The future of retail

In a world increasingly shaped by technological advances and shifts in consumer values, the finer points of retail operations are becoming ever more crucial. The sector is undergoing profound transformation as business models are redefined worldwide, unleashing the potential of AI and data-driven insights to improve operational efficiency and customer experience.

Saudi Arabia is among the leaders of this global trend, with PIF playing a key role in retail’s rethink via investments aligned with the country’s Vision 2030 initiative. These investments and strategies foster a vibrant private sector and support innovation across retail and consumer goods.

Making a success of retail

Vision 2030 is a blueprint for economic diversification, with retail a core element of the strategy. PIF’s investments in companies such as the online marketplace Noon and supermarket chain Tamimi Markets shine a light on local champions that are driving innovation while retaining significant economic value within Saudi Arabia.

Noon, an ecommerce platform and ecosystem of digital services, has become a key player in this sector’s growth. Launched initially in Saudi Arabia and the UAE, Noon quickly expanded to Egypt, with more countries in the pipeline. A major factor in Noon’s success is its ability to tailor its services to the region’s cultural nuances and purchasing preferences, supporting both major brands and micro-businesses. The company has reshaped the retail landscape with innovations such as Noon Minutes, a 15-minute delivery service launched less than two years ago, and Supermall, which offers delivery of an even wider range of products in 45 minutes. What sets Noon apart from most quick-commerce services is the breadth of its offering.

“Speed is the future of retail. It’s the ultimate currency in meeting customer expectations with precision and convenience. Being homegrown gives us a unique advantage,” says Faraz Khalid, Noon’s CEO. “We understand the local market’s pulse and can quickly adapt to meet our customers’ needs."

With its fast service in electronics, groceries and food, along with cross-border coverage, Noon is driving regional competitiveness. “Retail is not only about selling products to customers,” says Majed Alassaf, Head of Consumer Goods and Retail in MENA Investments at PIF. “It’s about creating distinctive customer experiences. We need local champions to embrace technology to create a unique and personalised experience to compete on a global scale.”

Another significant investment is in Tamimi Markets, a chain focused on modernising Saudi Arabia’s grocery sector through high-quality fresh produce, international products and partnerships that prioritise sustainable sourcing.

“Tamimi Markets exemplifies how technology can enhance the traditional family grocery experience while maintaining personal connection,” says Bobby Rajendran, Tamimi’s CEO. “Our vision goes beyond just selling groceries. By integrating advanced technology across our operations, from AI-powered inventory management to real-time customer feedback systems, we’re able to listen and respond to our customers’ needs while focusing on what matters most: serving them with fresh, safe and healthy foods.”

Rajendran believes this technology-driven approach to customer engagement, combined with AI-focused solutions for tasks like inventory forecasting to personalised loyalty programs, creates a shopping experience that is both high-tech and highly personal.

As a shareholder in Americana Restaurants, PIF is also supporting the technological transformation of Saudi Arabia’s restaurant retail sector. “Our focus on delivering omnichannel digital access and convenience ensures our customers can engage with our brands wherever and whenever they choose, while our frictionless and fast service redefines the dining experience by eliminating barriers to enjoyment,” says Amarpal Sandhu, CEO of Americana Restaurants. "We’re building and rolling out technologies to prioritise personalised customer engagement, loyalty and data-driven insights, which create meaningful connections to keep our guests coming back.”

Localisation and knowledge transfer are central to PIF’s approach, with its investments aimed at building self-sufficiency and an innovation-led ecosystem. The Saudi Agricultural and Livestock Investment Company (SALIC), one of its subsidiaries, reflects this strategy, with its focus on Saudi Arabia’s food security, while the Sawani Company, also owned by PIF, is sustainably growing the Saudi camel farming industry as an alternative to dairy. Companies such as these highlight Saudi Arabia’s cultural diversity and rich heritage.

As a 2024 McKinsey report suggests, the Middle East is emerging as a hub for retail innovation. The online grocery market in Saudi Arabia, for example, grew at a CAGR of 25 per cent between 2021 and 2023 and digital ecosystems are expanding rapidly. In this context, PIF’s investments can be seen as part of a broader strategy to localise supply chains, develop SMEs and meet the needs of consumers. AI and automation are critical to this transformation, as they enable enhanced customer experiences.

What Saudi consumers want now

The recent launch of Kayanee, a wellness company tailored to women, demonstrates how consumer-centric innovation can drive engagement, particularly when aligned with cultural values and local preferences. “Kayanee stores are designed to be immersive, empowering spaces that invite women to embrace physical activity, personal care and wellness,” says CEO Vikram Natarajan. Their offerings span fitness, fashion and nutrition, and products that use sustainable materials and eco-friendly packaging.

The Saudi Coffee Company, too, focuses on local cultivation and reducing the carbon footprint associated with international sourcing. The company has become a popular, fast-growing business domestically, proving that consumers are willing to pay a premium for sustainable, fair-trade products that support local communities​. The company also has global ambitions, aiming to position Saudi Arabia as an international leader in coffee.

Innovation and technology are pivotal to achieving these sustainability goals. Spanning 19 sq km, New Murabba in Riyadh will become the world’s largest modern downtown zone when it opens in 2030. It will combine smart building technologies such as advanced energy management, lighting controls, IoT-driven systems, renewable energy integration and eco-efficient designs. “New Murabba will blend smart city principles with sustainability in a vibrant, digitally connected environment,” says CEO Michael Dyke. The project will introduce next-generation retail experiences and help position Riyadh as a progressive retail and lifestyle hub​.

A model for transformation

Looking to the future, Saudi Arabia’s retail sector is poised to become a cornerstone of the region’s broader economic transformation. Through Vision 2030, PIF’s strategic investments are not only reshaping domestic retail, but also providing a global model for digital-first retail innovation. “Retail in Saudi Arabia today must prioritise innovation, efficiency and localisation,” says Alassaf. “Our aim is to meet the needs of Saudi consumers while creating value that can be sustained for generations.”

This innovation, fuelled by advanced technologies and ESG commitments, could inspire other regions facing similar transformation challenges. New Murabba exemplifies how urban development goes hand in hand with forward-thinking retail. According to Dyke, the project is a showcase for “groundbreaking technologies that enhance urban experiences, from navigation to cultural engagement”, boosting Riyadh’s status as a global city.

As the sector evolves, it is increasingly defined by the integration of technology, sustainable practices and local consumer insights. Saudi Arabia’s retail journey is both a catalyst for economic diversification and a key element in the nation’s transformation into a modern society. “We’re not just building the retail industry of tomorrow,” says Alassaf. “We’re also building an innovative ecosystem that serves our people and inspires the world.”