Introduction
The retail market is one of the largest ones presented in Dubai and the UAE. The paper presents the analysis of its structure and organization, customer service, and other aspects pertinent to it. The company selected for the analysis is Ahmed Seddiqi & Sons. It is a large Dubai-based retailer selling luxury watches and jewelry. The report addresses its aspects, the ways it utilizes to attract and retain clients, and significant issues associated with the business.
Structure and Organization of the Retail Sector in Dubai
The retail sector plays a highly significant role in the city’s economy. Dubai has the second-highest mall density in the world, with more than 60 shopping centers (Dubai Chamber of Commerce & Industry, 2018). Its size is expected to reach more than $43 billion by the next year. Currently, the retail sector can be defined by its 30% contribution to the country’s economy, which is more than 25% of its real gross domestic product (GDP) (CORE Research, 2018).
As for trends in sales, Dubai’s retail market shows modest single-digit growth. Suppliers based in the city often offer price reductions and promotions to motivate customers to purchase their products. Boosting sales and three-day sales are also common for the market (Knight Frank LLP, 2017). A high level of profitability is the result of the issues mentioned above. For instance, visitors spend more than $25,000,000 in Dubai’s retail locations overnight (CORE Research, 2018). At the same time, annual prime rent is less than $5,000,000 in luxury locations.
As for store size and location, malls in Dubai are located both at the city center and at non-central locations. It is possible to say that large shopping centers above 10,000 sqm prevail (CORE Research, 2018). Independent retailers are less present than the retail locations working with multiple suppliers. Although the complete classification of the types of stores present in Dubai is unavailable, it is possible to analyze the retail sector based on one of the largest malls in the city. For instance, the categories of stores present at Emaar Malls include fashion, electronics, beauty, furnishing, and toy ones (Emaar Malls, 2019).
The majority of these stores operate both as online and offline businesses, which means that hybrid shops exist in Dubai, too. Not-for-profit organizations are also present in the city; the Dubai Shopping Malls Group is one of them (Oxford Business Group, 2020). As for service and product retailing, the number of visitors’ spending presented above suggests that the level of product retailing is higher in Dubai.
Speaking of retailers operating in the city and their ownership types, the majority of present stores are chain or franchise ones. As mentioned earlier, independent retailers are less common in Dubai, which may be determined by a high level of competitiveness and annual prime rent (CORE Research, 2018). The main retail areas in Dubai can be characterized by a mix of shopping and entertainment (Gulf Business, 2020).
The data about the exact number of employees, enterprises, and their turnover working in the retail sector is not available online, as Dubai represents one of the largest retail markets in the world. However, it is possible to suggest that the level of turnover is high because, as mentioned above, visitors contribute significantly more money than companies spend on rent and advertisement.
Distribution Systems in the Organization
As mentioned above, the company selected for the analysis is Ahmed Seddiqi & Sons. The organization specializes in luxury watches, accessories, and jewelry and currently represents more than 75 brands (Dubai Festival City Mall, 2020). The company is present in more than 90 locations in the UAE, including Dubai. Because of it, the products of Ahmed Seddiqi & Sons are available for all customers willing to purchase them. The primary distribution channel for all of the goods the organization sells includes offline shops; in some cases, customers can also buy watches, jewelry, and accessories online depending on a particular brand.
As mentioned before, Ahmed Seddiqi & Sons works with only three types of goods, which belong to the same retail segment. However, the company does not disclose information about the process of the movement of goods from manufacturers to retailers, as well as the data about transport and retail control of the supply chain. The firm offers several luxury brands, each of which may have a particular manufacturer. The company is responsible for after-sales service, which will be discussed in detail below.
The Process of Distributing Goods
The information the company discloses publicly does not address the channels the organization uses to transfer goods from the manufacturer to the customer. However, as the organization represents more than 75 brands, it moves its products across continents regularly. Ahmed Seddiqi & Sons works with different suppliers for its brands but is a distributor for the goods it offers. Currently, it has exclusive franchise agreements with leading Swiss watch companies.
The organization is likely to use information and communication technologies (ICT) in the supply chain, as it utilizes this approach in other aspects, including communication with customers. This point will be discussed in the next section of the paper.
Process of Providing Excellent Customer Service
The selected company is known for providing excellent customer service, especially because it works in the luxury segment. Besides customer care strategies common for all retail stores, the organization offers non-traditional services. They include consultancy, advisory, and after-sales (“Services,” n.d.). Ahmed Seddiqi & Sons supports the idea that the purchase of a luxury watch may be associated with increased responsibility. For this reason, the company ensures that customers obtain the necessary industry-related knowledge to choose the best model that aligns with their budget and design preferences.
This way, the company ensures a high level of satisfaction for new customers because it allows them to learn more about the products they want to buy. To ensure satisfaction for repeat customers, the organization provides them with advisory services, helping them to build their watch collections. The advisors working at Ahmed Seddiqi & Sons help consumers in adding new watches to their collections. They also assist customers in choosing the timepieces that reflect individuals’ vision.
All transactions at the company’s stores require the company to collect customer information. The organization collects individuals’ names, physical and email addresses, phone numbers, and other similar information (“Privacy Policy,” n.d.). Moreover, the company asks clients to verify their identity by providing an ID card, a copy of a passport, or a resident’s visa. Ahmed Seddiqi & Sons state that, in some cases, it collects financial information, including bank account details or credit card numbers. The organization uses the obtained data to create client profiles and simplify further purchases (“Privacy Policy,” n.d.). The company states that it may also share the information with third parties for fraud screening purposes. Otherwise, Ahmed Seddiqi & Sons does not disclose any data and aims at preserving its customers’ privacy.
The company uses ICT to interact with its customers. For instance, it sells promotional messages to its clients and answers their messages and concerns via its social media pages (“Privacy Policy,” n.d.). Moreover, customers are welcome to contact the company by phone or email at any time. Besides, Ahmed Seddiqi & Sons have a customer support team as one of the means of customer relationship management.
Competition in the Retail Environment
Some of the largest competitors Ahmed Seddiqi & Sons has in the retail environment are The Watch House and Al-Futtaim Watches & Jewellery. Moreover, many e-commerce organizations in the UAE and Dubai, specifically, offer watches, jewelry, and accessories. Its market position is defined by selling high-quality and luxury goods to the customers and those collecting vintage or high-end watches.
Moreover, the organization strives to support its clients in creating their collections of rare watches. Possible barriers to entry into the market the company operates in may include a high prime cost of products and increased rent prices in Dubai and the UAE in general. It is possible to say that the company’s prices are not its competitive advantage, as Ahmed Seddiqi & Sons sells luxury items. The organization does not seem to implement new retailing concepts, as it has a highly specific customer base. However, some of its new and outstanding services include advisory and consultancy ones.
Structure and Organization of the Retail Sector in the UAE
The retail sector in the UAE can be considered a highly significant one to the country’s economy. In 2014, it contributed more than 15% to the UAE’s GDP (Ardent Advisory & Accounting, 2016). The retail sector has become advanced because of high levels of disposable income, a retail-oriented culture, and an increasing population. The non-food segment constitutes 70% of the retail market in the country (Ardent Advisory & Accounting, 2016).
The top 10 stores, including those selling luxury clothes, account for around 65% of the value share. Statistics suggest that the retail market in the UAE is highly profitable. In 2016, the value of the retail sector in the UAE reached more than $65 billion and was expected to exceed $70 billion by the next year (Sadaqat, 2018).
From the perspective of store size, it is possible to say that, similar to Dubai, large malls prevail in the country compared to small independent stores. The majority of retail locations are situated in Dubai and Abu Dhabi, which are two of the largest cities in the UAE. Trends in sales in Dubai reveal that regardless of the growing number of purchases, customers have become more conscious of their decisions.
Sadaqat (2018) reports that the clients of the retail market want to receive value for money along with the high quality of products. Moreover, sales of organic products have increased in the UAE significantly, with more individuals purchasing fresh food and choosing sustainable clothing brands (Sadaqat, 2018). From this perspective, trends observed in the country can be considered different than the ones present in Dubai. The reason for it may be that the city is known for its luxury stores, while the customers are visiting other places of the UAE start focusing on sustainability.
The country’s retail market is dominated by international retailers and large domestic groups as opposed to independent and non-profit ones. The emerging store types that can be found in the UAE include community and neighborhood malls, convention centers, and creative entertainment locations. The first group of retailers includes apparel stores, discount department shops, booksellers, and supermarkets (Ardent Advisory & Accounting, 2016). Convenience centers offer services and products that neighborhoods may need daily. Finally, creative entertainment offerings have become more popular within the past several years.
The data about the exact number of retailers, their sizes, and the number of employees are not available online. The reason for it is that the country has a large number of enterprises, and some workers may not be registered officially. However, it is possible to say that, like in Dubai, the majority of retailers are franchise and chain ones. All stores present in the UAE can be classified in the following categories.
Clothing stores represent the largest sector of the retail market in the country, followed by the healthy and organic food one (Spary, 2018). Like in Dubai, many stores in the UAE operate as both offline and online businesses. The reason for it is that today’s customers in the UAE prefer to make purchases quickly and conveniently (Spary, 2018). As a result, many companies open e-commerce platforms or establish a physical store for their brands if they do not have one. However, it is possible to say that offline retail locations prevail, and their number continues to grow.
Methods of Distributing Products and Services in the UAE
Currently, the majority of companies operating in the UAE do not provide detailed information about the logistics process because of privacy reasons and a high level of competitiveness in the market. However, the supply chain may be presented by manufacturers, wholesalers, retailers, and customers. As mentioned above, the majority of organizations operating in the UAE are chain or franchise ones, which means that they may not have the need to move goods across continents.
The reason for it is that these firms are likely to be present in other countries, too. ICT is also likely to be used in the supply chain in the UAE in general because, as mentioned above, it is utilized in Dubai. The information about the stock locations and fulfillment is not disclosed; however, the companies should offer home delivery options for customers.
Sales Techniques and Customer Service in the UAE
As mentioned above, customers of the UAE have particular preferences and needs that retail organizations should follow. Trends in sales affect the ways customer service is provided, as well as the sales techniques companies use. It is important for organizations to respond to consumers’ needs. Today, the retail market in the UAE forces companies to follow the principles of sustainability. It means that organizations operating in the market should provide ecology-friendly solutions for their businesses.
One of the most significant challenges retailers can encounter while working in the UAE is a high level of competition. Notably, it may be easier for companies to identify customers’ needs because there are various types of products and services available in the country. It means that retailers can observe the situation in the market, compare competitors’ revenues to their ones, and decide on the strategies they will use to achieve the desired result.
Companies in the UAE utilize various sales processes, which differ depending on the type of products they offer. For instance, Ahmed Seddiqi & Sons sell its goods in boutiques and focus on working with high-end brands and customers. From the perspective of sales support, the firm’s customer services mentioned above ensure that new clients become repeat ones. Moreover, the organization has franchise agreements with Swiss manufacturers and uses various techniques based on the type of the brand.
The Impact on the Company
It is possible to say that the sales techniques and customer service presented above have a positive impact on customers and sales. For instance, the current company’s revenue is around $260,000,000 (Zoom Information, Inc, 2019). It means that clients value the organization and its products. Moreover, statistics suggest that the levels of customer satisfaction for new and repeat clients are also high because Ahmed Seddiqi & Sons strives to provide support for them. The utilization of ICT allows the organization to share information about its products and communicate with its audience, which potentially helps it to attract new customers.
The collection and use of customer information do not affect the level of satisfaction among clients because the company does not disclose the obtained data. After-sales service is likely to increase customers’ dedication because it helps individuals to manage possible problems associated with the products. Ahmed Seddiqi & Sons does not address the sales process and techniques in detail; however, the information about its revenue reveals that its approaches are successful.
Conclusion
The report reveals that the retail market in Dubai and the UAE, in general, is highly significant. It represents a significant part of the country’s economy and shows an increased level of revenue. Ahmed Seddiqi & Sons is a competitive organization offering high-end watches, jewelry, and accessories. The firm offers excellent customer service, uses ICT to interact with clients, and supports the ones purchasing its products. It is possible to conclude that the organization is competitive in the retail market of Dubai and the UAE.
References
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