As the retail landscape continues to evolve, businesses must navigate shifting customer behaviors and economic pressures. The past year saw significant challenges with low consumer confidence, rising fuel prices, and squeezed discretionary income. However, the economic outlook for 2024 brings a cautious optimism, with easing headwinds and a slow rise in consumer confidence.
1. A ‘Phygital’ Outlook
The integration of digital engagement with a rich in-store experience is becoming increasingly important. Abdullah Ajmal, CEO of Ajmal Perfumes, emphasizes the need to balance these elements. “At Ajmal Perfumes, we’ve navigated the evolving landscape by deepening our digital engagement and reinforcing our rich heritage in physical stores,” says Ajmal. The company has invested in its e-commerce platform, offering features like virtual consultations and personalized fragrance recommendations, meeting the demand for convenience and tailored service.
2. Maintaining Customer Loyalty During Economic Downturns
During economic downturns, fostering customer loyalty and attracting new clients is crucial. Ajmal Perfumes offers value-added services such as free shipping, extended return policies, and loyalty programs. “These initiatives help reinforce the trust and satisfaction of our existing customers,” notes Ajmal. The company has also diversified its product range to include affordable luxury options and leveraged social media and influencer partnerships to create a strong emotional connection with their audience.
Ugur Karci, Customer Success Director at NielsenIQ, highlights the price sensitivity of Gulf consumers. “Companies need to sustain their new customers through their core products after attracting them through price or promotion,” Karci states. He emphasizes that innovation is key, with studies showing that manufacturers growing their innovation sales are more likely to see overall sales growth.
3. Shift Towards Budget-Conscious Purchasing
A noticeable shift towards budget-conscious purchasing is evident among UAE consumers. Ajmal Perfumes has responded by expanding its range of economically priced products and introducing promotional bundles. “Operational efficiency is another critical area where we’ve made significant improvements,” mentions Ajmal, allowing them to offer competitive prices without sacrificing quality.
Karci points out a unique trend in the UAE: the simultaneous rise of high-tier brands. “The 2-year growth is +29% and high-tier brands gained weight by +4.2 points, which is 3 times more than low tier,” Karci explains. He attributes this to the increasing diversity of the population and the demand for international brands, as well as the support of innovations.
4. Leveraging Technology and Data Analytics
Technology and data analytics are crucial for understanding and responding to changing consumer behaviors. Ajmal Perfumes utilizes advanced data analytics and AI technologies to gain insights into consumer preferences and provide personalized fragrance recommendations. “This AI-driven approach allows us to analyze vast consumer preference data, helping us create highly personalized and unique fragrance experiences,” states Ajmal.
Roshni Sheth, ME Retail Lead at GfK, an NIQ Company, emphasizes the importance of consumer insights in e-commerce. “By leveraging data from various sources, retailers can gain a goldmine of information about their customers, their preferences, and buying habits,” Sheth notes. She emphasizes the need for personalized marketing and predictive models to forecast trends and anticipate shifts in consumer behavior. “By implementing AI-powered tools, brands can personalize customer interactions, streamline service delivery, and ultimately create a more engaging and satisfying shopping experience,” Sheth adds.
By embracing digital engagement, maintaining customer loyalty, adapting to budget-conscious purchasing, and leveraging technology and data analytics, retailers are positioning themselves to thrive in 2024. Abdullah Ajmal succinctly puts it, “We understand the shifts and changes in global and local wealth and translate this into opportunities and outcomes for our clients.”
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