Teleport someone off the main thoroughfare of a major city in 2009 and land them in the same place a decade in the future and what might they notice? The once-ubiquitous Blackberry phone is conspicuously absent from the hands of most commuters, and in many cities, major department stores and smaller independent shops are gone from the high street, too.
But it would only be a matter of seconds before one of a legion of bikes and scooters topped with brightly branded cooler bags zipped across the road, perhaps avoiding a box truck laden with packages.
Food delivery applications such as Careem Now, Uber Eats and Deliveroo, many of which utilise the ride-sharing software developed earlier in the decade for taxis, have transformed cities alongside major logistics firms like UPS, Aramex and FedEx. Cities are now hyper-connected so that commerce can coexist with the comfort of staying put.
This year, Deliveroo generated Dh533 million in food sales across the UAE. It competes with UberEats and Careem Now, the food delivery arms of the eponymous ride-hailing apps, neither of which were willing to give a breakdown of their revenue from food delivery. It also competes with food delivery apps like Zomato and Talabat, who employ their own riders to pick up from restaurants for a fee.
The e-commerce market in the Middle East and North Africa is expected to reach $28.5bn by 2022 although "[there is] still a demand for traditional stores and shopping malls", Rami Suleiman, president at UPS for the Indian subcMiddle East, told The National.
New delivery technology will be worth $22bn by 2025, according to a 2016 McKinsey report. This projection is partly because mobile food delivery apps are capturing fresh markets and moving into new areas such as the delivery of cash, medicine and other small items. What had started as digitalisation of the take-away model is rapidly diversifying across various sections of retail.
David Jinks, head of consumer research at ParcelHero, a courier site, tells The National: "The scale of online delivery growth shows no signs of slowing down. Online retail offering fast home delivery is expanding into new sectors ... experimenting in pharmacies and car sales, among others".
These digital companies are also changing traditional physical retail spaces: reducing store sizes (and overheads), increasing warehousing of non-perishable goods and promoting low cost, micro-production units for perishables. This is especially prominent in food, where ‘ghost kitchens' have emerged that prepare food solely for delivery apps and have no face-to-face interaction with customers.
This realignment of retail space in response to the pressures of the internet has already had an impact on the UAE. A spokeswoman for Deliveroo in the GCC told The National that its own ghost kitchens are, "at a time when the restaurant industry is under pressure", helping to "overcome the huge costs of opening new brick-and-mortar sites".
Property consultancy JLL said in its second quarter UAE Real Estate Market report that the Dubai retail property market "faces the greatest threat of oversupply of any sector", given that the amount of new space is set to increase by 37 per cent by the end of 2020 to 5.2 million square metres, even as rents in existing centres are falling and vacancy rates are increasing.
Although 95 per cent of the Dh200bn of retail sales generated in the UAE last year took place in physical stores, according to Euromonitor International, online sales are growing at a much quicker pace. Online sales grew 22 per cent last year, compared to 5 per cent for the overall market.
But the rise of online logistics are certainly not a given.
Webvan, a pioneering dot-com grocery delivery business based in California, went bankrupt in 2001. Last year, UberRush, the on-demand, same-day delivery service for merchants was wrapped-up, closely following the failure of Shyp, another smart delivery service. UberFreight, the app designed to match truckers with loads, is in risky territory due to labour and skills shortages, Forbes reported. Digital delivery has many bugs to fix before it becomes a dominant retail and logistics channel.
Emmanuel Durou, technology and telecommunications leader at Deloitte Middle East, tells The National that an "omnichannel focus" is also affecting previously online-only delivery companies: "Amazon and Alibaba have started opening brick and mortar stores in order to provide the full experience that they promise to their customers."
Mr Durou adds the caveat that “for years the ‘mall culture’ in the UAE and Saudi Arabia was tagged as the main barrier to e-commerce adoption” but now “the purpose of the store is changing...even Souq [and] Amazon in the UAE [have physical] pickup locations which will eventually develop into service centres and later also experience centres”.
David Jinks agrees with the premise of pessimistic headlines over the end of retail, but says digital delivery services are a help and not a hindrance to traditional physical stores.
"Brick-and-mortar certainly needs saving," he tells The National. "The only way for the High Street to survive is in a symbiotic relationship with online retail. That absolutely means the adoption of apps such as Uber Eats, Just Eat and Deliveroo, which give instant, citywide deliveries to companies that would never be able to provide services on such a scale independently."
Professional services firm Deloitte has done much to deflate prophecies of retail’s doom by digging into the data. In a recent study they found that 55 per cent of customers visit stores before making online purchases and 73 per cent of customers are likely to visit a retail store after seeing that inventory is marked available online.
A combination of online and physical locations working together is what is most likely to transform the landscape the most, analysts say, and the growth in online is also creating more opportunities for investors in logistics space.
Ikea and the Landmark Group are among the retailers to have made big investments in new logistics centres in Dubai, JLL said in a Redifining Retail Logistics report unveiled at the Cityscape Global conference last month.
And although its retail market may be suffering, JLL said Dubai is emerging as the region's e-commerce hub "by encouraging both established businesses and start-ups to set up operations in the emirate".
It also pointed to the development of Dubai Commercity, a Dh3.2bn, 200,000 square metre free zone dedicated to e-commerce.
Mr Jinks of ParcelHero said that the blurring lines between what makes a brick and mortar space and a digital experience is the space to watch. Many companies that started out online-only are now opting into physical retail stores like SuitSupply, Everlane and Warby Parker have done. But so far Amazon has been the most disruptive, he says.
“In the US, Amazon has opened its own physical bookstores and convenience stores using apps to eliminate the need for cashiers ... your phone simply logs the items you take from the store and bills you appropriately.”
Delivery options won’t save brick and mortar, but it will change how people consume. In the process, barriers are being broken down between physical space and the online world.