Monthly Archives: August 2020

From Like to Love: Build Closer Customer Relationships

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Customers have always been the focal point for marketers to devise key marketing strategies. This focus has only intensified in the present time when brands have to be more empathetic to understand the changing customer mindset and shopping habits. Using data and analytics to understand these trends and providing unique customer experiences is the need of the hour. 78 percent of frontline employees report that their leaders have made customer experience a top priority. 

 

As customers become more adaptable to change and shift to online experiences, marketers need to constantly evolve their ways of communicating and engaging customers. Digital engagement can pave the way to embrace the new reality, form an emotional connect with customers and maximize profits. As this is likely to become a permanent customer behaviour, retaining brand loyalty and optimizing costs should be the top priority for brands. 80 percent of companies believe that their core business model should be digitized to remain economically viable.

 

New Product Upgrades & Enhancements 

 

Here are Capillary’s key features that can help marketers use changing customer trends to understand their customers and build deeper relationships : 

 

Audience Reporting

 

In the constantly evolving marketplace, one of the topmost priority areas for marketers is to keep a constant check on the dynamic customer insights. The first step towards getting there is understanding consumer patterns with data-backed analysis. With data and analytics, marketers can anticipate the expectations of their customers and engage them with the most relevant offers.

 

With Audience Reporting, garner deep insights about customer behaviour and shopping patterns to improve the campaign effectiveness and increase the chance of getting high hit rates. Marketers can now get automated reports in EI before, during or after sending out a campaign. The segmented audience lists can be used to compare performance and use these insights to set-up campaigns. Choosing the relevant offer for each customer based on these insights can enrich their experience.

 

Benefits:
  • Pick the right offer for each consumer to maximise customer spend
  • Improved productivity with a reduced go-live time for campaigns by 50%
  • Easy to build reports with a simple & intuitive UI

 

Use Cases:
  • Track the behaviour of customers included in a list during the campaign lifecycle (before, during and after the campaign) to analyze the performance of campaigns
  • Comparative analysis of the current year with the previous one for a list of customers during a particular sale or festive season

 

Loyalty Tier Management

 

The whole marketplace is evolving in sync with the changing shopping behaviour of consumers. A huge number of consumers earlier preferred the touch and feel aspect of traditional retail to make important purchase decisions. Now, the focus has shifted to receiving a great contactless experience. This has pushed marketers to rethink their strategy and use digital mediums to keep their consumers informed and engaged.

 

Marketers can use these changed habits to offer consumers a gaming-like experience while communicating important information of tier upgrade/downgrade of loyalty programs. This can encourage shoppers to spend a little more to retain or upgrade their tier. The goal to reduce losses and optimize costs is also taking a center stage in the new reality. Marketers can identify the low spending consumers and reduce their loyalty benefits with a downgrade strategy. Recognize your best customers with industry-specific metrics and qualified loyalty engagements based on marketers’ criteria through tracker support.

 

Benefits:
  • Engage and encourage customers to make more purchase
  • Reduce costs for business by downgrading liable consumers
  • Flexibility to set industry-wise tier criteria

 

Use Cases:
  • Use trackers to set a tier management strategy for each industry. The metrics could vary –  for Hospitality, it could be room nights and for Fuel retail, it could be the volume of fuel purchases
  • Customers who can upgrade to the next tier by making a purchase for a smaller amount could be informed about it using gamification

 

Deeper Personalization

 

Consumers are moving more towards digital and are embracing digital channels to learn, communicate and shop. This new trend has increased the pool of customers who interact with messages on various channels. Marketers should leverage this to their advantage by sending relevant and contextual messages which strike a chord with their consumers.

 

With Capillary’s personalization capabilities, brands can now recommend products at the right time of the day, based on the purchase behaviour of customers. Knowing your customers’ changing preferences can come in handy to enhance their online experience. The current trend of customers’ preference of making purchases from nearest stores can be used by marketers to incentivize customers with the best offers based on their propensity to shop from a particular store.

 

Benefits:
  • Improve your ROI with 1:1 targeted messages
  • Enhance your customers’ online shopping experience
  • Connect on a personal level by understanding their preferences

 

Use Cases:
  • For a customer who prefers to buy casual wear from your brand, sending the right offer on work from home collection might entice him/her to shop
  • A personalized, time-bound offer can be sent to a customer on Tuesday if he/she prefers shopping on Wednesdays. This creates a higher top of mind brand recall that can increase the chance of engagement and conversion. 

 

Conclusion

 

This is the time to build trust, loyalty and win your customers’ hearts by developing a more personal relationship. Show them that you care by understanding their preferences, engaging them with the right information and delivering unique online experiences. And that’s how you will create a brand identity of being the most loved brand for your customers.

 

Interested in exploring these solutions? Reach out to your Customer Success Manager or contact us

 

People also ask  ⁝ 

 

1.What strategies can businesses use to build closer customer relationships?

Businesses can use personalized communication, loyalty programs, and customer feedback mechanisms to build closer and more meaningful relationships with their customers.

 

2.How does customer relationship management (CRM) software enhance customer relationships?

CRM software helps businesses manage customer interactions, track customer data, and provide personalized services, which strengthens customer relationships and increases loyalty.

 

3.What role does customer feedback play in improving customer relationships?

Customer feedback provides valuable insights into customer preferences and pain points, allowing businesses to make improvements and offer better services, thus enhancing customer relationships.

 

4.Why is customer engagement important for building strong relationships?

Engaged customers are more likely to develop a connection with the brand, leading to increased trust, loyalty, and long-term business relationships.

 

5.How can businesses measure the success of their customer relationship strategies?

Businesses can measure success through customer satisfaction surveys, Net Promoter Scores (NPS), and tracking repeat purchase rates and customer retention metrics.

 

 

The Omnichannel Marketing Opportunity for UAE Retailers

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The UAE and the Middle East as a whole poses several challenges for marketers and brands. This is because individual markets within the geography display similarities in culture, language and habits but at the same time have varying differences. For instance, the UAE and Saudi Arabia are geographical neighbours and both are part of the GCC council, however, the spoken dialect of Arabic differs considerably from each other.

 

To serve this complex, multi-cultural and multilingual cultural landscape there are a plethora of media, which makes it challenging for brands to reach out to their audiences. For instance, there are over 300+ TV channels in the region and over 3,000 officially registered print titles. In addition to this, there is a large number of blogs and digital publishers which further makes the digital media landscape even more fragmented.

 

The Convergence & Contradiction

 

Despite the regional and cultural differences, one area where there is convergence and similarity amongst the GCC countries is trends around media consumption and advertising spends. 

 

For a long time, even as early as 2015, TV and newspapers accounted for the majority of advertising revenue in the Middle East. But this has been changing recently and the region’s digital marketing spends have been steadily increasing. 

 

Internet advertising spend in the MENA region is expected to reach more than $5 billion, according to eMarketer and digital ads are expected to make up about 40% of that. Continuing its growth, regional spend on digital ads is expected to reach 28 percent of total ad dollars spent by 2022, with Google search ad spend accounting for the lion’s share.

 

 The contradiction here is that despite declining ad spend, television consumption in the region shows no sign of slowing down. Even though the greater portion of time spent with media is through the internet in UAE – an average daily time a user spent is over 7 hours  – there is still a significant TV viewing time of 2 hours 30 minutes. And MENA as a region has a substantial 5 hours average daily tv viewing time.

 

The surge in free to air channels, the rising penetration of video on demand and streaming networks, and COVID-induced quarantines are all expected to further contribute to a spike in  TV consumption patterns at least for the near future.  

 

The key takeaway here is that marketers and brands in the UAE are presented with a unique opportunity in terms of a large population (9.6 million), that consumes media across diverse traditional and digital channels (Television, Newspaper, Facebook, Instagram, Google Ad Networks, Snapchat, Tik Tok etc.) and are extremely tech-savvy (99% social media penetration) and connected (99% internet penetration). 

 

The Omnichannel Marketing Imperative

 

Omnichannel marketing is simply unifying multiple marketing channels in a way that creates a logical progression for your target audience to progress from one stage to the next. The various channels (SMS, Email, Ad Networks, Facebook, YouTube, Instagram etc.)  need to work together and provide context for the messages your customer receives as they move from one channel to another. The biggest advantage of omnichannel marketing is that it creates a win-win situation for both the consumer as well as the brand. From a brand’s perspective, it improves engagement/conversion rates at a higher ROI; for customers, it provides a connected brand experience regardless of the channel they chose to interact with the brand.

 

An omnichannel marketing strategy essentially stands at the crossroad that connects in-store retail, ecommerce, customer engagement & marketing.

 

There are several reasons as to why retailers and brands in the UAE are perfectly poised to leverage the benefits of omnichannel strategy to improve brand loyalty. 

 

Let’s dive in.

 

  • Investments in AI & Big Data

Omnichannel marketing leverages AI and Big Data to improve personalization and improve ROI by automating the channel mix for every customer based on his/her response and conversion rates. And the UAE government has been focussed in investing heavily into AI and digital initiatives. His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai recently approved the UAE’s action plan on artificial intelligence and digital economy.  In 2019, Sheikh Mohammed had appointed a full-time minister to increase the contribution of the digital economy from 4.3 percent of GDP  to 8% in the next 5 years.

 

Omar bin Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications, recently released a comprehensive plan that focuses on providing tools and infrastructure to support the UAE’s leadership in digital transformation initiatives. The larger business community in the region shares a similar view in terms of technological adoption; a PwC report states that digital transformation is the key priority for 88% of Middle East retail CEOs. 

 

  • Faster Retail Recovery from the COVID Crisis

The United Arab Emirates is predicted to be 6th best performing market in 2020 (of the 49 economies compared by GlobalData) with spend growth remaining in the positive territory, mostly due to the short lockdown period of just two weeks for non-essential stores. 

 

With lockdown restrictions for non-essential items being lifted in the UAE, retailers have started reopening stores with safety and hygiene measures that are likely to be used as a benchmark for other brands that are considering how they can operate safely. 

 

While the recovery in retail and consumer consumption is optimistic, brands are likely to be cautious about launching large scale campaigns. Omnichannel marketing in UAE presents a unique opportunity for brands to launch highly targeted and personalized campaigns and loyalty program initiatives even with a constrained budget.

 

  • The Launch of 5G

As adoption of 3G and 4G services gathers pace, the next stage of the region’s mobile revolution will be driven by the launch of 5G networks.

 

This technology, the GSMA estimates, will cover about 30 percent of the region’s population by 2025, with Ericsson predicting 17 million 5G subscriptions by 2023. To put it into perspective, that’s almost the same number as the total number of mobile connections in the region two decades previously. 

 

The UAE is also the third most-connected country globally, after US and Switzerland and the Telecommunications Regulatory Authority of UAE has established three committees, including all stakeholders (operators, manufacturers, academia and users), to synergize the 5G rollout in the region. This initiative by the TRA  works with several strategic partners to make UAE a leading country in deploying 5G.

 

  • Accelerated Ecommerce Growth

Even before the pandemic, the UAE was the first growing ecommerce market in the region and was projected to grow at 23 percent annually between 2018 and 2022. 

 

A recent survey conducted by Ernst & Young found that 92 per cent of the consumers in the UAE have changed their shopping habits – including shifting to online purchases. Around 68 per cent of UAE consumers said that Covid-19 led to their first online grocery purchase, while 70 per cent have made their first online purchase from pharmacies.

 

According to PwC, 53% of Middle East respondents had increased their use of smartphones for shopping in response to the pandemic. The results also suggest in particular that shopping via smartphones will continue to rise after lockdown ends, with 92% of those consumers who increased their shopping via smartphone reporting that they were “very likely” (63%) or “likely” (29%) to continue with this purchase method once social-distancing measures are removed. In essence, the impact of COVID-19 has forced change: consumers who were previously resistant to using mobile payment channels discovered that purchasing goods and services on their smartphone was not only easy but convenient too.

 

Recently, ZON,  hailed as the  “the region’s first fully decentralized mobile-only ecommerce network,” raised $8m in seed funding, ahead of its launch later this year. Meanwhile, Mumzworld, an online baby shop, reported an 800% increase in activity across channels. There have also been instances of traditional retailers partnering with online retailers – for instance,  Emaar Malls partnered with Noon.com to launch a Dubai Mall virtual store to support retailers and the community during the lockdowns. 

 

  • Significant Millennial Population

Millennials account for 30% of the population in the UAE and they are characterized by extreme digital-savviness and high spending potential. Being digital natives, they also account for the heaviest consumption of digital content, clocking at least 6 hours of Internet usage every day across multiple channels. Video content networks, especially YouTube is an extremely popular channel within the millennial demographic with more than 50% acknowledging that their shopping was influenced by YouTube videos/ads.

 

  • Surge in Social Media Usage

With 9.73 million social media users, UAE has a whopping 98% social media usage rate. YouTube leads the pack with 8.65 million users, followed by Facebook  (7.77 million), and Instagram (6.68 million). Amongst the messaging apps, WhatsApp has the highest adoption rates with 7.77 million active users. Millennials account for 45% of social media users. Marketers can leverage omnichannel marketing to create highly engaging, rich media content across multiple platforms to progressively nudge users to the next step in the purchase cycle.    

 

Wrapping Up

While omnichannel marketing is universally relevant and seeing rapid adoption across the globe, the United Arab Emirates is fortuitously placed in unleashing the full potential of the technology. 

 

Customer Loyalty Landscape in Indonesia

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The retail sector in Indonesia is projected to witness a growth of 13.8% CAGR by the year 2024.  The reasons for this growth are attributed to the following factors.

 

  • The retail market in Indonesia is  fairly organized and companies are expanding their stores and are also looking at new areas to promote business
  • Hypermarkets, supermarkets and other retail chains are replacing the unorganized sector.  The retail sector is neatly compartmentalized into the above-mentioned sections and more, such as convenience stores, pharmacies, department stores and drugstores
  • Indonesia has a large population.  The middle class is growing in terms of purchasing power and modern spending habits.  Household spending accounts for more than 50% of the nation’s GDP
  • Credit costs are lower, there is an increase in employment and social welfare is expanding
  • The food and beverage (F&B) industry in Indonesia is lucrative and attracts foreign investments into the country.  It is supported by the raw material that is produced by fisheries, agriculture and plantations
  • Indonesia is one of the largest producers in the world for coffee, palm oil, cocoa and fish and the surplus is exported abroad.  Even though it imports processed food, dairy and wheat, the government is working out policies that will reduce the dependence on imports
  • There is healthy competition in the retail landscape of the country.  Even though some players have been dominating the market, small and mid-size companies are taking the help of  product innovation and technological advancement to tap new markets and increase their presence
  • Many retail brands are switching their business online.  With internet connectivity becoming more affordable and robust, customers are feeling comfortable and secure on ecommerce platforms. Mobile commerce is also helping the growth of the online retail business
  • The rise in tourism, the preference of customers for local brands and an increase in marketing activities are some more reasons for the healthy growth of the retail industry

The COVID-19 Scare

 

In May 2020, the retail sales index reduced by 20.6%.  As per a survey conducted by Bank Indonesia, the sale of clothes, as well as recreational and cultural spending, took a huge nosedive.  It was the biggest dip since the year 2008.  The Coronavirus pandemic has shaken and shattered the Indonesian economy, even as the above survey says that things will improve in the near future and the economy will open up in the next three to six months.  

 

A change in the Retail and Consumer Landscape

 

Even though the Covid-19 pandemic threw up a lot of challenges, there have been opportunities for retailers to conduct businesses differently.  As the ecosystem gears up to meet the requirements of demand and supply, the ecommerce sector seems to be the beneficiary, as buyers and sellers go online to do business.  Online businesses in Indonesia are expected to have a 50% GMV growth in the year 2020.  The user base for the ecommerce sector is expected to grow up to more than 12 million users.  Under normal circumstances, it would have taken about 2 years to reach this figure.

 

In the new normal of 2020, consumers prefer to have a safer, convenient and contactless way of doing business and hence the mobile wallet payments are also expected to see a significant usage adoption. OVO, Dana and GoPay are some of the big players in the market.  

 

Consumers are getting cautious and are being careful about how they spend their money; since the future is uncertain at this point in time. Convenience and value for money are the two main factors that are driving spending habits.  

 

Customer Loyalty Programs in Indonesia

 

An interesting scenario is developing in the retail industry landscape in the country.  With an increase in the ecommerce business, retailers will find it pretty challenging to engage customers and maintain brand recall.  Conversely, new players will find it rather easier to enter the market, given the situation of lower marketing costs.  Traditional loyalty programs might not work in the current situation.  Here is looking at new customer loyalty and reward program software trends in this sector.

 

  • Omnichannel Program

The customer base is going to be a good mix of Gen X and Y to Baby Boomers – from letters and landlines to Face Time, Snapchat and Mobile Commerce.  So it becomes very important to keep them engaged and connected, by using different modes of communication, that is convenient and comfortable for each of them

 

  • Data-driven Reward Programs

It is more important than ever to collect data about customers, using loyalty programs.  Customer personalization can happen only when there is a significant data pool to work with.  Using business intelligence tools and AI, companies will now fuel their marketing efforts towards robust customer engagement.

 

  • Personalization

Customers in today’s times expect a high degree of personalization and say that personalized experiences drive them to be loyal to certain retail brands.  This trend is seen in the B2B space that is trying to match customer experiences that are available in the B2C sector.  Companies will now have to work towards improved segmentation and relevant communication, to offer this kind of service.

 

  • Seamless ecommerce integration

Businesses require automation and integration from their loyalty programs, in order to offer enhanced customer experiences.  Manual processes need to be replaced by effective automation, to increase the responsiveness from customers.  

 

  • Gamified loyalty programs

Game-like loyalty programs that have features such as leaderboards, points-scoring achievements and competitive elements are on the rise, to attract customer engagement and loyalty.  With digital transformation, customers expect gamification as a feature in their loyalty programs; they also look forward to features that are instant and easily attainable. 

 

  • Engagement-based programs

Customers are no longer attracted to too many purchases to earn and redeem points because they are knowledgeable and highly informed and there are a lot of options in the market.  The need of the hour is to reward customers without them spending any money on making purchases.  By creating such a scenario, businesses are likely to form deep emotional loyalty and increase customer loyalty.  Other benefits of an engagement-based loyalty program are lower advertising and marketing costs, through word-of-mouth and social media.

 

In Conclusion

 

The good news is that in spite of the pandemic and the threat of recession looming over the retail business horizon, the economic leadership of Indonesia is in safe hands and it would be interesting to see what kind of fiscal reforms will be rolled out to handle the present and future scenarios.

Recreating The Personalized In-store Experience With Digital Commerce

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Six months into the pandemic and the economic impact and fear from COVID-19 has brought striking shifts in consumer behavior, foreseeably for a long period. Globally, there is an accelerated rise in internet adoption, allowing users to stay connected and carry out essential daily tasks in trying times of social distancing. In the U.S., about nine-in-ten adults (93%)say that a major interruption to their internet service during the outbreak would be a problem in their daily life, including 49% who foresee an outage being a very big problem.

 

Brands continue their efforts to adapt to business disruptions and changing customer behavior. One example is the increasing number of brands offering cashlessand contactless delivery to customershence providing customer convenience and safety, and also adapting to the new consumer mindset. Life in the post-COVID world may look drastically different, yet customer experience has been crucial for promoting loyalty, retaining customers, encouraging brand advocacy, and that remains true during the pandemic. Pre-pandemic, customers were partial to brands that provided unique, personalized experiences—studies conducted have shown that customers increase their spending when they receive positive, personal shopping experiences.

 

The current demand for shopping experiences are those that limit physical touchpoints and interactions with other human beings. Self-service solutions powered by the likes of Artificial Intelligence, facial recognition, and infrared technology can make online and in-store experiences better for customers. Recent COVID-19 retail trends like BOPIS (buy-online pick-up in-store) and curbside pickup have gained in popularity. When compared to the previous year, orders placed online and picked up at stores in the month of April 2020 more than doubled,

 

In a bid to help brands strengthen their business in the COVID era, Capillary has added new features to our platform. Read on.

 

Growing Leads via Social Media

 

A new wave of digital platforms is emerging to offer multidimensional engagement and entertainment to users. Platforms like Instagram and TikTok may have once been viewed as those that cater to Gen-Z and young digital natives, but they have now exploded in popularity across all demographics, thanks in no small part to the COVID pandemic. In America, almost 50% of surveyed consumers have increased their social media use, according to eMarketer. In China, social apps are completely transforming the Ecommerce landscape, and Ecommerce is converging with livestreaming to quickly become the prefered shopping experience in Southeast Asia. For the uninitiated, Livestream Ecommerce involves brands and influencers leveraging livestreaming platforms to showcase products, try them, and rate the experience to viewers. 

 

Taking into consideration the large consumer audience using social media platforms, Capillary now allows new or existing users to login to your Web store with their Facebook/ Twitter/ Google credentials. These settings can be enabled through the AnywhereCommerce+ dashboard.

 

Store2Door now supports a chatshop feature, which will allow customers to directly connect with their nearest store without the store staff initiating the conversation with the customer. To enable this, brands can share a Chatshop page on their social media sites (through Stories, Posts, or Promoted Posts). Customers can click on the link to learn all the stores they can connect with on Whatsapp. This allows customers to enquire about catalogs, ongoing promotion, and get their order placed.

 

Showcasing Products Based On Customer Priorities

 

Ecommerce websites offer consumers the convenience of viewing all available products in one place. However many customers become overwhelmed by the sheer volume of available choices online, and often lose patience after navigating a few pages of products.

 

By enabling Dynamic Listing within Capillary’s AnywhereCommerce+ platform, brands can list their products (or specific categories of products) according to dynamic factors like Product Popularity, or Inventory Volumes, Order Recency, Catalog Sequence, or even a combination of parameters.

 

It would be recommended for brands to set their default product listing based on popularity, and provide consumers the option to view products by pricing, or other factors. Partly due to the severe economic impact of COVID across the globe, 68 percent of consumers in April indicated they spent less because of the pandemic, up from 49 percent in March (a 39 percent increase); and 35 percent of consumers indicated they spent significantly less in April, compared to only 22 percent in March (a 59 percent increase).

 

Enabling dynamic listing allows customers to browse products based on their own shopping priorities, and receive recommendations of popular products in their specific category and price range, like they would with store staff assistance.

 

Prioritizing Hyperlocal Commerce and Inventory Management

 

As consumers are getting conditioned to make purchases online, the growing trend of hyperlocal commerce facilitates faster delivery from the closest available store. With Capillary’s Anywhere Commerce platform, brands can enable rules to deliver orders from the closest store, or closest common store (for orders containing multiple products). 

 

However, since many stores are also facing challenges regarding stock excess and shortages, brands can, alternatively, define rules to allocate an order automatically to a specific location/warehouse (for example, a rule stating that all electronic products must be delivered from a warehouse in Bangalore). 

 

Brands can even modify their price list to define unique prices for products according to stores, or user groups, or order quantity, or specific date range, or even transaction channel. Product prices can vary for any one of these parameters or for a combination of parameters, allowing brands to incentivize customers to make purchases while keeping a check on expiring or excess inventory.

 

Conclusion

 

The global Coronavirus crisis has toppled global economies, and people across the world are apprehensive about their health, safety and financial security. Times like these call for brands to truly put customers’ priorities first. By putting your customers’ interests first and innovating your brand accordingly, this can be a time for your company’s brand to lead.

Customer Loyalty Program Trends in the Middle East

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It is shrinking. And shifting.

 

According to the 2019 survey by McKinsey, brand loyalty among the Middle Eastern consumers has eroded. 18% of the Middle East consumers confessed trading down (purchasing lower-priced consumer goods) in 2019 as compared to only 8% in 2015. Not surprisingly, the trend has only grown stronger with the 2020 pandemic.

 

These consistent and visible changes in consumer behaviour are a result of various concurrent factors – economic slowdown, the volatility of oil prices, government reforms, tax policies, and, more recently, COVID-19.

 

Overall, the Middle East consumers are less optimistic about their financial prospects and prefer to save more. Interestingly, retail analysts have observed that shoppers are shifting to lower-priced brands and intend to ‘stick’ with their new choices, even if their financial prospects improve. It indicates that the perceived (and real) quality of lower-priced brands has increased, with more consumers trying them.

 

Apart from price-sensitivity, we also see a shift towards more ‘conscious shopping.’ Preference has increased across all age groups, including the younger generation, for environmentally sustainable goods, all-natural ingredients in food and beverages, and locally sourced products.

 

Distrust for the conglomerates and larger brands, tripled with a sense of belonging towards the nation and a responsibility to revive the economy, is also visible in the purchase behaviour of millennials. They are ditching years of brand loyalty in favour of lesser-known local brands.

 

COVID has also accelerated the shift towards online shopping by leaps and bounds. So much so, that over 90 percent of consumers in the UAE and Saudi Arabia have shifted their purchases online. For example, Carrefour has experienced an 800 percent spike in online grocery orders in Saudi Arabia. Similarly, Majid Al-Futtaim Retail has welcomed a 300 percent growth in online sales from March to May 2020 as against the same period in 2019.

 

Loyalty Program Trends in the Middle East

 

With such drastic changes in shopping behaviour, retailers need to adapt and change the way they engage the Middle East consumers with their brand, ethos, and products. Quick fixes like deep discounts and price cuts would not be a sustainable approach and might lead to long term damage to the brand’s bottom line. Hence, engagement through emotional loyalty aligned with the evolved needs of the millennials becomes extremely important for the Middle East retailers to adopt.

 

On that note, here are our top loyalty trends that are likely to prevail in the Middle East.

 

  • Digital-first, omnichannel loyalty programs

Smartphones have eroded the differences between online and offline shopping experiences.

 

70% of loyalty program members currently access their rewards using an app. Like for everything else, consumers want to be in greater control of things. And loyalty is no exception. Businesses adopting omnichannel strategies using the latest loyalty software are seeing 91% higher customer retention rates than those that fail to adopt these techniques.

 

Retailers should thus focus on investing in channel-agnostic loyalty marketing technologies that provide a convenient, win-win platform for brands and consumers to interact and engage as well as exchange and track value across channels in a highly transparent manner.

 

  • Sustainability and social-consciousness in reward programs

As the younger generation becomes a truly glocal one, ‘responsible consumerism’ is fast catching up.

 

48% of MENA’s millennials only buy from socially responsible brands. And 45% prefer buying from local brands as an expression of solidarity with the local economy.

 

For brands that want to retain their customers in this heat of economic upheaval and rising competition, it becomes essential to offer a reason more substantial than a “points-based loyalty system.” Retailers should thus look at helping their consumers support a cause they care about when shopping for the category (say environmentally safe packaging in food or indigenous community-led fashion production).

 

  • Data-driven, engagement-based loyalty program

According to research by Forrester, emotion is the #1 driver of loyalty.

 

A study by Capgemini further reveals that ‘Consumers with high emotional engagement’ buy the brand 82% of the time whereas ‘Consumers with low emotional engagement’ buy it only 38% of the time.

 

The emotional engagement of consumers has today become extremely easy to notice, measure, and reciprocate. Positive interactions on brand’s owned channels (Instagram, Facebook Live), reviews and references, and participation in online activations (contests, etc.) – are all signs of emotional bonding. As price sensitivity increases in the Middle East, brands should appreciate and reward such non-spending but emotion-driven behaviour.

 

  • Coalition reward programs

A consumer’s shopping list is a long one.

 

And your brand is just one of the line items. Thus, when formulating loyalty programs, it is vital to consider the consumer’s entire lifestyle and allow scope for deriving loyalty benefits across the board.

 

Shared loyalty programs do just that. They allow redemption of loyalty rewards in multiple ways, at various places, and in numerous categories. Led by the participating brands themselves or independently branded by loyalty rewards program providers (such as Plenti in the US and Nectar in the UK), these offer freedom and flexibility to consumers. They also attract new customers from related categories if you strategically choose a partner with a shared demographic of customers.

 

  • Personalized, contextual rewards

The person before purchases.

 

What millennials expect from brands is to be understood, followed, and remembered as human beings. It is all about making them feel special. According to statistics, 91% of consumers are more likely to shop with brands that provide offers specific and relevant to them, and 31% of shoppers wish their shopping experiences were more personalized than they currently are.

 

It means something like offering a complimentary fashionable face mask to a consumer who may have ‘liked’ and ‘shared’ it from your Facebook page but didn’t end up buying. Today, there’s technology like Capillary’s engagement-based loyalty program to make it happen at scale!

 

  • Gamification and geolocation in loyalty programs

A good loyalty program has neuroscience behind it and is experiential in nature.

 

Brands that incorporate gamification into their customer engagement strategies see a 47% rise in engagement and a 22% rise in brand loyalty.

 

Loyalty gamification starts with a clear idea of what consumer behaviour to inspire, a simple-to-follow set of rules, and an easy way to know where the participant stands in the process. Starbucks, for example, uses push notifications to alert customers of their rewards status. And Florida’s Good Vibes Juice Bar makes loyalty shareable by inviting customers to post pictures of their glass bottles online.

 

Wrap up

 

The 2020 COVID pandemic has made it very clear to retailers that shopping behaviour can change overnight. Consumers who had never shopped online before or never cared to try little-known local brands are doing so out of financial uncertainty and a sense of responsibility towards their country. Softer aspects of personalization and corporate social responsibility (CSR) are adding their weight alongside technology and gamification. Embracing these shifts will require a considerable realignment in the way retailers engage with new-age shoppers and earn their loyalty.

 

It is the dawn of a new age of consumerism – one where consumption is a way of self-expression.