committed to diversifying their product offerings and introducing new retail concepts, a new study conducted by ACNielsen has found consumers in both countries are increasingly demanding both factors in their shopping experience.

The report also pointed to the growing importance of the concept refered to as ‘Shoppertainment’, which ACNielsen claimed is one of the key factors driving modern trade and has played a tremendous role in the transformation of the retail industry.

ACNielsen found that modern trade contributes to 45% of all fast moving consumer goods (FMCG) sales – including consumer electronics – across the GCC.

The UAE’s contribution to this figure is currently at an all-time high of 53%, while KSA accounts for 33%, due to a comparatively geographically diffused population base.

ACNielsen predicted that this figure will increase to more than 50% by 2010. Hubert Lobo, retailer services manager for ACNielsen, MENAP region, claimed that increased competition in the retail sector would force further consolidation as smaller players were swept aside.

“To win the battle for loyal shoppers, retailers must market their banners and brands in addition to efficiently managing their processes,” he said.

“Turning a store into a respected and trusted brand with attractive and established values is vital to stay ahead of the competition.”

Piyush Mathur, managing director of ACNielsen, MENAP region, claimed that with the continuing trend towards retail concentration and the emergence of marketing-savvy consumers, there had “never been so much competition for retail dollars”.

He further explained that with almost six months of summer in the UAE, residents were visiting shopping malls on average once every four days, seeking entertainment and shopping activities. Hence the term ‘shoppertainment’.

“Manufacturers need to have a better understanding of who they should be targeting in their stores and the decision-making dynamics therein.

"Whilst females remain the main consumer demographic in the UAE, their role in KSA is that of an influencer when it comes to purchasing decisions.

"With today’s busy lifestyle, shoppers tend to be on auto-pilot, essentially working on the sub-conscious rules they have formed both when it comes to selection of the retail outlet in addition to brand purchasing decisions,” added Mathur.

ACNielsen found that in the UAE, store equity in the retail market is driven by two broad factors - familiarity with the stores, and functional aspects such as accessibility and assortment. Another key finding is that whilst promotions are important, shoppers tend to seek promotions in their regular store rather than across stores.

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