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Saturday 16 March 2019
How GCC retail can succeed in a
millennial world
Panos Linardos, chairman of Retail Leaders Circle MENA, on how
millennials are changing the face of retail
Opinion
According to a new study, millennials are the revolution. There are currently 2.5 billion living
millennials globally who will inherit $33 trillion during their lifetime, meaning they have the biggest
spending power of any generation. In the GCC alone, about one-third to one-half of the GCC’s
populations is under the age of 25, and by 2050, 54 per cent of the population is expected to be
below 36 years of age in GCC.
But what makes millennials different from their predecessors and how is their behaviour
transforming the face of retail? Quite simply, they have higher expectations and different
priorities. Therefore, retailers must work harder to capture their attention. Millennials are
experience driven, adopters of the sharing-economy, prolific with social media and loyal
customers of e-commerce. However, although their preferences may have changed, shopping is
very much still part of their daily life. In fact, GCC millennials tend to be higher spenders than
their global cohorts.
With the emergence of e-commerce, millennials have changed the customer journey. According
to Euromonitor, internet retailing in the UAE grew by 18.5 per cent in 2018 and is now worth
Dhs7.4bn ($2bn) – exclusive of VAT. Today, shopping no longer starts when you walk into a
store. Instead, with mobile usage at almost 100 per cent among GCC millennials, they have
everything they could need within a touch of their smart phone.
When asked what motivated a purchase, a recent study by Visa showed that 70 per cent of
millennials shop to save time, whereas for 60 per cent of them it is a matter of
convenience. Finally, for 40 per cent it is about transcending their location. Empowered and with
a sense of exclusivity, e-commerce provides millennials access to aspirational products,
whenever they want.
But with this access to millions of products at their fingerprints, millennials are not completely
independent as they still look to social media for peer review and recommendations, with 84 per
When used effectively, social media can give retailers a direct link and open dialogue with their
target audience, creating communities of fans. Previously, data had been used for logistical
purposes, such as inventory, yet retailers are now using technology to effectively engage with
their customers and form meaningful relationships. Some brands, such as Paris 99 even used
Instagram as their launchpad, while influencer marketing has become one of the most effective
methods of building awareness and driving online sales. The online world enables brands to
reach out to their customers with the latest offers and promotions, instantly.
However, despite the ease of e-commerce, most millennials prefer the experience of traditional
retail. According to a Pew Research Centre report, more than three-quarters of purchase
decisions are made after looking at or trying on a product in-person. Therefore, it is essential for
retailers to track in-store display engagement as an understanding of where, when, how and
which customers are interacting with your products. Retailers can then apply these insights to
their digital campaigns, in-store marketing and merchandising.
Whereas previously multiple brands landed in the GCC and expected instant sales, the GCC
millennial is now looking for a bespoke, distinctive, locally-relevant experience. Some 78 per cent
of UAE consumers even admitted that they are comfortable sharing their personal data if they
receive more personalised or better deals.
Furthermore, customers are also becoming more ethical in their purchasing decisions as they
want to know the story and source of each product. Zero-waste design has become a key tenant
for customer loyalty as brands like H&M and Zara has created ‘conscious collections’ redesigning
old garments for new use.
With the focus on meaningful transactions, retail is becoming a service. Brands are looking to
provide non-merchandise aspects of their business, such as Lululemon or Apple, which offer
classes and events to connect with their customers on a deeper level, securing brand loyalty.
So what does the future hold for the GCC millennial shopper? This is one of the many topics we’ll
be discussing at the Retail Leaders Circle MENA Summit in Dubai from March 25-26. We will
look at the drastically changing customer behaviour that is forcing retailers to focus on offering a
seamless shopping experience, whether on or offline.
By taking advantage of every touchpoint, brands will unite all sales channels, whether physical
outlets, websites or smart phone apps, to capture meaningful data about their customers so that
they provide the most bespoke customer journey for each individual. Millennials have spoken,
openly sharing their preferences, and now retailers are beginning to listen.
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cent globally saying that they don’t trust original forms of advertising. Therefore, social media is
becoming increasingly crucial for the success of new and established brands as the average
GCC millennial spends between 4.5–6.5 hours online a day. They are scrolling, not strolling to
the mall.