Free delivery is decisive for UAE and Saudi shoppers

Pexels/Artem Podrez

• Free shipping a high priority
• Loyalty schemes less important
• Red Sea attacks are disruptive

Among the myriad discounts and perks offered by the Gulf’s retail sector, one factor that stands as a vital consideration for UAE and Saudi shoppers is free delivery, a report has found.

A survey by the buy-now-pay-later platform Tabby found that free shipping outweighs the allure of customer loyalty schemes. In all, 29 percent of Saudi and 23 percent of UAE shoppers express frustration when this perk is not provided.

The survey also found that only 7.7 percent of consumers cite loyalty programmes as a reason for returning to the same brand. 

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However, the current Red Sea crisis has presented a formidable challenge to the seamless delivery experience consumers expect. 

Major freight companies are forced to opt for longer routes, resulting in increased operational costs for the shipping industry. 

An estimated 81.6 percent, worth $229 billion, of Middle East consumer goods imports are exposed to Red Sea shipping disruptions, being transported using the critical Suez Canal shortcut between Asian and European markets, the research company BMI found.

Delays in delivery, even when it is free, have the potential to undermine consumer trust and erode brand loyalty, insiders told AGBI.

“Any disruption in supply chains can lead to frustration and dissatisfaction, prompting consumers to explore alternatives, including turning to physical retail stores for immediate needs,” said Saket Gaurav, chairman of TeknoDome, a Dubai-based distributor of consumer electronics.

Prabhakar Posam, CEO of the logistics startup Patang, said: “To work on these challenges, logistics providers and retailers must collaborate on proactively communicating delays.

“They can offer real-time tracking, diversify shipping routes to minimise reliance on vulnerable areas, optimise inventory levels to avoid stockouts, and provide flexible fulfilment options like click-and-collect.”

Using technology to optimise supply chain costs should also be considered, says Soham Chokshi, the co-founder of Shipsy, a logistics solution provider.

Laith Al-Bazirgan, head of retail at Endava, a UK-based software development company, said retailers must not lose sight of a holistic shopping experience.

“If retailers compete on convenience alone — prioritising fast shipping over all else — then they will soon reach a critical point at which all competitors offer a similar level of service.

“From then on, it’s just a race to the bottom in which all stakeholders stand to lose.”

Al-Bazirgan said that loyalty schemes can still be productive: “If loyalty schemes are prioritised, you can reward repeat customers and, if done right, this can be your most effective competitive differentiator.”