For an emerging eCommerce market like the GCC, the holy grail for brands and retailers is strengthening and growing their customer base over time.

In other words, your existing customers incrementally increase their spending over a period of time. This allows your brand to build a solid growth engine without denting your bottom line.

Chewy, the online pet product shop which recently IPO’d, is a great example of a company that managed to grow a sticky and loyal customer base. The brand has nearly 11 million active customers and its repeat rate is so strong that existing customers account for approximately 90% of their net sales at any given period!

Unfortunately, retaining customers and creating a loyal base in a digital-first world is extremely difficult as attention spans are at an all-time low and an army of competitors are just a click away.

Furthermore, eCommerce as a channel is heavily dependent on economies of scale to reduce costs and eventually hit profitability. Case in point, two of India’s biggest eCommerce players – Amazon and Flipkart – are still posting losses (Flipkart hit revenues of INR 6,318 crore with losses at INR 1,937 crore for FY20).

While achieving the economies of scale is a long-term strategy, retaining and growing your customer base is something any eCommerce player can start from Day 1.

How GCC Ecommerce Brands Can Maximize Customer Loyalty

The Ecommerce space in GCC is highly competitive with more than 25 multi-category players and there are bound to be winners and losers. For instance, Nisnass is in the process of shutting down while Kul’s market share has been steadily increasing thanks to lower delivery charges, effective marketing and continuous process enhancements.

Here are some key strategies for eCommerce brands to increase brand loyalty and stay ahead of the competition:

1. Create a Differentiated & Experiential Loyalty Program

The need of the hour for retail brands is to create a differentiated and engaging experience and this is applicable to loyalty programs as well. Along with the usual loyalty program staples like discounts, points, and signup bonuses, eCommerce brands in GCC should incorporate experiential rewards like personalized gifts, gamification, surprise tier upgrades, or exclusive milestone-based rewards. This will go a long way in increasing average Lifetime Value, AOV, and ultimately brand loyalty. As a first step towards this shift towards experiential loyalty marketing, consider investing in a good customer data and loyalty program software with advanced AI and Machine Learning-based capabilities.

2. Integrate Social & Community Aspects into Your Program

The GCC boasts of one of the highest internet and social media penetration in the world. UAE reports a social media penetration of a staggering 99%! This is a clear and present opportunity for retailers to leverage this digital and social-media savvy consumer to increase brand mindshare and loyalty. It’s vital for brands to blend social and community layers like referral marketing, influencer marketing, User Generated Content, and Social Logins into their loyalty program to capture the attention of GCC’s heavily tech-savvy consumer base. Some of the use-cases include incentivizing customers for referring friends, sharing brand stories or products with friends, mentioning the brand with hashtags, or logging in via social handles. Integrating a social element into your customer loyalty program also helps you tie-in revenue numbers to your social media metrics. For instance, you can create links between the number of repeat visits and Facebook interactions or compare the average lifetime value of customers who engage with the brand on Instagram vs other channels.

3. Track Changing Consumer Needs & Preferences

The COVID crisis has rapidly shifted previous consumer preferences and needs. There are clear indications of GCC consumers buying down and opting for cheaper alternatives to conserve cash due to the economic uncertainty. Brands that don’t align to this changing consumer needs and revamp their marketing and engagement strategy risk being termed labeled as tone-deaf. Analyze your loyalty program data to understand the shifts in purchase patterns of your customers in terms of product choices, frequency, and average cart value. This will help you to revisit your segmentation strategy and offer a more relevant and personalized engagement strategy.

4. Re-engage Lapsed Customers

During the pandemic, a large segment of customers put a pause on luxury and apparel/fashion spends. Ecommerce brands dealing in these verticals should be looking at re-engaging and winning back this dormant segment. A combination of loyalty insights, contextual rewards, and personalized cross-channel promotion is highly effective in bringing this segment back into the purchase cycle. Brands can start targeting this segment through highly personalized emails that remind them of their current point status and how they can redeem them on a highly curated collection. To spark engagement, ensure the products are highly personalized based on their previous purchases, browsing patterns, loyalty, and CRM data. Showcase what’s trending since they last visited your site and the new features you have added since then. Unfortunately, email as a channel might not work for all your consumers, so it’s important to create a cross-channel marketing strategy that targets your consumers across multiple channels like Facebook, Google Search, SMS, WhatsApp, etc with the same personalized content and offer.

5. Adopt a Hybrid Approach

The pandemic certainly provided a massive boost to digital adoption and ecommerce in the GCC. However, the region has traditionally been a bastion for offline retail and is renowned for its mall culture. Once the case numbers drop below a certain threshold and consumer apprehensions recede, we expect the revival of offline retail in the region. At that point, ecommerce retailers must be able to create a seamless connection between the digital and physical world. This will entail allowing customers to redeem points earned in the digital world at an offline partner store, using QR code scans to incentivize customers to attend an offline event, rewarding customers to opt for pickup from a designated neighborhood store, etc.

Conclusion

While ecommerce in the GCC is poised for staggering growth, retailers shouldn’t lose sight of the fact that consumers in the region will eventually start shopping from stores again. This requisites a hybrid and omni channel lens to be applied to all aspects of retail – from customer engagement, loyalty marketing, merchandising, supply chain, payments and commerce.