Even before COVID-19 disrupted consumer behavior and day-to-day business, the GCC countries were on a path to rapid digital transformation.  For instance, UAE was working towards establishing a Smart City and innovative mobility solutions like Hyperloop, driverless cars, and flying taxis while Qatar had launched TASMU – an initiative that aims to transform the country into a world-class smart city.

And then COVID-19 hit the world and forever changed consumer behavior and business landscape. Like other economies, the GCC countries have been heavily impacted by the pandemic: Wholesale and retail trade, transportation and storage, and finance which accounted for almost 50% of Dubai’s GDP have been impacted, and Saudi Arabia was impacted by the fall in demand for oil, gas and jet fuel which pushed crude oil prices to a 17-year low in Q2 2020.

From a retail standpoint, there have been significant challenges around reduced footfalls, supply chain disruptions, depletion of brand loyalty, and last-mile delivery. However, the region witnessed some positivity even amidst the gloom, especially in the online retail sector. During the lockdown, consumers focused their online spending on groceries, personal-care products, and household supplies. As a result, the online grocery witnessed 5X growth during this period. Retailers have been quick to invest in digital sales channels, and revamp their product catalog and services to serve the changing customer needs. Multiple new players – like Noon Daily, Dubai Store, Sharaf DG, and Areem – entered the online grocery retail segment while existing players such as Mrsool and Nana rapidly scaled their digital expansion.

This fast-tracked digital adoption in the GCC retail sector will have a significant impact on the future of the retail landscape. Especially considering the fact that many of the consumer behavior changes are likely to persist well after the pandemic has been fully eradicated. For instance, 48% of customers who adopted digital payments during this crisis stated they would continue using digital contactless payments, even after the pandemic.

Here’s how retailers in the GCC can leverage digitization to adapt to the new reality and boost business growth in a post-COVID world:

Retain Customer Loyalty

As GCC customers dealt with pay cuts and job uncertainty, their purchasing patterns naturally shifted to low-cost alternatives of their preferred brands. There was an increased focus on saving money and cutting down on high-cost purchases. The increased adoption of eCommerce during the period offered customers a plethora of options from both domestic as well as international brands. This led to a shakeup of long-standing brand-customer loyalty dynamics and many brands found their loyal customer base shifting to other brands. To retain and strengthen customer loyalty in the post-COVID world, retailers will need to adopt data-driven insights to personalize customer experiences and go beyond traditional earn/burn loyalty program mechanics.

For instance, brands can adopt a Capillary loyalty platform to micro-segment customers based on multiple behavioral and transactional attributes like demographics, interests, product preferences, basket size, frequency of purchase, and time of purchase, etc to target them with highly personalized content and offers. Also, rather than rewarding customers only for a transaction, retailers should think about incorporating rewards throughout the purchase journey. For example, rewarding customers for promoting the brand on social media or sharing a positive review about the brand.  These strategies will go a long way in ensuring brand loyalty and customer stickiness.

Optimize Stock & Inventory

A customer-focused inventory assortment is a critical factor in ensuring retail growth and success. Often, retailers make stock and inventory decisions based on supplier availability or supplier pricing. In the new digital-first reality, brands will need to closely monitor customer behavior in terms of preferred products, alternatives, and what are the factors they consider when making the purchase. These insights can be accessed through several means: by investing in a CRM loyalty program platform, monitoring online behavior, through in-store analytics, feedback/surveys, and market research. Retailers should finally collect and unify these customer insights by leveraging a Customer Data Platform (CDP).

Maximize Marketing ROI & Customer Engagement

GCC has one of the highest social media and internet usage levels in the world. According to the latest reports, an impressive 98.98% of the UAE population remain active on social media while around 72% in Saudi Arabia. Retailers should find ways to effectively engage with their customers by leveraging these new-age mediums while still ensuring that they get the highest returns on their marketing spends. Intelligent cross-channel and omnichannel marketing platforms that can automatically select the specific segment, content, channel, and time for every campaign, enables retailers to achieve this at scale. By using Big Data and Machine Learning algorithms, these solutions learn which customers will respond positively to a specific offer and on which channel (Facebook, Instagram, Snapchat, Email, SMS, etc.). This helps brands to target customers only on specific channels on which they are likely to respond and save precious marketing budgets.


COVID-19 has ushered in rapid changes in customer behavior and retailers will need to adapt to this new reality with an agile, digital-first mindset to ensure continuous growth and profitability. The time to act is now!

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