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.

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
• Sustainability and social-consciousness in reward programs
• Data-driven, engagement-based loyalty program
• Coalition reward programs
• Personalized, contextual rewards
• Gamification and geolocation in loyalty programs

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.

For detailed insights visit https://www.capillarytech.com/blog/loyalty/customer-loyalty-program-middle-east/