Foreword
The KPMG Customer Experience Excellence (CEE) annual report underscores the pivotal role of orchestrated experiences in shaping the landscape for leading companies and brands. These experiences aren't just random occurrences. They're the result of carefully planned efforts to create smooth interactions that help customers achieve their goals and make them happy along the way. Against a backdrop of heightened global uncertainty, the imperative for accelerating digital transformation in business looms larger than ever before. Customers, empowered by digital technologies, now demand a more fluid and cohesive journey, with little tolerance for subpar experiences. As the ubiquity of AI continues to permeate organizational frameworks, the potential for its transformative influence on redefining the paradigms of customer experience excellence across industries becomes increasingly pronounced.
This year, our global report confirms a declining trend in customers’ perceptions of their experiences, and UAE is not immune to this fact. Although we witness a positive evolution in 17% of the brands, the remaining market shows a decline pushing the UAE’s CEE score to an overall drop this year compared to last year (-1.5%).
Customers attribute this decline to an overall failure of brands to meet their expectations. Technology also contributed to the fall, specifically in the way companies implemented technology that shepherded customers into low-cost and low-satisfaction channels - channels that lack empathy and the human touch.
For the last 14 years, we’ve looked at how the world’s best organizations connect customer excellence to lower costs and faster growth. In 2023, we reached a tipping point in business adoption of artificial intelligence (AI), which is radically rewriting the rules of the game.
Trendsetters have already successfully built practical use cases for AI applications, many organizations are still assessing how AI can be successfully implemented, while balancing opportunities and inherent risks, in a context where both regulators and customers are increasingly concerned with transparency, data privacy, and ethical use of AI.
Despite these concerns, our prediction is that AI trendsetters will have the advantage of illustrating the extraordinary opportunities the technology can provide while leading the upcoming social and economic changes to come.
We can anticipate that part of these innovations will first happen in the region, driven by the UAE's 2017 National AI Strategy, which aims to catalyze innovation in both the private and public sectors. The strategy aspires to make the UAE a global AI leader by 2031 through AI integration into customer services to enhance citizen life and government efficiency.
Finally, despite concerns about the cost of living, most consumers prioritize environmental and social responsibility in brands, as evidenced by 58% of young GCC Arabs willing to boycott environmentally neglectful firms.
Customers are showing increased interest in sustainable and eco-friendly practices, as well as a willingness to pay the right price for goods and services that are consistent with their personal values. This phenomenon has recently urged some brands to issue communications and marketing campaigns to highlight their values, ethics, and social involvement, among other factors.
Being a Customer Experience leader in the UAE requires delivering the right combination of seamlessness, convenience, personalization, and purpose.
The six pillars of customer experience excellence
Even in a world fueled by technology, the KPMG Six Pillars of Customer Experience Excellence still define the elements of great experiences. They act as design principles providing guidance on how to incorporate best practice into creating world-class customer journeys.
Personalisation
Using individualised attention to drive an emotional connection.
Integrity
Being trustworthy and engendering trust.
Time and effort
Minimising customer effort and creating frictionless processes.
Expectations
Managing, meeting and exceeding customer expectations.
Resolution
Turning a poor experience into a great one.
Empathy
Achieving an understanding of the customer's circumstances.
Leading in the UAE
customers interviewed
brand evaluations
brands
Market view
Despite global economic challenges, disruptions in supply chains, and high inflation, the UAE economy has remained remarkably resilient. While oil continues to be a significant contributor to the UAE's robust economy, other sectors are also on the rise. The country has made substantial investments in various sectors such as tourism, real estate, retail, and technology. This diversified approach has helped the economy grow and remain strong. For instance, in 2022, the non-oil sector expanded by 6.6%, fueled by thriving real estate and tourism industries.
The real estate sector is experiencing a boom, with property sales hitting a 12-year high. Sales increased by 60% compared to the previous year, reaching a total value of AED 265 billion. This surge can be attributed to several factors, including government initiatives, a positive economic outlook, and the country's attractiveness to high-net-worth individuals as a secure investment destination.
Tourism in the UAE has also seen significant growth, primarily driven by the reopening of international travel and major global events like EXPO 2020 and the FIFA World Cup in neighboring Qatar. Additionally, government initiatives such as visa reforms and the launch of the National Tourism Strategy 2031 have further boosted tourist arrivals. As a result, the total number of international visitors to the UAE more than doubled, reaching 14 million.
From a consumer perspective, even though the cost of living has increased, optimism about the economy is growing. The UAE boasts one of the highest per capita incomes in the world, providing consumers with greater purchasing power.
Customers in the UAE are becoming savvier and demanding more from their brands: more personalized experiences, more value for their dollar, and more seamless, omnichannel processes. Once again, we see customer perceptions of value formed by how they feel about service and support. They are also formed by how organizations demonstrate their purpose, relevance, and ability to have a positive long-term
impact on the environment and society. As seen also in the global insights, higher customer demands have led to an overall drop in the UAE CEE metrics score this year compared to last year (-1.5%).
Some of the key insights of this UAE report include:
- This year’s CEE ranking is led by airlines. Emirates maintains its leadership for the third time in a row, and it is now challenged by Etihad Airlines in the third place.
- Financial services are coming back in the top-ranked organizations driven by improved digitized capabilities, wider and rewarding service offering, and more humanized customer service support.
- Despite the decline of the CEE metric, 17% of the brands witness an increase compared with last year.
- Air Arabia, HSBC, and Deliveroo lead the top three movers in the ranking with an increase of 3% on the CEE metric, mainly due to their efforts on minimizing customer effort while enhancing their experience and creating frictionless processes as well.
- The Six Pillars of experience continue to define world-class experiences and maintain a high degree of explanatory power for advocacy and loyalty.
- Integrity, Personalization, and Expectations are the core of both advocacy and loyalty: organizations are expected to fully understand their customer needs while instilling trust and meeting or exceeding their expectations.
- The Expectations (and Empathy) pillars are the ones with the largest year-on-year decline. Customers attribute this decline to an overall failure of brands to meet their expectations. Technology also contributed to the fall, specifically in the way companies implemented technology that shepherded customers into low-cost and low-satisfaction channels which lacked empathy and the human touch.
- Among the top ten in the CEE rankings, five organizations have Integrity as their highest-performing pillar; for the remaining, it is Time & Effort.
This year, UAE customer experience has declined. Each pillar saw a fall in average global scores. This opens companies to the risk of losing the benefits reaped of good work in previous years unless they actively respond to changing customer needs.
Integrity
Trust is the essential quality of every relationship. Overall, the score for Integrity fell by 1.6 percent, in line with the global trend (-2%).
Resolution
Resolution scores fell only by 1.6 percent when compared with the global average (-3%) – as companies failed to deal proactively and effectively with customer issues.
Expectations
With the rise of advancing technologies, businesses will likely need to manage customer expectations within the realities of their business. This is especially important as customer expectations have already seen a decline closer to 2 percent, although below the global average (-4%).
Time and Effort
Organizations are struggling to make their customers’ lives easier. Time and Effort scores fell by less than 1% percent.
Personalization
Despite the huge investment companies have made in personalization technologies, the Personalization score dropped by 1.6% in the UAE, in line with the global average (-2%).
Empathy
Empathy is down closer to 2 percent, tying for the largest year-over-year decline with Expectations and in line with a global trend (-4%).
Our analysis identifies several critical success factors pivotal for organizations aiming to deliver enhanced customer experiences.
Firstly, significant emphasis is placed on technology investment, with companies actively enhancing customer experience through digital advancements such as user-friendly mobile applications, real-time tracking, and comprehensive digital platforms. These technologies streamline customer interactions, offering easy access to products and services.
Another cornerstone of success is a strong customer service focus, where companies not only prioritize but excel in delivering high-quality service, often exceeding customer expectations. Leveraging the right combination of technology and human interactions along the customer experience. Indeed, although leading organizations have successfully implemented the right digital support tools such as chatbots, their key differentiator is largely attributed to the access to well-trained staff members who are dedicated to customer wellness and embody the brand's values in every interaction, serving as the foundation of exceptional customer service.
Additionally, the provision of diverse offerings is essential. Companies strive to succeed by catering to varied customer needs through a broad spectrum of products and services, sometimes extending their reach through strategic partnerships. This adaptability ensures a wider appeal and satisfaction across different customer segments.
A data-driven approach also plays a crucial role, with companies leveraging customer feedback and analytics to refine and personalize their services continuously. This includes offering customized promotions, upgrades, or tailored service experiences that resonate with individual preferences.
Lastly, operational efficiency is a key focus area, with companies striving to streamline and automate processes to enhance responsiveness and ease of customer interaction. This not only improves the customer experience but also positions companies to maintain competitive pricing, a critical advantage given the current economic climate marked by a rising cost of living.
Together, these factors assist in delivering enhanced customer experiences, underlining the importance of technology, customer service, diversity in offerings, data insights, and operational agility.
Hall of fame
The lifting of global travel restrictions related to the pandemic, along with the ongoing recovery of both business and individual international travel, has positioned the UAE as a major travel hub and a top tourist destination. The country's strategic location between Europe, Asia, and Africa, as well as an increasing number of available routes, further enhances its appeal. This has enabled the two local top airlines – Emirates and Etihad Airways – to see their passenger carrying capacity used at about 80%, a huge increase compared to the previous year. In this year's survey, we have seen a significant rise in the rankings of low-cost carriers. - but also to marked improvements in service quality, including route options, punctuality, in-flight entertainment, comfort, and digital platforms for travel planning and booking. Government investments are also supporting this growth, as illustrated by the opening of a new state-owned terminal at Abu Dhabi International Airport in early November - The Midfield Terminal - which was designed to complement the growth of Abu Dhabi’s Etihad Airways as it competes with neighboring global carriers Emirates and Qatar Airways.
Hall of fame brands
This year's top rankings in the CEE report showcase the continued dominance of airlines, with Emirates maintaining its leadership position for the third consecutive year. However, the landscape is shifting, with Etihad Airways challenging the leader and bagging the third spot. Financial services organizations are making a strong comeback, propelled by enhanced digitization, expanded service offerings, and a more personalized approach to customer service.
Top three movers
In this year's CEE report, three companies – Air Arabia, HSBC and Deliveroo - have made remarkable strides, positioning themselves at the forefront of customer satisfaction and efficiency. Each witnessed a notable increase of 3% on the CEE metric. Their ascent can be attributed to concerted efforts in minimizing customer effort and establishing frictionless processes. Moreover, they have demonstrated a remarkable ability to transform poor experiences into exceptional ones, showcasing a commitment to excellence and innovation in their respective industries. As leaders in their fields, these companies serve as exemplars of what it takes to not only meet but exceed customer expectations in today's competitive landscape.
Leading in the age of AI
AI and customer experience: insight from the UAE
In the UAE, the adoption of AI reflects and amplifies the global trend towards enhancing customer experience (CX), with the region emerging as a leader in AI integration across various sectors. From aviation to retail, the UAE's public sector and businesses are using AI to exceed citizen and customer expectations, establishing a standard for both regional and global markets.
The UAE is actively integrating AI into CX strategies, with companies embracing digital transformation not just as a response to the pandemic, but as a strategic initiative to improve customer engagement and keep pace with changing consumer behaviors. This shift underscores the critical role of AI in transforming customer interactions.
The use of cloud computing and AI in CX strategies marks a significant advancement for the UAE's business environment, making advanced technologies more accessible to a wider range of organizations and fostering innovation and competition across sectors. Despite these advancements, there's still a gap in technology adoption among businesses, indicating room for growth in the UAE's CX domain. As more companies integrate cloud and AI into their strategies, the expectation is for a more inclusive market where excellent customer service is a standard feature.
The emergence of data-driven personalization in the UAE
In the UAE, AI's impact on customer experience (CX) has evolved beyond simple automation to include advanced, data-driven personalization. Businesses are using AI to analyze customer data and deliver tailored experiences that align with individual preferences and behaviors. This approach is enhancing the quality of customer interactions, improving CX metrics, and adding significant business value. This progress highlights a key phase in the UAE's move towards an AI-enabled future, embodying the global view of AI as a driver of innovative, customer-focused business models.
The UAE exemplifies the transformative power of AI in CX strategies, demonstrating its ability to meet current market demands and predict future trends.
In this report, we have selected case studies highlighting how AI is innovatively used to increase customer satisfaction and loyalty locally.
Emirates Airline's (#1 in the UAE CEE report) commitment to AI-driven customer service sets a high standard in the aviation industry. Their approach includes crafting personalized journey experiences for each passenger. By leveraging AI, Emirates can analyze customer data to offer tailored travel recommendations, custom in-flight entertainment options, and personalized service touches. Furthermore, their innovative loyalty programs, powered by AI algorithms, predict customer preferences and offer rewards that are more aligned with individual customer needs. This strategic use of AI not only enhances the overall travel experience but also fosters deeper customer loyalty and engagement.
IKEA's (#4 in UAE CEE Report) approach in the UAE exemplifies how AI can bridge the gap between digital and physical retail experiences. Post-pandemic, IKEA has adeptly used AI to enhance in-store experiences, employing technology for inventory management, personalized product recommendations, and efficient customer service. Simultaneously, their online platforms leverage AI to provide a seamless shopping experience, from virtual room planning tools to AI-driven customer support. This blend of digital and physical shopping, enhanced by AI, has elevated IKEA's customer engagement and satisfaction levels, showcasing the potential of AI in retail innovation.
Carrefour's (#6 in UAE CEE Report) use of AI in omnichannel strategies reflects a deep understanding of the modern retail landscape. By integrating AI across both physical and digital platforms, Carrefour has enhanced customer interaction at every touchpoint. In-store, AI aids in personalizing shopping experiences, managing inventory, and optimizing store layouts. Online, AI enhances the customer journey with personalized product recommendations, predictive search functionalities, and efficient customer service chatbots. This holistic application of AI ensures a consistent and satisfying customer experience, regardless of the shopping channel. Carrefour's strategy, as highlighted in the report, is testament to the increasing necessity of AI in contemporary retail.
AI implementation
Looking ahead
Integrating AI into customer experience has shifted from a mere trend to a critical strategy for companies, especially within the UAE's dynamic market. Insights from our report highlight how effective and ethical AI can support companies with driving higher customer satisfaction and growth. As the UAE solidifies its position as a technology leader, AI's role in customer experience is expected to grow. Companies that skillfully use AI are more likely to meet current needs and anticipate future customer expectations, leading in technological adoption and customer journey innovation. The UAE's government and businesses have shown foresight in adopting AI, showcasing its ability to improve customer interactions and streamline operations. Moving forward, evolving and refining AI strategies will be crucial for staying competitive and offering outstanding customer experiences. Integrating AI into customer experience is a journey of continual innovation and improvement. Companies that approach this journey with a strategic mindset will not only thrive in the UAE but also set global standards.
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