< Previous20 edge_december 2023 cover story 20 edge_december 2023 cover storyedge_december 2023 21 cover story RETAIL RENAISSANCE How embracing technology, automation, and ‘phygital’ experiences are propelling the Middle East retail industry into a new era of unprecedented growth BUSINESS By Adelle Geronimo edge_december 2023 21 cover story22 edge_december 2023 cover story T he retail industry has always mirrored the dynamic nature of the societies and economies it serves. In the Middle East, the sector is undergoing a profound evolution. The once bustling souks and traditional bazaars, emblematic of Middle Eastern commerce, now coexist with sleek, technologically advanced shopping centres and online platforms. The region, renowned for its opulent lifestyle and vibrant cultures, is experiencing a retail renaissance. Technology has played a pivotal role in shaping the retail landscape in the Middle East. Organisations are increasingly leveraging the latest innovations to captivate consumers’ interests and elevate their experiences. Modern consumers across the region now expect seamless omnichannel experiences that bridge the gap between physical and online shopping. This shift has compelled retailers to embrace new technologies that develop consumer-centric strategies driven by efficiency, personalisation, and convenience. Once dominated by traditional brick-and- mortar stores, the industry has rapidly evolved to keep pace with changing consumer habits and the rise of e-commerce across the region. In the UAE specifically, the growth of online shopping and multi-channel retail has been staggering, with the e-commerce market projected to reach $17 billion by 2025. This surge is attributed to factors such as widespread smartphone use, high internet penetration, and competitive pricing on retail platforms. In fact, a study by Cisco AppDynamics revealed that 70 percent of UAE consumers plan to do more of their holiday shopping online, using applications and digital services. “This represents a huge opportunity to attract new customers and drive revenues. But the pressure on brands to deliver seamless digital experiences is also higher than ever before,” says the report. However, for retailers, this isn’t just a push to move beyond a simple shift to online transactions. Regional players are embracing the concept of omnichannel retail experiences, seamlessly integrating physical and digital storefronts. This integration allows customers to enjoy the best of both worlds – the convenience of online shopping and the tangible, sensory experience of in-store browsing. Middle East retail evolution Traditional markets coexist with tech-driven shopping centres and online platformsedge_december 2023 23 cover story Tech-driven transformation From augmented reality to artificial intelligence, technology is redefining every step of the shopping journey-from discovery and decision- making to fulfillment and customer service. These innovations empower retailers to gain valuable insights into buyers and deliver hyper-relevant, frictionless experiences that build loyalty. Retailers are placing significant bets on the power of automation to revolutionise and optimise their operations across the entire retail spectrum. This strategic move involves harnessing advanced technologies to drive efficiency and eradicate mundane, repetitive tasks. From the intricacies of warehouse management to the seamless execution of order fulfillment and the introduction of cutting-edge features like contactless payments, automation is transforming how the retail industry operates. A McKinsey report highlights the potential of automating 52 percent of all retail activities with existing technology. The advantages are manifold, encompassing the reduction of human errors, acceleration of service delivery, improvement of service quality, heightened employee productivity, and substantial cost savings. In today’s fiercely competitive retail landscape, automation isn’t just a strategic option-it’s an indispensable requirement. Additionally, artificial intelligence (AI) has been a vital companion to the retail sector. In the Middle East, the implementation of AI is expected to generate economic benefits reaching an impressive $320 billion by 2030. Likewise, AI is projected to have a substantial influence in the UAE, with an economic potential amounting to nearly 14 percent of the country’s GDP in the same year. In line with this, retailers are pioneering AI-driven practices ahead of many other industries. For example, technology startup I.AM+ has introduced Omega, a conversational AI platform, across Majid Al Futtaim retail stores in the Middle East, beginning with Carrefour and VOX Cinemas. Utilising this platform, customers have the capability to buy cinema tickets and groceries through an AI voice assistant. This evolution has progressed significantly, incorporating diverse AI implementations and tools into various retail processes. A standout application is the recommendation engine, a popular tool that helps the industry anticipate user preferences and recommend tailored products. Machine learning algorithms analyse customer shopping histories, locations, and the purchasing behaviours of similar customers to provide personalised product recommendations. Virtual and augmented reality (VR/AR) technologies are also making waves in the retail scene. Retailers are experimenting with virtual try-on experiences, allowing customers to visualise products before making a purchase. This not only Virtual try-ons Using VR/AR tools enhances online shopping, reducing returns and reshaping customer experience Contactless stays Driven by the pandemic, this payment solution offers secure and convenient transactions have become permanent fixtures24 edge_december 2023 cover story intersection of the physical and digital realms, ushering in the ‘phygital’ era-a blend of tangible products and their digital counterparts. This fusion of tangible products with their digital counterparts isn’t just a passing fad; it’s becoming a crucial strategy for businesses to thrive in today’s retail environment, heavily influenced by data and technology. A survey by McKinsey highlights that the majority of the retail industry sees the expansion of omnichannel and digital services as both a key trend and a formidable challenge. The concept of ‘phygital’ has moved beyond theory, with global brands leveraging Web3 services to create innovative experiences that reshape how consumers interact with products. Web3 services use decentralised, cryptographically enforced addresses, providing users with unique digital identities and enabling personalised interactions. This shift gives consumers significant purchasing power, challenging brands to rethink how they earn Technologies such as augmented reality and artificial intelligence are reshaping every aspect of the shopping experience enhances the online shopping experience but also reduces the likelihood of returns, a common concern for both consumers and retailers. The Internet of Things (IoT) is another game- changer. Smart devices and connected technologies are being employed to create smart retail spaces. From intelligent inventory management systems to interactive displays, IoT is enhancing operational efficiency and providing a more immersive shopping experience. Contactless payment methods, driven by the need for hygiene during the COVID-19 pandemic, have also become a permanent fixture in the region’s retail landscape. Mobile wallets and digital payment solutions such as Apple Pay, Google Pay, and UAE-born Careem Pay offer secure and convenient ways for consumers to make transactions, further redefining the lines between online and offline shopping experiences. A glimpse into retail’s future Retail is increasingly positioning itself at the The rise of ‘phygital’ Retailers are blending physical and digital storefronts to thrive in today’s landscapeedge_december 2023 25 cover story loyalty and engagement. Well-known brands like Starbucks, Gucci, Dior, Lacoste, and Nike have embraced ‘phygital’ experiences. Starbucks uses NFTs in its loyalty program, while luxury fashion brands seamlessly blend physical and digital elements. Technologies such as near-field communication (NFC) chips play a crucial role, enhancing product discovery, addressing counterfeiting concerns, and elevating overall customer experiences. The mobile phone emerges as a key player in this ‘phygital’ transformation, serving as the gateway for users to access and engage with these hybrid experiences. Brands are increasingly exploring this avenue, especially considering the substantial portion of online spending happening through mobile retail. As technology continues to push the boundaries of what is possible, the Middle East’s retail scene is poised for further transformation. It’s clear that industry players who pivot fastest to deliver products and services that merge the physical and digital experiences will rise to the top. Empowering consumers Web3 services provide unique digital identities, giving users significant purchasing power Online retail in UAE The ubiquity of smartphones has contributed to the widespread embrace of e-commerceinterview 26 edge_december 2023 people participate and actively contribute (and build a brand community). The focus on decentralised technology, like blockchain and smart contracts, is one significant development. These technologies facilitate interactions that are transparent and ‘trustless’, fostering genuine connections between users and platforms. Daniel Pal, Founder and CEO of Chappyz, a Web3 platform that connects communities and projects together, shares insights into how leveraging decentralised technologies such as blockchain is transforming user acquisition and engagement. The rise of decentralised applications (dApps) and blockchain-based incentives has introduced new opportunities for users to be rewarded for their contributions, transforming acquisition into a community-driven endeavour, according to Pal. He further notes that opportunities lie in the creation of inclusive ecosystems where users feel a sense of ownership and are incentivised to participate actively. “Smart contracts allow for transparent reward mechanisms, enhancing user loyalty. Strategic partnerships within the Web3 ecosystem offer expanded reach and collaborative potential. The Decentralised dynamics A look into the evolution of user acquisition, engagement and retention in the Web3 era WEB3 By Arya Devi T he Web3 era has simplified the way people use apps and websites. Instead of looking only at ad impressions, digital platforms are focusing on getting users actively involved in the brand community. With this evolution, user acquisition strategies have changed completely. The decentralised and participative nature of digital environments is the key influencer in the evolution of user acquisition tactics. Conventional techniques, such as centralised advertising, have been replaced with community-driven strategies in which edge_december 2023 27 interview shift towards decentralised finance (DeFi) also opens up new avenues for user acquisition, with the integration of financial services within blockchain networks,” he explains. Role of AI and Web3 Advanced technologies such as artificial intelligence (AI) and Web3 are the key drivers revolutionising user acquisition strategies. In data analysis, AI is a superpower that helps companies better comprehend consumer behaviour, interests, and involvement. AI significantly increases the effectiveness of efforts to draw in particular consumers by leveraging this data to personalise interactions and communications. Users also have opportunities to fully participate and take ownership of their experience with decentralised technology. “When we blend AI and Web3, we’re not just making things smoother for users, we’re also keeping up with the spirit of a decentralised and participatory digital world. It’s not just about attracting users—it’s about making sure they stick around, engaged and happy for the long haul,” says Pal. Challenges Like any emerging technology, this also has certain unique challenges. The decentralised nature of the digital landscape brings about complexities in the task of monitoring and understanding how users behave across different platforms. Tracking and analysing user behaviour becomes more intricate as there isn’t an authority governing everything. Ensuring interoperability, or in simpler terms, making sure different systems can work together smoothly, is now a critical concern. In the Web3 world, where various blockchain networks coexist, it’s essential for user experiences to seamlessly flow across these different platforms. Moreover, the decentralised setup heightens the stakes when it comes to trust and security. Users need to feel confident that their information is safe and their interactions are private. Addressing these concerns requires inventive solutions that go beyond traditional security measures. Adding to the complexity is the dynamic and changing nature of the Web3 environment. “User acquisition strategies need to not only be well- planned but also agile and adaptable. It’s like navigating through a rapidly changing maze— strategies that work today might need adjustments tomorrow,” explains Pal. Key considerations When developing and putting into practice user acquisition strategies, Pal recommends that Web3 businesses give priority to a number of important factors. He points out that being involved in the community is the most important thing. Since Web3 is all about user interaction and decentralisation, tactics should centre on fostering genuine relationships inside communities. “In Web3, connecting with our community is like the heartbeat of bringing in new users, and I’ve seen firsthand how powerful it can be. It’s not just about selling a product; it’s about creating a sense of togetherness and collaboration.” This close-knit group turns into the main engine for user acquisition. Content and involved users are the greatest promoters by default, drawing in new members with their enthusiasm and ideals. This makes community participation in the Web3 world a genuine process of establishing relationships that transform people into enthusiastic supporters. Pal also suggests that it is imperative to utilise decentralised technologies like as blockchain to offer transparency and user incentives. It is important to give users a sense of ownership and to reward them for their contributions. Daniel Pal, Founder and CEO, Chappyz “When we blend AI and Web3, we’re not just making things smoother for users, we’re also keeping up with the spirit of a decentralised and participatory digital world”Immersive gastronomy Exploring Krasota in Dubai, where culinary artistry meets innovation and technology AI interview By Adelle Geronimo 28 edge_december 2023edge_december 2023 29 interview P icture a future where humans and artificial intelligence live harmoniously together, traversing Mars and the depths of space. In a cyberpunk-dominated world with perpetual neon night celebrations, imagine experiencing a time when boundaries between reality and fantasy blur. Now, envision witnessing all of this while enjoying fresh culinary masterpieces. This is just a glimpse of what awaits you at Krasota, the latest culinary sensation in Dubai from the White Rabbit Family, a global restaurant alliance. Located within The Address Downtown Hotel, Krasota offers a multisensory encounter where Russian Haute Cuisine intersects with state-of-the-art technology. This upscale dining experience, offers patrons an immersive journey featuring interactive installations, mesmerising 3D technology, AI artwork, and of course, world- class gastronomy. At the heart of this culinary revolution is Anton Nenashev, co-owner of Krasota and the visual artist orchestrating an immersive dining experience like no other. “Our goal was to create a unique statement in the industry,” says Nenashev. “Dubai, being a hub for innovation and creativity, became the perfect canvas for our culinary artistry.” According to Nenashev, the genesis of Krasota sprang from his many travels around the world. “After exploring the dynamic restaurant scenes in cities like Shanghai and Tokyo, I had a lightbulb Anton Nenashev, Co-owner and Visual Artist, KrasotaNext >