The cashless revolution, which accelerated in the wake of the Covid-19 pandemic, and a new generation of consumers will shape the future of the retail industry, according to Amazon, the world's biggest e-commerce company.
While companies are perceived to be the drivers of disruption, Seattle-based Amazon believes when consumers' behaviour changes “in a meaningful way”, they become advocates for change, Paul Misener, Amazon's vice president for global innovation policy and communication, said in an interview with The National in Dubai.
The global retail industry has grown manifold, with consumer demand and behaviour influencing trends. Combined with increased competition and supply chain issues, these have set off a fierce market-share battle among retailers.
E-commerce, in particular, has benefited from this rapid rise. Global sales are expected to hit $6.39 trillion in 2024, up almost one third from 2021's projected $4.89tn and an almost 400 per cent surge from $1.33tn a decade ago, according to Statista data.
Amazon posted sales of over $386 billion in 2020, less than 1 per cent of this year's $4.28tn global total. But it is still the world's largest e-commerce company, with sales more than triple that of China's JD.com, the world's second-biggest online retailer.
Millennials — those born between 1981 and 1996 — have played a major role in the global trend. This is the generation with the most digital buyers, with 85.9 per cent making purchases online, according to content platform Power Reviews.
Millennial shoppers also depend on ratings and reviews to make informed purchase decisions, with 99.9 per cent reading reviews when shopping online and 63 per cent doing so when buying in-store, it added.
“In the early days it was novel to put your card information online. It was even a big deal in the countries that adopted the internet early,” Mr Misener said.
“This is a generational thing; today, young people entering the ranks of consumers are very comfortable with cashless payments, and it's not an impediment any more for the industry to grow because young people are encouraging others.”
Meanwhile, Generation Z — those born between 1997 and 2021 — have a spending power estimated at $323bn, business application platform CGS said in a recent report. While 67 per cent of older generations rely on sites such as Amazon, only 37 per cent of Gen Z shopped on the platform, CGS added.
Gen Z is also spending more on sustainable shopping destinations, with around 15 per cent using second-hand sites such as eBay or ThredUp for non-essential items, compared with just 3 per cent of Baby Boomers. Depop, a UK-based reselling site, is another indicator of Gen Z’s preferences: 90 per cent of its users are under the age of 26, CGS said.
Loyalty programmes, such as discounts on future purchases, are also high on Gen Z's list and are more important than fast delivery times, company philosophy and even quality of products.
“It's hard to say which among being all online, all offline or hybrid is the best, because it can matter a lot for the kinds of goods you're selling. The real challenge is that customers have so much choice now that everybody has to keep up,” Mr Misener said.
Acquisitions to fit in
While Amazon has been involved in more than 100 mergers and acquisitions since 1998, Mr Misener said it is a relatively low number as Amazon looks more at how an integration of another company would fit into its strategy. Its biggest transaction was acquiring Whole Foods for $13.7bn in 2017.
“We're not overdoing on acquisitions. The reality is that we've grown so much as a company within. If an acquisition makes sense we'll do that, but it also has to fit in the company to become part of us,” he added.
Amazon has also branched out into other sectors, including its Prime Video streaming service that rivals Netflix and its Luna gaming platform to challenge Microsoft and Google. At the recent Fantom Developer Conference in Abu Dhabi, its Amazon Web Services unit said it will help get the first one billion users into the blockchain industry, creating opportunities to build products and services on secure platforms.
“The future of retail is meeting consumer demand not only for a great selection of products and services available but also for a greater quality of delivery. Consumers are going to be increasingly picky about how they shop and level of service they expect,” Mr Misener said.
Young people entering the ranks of consumers are very comfortable with cashless payments, and it's not an impediment any more for the industry to grow because young people are encouraging others
Paul Misener,
vice president for global innovation policy and communication at Amazon
As with many other companies around the world, Covid-19 caught Amazon off guard and it spent around $800 million on Covid-related safety measures in the first couple of months when the pandemic was taking hold, Mr Misener said.
“It taught us to innovate the same way we had to innovate all the time, but we weren't prepared for it just like everyone else. We found ourselves in a place where we had to act very fast to protect not only our employees but also our customers. We've been perfecting safety for over 20 years, but not for a virus,” he added.
Amazon, founded in a garage by Jeff Bezos in 1994, started off by selling books online. Mr Misener — an engineer, scientist and attorney — was hired in 1999 by Mr Bezos, currently the world's second-wealthiest person. He stepped down as chief executive in July to focus on his other ventures and was succeeded by Andy Jessy, but remains as Amazon's executive chairman.
In October, the company reported a drop in profit, which it expects will continue through the holiday quarter, blaming heavy spending to maintain delivery operations.
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The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
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Five hymns the crowds can join in
Papal Mass will begin at 10.30am at the Zayed Sports City Stadium on Tuesday
Some 17 hymns will be sung by a 120-strong UAE choir
Five hymns will be rehearsed with crowds on Tuesday morning before the Pope arrives at stadium
‘Christ be our Light’ as the entrance song
‘All that I am’ for the offertory or during the symbolic offering of gifts at the altar
‘Make me a Channel of your Peace’ and ‘Soul of my Saviour’ for the communion
‘Tell out my Soul’ as the final hymn after the blessings from the Pope
The choir will also sing the hymn ‘Legions of Heaven’ in Arabic as ‘Assakiroo Sama’
There are 15 Arabic speakers from Syria, Lebanon and Jordan in the choir that comprises residents from the Philippines, India, France, Italy, America, Netherlands, Armenia and Indonesia
The choir will be accompanied by a brass ensemble and an organ
They will practice for the first time at the stadium on the eve of the public mass on Monday evening
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How to keep control of your emotions
If your investment decisions are being dictated by emotions such as fear, greed, hope, frustration and boredom, it is time for a rethink, Chris Beauchamp, chief market analyst at online trading platform IG, says.
Greed
Greedy investors trade beyond their means, open more positions than usual or hold on to positions too long to chase an even greater gain. “All too often, they incur a heavy loss and may even wipe out the profit already made.
Tip: Ignore the short-term hype, noise and froth and invest for the long-term plan, based on sound fundamentals.
Fear
The risk of making a loss can cloud decision-making. “This can cause you to close out a position too early, or miss out on a profit by being too afraid to open a trade,” he says.
Tip: Start with a plan, and stick to it. For added security, consider placing stops to reduce any losses and limits to lock in profits.
Hope
While all traders need hope to start trading, excessive optimism can backfire. Too many traders hold on to a losing trade because they believe that it will reverse its trend and become profitable.
Tip: Set realistic goals. Be happy with what you have earned, rather than frustrated by what you could have earned.
Frustration
Traders can get annoyed when the markets have behaved in unexpected ways and generates losses or fails to deliver anticipated gains.
Tip: Accept in advance that asset price movements are completely unpredictable and you will suffer losses at some point. These can be managed, say, by attaching stops and limits to your trades.
Boredom
Too many investors buy and sell because they want something to do. They are trading as entertainment, rather than in the hope of making money. As well as making bad decisions, the extra dealing charges eat into returns.
Tip: Open an online demo account and get your thrills without risking real money.
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
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- Priority access to new homes from participating developers
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Ruwais timeline
1971 Abu Dhabi National Oil Company established
1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants
1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed
1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.
1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex
2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea
2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd
2014 Ruwais 261-outlet shopping mall opens
2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies
2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export
2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.
2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery
2018 NMC Healthcare selected to manage operations of Ruwais Hospital
2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13
Source: The National
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