While large parts of the world are experiencing a squeeze on wallets driven by high inflationary pressures and market uncertainty, commerce remains in robust health globally with a forecast of over $8 trillion by 2026
Fuelled by technological winds of change that have been blowing at unprecedented pace in recent times, brands are becoming retailers. The line between social and retail has blurred to the point that it is becoming indistinguishable and the rise of retail media – which is now 18 per cent of all digital advertising spend – is being called as the ‘third great wave of digital advertising’.
It’s a melting pot of opportunity potentially so rich that both Microsoft and Meta have recently announced they are entering the market.
The Middle East is well poised to not just dip a toe into the waters of this opportunity but rather dive right in and thrive in the new world order. The UAE has witnessed exceptional commerce growth and is projected to see the market grow to $9.2bn by 2026.
Why does MENA stand out? With e-commerce penetration lagging behind the likes of the US, there is real headroom for growth and the Middle Eastern shopper sits at the eye of the proverbial commerce storm:
Young: 55 per cent of the population is under 30
Connected: 94 per cent of all Arabs are projected to have a smartphone by 2025
Digitally engaged: 91 per cent shop regularly online, with half saying they expect to shop more in the next 12 months
Willing to spend more: Average spends of $144 vs $79 in Europe/US
Socially engaged: 20 per cent of e-commerce sales are projected to be driven through social commerce in 2023
The description almost seems perfectly suited to a Gen Z profile, but it means MENA it is a perfect incubator for retail media growth and brand engagement. Too often brands regard retail media as principally a tool to drive ROAS and a lower funnel conversion.
But the impact branches far further across the ecosystem of consumer interaction as it incubates rich brand experiences to drive equity and awareness.
To this end, the Digital Shelf Institute found in one test for every $1 spent on retail media that $7 haloes over the wider ecosystem as a whole.
VMLY&R Dubai/US recently launched a good example of creative brand building with its ‘I See Coke campaign’. The Middle Eastern shopper is hungry for engagement and these campaigns can empower brands to truly stand out on an infinite shelf.
Taking a lens to the retailers and the market itself, retail capability in the Middle East is further ideally suited to dynamic change with:
Proliferation of choice: With a rich proliferation of retailers, choice for the consumer is abundant in the region and this is driving a competitive need for better experiences. From Careem, Instashop and Talabat to Noon and Jumia, there is a wealth of endemic, forward-facing and dynamic platforms in the region.
Immature offering experiencing rapid evolution: Inventory in the region varies from traditional well established retail media networks in the form of Amazon Advertising, which is well established since the acquisition of Souq in 2017.
Also, Carrefour’s Citrus Ad media aggregator allows partnership with endemic retailers like Noon, which have developed an impressive array of media inventory. While retailers in the region have robust foundations in place, they are looking at how they can enhance their offering with the development of retail media offerings in multinationals like Uber Eats and Deliveroo setting a strong blueprint for the region.
Endemic retailers like Noon already offer a wealth of data, insights and opportunities to engage the shopper both onsite and off.
Rapid commerce growth: Commerce is expected to grow to $56bn in the Middle East by 2026 (+53 per cent since 2022). The shopper base is ideally engaged and retailers are well poised to transform both experience and inventory in the region
The challenge for brands will be with every touchpoint becoming addressable and every moment of interaction shoppable, how to standardise brilliant experience along each and every step of the consumer journey. Brands need to stand out and imbue interactions with creativity and genuinely impactful experience that actually resonates with local shoppers.
MENA retail media networks are well poised to provide brands a unique opportunity to both understand their shoppers and engage and connect with consumers. The perfect storm of a commerce revolution is here now and will accelerate tomorrow.
Brands need to not just buy a ticket for the ride but become the conductor, joint owner and engine behind experience in the region or risk being left behind
By James Galland, Global Ecommerce Director VMLY&R
