Majid Al Futtaim Lifestyle reveals rise of influencer marketing, consumer spends, upcoming trends

Feb 23, 2024
Majid Al Futtaim Lifestyle reveals rise of influencer marketing, consumer spends, upcoming trends
Influencers are growing to be “potent marketing tools” with no signs of decline, the report says

UAE’s Majid Al Futtaim Lifestyle unveiled the Beyond Shopping Report providing an in-depth analysis of consumer spending patterns, upcoming trends, and market predictions.

The report unveiled several retail sector insights including the rise of influencers which the report described as “potent marketing tools.”

“We firmly believe in knowledge sharing, transparency, and active contribution to broader industry efforts,” Fahed Ghanim, CEO, Majid Al Futtaim Lifestyle said in an exclusive interview with Arabian Business.

Increasing influence of influencer marketing
Influencer marketing is on the rise in the region with a growing impact on consumer purchase decisions. 71 percent of UAE female shoppers and 58 percent of UAE male shoppers said that they follow influencers.
The statistic was comparatively higher in Saudi Arabia with 78 percent of female shoppers and 58 percent of male shoppers stating that they follow influencers.
A majority of these consumers revealed that they follow influencers for information about products and services as well as, to stay updated on latest trends.
Last year, Arabian Business reported that the UAE is now home to over 25,000 influencers with a follower count ranging from 1,000 to 10 million.
According to data from the Beyond Shopping report, influencers are growing to be “potent marketing tools” with no signs of decline.
Among the top category of influencers came fashion, technology, food, entertainment and travel.
“In an era where authenticity is paramount, influencers play a central role in bridging the gap between brands and consumers,” the report says.
MENA e-commerce market projected to surge to $50 billion
According to the latest data released in the report, consumer spending within the region saw significant increases in 2023, especially in the e-commerce sector. 49 percent of shoppers in the UAE and 46 percent of shoppers in Saudi Arabia shop online at a minimum of once or twice a week.

The retail sector in the Middle East plays a key role in driving the non-oil economy, contributing to a significant increase in the GDP of several countries. Last year, the UAE saw a 3.6 percent GDP growth from the non-oil sector. The e-commerce sector particularly witnessed substantial growth.

The e-commerce industry in the region is predicted to reach a whopping $50 billion by 2025, according to data by Statistica.

“The exponential growth of e-commerce highlights the importance for brands to prioritise delivering a seamless online shopping journey for consumers which focuses on personalised experiences to foster increased loyalty,” Ghanim said.

AED1,500-AED5,000 was the average range recorded by 39 percent of UAE shoppers and 45 percent of Saudi shoppers, per month online.

According to the report, there has been a notable shift in consumer priorities, with a growing emphasis on sustainability and ethical consumption.

This trend is reflected in increased spending on eco-friendly products and brands committed to social responsibility. The report further highlighted the importance of personalised shopping experiences, with consumers expressing a preference for brands that offer tailored recommendations based on individual preferences and previous purchases.

53 percent of UAE shoppers and 48 percent of Saudi shoppers said that they are willing to pay more for sustainable lifestyle products.

UAE – one of the world’s biggest retail markets
The UAE has gained positioning as one of the world’s most prominent retail markets with demand driven by international and local shoppers. The country’s retail sector is estimated to have contributed 18.1 percent to the UAE’s GDP in 2021 and 28 percent to Dubai’s GDP alone.

According to the report, there has been a shift towards experiential and immersive shopping environments as consumers increasingly indulge in hybrid shopping. 59 percent of UAE shoppers use their smartphones to enhance in-store experiences.

89 percent of UAE and Saudi customers think that it is important for brands to offer a mobile website option, a further 90 percent in the UAE and 89 percent in Saudi believe that is is important for brands to have a dedicated application.

With the growth of AR and VR technology in the shopping space, retail experience such as virtual try-ons, VR demonstrations and interactive displays are growing in popularity.

“There is a notable trend towards authentic, immersive experiential retail. We are seeing a shift from conventional transaction-based retail towards more immersive and engaging experiences for customers, which aim to establish deeper emotional connections, increase brand loyalty, and create memorable encounters that go beyond the act of purchasing products,” Ghanim explained.

Retailers are urged to embrace these technologies to stay ahead of the curve and meet the evolving expectations of their customer base.

However, there still continues to be a fine line between actual added value and “gimmicks.”

“It is crucial for businesses to ensure that these encounters are not only innovative but also relevant,” the report read.

Trends and market predictions
One notable prediction is the continued growth of e-commerce, with the report forecasting a significant increase in online retail sales.

However, it also emphasises the importance of a seamless omnichannel approach, where brick-and-mortar stores and digital platforms complement each other to provide consumers with a holistic shopping experience.

Artificial Intelligence (AI) continues to stand as a pivotal force in shaping the future of the retail industry, particularly in the region.

According to the report, the technology is set to revolutionise customer shopping experience to supply chain management, customer service and more.

In accordance with the UAE National Strategy for AI, the adoption of artificial intelligence aligns with the economic potential of 14 percent.

Buy now, pay later
With the rise in the retail sector and the prevalence of e-commerce the Buy Now, Pay Later (BNPL) models are on the rise in the region. The report stated that Majid Al Futtaim Lifestyle’s online stores has seen BNPL sales double last year.

As consumer preferences continue to evolve, staying ahead of the curve is not just an option; it is imperative for those looking to secure a lasting presence in the competitive world of retail.

Source: arabianbusiness