Over 50% of MEA consumers in loyalty programmes want freebies - Euromonitor International

Photo by Nathan Dumlao on Unsplash

Nadejda Popova, head of Loyalty at Euromonitor International, said: “Creating lifestyle loyalty programmes by rewarding actions rather than purchases has become an essential focus for brands across industries in the MEA.

Another important reason for participation in loyalty programmes is exclusivity combined with deeper engagement for loved and preferred brands.

“According to Euromonitor International’s Voice of the Consumer: Loyalty Snapshot for 2023, discounts and free products are one of the major factors impacting consumer participation in loyalty programmes in markets like the UAE and South Africa in the MEA region.”

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Consumers are becoming savvier, seeking added value from their regular purchases and membership schemes. This is forcing brands to adapt and deliver wide-ranging rewards, more prestigious membership status, enjoyable experiences and personalised services.

Popova said: “Businesses should aim to become part of their consumers’ everyday lives by incentivising wellness and wellbeing behaviours, and providing innovative, useful and highly personalised benefits. By forming relevant partnerships and delivering more choices for consumers with the help of these schemes, brands can stand out from the crowd and remain relevant.

“Consumers in the Middle East and Africa region value real-world experiences. In fact, 88% of consumers in Nigeria agree that real-world experiences are of great importance to them, followed by such markets as South Africa and Egypt.

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“Customer experiences have a pivotal role in helping local businesses attract and retain customers, gain a competitive edge and ultimately drive business growth. As consumers become more experience-driven, offering experiential rewards helps engagement with customers and encourages their investment in the brand.”

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Grocery retail leads with highest participation in loyalty programmes

Grocers are increasingly investing in delivering a seamless omnichannel shopping experience, which has impacted the popularity of their loyalty programmes.

Consumers are actively seeking bargains and leveraging loyalty programmes to secure cost-saving advantages.

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Some 47% of global respondents participate in rewards-based programmes in grocery stores. Participation in loyalty programmes is higher in South Africa (70%) and also higher than the global average in the UAE (49%).

Mehrnoush Shafiei, senior research analyst at Euromonitor International, said: “The MEA region presents an exciting opportunity for loyalty programmes. The region is receiving more attention than ever before following the global Covid pandemic, when a mountain of data was collected as consumers shopped online.

“If we compare the region to other parts of the world, MEA is forecast to register a 4% Compound Annual Growth Rate (CAGR) in consumer spending from 2023-2040, outpacing global projections of 2% followed by the Asia Pacific region.”

“Some of the biggest factors underpinning the MEA region’s consumption patterns are the growth of the middle class and youthful demographics.”

Rise of gaming culture in MEA will also drive loyalty programmes

Popova said: “companies are shifting their strategies to build trust and a long-term relationship with their customers engaging through gamification. Gamification is an effective motivator for customers to engage more frequently with brands in a fun and novel manner.”

In the MEA region, 27% of consumers played online video games in 2023, compared to 25% in Asia Pacific and 22% in Latin America, according to the Euromonitor International Voice of the Consumer: Lifestyles Survey for 2023.

More brands are gamifying loyalty programme experiences through scoreboards, challenges, badges and performance charts to drive engagement, satisfaction and loyalty.

Download Euromonitor International’s Customer Loyalty in the MEA Region report.