Amazon has been dabbling in physical retail since 2015, during which time it’s opened a half-dozen bookstores that double as gadget emporia, a score of campus bookstores that don’t sell books and a convenience store without cashiers. For now, its efforts seem largely experimental, though that may not be true for long.

Although the company already dominates e-commerce, 90 percent of worldwide retail spending is still in brick-and-mortar stores, according to eMarketer. Amazon has the chance to change retail with automation and data-mining technologies borrowed from e-commerce.

“It seems counterintuitive they are investing in any physical stores when they are blamed for the demise of so many of them, but no cow is sacred,” says Sucharita Mulpuru, a retail analyst in Charlotte, North Carolina.

Amazon’s offline ambitions could even boost Amazon’s online operations further, even though they seem to be doing just fine for now. In the first three months of the year, the Seattle company earned $724 million, or $1.48 per share, a 41 percent increase from a year earlier. Amazon soundly beat Wall Street’s expectations of $1.08 per share, according to FactSet. Revenue increased 23 percent to $35.7 billion, above expectations of $35.3 billion.

Amazon doesn’t break out numbers for its retail-store operations. Chief Financial Officer Brian T. Olsavsky said in February that “we’re still in that phase where we’re testing and learning and getting better.” Exactly what it’s learning, and what it plans to do with that knowledge, is the next big question.

Here are five ways physical stores could help Amazon.

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A SHOWCASE FOR GADGETS

At Amazon’s six physical bookstores — six more are on the way — books are arranged on shelves face out, even though that takes more space. Amazon isn’t trying to cram its entire inventory into these stores; Amazon figures you can just order everything else from your phone.

Amazon also devotes a lot of space to its Kindle e-readers, streaming TV devices and other gadgets, so you can try them out before buying. Tutorials are also offered on weekends.

Wedbush Securities analyst Michael Pachter says physical bookstores are good places to win Kindle converts, as “the only people who don’t have Kindles who should have Kindles are luddites who also read.”

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SERENDIPITY

Amazon opened its third bookstore in October, near Portland, Oregon. Miriam Sontz, CEO of Powell’s Books in Portland, calls Amazon’s entry “an acknowledgement of the inability of the internet to provide a certain retail experience that book buyers enjoy.” That includes spontaneous conversations with fellow shoppers on what they’re reading, and having a book cover or blurb grab you as you walk down the aisle.

Robert Hutu, a retail analyst at Gartner, says online customers tend to go to a website knowing what they want to buy. By contrast, customers visiting a physical store often make impulse purchases, even if they go in with something specific in mind. Amazon could learn more about that serendipity from its stores, and perhaps find better ways to increase impulse buying online, Hutu says.

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MAKE CUSTOMERS DO THE WORK

Amazon is scheduled to open its 20th book-less campus bookstore next week in Cleveland. Students order textbooks and dorm furnishings online and come to these stores to pick them up. The centralized pickup location reduces shipping expenses.

The company is also testing a grocery pickup service at two locations in Seattle. Once it launches, Prime members will be able to order groceries online and visit one of these stores for pickup, skipping the aisles. Crews will even bring orders to the car. It’s cheaper than door-to-door deliveries.

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RETAIL TECHNOLOGY

Amazon already makes heavy use of robots at warehouses to fulfill online orders. Now Amazon is trying to bring automation to retail. The Amazon Go convenience store in Seattle uses sensors to track items as shoppers put them into baskets or return them to the shelf. The shopper’s Amazon account gets automatically charged. The store is expected to open to the public soon, after a test with Amazon employees.

Amazon not only saves money on cashiers but also could use the data to manage inventory better and even assess when to discount items, says Mulpuru, the retail analyst.

Hutu suggests that Amazon might even license its technology to other retailers, the way it rents out its data centers to businesses and groups to power their websites and other digital needs. That business, known as cloud computing, made up 10 percent of Amazon’s revenue in the first quarter, as sales grew 43 percent to nearly $3.7 billion.

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BUILDING LOYALTY

Amazon can use its campus locations to promote its Prime loyalty program (students get 50 percent off the normal $99 annual fee). The strategy is simple: Get students hooked, and they’ll be customers for life.

As for the regular bookstores, Prime members get the same prices available online. For everyone else, only Amazon gadgets match the online prices; books and other items are sold at an often-higher list price. Of course, you can sign up for Prime on the spot.

Hutu said Amazon could use these experiences to deepen loyalty — though they can also damage Amazon’s reputation if it can’t deliver an experience Prime members are already used to.

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The visit was part of the joint efforts towards exchanging expertise and sharing knowledge with the aim of improving performance to bring it in line with the world’s best standards.

Abdullah Al Jawi, Director of RTA’s Internal Audit, said, “The authority is keen on sharing knowledge with local and federal government entities in a bid to identify the best practices for leveraging the performance of government departments in the UAE, especially Dubai. The Internal Audit Department is keen on adopting the best local and international standards and practices to boost the corporate governance such as enhancing the monitoring and accountability roles through internal audit.”

During the meeting, a visual presentation was made highlighting the values, vision, mission and goals of the RTA. The session also explained the objectives and core processes of the Internal Audit Department, and the key standards and practices used to streamline the business of the department such as internal audit standards issued by the Institute of Internal Auditors (IIA), and the Information Systems Audit and Control Association (ISACA).

The presentation also touched on the roles and responsibilities of the IT Audit Section and the key factors relating to the assessment of risks of auditing an IT environment. It also discussed the role of the department in broadening the exposure and capacities of employees through dispatching them to several international institutes of the industry, and reviewed the technological systems used by the department including an advanced software to ensure high-class functionality of auditing process.

At the end of the meeting, the parties discussed several ideas for improving the business process.—WAM

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RERA declared that there must be a written agreement in which property owners authorise real estate brokers to carry out their marketing campaigns.

Commenting on this, Ali Abdullah Al Ali, Director of the Real Estate Licensing Department at Dubai Land Department said, “Dubai Land Department seeks to establish safe and attractive property investments. We aim to enhance the growth of ourreal estate industry, in order to further develop the local economy. To support these objectives, DLD works towards strong and effective regulation of the Dubai real estate industry. We regulate the process of advertisements within a specific agreement that defines the role of each party involved in any real estate sales or rent with total precision, which will guarantee the rights of all parties, including landlords, investors and brokers.”

RERA’s statement announced that the Real Estate Marketing Agreement is mandatory between owners and real estate brokers which will result in the issuance of permits through its e-service system. All Dubai real estate advertisement mechanisms will be regulated through this system, with RERA facilitating marketing agreements between the landlords and the brokers through its Form A.

The property owner is required to sign Form A to authorise real estate brokerage offices to market any properties, in order for any broker to obtain permission from DLD to represent properties for sale or for lease. The landlord is permitted to deal exclusively or with more than one real estate broker for the marketing of any property.

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To meet the interest generated from the recent inauguration of the Dubai Water Canal, the new scheme allows buyers to build their own waterfront villas in the most in-demand area in Dubai. Nearly 14,000 sqft of land is available for constructing waterfront villas.

“We have just enabled buyers to build their own abode in Sobha Hartland right next to the newly-opened Dubai Water Canal,” said P.N.C. Menon, founder and chairman of Sobha Group. He said these plots are limited and exclusive to those who want to build their own waterfront villas. The plots are surrounded by 2.4 million sqft of greenery, world-class amenities and Dubai’s hottest attractions.

“Real estate investments in Dubai are regarded as a good decision especially with Dubai being considered as the region’s safe haven and the city recently has also climbed to No.2 among world’s cities with ‘most improved livability’,” Menon said.

As part of Sobha Hartland, these plots are part of an eight million sqft resort-style community that comprises freehold studios, one-, two- and three-bedroom apartments, duplexes, townhouses and four-, five- and six-bedroom villas and is surrounded by 2.4 million sqft of greenery – 30 per cent of the entire community.

Their location within Mohammed bin Rashid Al Maktoum City and three kilometres proximity to Dubai’s hottest attractions makes them one of the most-sought after plots in Dubai.

Sobha Hartland also boasts a selection of world-class amenities such as international schools, nurseries, healthcare facilities, swimming pools, tennis courts, yoga centres, gyms, playgrounds, and parks just a stroll away.

– business@khaleejtimes.com

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Imposing a tax of about five per cent on expat remittances from the GCC, estimated at $84.4 billion annually, will result in very little and marginal revenue of only 0.3 per cent of the region’s gross domestic product, or GDP, (or $4.2 billion), which is very modest compared to the financial reforms required in the GCC countries, the IMF said in a report.

The IMF said such tax, which has been proposed in Kuwait, would also result in administrative and operational costs that might reduce revenues and cause risks related to the repute of the country among the workers. The competitiveness of the private sector will also decline.

The report also stressed that the incomes of expatriates in GCC countries will reduce if the taxes are imposed, taking into account the fact that unskilled workers in these countries form about 80 per cent of expatriates. It added that another disadvantage of imposing the abovementioned taxes is that it will make the GCC countries undesirable for skilled workers who will prefer to look for employment options elsewhere.

“This will lead to serious brain drain if the local talents do not possess the same skills as their expatriate counterparts,” it said.

The IMF said in order to avoid further delays in the implementation of GCC-wide Value added tax scheduled by 2018, authorities should envisage a transition period of three to five years, the International Monetary Fund said.

“However, the transition period over which countries adopt the VAT should be relatively short in order not to hinder the integration process,” the IMF said.

Within the three-five year time frame, as countries gain experience with operating the VAT, they work together to harmonise their tax systems, including tax base and tax administration procedures “to ensure that VAT accrues to the destination member state without breaking the VAT chain,” said a report prepared by the IMF staff.

In implementing VAT, which is expected to boost the region’s economy by as much as 1.5 per cent to two per cent, member countries face different fiscal challenges that require different sequencing for fiscal consolidation. “Since the VAT should accommodate regional integration, all members should implement it, as planned in the current VAT agreement.”

“Moreover, international experience among sovereign states, and in federations, suggests that a non-simultaneous VAT adoption is manageable. It may even be desirable since the political and technical difficulties involved in a simultaneous approach may delay or preclude the introduction of the tax in some countries,” said the report.

– issacjohn@khaleejtimes.com

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Key figures in innovation converged in Dubai for the anchor event of UAE Innovation Week 2016, which also featured interactive sessions with industry figures and live demonstrations showing what we can expect from technology soon.

Innovation Live was kicked off with a keynote from Majid Saif Al Ghurair, chairman of the Dubai Chamber of Commerce of Industry, the official headline partner of the event. He encouraged everyone to be active in coming up with fresh ideas and contribute to innovation-fuelled success.

Huge leaps
Reem Ibrahim Al Hashemi, UAE Minister of State for International Cooperation and Director-General of the Dubai Expo 2020 Bureau, kicked off the event with a keynote that highlighted the huge leaps Dubai has made when it comes to innovation.

She explained the role the Dubai Expo is doing in elevating the UAE in the ranks of the most innovative nations in the coming years.

Guy Kawasaki, an Apple fellow who had worked for the late Jobs and an innovation evangelist, perked up the crowd with his tips on innovation and what he learned from Jobs; he even spilled the beans on secrets in Silicon Valley, where he is based.

More on the Hyperloop concept was also discussed by Bibop Gresta, co-founder and chairman of Hyperloop Transportation Technologies. He revealed interesting facts on how the technology is being developed and assured the audience about its safety.

Jack Andrada, a 19-year-old inventor, spoke of what inspired him to come up with a very affordable and quicker alternative to cancer detection – with the aim to encourage youth to be a part of the innovation revolution.

Other sessions at Innovation Live ranged from digital content strategy to smart buildings and energy to having creative leadership.

There was also an Innovation Arena in which visitors were able to experience concepts in virtual reality, healthcare solutions and an artificial intelligence system that gamely answered questions from people.

– alvin@khaleejtimes.com

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Last week, the International Day of Tolerance was celebrated in the UAE. Comments from the hundreds of participants included one from the Christ Church Jebel Ali chaplain, Reverend Tim Heaney, who noted: “Tolerance has always been practised in Dubai. But what’s great about the last few years is that it has been much more explicit and deliberate, especially with the creation of the Ministry of Tolerance under Shaikha Lubna Al Qasimi.”

Tala Al Jabri, a Dubai-based management consultant, in a recent report said: “Prior to moving to Dubai, I spent 20 years living in Saudi Arabia, Bahrain, Jordan and Canada. Everywhere else, I have always felt a little out of place, like a fish out of the water.”

UAE residents hail from over 200 countries. Each one of us is a potential gateway back to the country of our origin. This is probably why UAE’s start-ups rapidly expand regionally as well as globally.

In this context, I had the opportunity to speak to Prashant (PK) Gulati. Prashant exudes the energy and go-getter attitude that is synonymous with starting up on one’s own.

PK’s list of designations and organisations encapsulates his energy – founder, The Assembly; founder, managing partner, The SmartStart Fund; CEO Optimistix Ventures; special advisor, Dubai Future Foundation; president, Tie Dubai among others. But what stands out is his evangelising role in the area of start-ups and small footprint ideas in the economy of the region and around for the last 15 years. After having founded companies, he realised that support to budding ideas needed to be widespread to give rise to the culture of creation, not just consumption. He founded the Middle East Chapter of TiE, with a group of like-minded entrepreneurs, in Dubai in 2002 – to bring Silicon Valley thought into the region. Among many, two start-ups that he has mentored are Wrappup and Remitr.

He has leveraged his access to multiple geographies to channel idea and support to start-ups in the UAE. For example, NASSCOM, TiE in India; GES of US State Dept. This access has been a key factor in his involvement with Dubai Enterprise Centre, Dubai Future Accelerators, in5, Flat6 Labs, Global Blockchain Council and The Assembly – the community hub for introducing exponential technologies into the daily innovation feed of the builders, makers and developers in Dubai.

Speaking about Dubai, PK said, “Look around us, the city has all that takes to make it the centre of the world of those who are out to make a difference. this city has proven its mettle as being the magnet for the best of the best and we can build on it to attract the best talent and build some of the most innovative disrupters this world has seen. This reality, of which I am a part of, is what drives my passion and makes me look forward to waking up and getting going!”

An example of the value of access – Soon after the set-up of the Global Blockchain Council in the UAE, a leading bank here announced its tie-up for Blockchain-based transactions with a bank in the Indian sub-continent. The UAE has already implemented this technology on a cross-border corridor. The ease of access to other markets clearly shows why the UAE looks to be ahead-of-the-curve vis-à-vis other countries globally that are beginning to think about this.

The writer is director at Vyashara and a digital banking and digital payments evangelist, practitioner, advisor and consultant. Views expressed are his own and do not reflect the newspaper’s policy.

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The innovation index report released on Monday by the Dubai Chamber of Commerce and Industry and PricewaterhouseCoopers shows Dubai improving its ranking from 16 to 15 while outperforming business hubs such as Madrid, Milan, Shanghai and Moscow.

New York secured the top position in the index, while London fell to fourth place after being ranked first in 2015. European cities ranked higher in general due to an increase in investments on skills and talent, while GCC cities scored high marks in the political, economic and social indicators category, said Dubai Chamber, which plans to invest Dh100 million on innovation-focused projects and initiatives over the next three years.

Hamad Buamim, president and CEO, Dubai Chamber, said the results indicate the Dubai government’s efforts in laying down a strong foundation to drive innovation on a city-wide level are taking effect.

The index, released on the sidelines of the UAE Innovation Week, highlighted the Dubai government’s ongoing efforts in spearheading innovation initiatives, the private sector’s contribution and increased public-private sector collaboration.

The index showed that Dubai’s private sector companies have started embracing innovation as they become more proactive about implementing new ideas. Business have also recognised the importance of finding and retaining the best talent required to drive innovation, while they work to align skills to meet the requirements of the labour market.

Dubai Chamber said there remained some areas where Dubai can improve further. These include investing in research and development, developing employees’ skill sets and raising IT awareness. In addition, there is still a need for businesses to adopt long-term innovation strategies that support the sustainable development of the emirate’s economy rather than their own institutional objectives.

“The index has succeeded in identifying areas where we need to improve upon in order to boost our competitiveness. By embracing innovative strategies and practices, the private sector can contribute greatly to Dubai’s vision to become one of the world’s most innovative cities by 2021,” said Buamim.

Anil Khurana, partner, PWC, said the index comes at an interesting time for Dubai, the region and the world. “Though the region and the world are going through significant economic uncertainty and several sectors are badly hit, the role of innovation in Dubai and the world has kept its pace.”

He said apart from the government, several leading companies are now investing not only in greater R&D activities, but also in emerging technologies such as blockchain, Internet of Things, virtual reality, 3-D printing, drones and dozens of others that are often known by the moniker of Industry 4.0.

Dubai Chamber’s innovation strategy aims to stimulate innovation in the private sector. Its three main pillars focus on supporting enablers of innovation, measuring innovation and honouring innovators.

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With its oil revenues slashed by low crude prices, the government of the world’s largest oil exporter has cut spending sharply this year and reduced or suspended payments owed to construction firms, medical establishments and even some of the foreign consultants who helped to design its economic reforms.

The payment delays have tightened liquidity in the banking system and caused severe financial problems for some companies, particularly those in the construction industry. In recent weeks, top officials have indicated that all or most of the delayed payments would soon be made.

Construction firms have received 40 billion riyals in the past two weeks, representing 25 per cent of money owed to them by various government agencies, Fahad Al Hammadi, chief of the National Contractors’ Committee at the Council of Saudi Chambers, a business association, was quoted as saying by Arab News on Sunday.

“The Saudi government is expected to pay up to 80 per cent of the total dues to contractors during the remaining few weeks of this year by disbursing another 100 billion riyals,” he told the newspaper.

“More then 80 per cent of the back-logged payments will be released within the next few days or weeks.”

The government set aside 100 billion riyals to pay debts that it owed to private sector companies after the payment delays, which lasted months, Reuters reported on Nov. 11, citing an official document.

Authorities have not disclosed the total size of the unpaid bills. Most construction projects suspended as a result of low oil prices will eventually be revived and implemented in order of priority, Hammadi also told the newspaper.

Arab News said some construction firms from Germany, Turkey, Spain and India, contacted by Arab News on Saturday, had confirmed they were being paid their dues.

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The event was inaugurated by Shaikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance and Industry.

dmg events, organisers of the four-day event, said the exhibition assumed greater significance as Dubai is driving the new round construction boom in the region.

The value of Dubai’s construction projects in the execution and planning stages is expected to reach a record of $390.7 billion this year. A total of 13.7 per cent of these projects, which are valued $53.5 billion, are currently under progress despite the oil slump.

A report estimated that the total spend on infrastructure projects related to Dubai Expo 2020 might reach up to $18 billion, with estimated development costs of the Dubai South area between $8.1 billion and $8.7 billion.

The UAE, one of the world’s most attractive construction markets, hosts a robust construction pipeline of more than $700 billion, over one-third of the GCC’s pipeline, according to the recent report “Powers of Construction: 2016” by the consultancy Deloitte.

Legoland Dubai’s Castle Kingdom and Building Experience joins the Abu Dhabi Midfield Terminal, Al Habtoor City Theatre, Dubai Opera, and NAS Arena are some of the UAE projects that won Tekla Global Building Information Modeling (BIM) Awards for their leading use of 4D digital models that can enhance productivity and collaboration.

“This year has been a seminal moment for GCC construction innovation, and 2017 will see continued momentum with government BIM directives, 3D printing and pre-fabrication, and BIM gaining wider take-up. The UAE’s strong showing in international awards demonstrates the country’s standing as a global BIM leader,” said Paul Wallett, Regional Director of Trimble Solutions Middle East.

The Big 5 is expected to draw 75,000 participants along with national pavilions from all major exporting countries in East and West. This year, the teams from France, Italy and Brazil are in force with their innovative products.

This year’s Big 5 edition has several key features including dedicated product sectors, live product demonstration, a one-day Excellence in Construction Summit, a tools demonstration besides a brand new floorplan layout clustered in five product sectors. The five product sectors in which exhibitors are grouped this year are: Building Interiors & Finishes, MEP Services, Building Envelop & Special Construction, Construction Tools & Building Materials, and Smart Building & Design technologies.

Another key highlight of the show is the dmg events’ strategic partnership with Dubai Economic Council for the debut “Excellence in Construction Summit” on the sidelines of the expo. Taking place today, the summit will draw 500 industry leaders to discuss current and future trends of the construction sector in Dubai, the GCC region and beyond. Besides this, the giant construction expo will also feature key events such as the FM Expo, PMV Live and Middle East Concrete thus providing complete building solutions.

 – issacjohn@khaleejtimes.com

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