Consumer behaviour and expectation in the Middle East are experiencing rapid changes, and retailers need to keep pace with emerging trends among customers, according to a recent study by Orient Planet Research and Galal and Karawi Management Consulting.
The study pointed out that retailers place their focus primarily on enhancing customer experience, in an attempt to raise their competitiveness within targeted markets and attract the attention of a wider segment of buyers.
In spite of these attempts, the market has witnessed a significant decline in the levels of brand loyalty in customers as they tend to move away from buying their favourite brands and opting for other options that guarantee a better value for their money.
The study’s results are consistent with the insights and conclusions of McKinsey, the global management consulting company, which found that Middle East customers have been spending more on e-shopping. These findings give evidence to the idea that shoppers have an increased awareness and interest in value-for-money, and are stepping away from brand loyalty.
They indicated that most shoppers are aged between 25 and 44, despite the steady expansion in the e-shopping customer segment.
Retailers view paid ads as an effective tool to reach this target segment. They are also benefiting of additional benefits offered by advertising platforms, such as product offering, remarketing, and marketing ads. In addition, companies are quickly adopting customised product recommendations provided by artificial intelligence technology via electronic platforms, which gives retailers an important opportunity to ensure the best results, which was confirmed by Microsoft and PSFK in their book titled “Retail Trends Playbook 2020”.
Specialised research indicates that the Middle East and North African (MENA) region is the fastest growing region among e-commerce markets, driven by an annual growth rate of 25%.
The steady growth is primarily due to several factors, most notably the ease of shopping and speed of delivery coupled with diverse payment options and the ability to check product quality through customer evaluations and ratings.
The UAE is the most advanced in electronic commerce in the region. Saudi Arabia comes second. A specialised study on e-commerce conducted by Visa Inc in June 2019 speculated that the retail sector in the UAE, both traditional and electronic, will achieve significant revenue growth of up to $63.8bn by 2023.
Meanwhile, Deloitte, in its annual report, entitled “Global Powers of Retailing 2019”, classified Majid Al Futtaim Holding Company in the UAE among the 250 best companies that managed to achieve the strongest growth rates in the fiscal year 2017.
Retail stores in the MENA region are exploring new ways to adapt to the changing behaviour of consumers, which are usually characterised by high levels of digital technology and social media use. However, shopping experiences and retail activities such as “Black Friday,” “Yellow Friday,” “White Friday,” and other retail offers, revealed that as people increasingly buy their needs online, traditional businesses and retailers continue their growth and prosperity.
The term “Webrooming” refers to a shopper browsing online stores, looking at their products and reviewing their ratings via social media or websites before purchasing a similar product from a traditional store. The term “Showrooming” also refers to shoppers who visit traditional stores to see the product and then use the Internet to get it at a cheaper price. Some may do this while at the store, using their cell phone.
The study advised traditional retail stores to implement the comprehensive channels strategy and adopt a marketing plan that allows consumers to integrate and continuously be part of the brand. This would happen using multiple channels such as traditional stores, web pages, social networks, smart applications, and mobile phones in order to maintain competitiveness within targeted markets. It pointed out that one of the main advantages of multiple channels is their ability to provide a unique consumer experience for shoppers.
In conclusion, the growing popularity of mobile shopping applications in the region reveals a new trend that indicates stores are no longer able to ignore the role of e-commerce, and that the presence of these stores on the Internet or in the mobile phone market will add great value to their business, while ensuring the highest levels of convenience for customers. The study said that brands work to enhance the experience of consumers at every point of contact with them, whether in a digital platform or in a traditional store.