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The United Arab Emirates’ retail market is set to hit $139bn by 2028 with e-commerce sales reaching $17bn by 2027. Driven by the deep pockets of resident consumers, and enhanced by a lively tourism sector, the UAE’s shopping-hub credentials are long-established. But a new chapter in the tale is being written by digital shoppers who crave a personalised experience and gravitate towards loyalty schemes. Reports show that the country’s loyalty market is going to be worth $490.8m in 2025, and grow at a compound annual growth rate (CAGR) of 13.6 per cent to reach $817.6m by 2029.
Leading retailers have recognised that such programmes are growing in popularity. Many retail conglomerates, including Landmark Group’s Shukran, Al Tayer’s Amber and Alshaya’s Privileges Club, now offer multi-brand loyalty schemes that extend beyond retail to include travel, hospitality and dining rewards.
As of 2024, 76 per cent of UAE consumers were enrolled in at least one e-commerce loyalty programme, demonstrating how deeply embedded these schemes have become in shopping habits. It is therefore hardly surprising that retailers are now including loyalty programmes in their digital transformation efforts.
The phygital loyalty shift
To understand why loyalty programmes have become essential to modern retail, it’s crucial to examine the evolution of the region’s shopping landscape. The rise of hybrid shopping has made a seamless omnichannel experience a necessity.
When 6thStreet.com launched its Dubai store in 2022, it was described as the GCC fashion industry’s first true ‘phygital’ retail space. Today, leading brands such as Namshi and Sephora, as well as major retail hubs like Mall of the Emirates and Dubai Duty Free, have developed apps that seamlessly blend physical and digital shopping experiences.
Technology underpins this transformation. Traditional retail infrastructure, including data warehousing, ERP and CRM, now works alongside advanced innovations like AI and IoT to create personalised, flexible customer journeys. But engaging customers meaningfully requires all this technology to be presented in an intuitive and attractive way. That’s where loyalty programmes offered through mobile apps shine.
As retailers build phygital environments that connect offline and online touchpoints, mobile apps have emerged as the essential medium for delivering a cohesive loyalty experience.
These apps aren’t just a by-product of digital transformation but rather its linchpin, enabling real-time personalisation, data-driven engagement and a frictionless connection between physical and digital shopping moments.
The loyalty glue: creating apps that stick
Staff play a key role in onboarding customers into loyalty schemes, but the real challenge lies in keeping them engaged. A successful loyalty app does more than just track points. It keeps the brand top of mind, offering personalised incentives that align with customer preferences.
Relevance is key. While younger consumers may be price-sensitive, high-net-worth shoppers in the UAE respond to exclusivity, bespoke experiences and value-added rewards.
Many loyalty programmes fail not because they lack appeal, but because they offer generic, irrelevant promotions. A well-designed app delivers the right rewards at the right time, ensuring sustained engagement.
Game on: gamification as the next frontier
For brands looking for a further differentiating edge, gamification is emerging as a powerful tool to enhance loyalty programmes.
By leveraging the immersive nature of mobile gaming, brands are integrating offers directly into interactive experiences. In-game advertising, virtual pop-up shops and interactive promotions are becoming more prevalent.
But gamification can and should extend beyond mobile games. Retailers can apply these principles to shopping itself, using engagement mechanics such as challenges, leaderboards and rewards, to create a sense of achievement and exclusivity.
As the Metaverse and Web 3.0 evolve, user-generated content (UGC) and virtual experiences will play an even larger role in driving consumer engagement.
The key is to ensure these experiences feel organic and emotionally compelling, rather than purely transactional.
Loyalty is everything
Today, loyalty schemes have become so ubiquitous that a brand will lose market share if it does not have one. There is a danger, though, that with so many schemes being so similar, consumers may suffer loyalty fatigue.
Because of this, I expect to see more elements like gamification coming in within apps to maintain interest.
What is clear is that the retail landscape is morphing towards a hybrid future with technology at its core.
Because of this, brands are rightly focusing more on brand ambassadors than influencers. Today, loyalty is everything.
By Sue Azari, Industry Lead, E-commerce, AppsFlyer
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