Luxury, e-commerce to lead retail sector’s contribution to GCC economy

The evolution of physical stores revolves around the idea that retailers are keen on transforming the consumers’ retail journey and assuring that the in-store visit is a rich experience by showcasing product lines and merging brand activations. (Shutterstock)
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Updated 12 March 2023
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Luxury, e-commerce to lead retail sector’s contribution to GCC economy

  • Malls have stepped away from acting as just retail outlets to become social and entertainment hubs as well

RIYADH: Luxury and e-commerce retail sub sectors are projected to lead the industry’s contribution to the Gulf Cooperation Council’s economy, according to Retail Leaders Circle Chairman Panos Linardos.

“Luxury continues to perform well and favors the in-store model, as consumers investing significantly in a product want to examine it physically before committing to purchase,” Linardos told Arab News.

“E-commerce is growing fast as customers continue their buying habits from the pandemic. Spending power among younger digital buyers, who generally enjoy the convenience of online shopping, will also contribute significantly to the growth of retail in the GCC,” the chairman added.

In addition to luxury and e-commerce, domestic and regional retailers are also contributing to the GCC economy as a hike in prices alongside supply chain disruptions in key European countries are hindering the delivery and cost-competitiveness of their export products.

Moreover, integrating physical and digital retail, conscientious consumerism, and the evolution of physical stores are three key trends in the industry that are helping propel its growth which is estimated to hit SR596 billion ($158.85 billion) by 2024.

Speaking on integrating physical and digital retail, Linardos notes that while several retailers have incorporated digital technologies to their businesses, they are yet to design the entire customer journey around digital integration.

“Artificial intelligence will help to anticipate and respond to shifting consumer demand patterns by streamlining inventory processes, increasing supply chain efficiency and tracking production, and augmented reality will make the online and physical shopping experiences more immersive, while also supporting product customization and enhance brand loyalty,” the chairman explained.

As for conscientious consumerism, this refers to the fact that consumers are becoming more aware of the impact their decisions are having on the environment and on the local communities as well.

“Transparent reporting and independent auditing of sustainability claims are going to become increasingly significant to retailers hoping to protect and grow their market share,” he disclosed.

Luxury continues to perform well and favors the in-store model, as consumers investing significantly in a product want to examine it physically before committing to purchase.

Panos Linardos, Retail Leaders Circle chairman

Meanwhile, the evolution of physical stores revolves around the idea that retailers are keen on transforming the consumers’ retail journey and assuring that the in-store visit is a rich experience by showcasing main product lines and merging brand activations and in-store technologies to substitute the conventional inventory-driven model.

“The ability of retailers to allow customers to order products from the entire product line in-store and have them delivered quickly and seamlessly reduces the need to keep large, comprehensive product inventories on-site and instead they can devote space to more creative product displays and in-store promotion activities,” Linardos emphasized.

With regards to the competitiveness in the Middle East, Linardos goes on to argue that malls in the region have stepped away from being single-minded and acting as just retail outlets to become social and entertainment hubs as well.

This is mainly attributed to the high temperatures associated with Middle Eastern countries, making it hard for consumers to enjoy the traditional “high street” retail model common in more temperate regions.

“Mall investment, especially in Saudi Arabia, continues to expand. To enhance their competitive appeal, new retail spaces should be seeking to integrate more digitally enabled, immersive experiences into their offer to attract consumers and retain loyalty,” he said.

Moving on to ways in which malls in the region can attract new consumers, it is evident that the more customized or immersive the experience is, the more likely that this is going to drive high purchase intention and diminish product returns.

“The question retailers should be asking is not ‘Shall we invest in immersive technology?’ but rather ‘How long will it be before immersive technology is a basic cost of entry?’ according to the chairman.

HIGHLIGHTS

• The end goal of the Retail Leaders Circle Summit is to provide the world’s retailers, brand owners, and suppliers with the intellectual and social capital they need in order to further prosper and succeed.

• The summit is expecting more than 4,000 attendees, 750 retail firms, 500 sector CEOs, and over 75 speakers from all around the world.

• Influential leaders, industry pioneers, innovators, investors, as well as senior policymakers are on track to partake in the event and take stock of an industry in the midst of rapid reinvention.

Retail Leaders Circle is the region’s largest and most significant meeting place for the retail and commerce industries.

The two-day event is set to kick off on Mar. 7 and is being held under the theme “Digital Economy & Purposeful Growth.”

Influential leaders, industry pioneers, innovators, investors, as well as senior policymakers are on track to partake in the event and take stock of an industry in the midst of rapid reinvention.

During the course of the event, all participants will tackle and debate on what the future holds for retail and commerce.

“Digital is making the biggest impact on the modern retail landscape, and it will be a central to the discussions at the Retail Leaders Circle MENA Summit,” Linardos highlighted.

The summit is expecting more than 4,000 attendees, 750 retail firms, 500 sector CEOs, and over 75 speakers from around the world.

The event will host thought-provoking sessions, task-force roundtables, engaging live experiences, in addition to a retail exhibition.

The retail exhibition — which will be presented by the Saudi 100 Brands initiative under the Saudi Fashion Commission — offers a portal for some of the Kingdom’s homegrown brands to showcase their offerings.

The end goal of the Retail Leaders Circle Summit is to provide the world’s retailers, brand owners, and suppliers with the intellectual and social capital they need in order to further prosper and succeed.

“The Retail Leaders Circle is the most important strategic forum for the MENA retail sector, bringing regional and global thought leaders together to examine regionally significant emerging trends and drive positive industry change,” Linardos stressed.


The hidden side of clean power: why grid integration matters

Updated 58 min 40 sec ago
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The hidden side of clean power: why grid integration matters

  • Exploring the predator’s role in the region’s heritage and ecosystem

RIYADH: As Saudi Arabia expands solar, wind, and battery projects, a critical piece of the sustainability puzzle often goes unseen: grid integration.

Before renewable plants can deliver power, engineers must ensure the grid remains stable, safe, and efficient under new loads. Integrating renewables into existing systems has become one of the toughest — and most crucial — steps toward building a truly sustainable energy network.

Engineers widely consider the electricity grid the largest and most complex machine ever built. As more renewable capacity comes online, managing it is becoming as much a data challenge as an energy one.

“A big share of Saudi Arabia’s electricity is generated from renewables and more projects are connected to the grid each year. This shift changes how the electricity grid is managed on a day-to-day basis,” Saeed Al-Zahrani, general manager of data enterprise storage leader NetApp in Saudi Arabia, told Arab News.

“To add context, traditional generation can usually be adjusted in a controlled way. Wind and solar, however, move with conditions such as cloud cover, dust, temperature and wind speed, meaning supply can rise and fall quickly,” he said.

In this environment, grid integration is less about whether enough electricity can be produced and more about whether operators can see and respond to changes across the network fast enough to maintain stability.

Frequency, voltage, congestion, and reserve margins all become more dynamic. Real-time measurements, accurate forecasting, asset status updates, and weather intelligence must come together into a reliable, unified system view.

“From NetApp’s perspective, this is where the data foundation matters most, because the grid can only act confidently when the information behind the decisions is timely, governed, and reliable,” Al-Zahrani said.

Under Vision 2030, Saudi Arabia aims to generate 50 percent of its energy from renewables — an ambitious target that introduces new technical and operational challenges. Weather variability, cyber threats, and system coordination can all affect grid stability.

“Every device that operates under this control regime that’s connected to the grid is digital nowadays. You have smart inverters, you have sensors, you have energy management systems, and all those devices and systems are potential entry points for attackers,” Charalambos Konstantinou, a professor at KAUST, told Arab News.

As solar capacity grows, ensuring seamless integration into the national grid has become one of the most complex challenges of the energy transition. (SPA)

His lab focuses on maintaining reliable and secure power infrastructure, developing faster and smarter control algorithms capable of responding to sudden changes in the power system.

“This is what we’re working to make sure that those algorithms remain robust. They remain resilient. They remain secure, even if something, maybe an extreme weather event, or a cyber attack, is aiming to disrupt them,” he said.

Rapid digitalization, however, can create vulnerabilities if security measures do not keep pace. In 2012, Aramco experienced the Shamoon attack, a computer virus that affected around 30,000 workstations.

“When you scale fast, security practices typically lack behind deployment, and this is essentially what we focus a lot in my group: making sure that internet-connected or digital devices cannot be used as an entry point to destabilizing the grid,” Konstantinou said.

One particularly concerning threat involves load-altering attacks, which can disrupt power systems without requiring deep penetration of the grid itself.

“If an attacker is able to control a large amount of what we call internet connected high voltage devices — think HVAC systems, air conditioning systems, water heaters, electric vehicle chargers — and is able to switch them on and off at the same time, simultaneously, then he or she can create a certain imbalance between generation and demand, and then the grid (becomes) very difficult to handle,” he said.

A view of an Aramco refinery in the Eastern Province. (Supplied)

Such disruptions could potentially trigger widespread blackouts.

Beyond cybersecurity risks, the physical environment also presents challenges. Saudi Arabia’s relatively consistent weather can be an advantage for renewable energy production, but factors such as dust accumulation on solar panels and thermal stress on inverters can still affect performance.

Testing technologies under local conditions — including extreme heat, network behavior, and the mix of generation assets — is essential before large-scale deployment. Equally important are intelligent coordination frameworks that allow flexible energy assets to work together while optimizing energy use across industries.

Renewable-heavy grids across Saudi Arabia and neighboring countries increasingly depend on real-time data from SCADA systems, substation automation, and weather monitoring to balance supply and demand. While these continuous data flows improve efficiency, they also introduce new risks, including potential system disruption and data manipulation.

Vasily Dyagilev, regional director for the Middle East, Russia and CIS at Check Point Software Technologies Ltd., highlighted the scale of these vulnerabilities.

Vasily Dyagilev, regional director of Check Point Software Technologies Ltd. for the Middle East. (Supplied)

“In Saudi Arabia, 58 percent of organizations have experienced information disclosure vulnerabilities, while remote code execution and authentication bypass remain significant threats. The complexity of managing legacy operational technology networks alongside modern cloud-based systems and third-party integrations makes it difficult for utilities to maintain full visibility over their risk landscape.

“The region has also seen high-profile incidents where attacks on SCADA systems led to operational disruptions, highlighting the fragility of critical infrastructure. Effective exposure management, including continuous vulnerability discovery and prioritized remediation based on operational risk, is now recognized as essential for maintaining grid stability and protecting the integrity of real-time data streams.”

Alongside cyber and operational risks, uncertainty in weather patterns remains a key variable in renewable power generation.

Omar Knio, another professor at KAUST, studies how atmospheric processes influence renewable energy systems through uncertainty quantification and climate modeling. Dust particles originating in the Arabian Peninsula, for instance, can travel thousands of kilometers and influence weather patterns across South Asia.

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“Phenomena at tiny little scales end up, through teleconnections, making very important contributions to weather patterns and to the climate as far as renewables themselves, because these phenomena affect the solar and wind potentials, they’re extremely important to predict accurately,” Knio said.

“The presence of dust in the atmosphere and cloud cover affect the output of solar panels or solar plants, and similar phenomena happen to wind, and that's why they are really challenging. It's important to be able to predict them as accurately as we can.”

Maintaining a stable renewable grid requires both short-term and long-term forecasting. Hourly predictions are essential for balancing supply and demand, while longer-term projections help planners prepare infrastructure and storage.

Artificial intelligence is increasingly helping researchers build models that forecast weather patterns, simulate thermal behavior in buildings, and analyze industrial energy use. In areas where detailed physical models are limited, AI also helps uncover patterns in human behavior and electricity consumption.

“An example is power demand, consumer behavior, or changes in patterns that have to do with the day of the week, whether it's a weekend, a holiday season, whether it's during harsh weather, or it's during Ramadan: how do these patterns change? And artificial intelligence is really bringing the capability for us to represent and forecast these very complex phenomena,” Knio said.

As renewable energy penetration approaches higher levels, the system becomes more sensitive to fluctuations and extreme events.

“There comes a point where we start having a very dramatic rise in the need for storage capabilities. And the important aspect of why our fuel is important. We can make them cleaner, but they’re wonderful in the sense that they are plentiful right now. They are cheap, but more importantly, they are quite economical to store after. After fuels come nuclear power. So it’s really that storage capability. As we approach 100 percent, the need for storage becomes extremely heightened,” Knio said.