Leveraging Behavioural Loyalty in UAE: Transforming Consumer Engagement Trends

There’s one thing today’s consumers are doing more than ever: spending time online. This shift presents a golden opportunity for marketers to rethink their customer engagement strategies and adapt to this new reality.

 
In this blog, we dive into a few consumer trends and the role of behavioural loyalty in the UAE and explore how brands can create delightful, meaningful experiences by understanding and rewarding customer behaviour, even between transactions.

So what is Behavioural loyalty?

Behavioural loyalty is the ability of brands to retain loyal customers by adopting strategies to reward members’ non-transactional behaviour.

 
Through behavioural loyalty, brands can (a) segment customers based on high or low engagement frequency, and (b) reward customers based on key elements like purchase behaviour, occasional purchasing, engagement levels, user status, participation in customer feedback, and more. As we move ahead, we will describe how behavioural loyalty has leveraged the shifting UAE consumer trends.

The Current Consumer Landscape in UAE

As of 2024, the UAE’s retail market has experienced significant growth, with its value reaching approximately USD 138 billion in 2023 and projected to reach USD 219 billion by 2032. This expansion is driven by rising per capita income, a flourishing tourism industry, an increasing population of expatriates, and high-profile events like the Dubai Expo.

 
Recent studies indicate that 95% of UAE consumers have altered their shopping behaviors, showing a willingness to explore different stores and experiment with new brands. This shift has prompted many brands to reassess their loyalty initiatives and strategies to stay relevant in a competitive market. In this dynamic environment, retailers face the challenge of retaining loyal customers and preventing churn to competing brands.

 
Implementing behavioral loyalty elements can serve as a strategic lever to build mutually rewarding relationships between retailers and consumers, ensuring sustained engagement and loyalty in the evolving UAE retail landscape.

Leveraging Behavioural Loyalty in UAE

1) The Shift to Online Shopping

The UAE continues to lead digital adoption in 2024, with 71% of consumers incorporating digital features into their shopping experiences. This widespread embrace of digital tools highlights the growing importance of online shopping methods, as consumers increasingly appreciate the convenience of obtaining their desired products with just a few clicks.

 
Marketers’ perspective: Brands can get much closer to consumers by building an omnichannel loyalty program. This further gives the brand endless opportunities to delight its customers by rewarding desirable behaviours. For instance, customers can unlock bonus rewards when they link their loyalty accounts to their online purchases. Customers can be incentivized higher when they pick up online orders against getting them delivered. Those who engage more by writing reviews, visiting specific pages or watching videos can be rewarded using a behavioural loyalty program.

2) Brick-and-Mortar Stores Rule the Roost

In 2024, UAE’s retail scene continues to thrive as consumers embrace the unique experience of shopping in physical stores. For categories like clothing, footwear, and electronics, the touch-and-feel element remains a key driver for in-store visits. Similarly, the dining sector is flourishing as consumers seek out memorable and social experiences at restaurants, highlighting the importance of in-person interactions in today’s retail and hospitality landscape.

 
Marketers’ perspective: Customers visiting stores can be incentivized to engage in in-store activities, such as ‘check-ins’ during their visit. Offering options like pre-ordering and picking up items during quieter hours can enhance convenience and efficiency. Loyalty programs can reward these proactive behaviors, creating a seamless and personalized experience. For premium-tier customers, brands can elevate the experience with perks like assisted shopping or exclusive shopping slots to ensure a more tailored and comfortable visit.

 
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3) New-found Love for Local

Global supply chains continue to face significant disruptions due to geopolitical tensions and natural disasters, leading to delays in the availability of international goods. This has prompted consumers worldwide to increasingly favor local products, a trend particularly evident in perishable goods like dairy and meat. A recent survey indicates that one in three shoppers now prefers to buy local products, underscoring a broader shift toward conscientious shopping habits that prioritize community support and local economic growth.

 
Marketers’ perspective: Loyalty programs can be tweaked or enhanced to ensure that customers earn more when they add local brands to their cart. Customers are increasingly looking for relevance and would shop more with businesses that are committed to social causes like promoting local businesses.

4) Ease of Payments

With the surge in e-commerce platforms, UAE consumers are also expecting top-notch digital payments services. The last few years have seen a spike in the use of cash on delivery, and over time buyers have drifted to using digital wallets like Apple Pay and Google Wallet.

 
Marketers’ perspective: Consumers in the UAE are looking for flexible payment options. So, it is important that the e-commerce platforms of brands seamlessly integrate all of the commonly used payment options. To ensure that consumers get the extra benefit, retailers can provide special offers across the various payment options.

5) The Coupon and Discount Hunt

UAE is the third-richest country with respect to GDP per capita. But the country’s economy did not escape from the effect of the pandemic, which affected household income and spending. The drop in income has resulted in UAE consumers becoming price-conscious, and buyers are seeking ways to save through discounts and offers. Talkwalker claimed that many international brands are being associated with deals and discounts.

 
Marketers’ perspective: When consumers are looking for great deals and value, it’s a good idea to include personalized deals in loyalty programs. This makes the customer feel special and would stick around with the brand for a long time. The hunt for coupons can be packaged into a game to keep customers engaged ‘in-between’ transactions and to reward engagement with the brand on digital channels.

How Capillary Can Drive Behavioural Loyalty in UAE

Behavioural loyalty programs in UAE can be shaped creatively depending on the products. In fact, Capillary’s loyalty program enabled one of the leading fashion retailers in the UAE to get a boost in their overall average transaction value. Our loyalty program triggers bonus points to customers when they shop on specific days of the week, thereby encouraging more store check-ins. This program also incentivizes customers with additional benefits for buying from multiple categories.

 
Our loyalty experts share some more ways where retailers from different sectors can adopt behavioural loyalty at the right time and reward customers:

• A customer who buys a pair of running shoes may not revisit the store for at least 6 months. However, retailers need not wait that long to engage with the customer. To encourage the customer to regularly use the product, customers can get access to content that helps customer with their running basics, posture, and nutrition. Customers who consume the content or are able to maintain a streak of consecutive workouts can unlock badges that they can share on their social media pages.
• In an apparel store, if the customer has purchased a shirt, the brand can delight customers with personalized offers on pants or other accessories to pair with the shirt, encouraging more store check-ins and purchases
• Loyal customers entering their regular aisles in a supermarket can find QR codes across their favourite products and can avail exclusive offers and discounts.

 
Consumer relationships with brands are constantly evolving, shaped by shifting preferences and technological advancements. Innovation remains the driving force behind successful engagement. While agile marketing strategies help brands stay ahead of the curve, tools like behavioral loyalty programs can significantly elevate customer engagement. Connect with our experts today and craft a winning loyalty strategy for your brand.

FAQs

What is Behavioural loyalty?

Behavioral loyalty enables brands to retain loyal customers by implementing strategies that reward non-transactional behaviors.

What is the role of behavioural loyalty in UAE?

Behavioral loyalty is crucial for enterprises in the UAE to adapt to shifting consumer trends, from incentivizing online and in-store engagement to promoting local products and flexible payment options. By rewarding non-transactional behaviors and offering personalized experiences, brands can build deeper connections and long-term loyalty in a competitive market.

An example of how Capillary can drive behavioural loyalty programs for enterprises in UAE?

Capillary’s behavioral loyalty program in the UAE boosted transaction value for a leading fashion retailer by offering bonus points for specific shopping days and multi-category purchases, driving more store check-ins.

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Keerthana is a business journalist and is adept at catching market and retail trends. She enjoys analyzing facts and figures and often shares those insights through her writing. Before becoming a writer, Keerthana also had a stint in Biotechnology research.