What do consumers want from their retail experiences?

Amal: This is Reimagining our Region, your go-to podcast for regional insights and trends.

Each episode brings together expert discussions on the challenges and opportunities shaping the Middle East. From economic shifts to emerging technologies.

I am Amal Larhild, Partner at PwC Middle East

Patricia: And I am Patricia Keating, Senior Manager of PwC Middle East.

We'll explore how businesses in the Middle East are adapting to remain competitive, focusing on business model reinvention, sustainable growth and the transformation needed to thrive in an evolving landscape.

Cyber Monday globally marked a record.

Sales reached over 13 billion. More than 7% year over year increase.

Closer to home, GCC e-commerce and retail apps reported an almost 30% spike compared to the average Friday in November.

Amazon's Middle East platform reported over 1 million items sold during Cyber Monday.

However, headwinds of inflation, economic uncertainty are continuing to shape consumer behaviors right across the Middle East, pushing people towards a more value driven purchase.

At the same time, trust in brands, sustainability and the adoption of AI are all becoming key drivers of consumer loyalty.

We have some incredible guests with us today.

Ayman Beydoun, CEO of Brands For Less and Roy Hintze, Partner with us here at PwC Middle East. Welcome, guys. Thank you so much for joining us.

Ayman: Thank you. 

Roy: Thank you.

Patricia: Now, I know that we have a lot to talk about and I'm really looking forward to today's conversation.

We'll be talking about economic volatility, AI, omnichannel and of course the vital role that data protection will play in maintaining that consumer loyalty.

But before we dive in, I really would love to hear a little bit from you Ayman. We're delighted to have you with us here today, you're at the helm of one of the GCC's biggest retail success stories.

Tell us a little bit about you personally and also the company that you lead.

Ayman: Thank you so much. And thank you for hosting this podcast.

So, I'm today officially doing this for the first time as CEO of Brands For Less Group.

I've been with the group for the past seven years, been part of a great growth and success journey. We started with around 23 stores in the UAE; today we are in more than 120 stores across the region, in addition to our latest expansion to Singapore, and then hopefully next month to Malaysia.

Prior to that, I've been managing sales and marketing in a completely different industry, wholesale manufacturing.

And then I had to move to London and then back to Dubai with the group.

Cannot be more than happy to be part of the group's success and looking forward to having this podcast.

Patricia: All the building blocks for a CEO. 

Ayman: Absolutely.

Patricia: Thank you.

Amazing. Roy, tell us a little bit about you. 

Roy: Yeah, sure.

So, as you mentioned, I'm a Partner at PwC.

I've been with the firm for nine years. I lead our consumer markets practice for our deals strategy and operations business, which includes sectors like retail, consumer goods, food, and agri.

I've been involved with supporting a number of companies and government entities here, mostly around investments and transactions and I was very lucky to be involved with Ayman and the Brands For Less Group in the recent transaction they went through.

So very happy to be in this conversation with Ayman and yourself and looking forward to the next 30 minutes or so. 

Patricia: Amazing. We'll jump into that, recent expansion and new family member as part of Brands For Less in a minute.

But before we do, we'll talk a little bit about the challenges.

We've mentioned inflation.

There's a lot of economic uncertainty out there and it means that consumers are being a little bit more cautious about how they're spending.

There's an impact on global growth supply chains.

Ayman, you will know these problems intimately. What are the retailers doing to shift and adapt to these new consumer behaviours? And what role is trust playing in that, as you're building out these new customer loyalty approaches, during these challenging times? 

Ayman: No, absolutely.

Like I said, there are a lot of challenges, whether in the supply chain.

And obviously this all comes in affecting the consumer.

Now, given that the concept that we currently operate within, which is the off-price concept Brands For Less is positioned, well, I'd say ahead of others because we provide brands and sell brands at lower prices.

So, a consumer would always want a brand, but now is getting a brand with a deal, we're giving a great deal to the consumer. It plays in our favour.

However, obviously we have challenges in the supply chain, which we really need to be more efficient and address, to give the best price to the customer, because that's what the customer expects.

Now, we've built certain brand loyalty. We know the consumer will always come to Brands For Less, as long as we give them that great deal.

Now, to do it, we have to go and make sure that the product is offered to them but in a backward cycle, meaning we go down to, the first purchase of that product to how that product was shipped, how that product was cleared, how efficiently the costs were managed to be to be able to sell at a great deal.

We've been working with a lot of partners as well to enhance our operational efficiencies.

We've been introducing AI and understanding trends when it comes to shipping costs and eventually inflation and supply chain cycles.

That's where we are trying to make sure we address these challenges proactively rather than proactively to be able to manage costs and obviously manage the selling price of items.

Patricia: Yeah. I’m hearing when you're talking about hearing value.

Ayman: Yes.

Patrica: Value for the customer and making sure that their money is being used in the best way possible and a lot of that's happening behind the scenes. It is like an iceberg, I think. And Roy, what would you add to that?

Roy: Yeah. Let me just and I 100% agree with what Ayman's been saying.

This is further reflected in some of the responses we've received in our “Voice of the Consumer” survey that was launched earlier this year.

No matter what dimensions you had, the top two things that consumers want are: value for money, right? Irrespective of how you cut it and shape it, the discussions are always about value for money. The second dimension is about quality of goods. Right.

As long as retailers can work towards those, using any means, any technologies, if they're addressing those two points, they'll do well with attracting new customers and retaining existing ones.

Patricia: It's interesting what you're saying there because, that value, being transparent about what you're doing, helping to build the trust and the pricing component, obviously that plays a part throughout that. 

Sustainability is also a factor, and retail is obviously something that's very visible to everyone. We receive all of these packages through our doors, on a daily basis.

But, you know, there is an indication that they are willing to pay, for the premium prices.

And I know some of the big fashion labels have done some things around this. Right.

Zara has released their brand discreetly; I think we've seen a couple of good examples there. Overall, what does this shift towards sustainability mean to the retailers?

Roy, what is Voice of the Consumer telling us?

Roy: The regional consumer finds climate a big issue. Around 40%, I think, considered it a risk; and that's about five percentage points more than what global consumers are saying.

Now. What does that translate to?

There is an indication from them that about 20% are saying that they're willing to pay more.

Now, whether that translates to actual spend, higher spend for those specific products, I think is yet to be seen, maybe Ayman has a view on that.

But I think in all cases the trend is there, which is even if today they're not willing to spend more, they are changing their behaviours in terms of what they're looking to purchase, and which brands are they looking to purchase from. Looking at the logistics, from manufacturing all the way to getting the product to the consumer's doorstep, this needs to be thought through.

And making sure that those brands understand that their footprint is important to consumers making decisions, particularly in this region. 

Patricia: Yeah. No, absolutely. Ayman, we know what Voice of the Consumer is saying, but what are they doing? What are you observing in your data?

Ayman: Yeah, I think there are 2 or 3 different verticals.

One, Brands For Less being the last channel within the supply chain, because we give products a second life rather than brands just dumping off those products.

We say “listen, guys, we're going to buy them and we're going to sell them at great value.”

Now we follow what brands do because at the end of the day, we are at the end of that cycle.

However, we have our own licenses and our own private labels. That's not a big business, but it's a good business for BFL, where we've tried to introduce sustainable products and sustainable packaging. It's something we've already initialised and have seen the impact on the environment and, also through our ESG reports. But within the product range and within the product vertical, when we've tried to introduce sustainable products for around 7% more expensive pricing, because of the higher costs involved, we've seen slightly better sales through those products.

Now, is this equal or is the appetite higher than what we've produced or what we've loved to sell out of that production? No.

Today we've seen some positive approaches to sustainability, but not to an extent where we can say that the consumer will be willing to pay that extra 7%. So, it might be 2, 3, 4%, We are testing today.

The good thing is that the consumer changes in each and every market, so it's behaviour, I mean, in countries like Singapore, for example, they are more cautious about it, and we've seen higher sales than in that part of the world.

Without getting into the details of each of the countries, I think consumer behaviour changes in each of those markets. We're yet to see the full awareness of the consumer on sustainable products but we've seen a good signal.

Patricia: Yeah. I think that's encouraging.

Roy: Maybe just to add to that. The other thing that I believe is an opportunity in this part of the world is to consider locally produced products as well.

I think, you know, having locally produced products means you're not relying on a global supply chain. There's less footprint there, and that's, I think, an opportunity for not only the retailers but specifically some new brands, new manufacturers on the beauty side, or fashion side, to generate new opportunities and new brands and products for this part of the world.

Patricia: I think that’s a great point. When it comes to sustainability, understanding where you can introduce it into your supply chain really requires data and intelligence.

We're going to lead into a nice segue nicely into your favourite topic: artificial intelligence.

It is transforming industries, right? We are all using it daily, whether consciously or unconsciously.

This is something I'd really like to talk to you guys about.

It's being introduced through different channels: customer experience, customer service, predictive analytics, and of course, automation on the logistics side.

How are you seeing Middle East consumers respond to the ‘above the line’ experience of AI, so to speak? And then, of course, there’s everything happening ‘below the line,’ where AI is being used behind the scenes - it’s not directly interacting with them, but it’s still shaping their experience.

Ayman, tell us - what’s going on in AI?

Ayman: I think AI, automation and robotics have played a big role in BFL’s success, whether in the back end or the front end.

We’ve tried a few things on the front end. We failed. We tried again. Failed again. But eventually, you succeed. I’ll give you some examples.

Before jumping into that, on the back end, whether it’s our warehouses fully supported by automation, robotics and AI, or the use of AI in a more meaningful way - not just the trendy version everyone is talking about... I’d say almost all our pricing at BFL today is done dynamically through AI. That means understanding customers’ past habits and purchases, forecasting trends, and aligning prices with what customers expect.

Then there’s allocation, which is critical in off price retail. Allocating the right product to the right channel, the right store, at the right price. That entire cycle is fully automated within the business.

It helps us make sure we send the right product and ultimately sell it to the right customer.

The whole BFL ecosystem, from the back end, is fully automated and powered by AI, whether in the warehouses or in the stores through the POS systems.

We also experimented with smart models on the front end, trying to be trendy, but that is not our focus. So, we shifted back to the bread and butter of the business: offering great deals at great prices, through the right channel, to the right customer.

We have hundreds of thousands of different products at Brands For Less, and you will not find the same item in every store. That is the beauty of AI, being able to deliver what customers want, the way they want it.

Of course, not everything has worked. We are still optimising. We started with chat bots, like everyone else, to offer customer support around the clock. We have now reached an 83% success rate in handling complaints and queries through chat bots, up from 57% last year.

I would say AI is improving, and it all comes down to machine learning. The more you feed the system with the right data, the more you correct and optimise, the better the results.

Patricia: Yeah. It has even progressed.

You mentioned chat bots, but now they're calling it Agentic AI. 

It’s actually GenAI driving it and having more of a conversation, but that's a fine line, right?

Everything you're talking about - Roy, I'm glad to hear your thoughts - this intelligence that we have on consumers as retailers, it can cause some concern. How can retailers continue to do that at scale and pace, responsibly?

There have been some horror stories.

There’s a well-known one in America where they congratulated a lady for being pregnant, but her father didn't know. These are things where it does step into a bit of a grey area.

How are you guys making sure that - 

Ayman: I think transparency is key here.

We have been very transparent in letting the customer know how we use their data and when we use it. When data is used in the right channels and for the right reasons, I think customers are more than happy.

But if you use it in the wrong channels or at the wrong time, like the example you just gave, then it creates challenges and issues.

Transparency is key.

We have an audit committee that reviews each cycle of AI usage, especially when it involves using data generated from customers.

We do not apply the same process when it comes to product data, because that data belongs to BFL. But when it comes to customers or suppliers, we make sure it is properly audited and clearly communicated with them, if their data is used.

Patricia: Roy, you're advising retailers daily - what’s your general guidance when you're speaking to clients? What are some of the things you're discussing with them, and what are some of the things they're thinking about when it comes to this issue? 

Roy: I mean, we all know that AI is here and it's disrupting.

It's not largely disrupting, at least influencing and touching on any and every business, even ours. 

Patricia: Yes.

Roy: What’s interesting about Ayman’s point is that you have your back end and your front end. The ability of AI to influence and improve how the back end operates is essential. As Ayman said, it is about making sure you deliver what the customer needs, when they need it.

Not only does that help with customer experience and loyalty, but if we look at sustainability as well, it contributes to improving your footprint. You are not overstocking in certain areas, there is less wastage, and so on. So, there are a lot of positive benefits that come with AI.

On the flip side, when it comes to the front end, this is where some of the risks start to show.

Based on the survey we ran, our consumer survey, about half - if not more than half - are comfortable with AI as a technology, or at least comfortable with retailers using AI, but only for low-risk activities. Things like identifying products, making recommendations, or using chat bots for customer service - those are all acceptable. But when it comes to transacting, where more personal data is involved, people are still cautious. They want to know how their data is being used, what information is being collected, and how private it really is.

So, it is going to be an evolution. Things will change over time. I am sure that when we speak again in one year, five years, or ten years, the landscape will be very different.

But as Ayman mentioned, it is important that organisations understand those risks, put the right controls and governance in place, and make sure they are testing. You have to try, and sometimes you will fail.

But the key is to keep investing in this space.

Even if you are not always leading, you should at least know where the leading edge is and make sure you are adapting to those changes as you move forward.

Patricia: Yeah, they need to be mindful, aware, and focused on educating the consumer, right? The more consumers are educated, aware, and understand how it works, the more likely adoption will happen.

Roy: In the region, by the way, when you talk about regional consumers, they are very well adapted to these types of things. They are actually very open to trying new technologies and new applications for these technologies, probably more so than what you see globally. You can also see that reflected on social media, right?

Patricia: Yes!

Roy: I think some of the largest social media users are consumers or individuals living in this part of the world. There is a lot of opportunity here.

Patricia: Yeah, I think we have the highest smartphone penetration globally - across the region, it is over 100 percent because everyone has two phones.

And since you brought up social media, I really wanted to talk to you both about that because I think there is a lot to cover here.

Digital native fashion retailers have moved quickly in this space.

You know, brands like Boohoo and Fashion Nova with their Cardi B collaboration, they hit one million dollars on launch.

These are fantastic stories. 

The role influencers play in this market might be slightly different though, and I would love to hear your perspectives and experiences, successes and failures. We love those too, because all of us are sharing and learning here.

Ayman, let me come to you first. What is going on with influencers?

Ayman: Sure. So, yeah.

I think Brands For Less has been a leader when it comes to trying and testing, especially since we have involved our founder and chairman, Toufic, in our social media practices.

It started as a trial.

We wanted to move away from using influencers just to influence people.

Instead, we wanted to work with authentic brand owners and brand ambassadors, people who could genuinely reflect the real value of the brand.

And we thought, who better to do that than the co-founder and chairman of the group? He is charismatic, as you can see.

We tested it. I remember him posting a video on social media at 3 p.m., going to sleep at 5 p.m., and then waking up at 7 p.m. saying, “Oh Ayman, I have 400,000 likes. What’s going on?”

I said, okay, we clearly tested the right thing. It is working.

Today, he has more than 3 million followers across platforms, and we have seen tremendous growth on our social media pages as well.

So, it worked.

Then we made sure to work with the right influencers, the authentic ones who are true fans of the brand, who understand and reflect its values, and who speak to audiences that align with our brand DNA.

And I think that is what really matters.

We tried this approach in different countries.

One example is when we launched in Saudi Arabia. At first, we failed. We realised something was off. The ROI we expected just was not there.

So, we changed course and brought in influencers who truly fit the brand’s identity.

That made a huge difference. We saw more engagement, more interest, and people coming to us saying, “We’re happy to be associated with Brands For Less. We want to be your influencers.” Now, we have even started working with customers as influencers, bringing in people who already love the brand to share their experiences and connect with new audiences.

That has been a great learning journey.

Patricia: Yeah, bringing in a bit of a family feel. But I think, as you were speaking, what I’m hearing again is the challenge of trust. 

It is about making sure someone is not just pushing something because they were paid to do it, but because there is a real relationship with the audience.

Roy, I know you have a point of view on influencers and the role they play.

Roy: Yeah, I want to touch on Ayman’s point about authenticity.

I think it is crucial, especially after consumers have had the chance to try, test, and experience how social media actually influences their buying journey.

Just to step back a bit and look at social media more broadly - how we see it, what consumers are experiencing, and what really matters to them.

It is primarily about discovering new brands and helping with decision making. I believe around three quarters of consumers in this region use social media for that purpose, compared to about two thirds globally.

So social media is a powerful tool for helping people discover brands.

But as Ayman said, authenticity matters. Consumers need to see brands represented in a way that feels real and trustworthy.

What we are not seeing as much here, compared to places like East Asia, is actual purchasing through social media. That is still in its early stages in this region.

In fact, based on our survey, more than half of consumers here have had negative experiences trying to buy directly through social platforms.

So, the jump from discovery and exploration to actual transactions on social media is still limited. Will that change? Maybe.

I do not think anyone has a clear answer yet. But there is definitely a trust issue. People are asking, “Can I really buy through this platform?” and many have had past experiences that make them hesitant.

Whether that trust can be rebuilt on social platforms is still uncertain.

That said, I think retailers like Brands For Less are in a good position. They use social media to connect with customers, but they also have their own e-commerce platforms.

Consumers here are not only comfortable using e-commerce - they are increasingly shopping through mobile devices.

And compared to global trends, regional consumers are actually more inclined to shop on mobile.

So, when you combine mobile, social media, and strong e-commerce platforms, you create a space where consumers can engage and transact in one seamless journey.

Patricia: Yeah, but is it an ‘influencer’ challenge or is that a ‘trust in social media’ challenge?

You’re talking about the purchasing component, and I’ve had two experiences where my card was hacked. I was told off by the bank for buying things on social media. So, there is definitely a data protection element involved.

Now, the GCC market is expected to grow to 50 billion by 2025. What are retailers going to do?

Ayman, I’m thinking about this more broadly. This is not just a challenge for Brands For Less to solve, but one for the retail industry as a whole if we want to maintain that kind of growth trajectory.

Ayman: Yeah, I think retailers are working to ensure the right governance is in place. You now have DPOs (Data Protection Officers) in house.

And of course, you make sure to get the proper consent from customers.

In addition to that, we are strong believers in data minimisation. That means feeding the right set of data to the right departments in the organisation, rather than sharing everything across the board.

So, we make sure data is minimised.

Each department gets only the data they actually need to deliver what the customer wants.

I believe that with these three pillars in place—strong governance, proper consent, and data minimisation - retailers can scale their use of data without negatively affecting the customer.

Patricia: Nice.

Roy, data protection. I think we have managed to address all the key components.

Ayman, I’ve really enjoyed speaking with you. We have covered a lot today.

The critical role of trust and sustainability, the way AI is transforming the retail landscape, and what it means for the future.

I think consumers will keep demanding more, and retailers will rise to the challenge, maintaining trust and positioning themselves for long-term success.

Thank you both for your insights.

It has been a real pleasure to talk with you and hear more about the incredible work you are doing, and what you have planned as you grow beyond the GCC.