Retaining customer loyalty remains top priority for UAE retailers, says Yegertek CEO

With e-commerce gaining a foothold in the UAE, retailers are rewriting the marketing rulebooks.

Brands across the region are implementing effective marketing strategies to retain customer loyalty paving innovation in the field of marketing. The UAE being extremely competitive with local and global brands retailers are compelled to study consumer behaviour and come up with solutions that will help them retain their clients.

“Competitive markets characterise opportunities if you have the right tools of the trade,. The internet penetration in the UAE is 99 per cent — the highest in the region. So, naturally, there is data proliferation, which is the playing field for purpose-driven brands. Such companies share an enthusiasm for technologies that can help them understand their customers better, provide actionable insights, segment, and hyper-personalise. Upon analysing a number of data points, including but not limited to shopping behaviours, purchase history, channel preferences, and demographics, brands derive insights that can enable them to cater to the customer’s unique requirements. Such experiences put the onus back on customers, thereby generating their loyalty,” said Sajid Azmi, founder and CEO of Yegertek, a Dubai-based solution provider in brand engagement and customer loyalty.

“Our expertise and value proposition lie in orchestrating customer loyalty programmes that are predicated on omnichannel, cross-platform data. Our customised rule engine tracks customer behaviour across channels and rewards each user effectively. The derived business intelligence empowers brands to streamline their merchandising, store operations, product placement, etc., in both online and brick-and-mortar models. Most importantly, these one-stop-shop offerings are customised and made available to brands across sectors as diverse as hospitality, dine-in business, e-commerce, B2B, B2C, etc., keeping in view the ubiquity of digitalisation,” he added.

In a hyper-connected world, a crisis creates both opportunities and challenges. The Covid-19 pandemic was no different — it set digitalisation on hot wheels, impacting the traditional order of commerce. Initially, the economic impact of digitalisation was obscure due to restrained consumer spending. Following the reopening, however, people are back in the market, and researchers have extensive data to work with. Turns out, shoppers are not spending like before. According to McKinsey, 95 per cent of consumers in the UAE have changed their shopping behaviour. Particularly noteworthy is their newfound affinity for e-commerce.

With e-commerce gaining a foothold in the UAE, retailers are rewriting the marketing rulebooks. Chief among the focus areas is customer loyalty — which is an outcome of a strong relationship with brands, critical to long-term success. Digitalisation has not only upended the traditional notions of loyalty but also increased buying options, thereby complicating customer retention.

“Loyalty was never granted to begin with; it was nurtured through effective customer engagement across omnichannel touchpoints. Today, with e-commerce taking precedence, retailers must nurture loyalty with greater technological aid,” Azmi.

Loyalty trends in UAE

Loyalty should go beyond financial incentives

Programmes that reward loyalty with financial benefits such as cashback and discounts are still popular in the UAE. However, with customers now exposed to a multitude of options online, loyalty strategies must be more than transactional, rewarding shoppers for their non-transactional behaviour. Brands subscribing to this approach are giving out random prizes, rewarding shoppers for taking surveys, offering an opportunity to donate a portion of their spending to charities of choice, etc.  Most importantly, brands are creating exclusivity. For example, LinkedIn Premium and Mastercard’s World Elite, which tap into customers’ innate need to feel exclusive and special. There is a FOMO effect that accompanies loyalty programs with exclusive benefits. Such programs enable life-cycle customer engagement by virtue of their design.

Personalisation is non-negotiable

“Numerous, reliable studies have established that customers are willing to pay a premium for personalized shopping experiences and services. However, in a crowded sector like retail, success hinges on your ability to hyper-personalize your customer engagement, at scale — which requires cutting-edge analytical tools and deep-dive analysis of every bit of data pertaining to shoppers’ online shopping behaviour,” explained Azmi. This belief was echoed in a recent survey by KPMG, in which personalisation was selected as the leading determinant of loyalty by respondents from the UAE.

Cookie-cutter strategies run the risk of disengaging existing customers, making them seek alternatives. Customers expect the brands they spend on to demonstrate how well their unique needs are recognised and products/services are tailored to their expectations. In a nation like the UAE, with its 99 per cent internet penetration, the expectations are highly distinctive and eclectic.

CSR as a loyalty driver

Empathy is next only to personalization as a loyalty driver in the aforementioned KPMG survey. Following the pandemic and the accompanying impact on health, consumers are increasingly gravitating towards brands that are compassionate in their messaging and content. Brands that strike the right chord with customers can inspire loyalty in return. Also, meanwhile, customers have become well aware of environmental issues and the sustainability imperative. They are consciously seeking brands that are aligned with the larger sustainability drive and sociocultural evolution. Also, digitalization has ensured that brands are transparent in their CSR efforts. Therefore, empathy-based customer engagement and measurable CSR activities are becoming commonplace in the retail ecosystem.

UAE’s tech focus complements the e-commerce boom

Around 45 per cent of the respondents in the aforementioned McKinsey survey intend to spend online even after the pandemic. This subset represents a customer base that is not particularly loyal to any brand; they are exploring their options. Retailers can capitalise on this untapped opportunity through the adoption of marketing automation, sophisticated data analytics, and clienteling solutions. “Retailers cannot have selected, standalone technologies for customer engagement and loyalty — technology silos hold back retailers from maximising positive outcomes. Full-suite clienteling solutions that consolidate omnichannel customer data points and deliver actionable insights for hyper-personalisation will be best positioned to differentiate themselves in the crowded retail sector,” said Azmi.

“Metrics like Customer Lifetime Value (CLV), Customer Retention Rate and Share of Wallet will continue to hold relevance within the loyalty space, but how they are measured and utilised will change,” he concluded. — sandhya@khaleejtimes.com

• Dubai