Trends that Would Shape the Middle East Retail Industry

Trends that Would Shape the Middle East Retail Industry

Retail Tech Insights | Tuesday, February 28, 2023

In the past three years, e-commerce has grown faster in the Middle East and North Africa (MENA) region than anywhere else, with an estimated 209 million consumers transitioning to online shopping during the pandemic.

FREMONT, CA; With an estimated 209 million people switching to online shopping during the pandemic, the Middle East and North Africa (MENA) region has had the fastest growth of e-commerce over the past three years. Also, the region's internet consumer base is only expanding.

As the local e-commerce sector expands, traffic congestion and carbon emissions are getting worse due to the millions of items that are delivered every day. Add to that the development of quick commerce, where businesses vie for faster delivery (within 20 minutes) and go above and beyond to entice customers. The World Economic Forum predicts that by 2030, the demand for last-mile delivery in urban areas will increase by 78 per cent.

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The shift toward omnichannel experiences will continue.

The integration of the internet and in-store buying will be the norm for the retail sector by 2023. 96 per cent of retail executives already assume consumers desire seamless shopping across all platforms, making this assertion hardly surprising. Also, 53 per cent of consumers are inclined to browse products in-store before purchasing them online, and the opposite is also true. Additionally, compared to shops using a single channel, those using three or more report an order rate that is nearly 500 per cent greater. This trend illustrates that customers desire to have their buying experiences synchronised across channels. The option for customers to BOPIS, or buy online and pick up in-store, can assist enhance conversion. Making better marketing decisions can also be aided by gathering direct client input, whether it be online or in person.

Consumers will be more likely to reward next-level hyper-personalisation.

Customers' names are no longer only displayed in emails and SMS. Nowadays, personalisation involves creating buyer profiles based on preferences, i.e., tailoring buying experiences based on search history, age, location, likes, height, etc. 80 per cent of customers are likelier to purchase a business that offers a personalised experience. Hyper-personalisation is already being funded by astute retailers. Companies are investing in omnichannel personalisation, with 35 per cent investing in it and 37 per cent using first-party data to future-proof their personalisation plans.

There will be a renewed focus on tracking technologies.

Retail will benefit greatly from the increase in personalization, but it will be more difficult to implement given the new data privacy laws. Retailers have long utilised tracking cookies embedded in websites, applications, advertisements, etc. to obtain consumers' data. This is a required authorisation request for app developers to ask consumers for their consent to track their activities across different websites and applications. This will set advertisers like Meta back a whopping USD 10 billion. As a result, businesses are considering more advanced first-party tracking options, particularly server-side tracking endpoints. Using their Conversion API, providers like Facebook enable the integration and acquisition of first-party data. These server-side (and increasingly edge-side) technologies give marketers the ability to govern and abide by new international rules while also collecting data from first parties.

Consumers currently respect initiatives connected to enhancing the sustainability of internal operations, promoting sustainable product and service offerings, as well as making long-term sustainability pledges, therefore sustainability is a key emphasis area for the region's brand guardians who were polled. In their marketing initiatives, 64 per cent of Saudi Arabian business leaders promote their internal sustainability policies. In addition, 56 per cent of the CEOs who participated in the study said they were committed to long-term sustainability projects.

In contrast, 56 per cent of business executives in the United Arab Emirates are taking action to bolster their marketing plans through long-term sustainable business commitments. Additionally, 54 per cent of business owners think their marketing plans need to offer more environmentally friendly goods and services.

Affordable sustainable solutions are possible and desirable so that customers do not struggle to adopt more ethical practices. Despite the uncertain economy, customers continue to show interest in sustainable products to uphold their moral standards. They choose goods that use resources like water and electricity more effectively, which helps them cut expenses. Global consumers are also becoming more interested in circular solutions like used and pre-owned goods. When environmentally concerned customers see rising disposable incomes once more, brands that encourage consumers to embrace sustainable lifestyles will be better positioned and hence favoured.

The good news is that these remedies to the traffic and environmental effects of e-commerce addiction can be put into place right once and have significant advantages when offered as a customer option by businesses. Recently, a DHL online shopper poll found that customers are prepared to pay more and wait longer for deliveries if they can ensure that they are more environmentally friendly. By giving their consumers a green shipping choice throughout the checkout process, e-tailers might encourage this trend. 

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