The spending pattern of millennials is vastly different from that of Gen X. The former has entered the earning bracket at a time when there are major disruptions across the world: technological changes, globalisation and the pandemic. This has resulted in a new set of spending triggers driven by experiences and economics.
The first generation of digital natives in the UAE have a great affinity for spending through new channels. And they are accustomed to instant access to price comparisons, product information and peer reviews.
These are the behavioural ingredients reshaping the retail space in the UAE because new-age customers are turning to brands that can offer maximum convenience at the lowest cost.
Therefore, retailers, who want to capture the attention of this prime group of shoppers have to connect with them through the right shopping experiences and unique products.
The internet penetration in the UAE is expected to reach 96 percent by 2025, with 67 percent of Middle East consumers shifting to digital channels to engage with brands. Online retail sales are expected to grow by 20 percent in 2022, beating brick-and-mortar sales.
Apart from higher spending power and affinity towards digital channels, millennials in the UAE have displayed significantly higher brand loyalty compared to their peers in the US, UK, and Japan, sometimes even sticking to single brands. This consumer group of people are also value conscious as they realise the burden of increasing cost of living, unemployment and loans/financial burdens.
Need for building personalised omni-channel engagement strategies
With such a high affinity towards digital engagement, it’s no surprise that customers are looking for a personalised omni-channel engagement with retailers. The engagement should be honest and authentic with a story telling approach.
More importantly, there should be a consistency in communication across all channels with emotional messaging. Millennials are also attracted to visual content as millennials in the region spend more than three hours daily viewing online videos.
Leveraging integrated platform vs point solutions for better customer satisfaction
While the initial cost of point solutions might be lower, but they have add-on licenses and growth tiers built in, that further add to the total cost of ownership. Pricing of platform solutions are more foreseeable and is fixed. These solutions share the economies of scale benefits with their customers.
Vendors offering platform solutions usually have experience in catering to customers across a diverse set of industry segments with different technical and application requirements. The platform solutions thus developed are flexible and highly user-friendly.
An integrated platform can be used to segment customers into cohorts based on behavioural attributes and personalise engagement while ensuring consistency in communication across channels and cohorts.
AI-based optimisation capabilities of an integrated engagement platform can help retailers reach the right customer at the right time and through the right channel.
For instance, the Dubai-based e-commerce arm of The Apparel Group, 6thStreet (with 1750+ stores, 75+ brands, 17,000 employees located across four continents), opted to connect with its consumers through a personalised omni-channel shopping experience.
With a modern engagement platform, the brand eliminated silos using channel-specific tools and consolidated the tech stack. The results speak for themselves with repeat purchases increasing by 24 percent and a 4X growth in revenue contribution from the engagement platform.
Hospitality major Airbnb used integrated platforms in an innovative way that has forced competitors to relook at their models or beef up their catch-up efforts.
The brand channelised its efforts into understanding customer needs and converted that into a service offering.
By anticipating customers’ needs and wants, Airbnb proactively created a new business model providing a feeling of belonging and trustworthy service earning huge goodwill in return.
Other advantages of integrated platforms are real-time visibility into all facets of a business, increased productivity, more harmonised operations, easy deployment of new applications and expansion of systems to new locations or channels and more time for management to focus on other areas of the business.
Companies can also achieve 100 percent website uptime, significantly faster page loads, enterprise-grade security against cyber threats and cost optimisation in the cloud.
An integrated platform also provides significant benefits when it comes to data analysis. Systems and applications can relate to each other that will help retailers compare data and gain an overall view of their business.
The need of the hour is an insights-led platform that can create a 360-degree user profile. Retailers that are debating whether to choose a point solution targeting a specific problem, or an integrated platform can weigh the pros and cons, but the two main differences are flexibility and scalability.
Retail brands in the UAE and wider region have to take up digitalisation on a priority basis for survival. It has become even more critical after the pandemic changed consumer behaviour drastically in the last couple of years. Consumer brands need to build deep engagement with consumers through continuous and consistent communication across all digital touchpoints.
Raviteja Dodda, CEO and Co-Founder of MoEngage.
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