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Despite e-commerce boom, UAE residents still preferring for physical stores

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Around 74% of buyers in the UAE feel their favourite brands are not rewarding them for their loyalty

Despite the enormous increase witnessed in the e-commerce sector post-COVID, most UAE residents still favour shopping for food, apparel, and furniture at brick-and-mortar stores, according to a new study.

Locals typically use the internet to book travel, purchase beauty products, and plan entertainment, according to a report by the international financial technology company Adyen.

The card continues to be the most common payment method for in-store transactions, followed by cash, QR codes, direct debit, and digital wallets.

The Dutch-based company’s conclusions are based on a survey of 1,000 UAE consumers and 500 merchants.

Customers Dissatisfied With Loyalty Programs

The survey also indicated that retailers have yet to satisfy consumers’ expectations for higher rewards and individualized offers when it comes to loyalty programs.

According to Adyen, 37% of retailers report declining customer loyalty.

“Around 74% of buyers in the UAE feel their favourite brands are not rewarding them for their loyalty, which is an increase of 4% from the previous year,” the study commented further.

As a result, 75% of brands are providing discounts all year round to win back customers.

According to the report, roughly 69% of UAE shoppers think they would be more loyal to merchants if allowed online purchases and in-store returns. In addition, 64% of respondents said they would have better in-store and online buying experiences, or vice versa, if a company allowed them to do both.

Approximately 78% of UAE customers say they want to see more sales at the stores they frequent, and 67% say they want stores to remember their preferences and prior purchases so that browsing is more individualized.

However, 58% of respondents said it’s now more challenging to categorize clients, which indicates that UAE merchants need help delivering on this.

According to the research, consumers “are craving a connection with their favourite brands and want to believe that their loyalty has a real impact on their buying experience.”

Approximately 80% of UAE customers said they spend more time looking for the best offers and pricing, while 30% said they wait until major holidays like Black Friday to make purchases. In response, 52% of UAE business owners think that year-round discounts are necessary due to the impact of inflation.

Notably, 69% of consumers said they would keep making purchases from a company that offered an enjoyable retail experience. Customers will notice and reward businesses with their loyalty, the study claimed, as they work to provide more inventive and smooth shopping experiences.

Unified Business

Additionally, the study discovered that UAE merchants know the need to integrate all sales channels, as 50% of them have already started investing in this approach in 2022, and another 45% are considering doing so.

“It’s lovely to see that in the UAE, more than half of shops have also seen the potential of unified commerce and chosen to invest in it,” according to Sander Maertens, head of the Middle East at Ayden.

The official also said that retailers who have adopted unified commerce will find it easier to manage and adapt to these transitions, despite the significant changes in customer behaviour over the past several years.

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