United Arab Emirates Loyalty Programs Industry Outlook in 2023

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With consumers in the United Arab Emirates turning cautious about their spending, more and more customers are signing up for loyalty and reward programs offered by their retailers.

This has driven the uptick in loyalty program adoption and the trend is projected to further continue from the short to medium-term perspective, as macroeconomic challenges put pressure on the monthly budget of consumers. Along with domestic firms, global players expanding into the region are also projected to launch loyalty and reward schemes to drive the popularity of their brand in the Emirati market over the next three to four years.

Retail firms are launching loyalty programs amid the growing adoption among consumers in the Emirates

Consumers prefer to shop from brands and retailers that provide their customers with loyalty and rewards programs. This trend has been growing significantly in the Emirates in 2022, and consequently, retail firms have launched their loyalty programs in the country.

• In October 2022, Alshaya Group, one of the leading international franchise operators, announced that the firm had launched its loyalty program for shoppers in the Emirates. The loyalty program, Aura, allows shoppers to earn points and redeem them across 70 brands, including while dining at restaurants. The launch in the Emirates follows a successful launch in Qatar and Kuwait, where the firm had amassed over 1 million members.

From fashion to beauty, dining, and home furnishings, brands can earn and redeem points online and in-store. From the short to medium-term perspective, PayNXT360 expects more such loyalty program launches in the Emirati nation, as consumers continue to demand such solutions amid rising product prices and inflation.

Airline carriers are forging alliances to offer flyers an integrated loyalty program experience

Airline carriers have been one of the early adopters of the loyalty program, offering their frequent flyers a host of benefits. These firms are now forging strategic alliances to offer an integrated loyalty program. For instance,

• In December 2022, Emirates Airlines and Air Canada entered into a strategic partnership to launch an integrated loyalty program. Under the collaboration, Skywards and Aeroplan members will be able to earn and redeem their loyalty miles on both airlines. The interoperability takes the loyalty programs a step ahead, as consumers are able to enjoy the rewards from two airlines while being a member of one.

Over the next three to four years, PayNXT360 expects more such interoperable and integrated loyalty and reward program launches in the United Arab Emirates and other countries around the world. This will keep driving innovation and growth of the market from the short to medium-term perspective.

Global firms are launching their loyalty program to attract more customers in the country

The United Arab Emirates has been a lucrative growth market for global firms across different industries. However, the potential is much higher when it comes to the luxury cars industry, because of its high-net-worth individuals who love luxury cars. To capitalize on this demand, global firms are entering the market and are also launching loyalty programs to drive their growth.

• In October 2022, GetRentacar.com, the global firm for car subscription and rental marketplace, announced the launch of its loyalty program in the Emirati market. The loyalty program gives frequent customers special prices among other benefits. The launch of the program is part of the firm's strategy to expand and grow its operations in the United Arab Emirates as well as Saudi Arabia. The firm had made the loyalty program available for US$1,000 per year.

Amid the growing demand for the loyalty program, the firm is projected to gain widespread traction among Emirati consumers. Furthermore, PayNXT360 expects more global firms and retailers to expand their loyalty programs and schemes in the Emirati nation from the short to medium-term perspective, thereby supporting the growth of the overall industry in the country.

To know more and gain a deeper understanding of the loyalty programs market in the UAE, click here.