The future of brick-and-mortar is still bright for retailers who create a seamless integration between in-store and online experiences, supported by streamlined digital platforms and analytics, according to trends revealed during a webinar by Visa, the world’s leader in digital payments.
The Future Retail Experience webinar shared Visa's top data and insights to support the retail sector as the novel coronavirus pandemic continues to impact businesses across the globe.
According to Visa's data and insights covering six months of the outbreak across the UAE and Saudi Arabia, even with eCommerce witnessing higher growth, brick-and-mortar stores still account for the majority of retail volumes – demonstrating the staying power of physical retail in the region.
Brick-and-mortar retail outlets held the majority of retail volumes in Saudi Arabia and UAE. However, in terms of growth, eCommerce in both markets recorded higher growth during the outbreak while face-to-face transactions saw comparatively low growth or decline when compared to same non-pandemic period last year.
As the health crisis continues, early adopters of contactless payments, smart shopping and omni-channel solutions are seeing positive traction, especially for essentials like food and grocery.
Visa's insights show that cash-only retailers have been most negatively impacted while merchants who moved online and adopted contactless payment systems have been able to better weather the economic adversity. Contactless payments usage in UAE and KSA, for example, grew by approximately 10% in Q2 2020 compared to Q1 2020, signalling the increasing preference for touchless commerce. Discount stores, home improvement and supply, and pharmacies were among the non-food physical retail categories that saw the highest growth in sales.
Akshay Chopra, Vice President, Innovation and Design, Central and Eastern Europe, Middle East and Africa (CEMEA) at Visa, said: “The future for brick-and-mortar retail is not the apocalypse it is being painted to be. As a company that enables digital payments at more than 61 million merchant locations around the world, our data shows that although eCommerce is now drawing a larger share of the pie, physical stores have continued to see their sales grow. But the virus has drastically altered the way people shop and providing customers with an omni-channel experience is now more critical than ever. So, the battle isn't between online and brick and mortar but rather about who will build convergence between digital and physical retail to create the perfect customer journey. This presents huge opportunity for innovation in future retail experiences especially with technologies like Artificial intelligence (AI), robotics, gamification, augmented and virtual reality (AR/VR) and the internet of things (IoT), as well as a wide range of secure contactless payment options.”
He added: “However, we recognize that bringing about seamless omni-channel experiences can be a tall order for smaller merchants. But small and micro businesses are key players in the world economy, especially in emerging markets, which is why Visa has launched a ‘Small Business Hub’ as part of our “Where You Shop Matters” campaign to provide information toolkits for digital growth and resources on how to move to new digital ways of working. As consumers switch to buying from small businesses with strong digital capabilities, the move to successfully unify a shopping experience that serves customers both in-store and online is the only way to navigate through the crisis and stay alive.”
Visa is helping small businesses tackle the various challenges they are facing as a result of the pandemic through initiatives such as ‘Where You Shop Matters’ to champion and enable merchants while encouraging consumers to support small businesses. Meanwhile, Visa's innovation centre continues to work with partners across the ecosystem to build better commerce experiences.