The retail industry in the Middle East has undergone a seismic shift. Consumers around the world are living differently, working differently, and shopping differently. But what do all these changes mean for businesses in 2022 and beyond? Which global and local trends, fuelled by evolving consumer behaviours, will continue to impact industry operations, define strategies, and shape ambitions?

Adyen’s latest Retail Report research shows that 73% of UAE businesses grew in revenue by 20% or more in 2021, across the retail, food and beverage, and hospitality sectors. This is higher than the 67% growth experienced on a global scale. This is largely thanks to accelerated investments in digital transformation, made in response to rapidly evolving shopper needs, local government regulations, and operational necessity. According to the study, 83% of UAE consumers say they are more likely to shop with retailers that use technology to improve the customer experience.

Businesses, in turn, have responded to this – with over 66% investing in digitalization to improve operations during the pandemic. Here are four key consumer expectations that are worth strategic consideration in retail right now:

More Seamless Cross-Channel Shopping
The flexible, tech-driven experiences made available mid-pandemic are blurring the line between sales channels and fuelling the rise of nonlinear customer journeys. Adyen data shows that 68% of UAE consumers believe retailers should deliver the same cross-channel flexibility they provided during the pandemic; 61% of them are more loyal to retailers who have both physical and online options.

Consumers in this region have specific expectations and shopping preferences, which present significant opportunities for loyalty-building and revenue growth. However, many businesses risk missing out. For instance, only 23% of UAE merchants allow customers to easily return items purchased online at their physical stores. Those who do not offer this experience are at a risk of losing their customers due to their inability to adapt.

In order to close this expectation gap, businesses should consider exploring unified commerce solutions, connecting sales channels, consolidating payments, and breaking down silos for a more modern customer experience.

More Effective, Tech-Driven Loyalty Programs
It’s never been easier for people to find, compare, and shop with new brands – and this is affecting traditional customer loyalty around the world. In the UAE, 70% of consumers have reported that they will not shop where they have a bad shopping experience, either online or in-store. To secure long-term loyalty, retailers must offer customers more compelling reasons to connect with them on a regular basis.

Loyalty programs are an area of the customer experience ripe for innovation: 86% of UAE consumers say retailers should use technology to make their loyalty or rewards programs easier and more effective. When it comes to growing loyalty, data must play a central role. Payment-linked loyalty, especially when sales channels are connected through a unified commerce solution, can help businesses capture richer data insights, understand shopping preferences, assign loyalty points, and better anticipate customers’ needs.

Tech-Enhanced In-Store Experiences
Despite the significant rise in online shopping during the pandemic, there’s still a strong appetite for the in-store experience. In the UAE, three out of five consumers still prefer to shop in a physical store – 24% higher than UK shoppers, where 51% prefer to shop online. Additionally, 70% of UAE consumers view physical stores as an important touch-point, even if they can shop with the same retailer online, while 68% of UAE consumers shop online for convenience, but still prefer the real thing. However, customers have developed higher expectations of in-store shopping, and  technology can be used to improve it.

Shopping in a physical store should be fun, stress-free, and technologically sophisticated. With more businesses planning to increase their numbers of physical stores in the next year, brands must find ways to captivate customers, shorten waiting lines, and create a memorable brand experience. More than half (58%) of UAE consumers only plan to shop in-store if retailers make it more interesting, for example, Virtual Reality experiences, in-store cafes, or special events.

Many retailers recognise the ongoing importance of in-person shopping, with businesses expecting the proportion of revenue to increase from physical stores in the next year. Embracing the role of the physical store as a place for brand experience and loyalty-building is a good start, and unlocking its full potential with digital technology and payments will be key to making the most out of your brick and mortar investments.

More Payment Methods and Flexibility
Lastly, a critical loyalty driver for retailers to focus on for 2022 and beyond is offering the right payment methods. Businesses have the chance to leverage the increasing popularity of digital and contactless payments, as well as the growing demand for alternative shopping options like buy now-pay-later (BNPL), social commerce, and buy online, return in-store.

While preference for cash payment is still high in the UAE, the world is seeing a rising trend in contactless and cashless payment on the whole. Globally, 78% of consumers expect to be able to pay with major cards, and 68% of consumers expect to be able to pay with cash.

Buy Now, Pay Later (BNPL) shopping is on the rise around the world, but while consumers are keen to embrace the flexibility of the solution, particularly for high-value purchases, retailers are lagging behind. Just 18% allow customers to use BNPL services.

Closing the Expectation Gap with Technology
For many retailers, the move to embrace digital technologies that enable greater operational agility and richer shopping experiences hasn’t just helped mitigate loss during the COVID-19 pandemic – it’s also opened up a wealth of new opportunities for growth. As evolving consumer behaviours fuel the need for innovation and flexibility, businesses that connect their sales channels and leverage data to better understand their customers, anticipate their needs and exceed their expectations will be the ones securing long-term loyalty.