Consumer engagement in the Middle East retail sector
Integrating personalisation, technology and training to further strengthen consumer engagement
Retailers are increasingly focused on creating seamless, customised experiences that blend the digital and physical worlds.
According to a PwC report, Middle East consumers have a strong preference for technology-enhanced shopping experiences. They prioritise data protection, value transparency and seek personalised and sustainable products.
“Integration of technology, particularly in-store digital touchpoints, has allowed companies to better engage with customers,” said Philip Coverdale, retail expert at GlobalData. “Simple initiatives, like incorporating cafes or comfortable seating areas, can significantly elevate the consumer experience.”
Whether through the use of mobile applications, QR codes for personalised service, or in-store coffee shops, brands are striving to build stronger connections with their customers.
In November, Mashreq and MEED jointly hosted a roundtable for business leaders to discuss strategies to help strengthen consumer engagement and ways to leverage technology for the promotion of brand and loyalty.
Technology and data protection
As the Middle East retail sector evolves, technology has become essential for driving consumer engagement, shaping omnichannel shopping and personalised in-store experiences.
McKinsey & Company reports that 70% of consumers in the UAE and Saudi Arabia engage in omnichannel shopping, blending in-store and online spaces.
“Technology helps create digital touchpoints with consumers, facilitating smoother interactions and greater engagement,” said Hasib Khan, founder of Udrive. “For retailers in the region, this involves integrating mobile apps, online platforms and in-store digital kiosks to provide a seamless shopping experience.”
One example of this integration is the ‘click-and-collect’ model, which has gained significant traction in the GCC.
Retailers such as Carrefour, Ikea and Marks & Spencer have successfully implemented the model, allowing customers to shop online and pick up their purchases in-store. The result has been increased foot traffic and higher customer satisfaction.
Retailers are also rethinking the in-store experience with hybrid solutions like the ‘phygital’ store, a portmanteau of physical and digital.
“The 6thStreet.com phygital store at Dubai Hills Mall allows customers to reorder sizes directly to their trial rooms, with products delivered within minutes,” said Neeraj Teckchandani, CEO of Apparel. “We have also integrated social media elements, enabling customers to instantly share their experiences with friends and family.”
McKinsey & Company has found that while digital and integrated solutions such as self-checkout and mobile apps are increasingly popular, the most successful retailers combine these tools with a focus on customer experience.
In fact, 42% of UAE consumers were reported to be hesitant to use self-checkout, mainly due to unfamiliarity with the technology and concerns about errors in scanning items.
“Historically, self-checkout technology has not always been reliable, leading to frustrating experiences,” said Coverdale. “However, some retailers, like Decathlon, have perfected the process with seamless, frictionless systems that work flawlessly, making the customer experience smooth and efficient.”
Alongside mobile apps and in-store innovations, artificial intelligence (AI), customer relationship management systems and data analytics are becoming essential for retailers looking to track customer behaviour and offer personalised services.
Gartner reports that 60% of global retailers are already leveraging AI and machine learning to analyse customer data and create specialised offers.
One of the challenges, however, is ensuring that data collection respects consumer privacy while also allowing for a tailored experience. “The biggest elephant in the room is data protection. If we don’t get this right, it could block our efforts in creating personalised retail experiences,” said Giulio Dal Dosso, regional director of finance at Hugo Boss.
Despite these challenges, McKinsey says that retailers in the region are increasingly using customer data to deliver tailored product offerings, promotions and services based on customer preferences and demographic insights.
“We launched limited-time offers tailored to specific nationalities that can drive foot traffic and increase brand awareness within key customer segments, based on our consumer behaviour,” said Katia Fakih, chief financial officer of Yolk Brands.
With the increasing reliance on data collection to personalise services, retailers must ensure they comply with local regulations around data privacy, such as those in the UAE and Saudi Arabia.
Personalisation and consumer demographics
Personalised customer service is another critical factor in driving consumer engagement.
Oliver Wyman reports that customers in the Middle East region expect more personalised products and services – over 30% more than their global peers – and believe this will greatly influence both in-store and digital experiences.
With a diverse, highly transient population and evolving cultural dynamics, retailers are adopting innovative strategies to meet consumer expectations. One example is the use of QR codes to identify loyal customers upon entering a store.
“We have implemented a QR code system in our stores that allows us to understand when a top-tier customer enters the shop and assist them with personal shoppers to track customer preferences and offer tailored services,” said Teckchandani.
Personalised experiences are driven by data. PwC reports that 79% of consumers are willing to share their data in exchange for a more tailored shopping experience.
“Customer feedback and loyalty programmes are key to strengthening our relationships with consumers,” said Fahr Ashour, senior area manager at Hugo Boss. “We focus on creating a 360-degree customer experience, where the goal is not just to sell products, but to make customers feel welcomed and valued.”
Engagement and staff training
A crucial element in delivering a hybrid customer experience is staff training.
“The training of sales staff is an essential part of developing a more engaged and customer-centric retail environment,” said Mohammad Rafeek, treasurer at Dubai Duty Free.
Bain & Company has found that brands that tailor their customer service training to reflect the diverse cultural nuances of the Middle East tend to see a 20% higher customer satisfaction score compared to those that do not emphasise cultural sensitivity in training.
“It ensures that employees not only master the latest technology, but also develop the interpersonal skills necessary to create a truly personalised customer experience,” said Rafeek.
McKinsey says that retailers with well-trained staff are more successful in delivering seamless experiences across physical and digital touchpoints, leading to better customer engagement and retention.
Without this personal touch, technology-driven initiatives may fail to create the desired level of customer satisfaction.
As demographic shifts continue to reshape the region’s retail landscape, retailers that embrace these changes – leveraging technology while also investing in staff training and cultural sensitivity – will be best positioned to succeed in a highly competitive market.
