The store of the future has arrived and it is threatening to leave technology laggards behind.
The modern store is equipped with cameras that look at you, guess your tastes based on your gender, age and behaviour and send deals to your smartphone accordingly. It also has the technology to reduce endless checkout lines and speed up the process for picking up something ordered online.
The deal-sending screen, made by Intel and used by Sears and others, was just one example of cutting- edge technology on display at this month's National Retail Federation (NRF) conference in New York, showcasing the innovations that retailers are trying out as they fight for shoppers.
New technology can help retailers know their customers' habits and preferences better and further integrate physical stores and e-commerce to make the most of the online sales boom.
"It's anticipating what the consumer wants," Don Kingsborough, the executive overseeing the push of eBay's PayPal online payment processor into physical stores, said at the convention.
To succeed, technology has to bridge the chasm between how people shop online, in stores and on their mobile devices, with more customers now doing all three simultaneously, he says.
Wall Street envisages success in this area as a decisive factor in who will thrive in a tight retail environment: The NRF says retail sales in the United States rose 3 per cent during the holiday season, below its forecast of a 4.1 per cent gain.
US retailers are expected to increase technology spending by 1.4 per cent this year, even as they cut 0.7 per cent from total capital investments such as store renovations, says Deborah Weinswig, an analyst at Citi.
According to Forrester Research, US retailers with 5,000 employees or more spent US$19.8 billion (Dh72.72bn) on technology last year.
Those retailers have an array of technology to choose from, as evidenced by the 500 or so companies exhibiting at the NRF event, which drew 27,500 attendees.
The recent payroll tax increase means that many US shoppers are taking home less money, upping the stakes for retailers, particularly those catering to middle-class shoppers, says Ms Weinswig.
"They're going to need to get the shopper in the store. They're going to need to get the shopper to read their email."
Nordstrom, Saks and Macy's each have spent tens of millions of dollars in recent years to integrate stores into their e-commerce to speed delivery and improve inventory management. A Citi report this month gave those three top marks for using technology, along with Wal-Mart.
"Historically, retailers have had very 'silo'-ed inventory and they have not known as much about the customer as they wanted to," says Eddie Capel, the president and chief executive of Manhattan Associates, whose clients include Macy's and J Crew.
Struggling chains such as JC Penney regard technology as essential to improving sales. The company is far along in a project to tag all of its items with radio-frequency identification devices so that it can track them as they move. One day, this could eliminate the need for cash registers and allow for self-checkouts.
Adidas is expanding its use of screens in stores to display hundreds of shoes on a "virtual wall", helping it compete with its rival Nike. Shoppers who use the screens often trade up to higher-priced shoes, spending as much as €60 (Dh296.39) to €70 more in a purchase than planned, says Chris Aubrey, the company's director of commercial experience.
Several companies at the NRF show devices they say can help retailers get sales staff to better roam the floor.
Certainly, in the race to catch up to Amazon.com, eBay and other e-commerce leaders, retailers must guard against turning off shoppers with technology that is "cool" but ultimately too invasive, such as facial recognition that tells them exactly who just walked in.
"Shoppers will tell us quickly, 'no'," says Jon Stine, the director of the retailer and consumer products practice at Cisco's internet business solutions group.
Still, intense competition leaves retailers with little choice but to push forward to keep up with consumers.
After the collapse in consumer spending that followed the financial crisis in 2008, companies pulled back on technology spending, says Diana McHenry, the director for global retail product marketing at SAS, a provider of business intelligence software.
But she says the risk of falling behind for good is making them focus on bigger, longer-term projects.
"It's like seeing new construction."
* Bloomberg News
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
LOS ANGELES GALAXY 2 MANCHESTER UNITED 5
Galaxy: Dos Santos (79', 88')
United: Rashford (2', 20'), Fellaini (26'), Mkhitaryan (67'), Martial (72')
The%20specs
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The specs
Engine: 2.3-litre, turbo four-cylinder
Transmission: 10-speed auto
Power: 300hp
Torque: 420Nm
Price: Dh189,900
On sale: now
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Company Profile
Company name: Yeepeey
Started: Soft launch in November, 2020
Founders: Sagar Chandiramani, Jatin Sharma and Monish Chandiramani
Based: Dubai
Industry: E-grocery
Initial investment: $150,000
Future plan: Raise $1.5m and enter Saudi Arabia next year
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Revibe%20%0D%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202022%0D%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Hamza%20Iraqui%20and%20Abdessamad%20Ben%20Zakour%20%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20UAE%20%0D%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Refurbished%20electronics%20%0D%3Cbr%3E%3Cstrong%3EFunds%20raised%20so%20far%3A%3C%2Fstrong%3E%20%2410m%20%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EFlat6Labs%2C%20Resonance%20and%20various%20others%0D%3C%2Fp%3E%0A
Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
RESULTS
Bantamweight
Victor Nunes (BRA) beat Siyovush Gulmamadov (TJK)
(Split decision)
Featherweight
Hussein Salim (IRQ) beat Shakhriyor Juraev (UZB)
(Round 1 submission, armbar)
Catchweight 80kg
Rashed Dawood (UAE) beat Otabek Kadirov (UZB)
(Round-1 submission, rear naked choke)
Lightweight
Ho Taek-oh (KOR) beat Ronald Girones (CUB)
(Round 3 submission, triangle choke)
Lightweight
Arthur Zaynukov (RUS) beat Damien Lapilus (FRA)
(Unanimous points)
Bantamweight
Vinicius de Oliveira (BRA) beat Furkatbek Yokubov (RUS)
(Round 1 TKO)
Featherweight
Movlid Khaybulaev (RUS) v Zaka Fatullazade (AZE)
(Round 1 rear naked choke)
Flyweight
Shannon Ross (TUR) beat Donovon Freelow (USA)
(Unanimous decision)
Lightweight
Dan Collins (GBR) beat Mohammad Yahya (UAE)
(Round 2 submission D’arce choke)
Catchweight 73kg
Martun Mezhulmyan (ARM) beat Islam Mamedov (RUS)
(Round 3 submission, kneebar)
Bantamweight world title
Xavier Alaoui (MAR) beat Jaures Dea (CAM)
(Unanimous points 48-46, 49-45, 49-45)
Flyweight world title
Manon Fiorot (FRA) v Gabriela Campo (ARG)
(Round 1 RSC)
