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Pathfinder Highlights 2025 GCC Retail Trends

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Conscious spending, AI-powered tech, hyperlocal growth are set to redefine the shopping experience across the region

By Sadique Ahmed, CEO, Pathfinder Global

Pathfinder Global, a leading innovator in AI-driven retail intelligence, highlights the top retail trends expected to shape the GCC market in 2025. These predictions highlight key drivers and emerging themes in the region’s evolving retail landscape.

The GCC’s retail sector is entering 2025 with significant momentum, boosted by a rising population, a growing number of high-net-worth individuals (HNWIs), strong business confidence and ongoing economic diversification initiatives. In 2024, consumer spending in the UAE alone surged by 4.8% year-on-year in Q3, reaching $3.7 billion, according to NielsenIQ. Saudi Arabia is similarly poised for expansion, with the hyperlocal retail market expected to contribute $13.5 billion (SAR 50 billion) to its non-oil GDP by 2030, as outlined by recent market studies​.

“Retail in the GCC is undergoing rapid transformation,” comments Sadique Ahmed, CEO of Pathfinder Global. “Consumers today demand convenience, personalization and sustainability. These trends reflect not just technological advancements but a deeper cultural shift in how people shop. These insights highlight the key areas retailers must focus on to succeed in this dynamic landscape.”

Top 10 GCC Retail Trends for 2025

  1. Continued e-commerce growth The Middle East continues to outpace global e-commerce growth rates, driven by mobile-first strategies, self-checkout technology, and advanced payment solutions. According to PwC, Middle Eastern consumers shop online more frequently than their global counterparts and highly value seamless digital shopping experiences, particularly through mobile apps and payment systems. The integration of AI is transforming platforms like Noon and Amazon to offer personalized product suggestions and faster transactions​.
  2. Advanced in-store technologies Retailers in the GCC are turning physical spaces into tech-enabled hubs, incorporating tools like smart mirrors and augmented reality (AR). For example, Magic Mirrors allows virtual try-ons and inventory browsing, while Beauty Mirrors enhances hygiene in cosmetics shopping. As PwC highlights, shoppers increasingly expect these digital enhancements to bridge online and offline experiences, creating hybrid retail environments​.
  3. MENA grocery market expansion The grocery retail market is thriving, with value-oriented retailers like VIVA meeting demand for affordability, and quick-commerce platforms like InstaShop catering to busy professionals. McKinsey reports that 2024 saw significant shifts toward online grocery platforms as convenience became a priority for tech-savvy GCC consumers​. This trend is particularly strong among younger, busy professionals seeking speed and convenience in their shopping habits​.
  4. Sustainability-driven choices Environmental concerns are driving purchasing decisions, with 53% of Middle Eastern consumers willing to pay more for sustainable products, compared to 46% globally. Initiatives promoting eco-friendly packaging and locally sourced goods resonate strongly, as brands like Carrefour emphasize their sustainability efforts to appeal to climate-conscious buyers​.
  5. Conscious spending Economic pressures are reshaping spending patterns, with Buy Now, Pay Later (BNPL) solutions like Tabby and Tamara making large purchases more accessible. Political and ethical considerations also influence purchasing behavior, as seen in regional boycotts of brands based on geopolitical affiliations​.
  6. Social media platforms driving sales Social commerce is booming, with platforms like Instagram and TikTok now integral to consumer buying journeys. PwC reports that 78% of Middle Eastern consumers discover new brands through social media, significantly higher than the global average of 67%. Influencer-driven campaigns have become powerful tools for driving conversions​.
  7. Saudi Arabia’s retail boom Saudi Arabia’s retail market is poised for explosive growth, with hyperlocal markets expected to contribute $13.5 billion to non-oil GDP by 2030. The country’s Vision 2030 initiatives are fostering retail IPOs and partnerships, which are reshaping the sector​.
  8. Same-Day delivery services Fast delivery options, popularized by platforms like Careem and Noon, are redefining convenience. Retailers are investing heavily in logistics to meet rising expectations for same-day or even 15-minute delivery​. These advancements underscore the need for robust local fulfillment networks, which are becoming critical differentiators in urban hubs like Dubai and Riyadh​.
  9. Enhanced Customer Experiences Experiential retail is taking center stage, with innovations such as pop-up shops, art installations, and sensory engagements redefining customer interactions. Events like Chanel’s olfactory installation in Dubai Mall highlight the importance of creating memorable and immersive shopping experiences​.
  10. Increased Demand for Commercial Space The competition for premium retail spaces is intensifying as flexible store designs, including pop-ups, gain popularity. Retailers are adapting to market demands by exploring innovative formats​. This adaptability allows brands to respond to seasonal demands while maintaining a strong physical presence​.

RetailGPT is at the forefront of helping both consumers and retailers adapt to the evolving trends shaping the GCC retail landscape.

RetailGPT’s ability to provide tailored product recommendations and real-time offers to consumers helps meet the increasing demand for seamless digital experiences. By anticipating consumer needs and offering customized deals, RetailGPT supports consumers in discovering relevant products while saving time and money.

For retailers, RetailGPT is a powerful tool in navigating key trends such as the rise of sustainability and social media-driven sales. By bridging these trends, RetailGPT empowers both consumers and retailers to stay ahead of the competition and create more meaningful, personalized shopping experiences.

“Key trends such as the continued rise of e-commerce, the integration of advanced technologies, and growing consumer demand for sustainability will play pivotal roles in shaping the future of the industry,” Ahmed states. Retailers who adapt to these changes by investing in mobile-first strategies, sustainable practices, and personalized customer experiences will not only thrive in 2025 but will also position themselves for long-term success.”

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WHY AI AGENTS PROVE THEIR WORTH UNDER PRESSURE

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Alexander Merkushev, Head of AI projects, Yango Tech

Business pressure rarely arrives in a neat or predictable form. It builds through overlapping demands, such as customers expect faster responses, regulators expect tighter control, leadership teams need clearer visibility, and frontline staff are asked to deliver all of this through systems that often do not move at the same speed. In stable conditions, organisations can usually work around those gaps. Teams compensate manually, service holds together, and inefficiencies stay partly hidden. In high-pressure environments, that buffer disappears. Slow workflows, fragmented systems, and manual bottlenecks become visible very quickly because the organisation no longer has the time or flexibility to absorb them. That is where the case for AI agents becomes much more practical. AI agents are most valuable when they allow businesses to extend operational capacity, where adding more people alone does not solve the problem fast enough.

This is especially relevant in the UAE, where digital maturity has raised expectations across both public and private sectors, with the UAE ranking 11th globally in the UN’s 2024 E-Government Development Index. This stronger digital environment has also raised expectations. Businesses need tools that can help them move quickly, stay consistent, and maintain control when pressure rises.

From Tools to Agents

With around 84% of GCC organisations adopting AI, it must prove its operational value. This is where autonomous AI agents stand apart from basic assistants. The lesson from digital transformation and automation is that technology creates the greatest impact where work cannot be carried out reliably at scale by people alone. That usually means high-volume, repetitive, rules-based, or time-sensitive tasks that still require consistency and traceability. A conventional assistant can answer a question, retrieve a document, or draft a message. An AI agent can operate across workflows, connect with enterprise applications and data sources, retrieve the information needed for a task, trigger an action, and escalate the case when human judgment is required. AI agents are less like a front-end convenience and more like a digital workforce layer that supports execution inside the business.

Keeping Service on Track

Customer service is often the first area where this becomes visible because it sits at the intersection of urgency, expectation, and reputation. When volumes rise, even strong teams can be slowed by manual routing, repeated verification, inconsistent answers, or language limitations. A customer support agent can handle thousands of routine queries across languages and channels without making customers wait for basic answers.

In fact, enterprise deployment data points to AI agents that can operate in 70+ languages, integrate with core business platforms such as CRM and support systems, and scale to handle 100,000+ interactions per day. Outcomes include 95% first-contact resolution, a 70% reduction in calls, and around 40% lower support costs. In a high-pressure environment, the benefit of an AI agent is that it helps the organisation respond at scale without allowing service quality to collapse under volume.

Compliance Under Pressure

Businesses often wrongly assume AI will automatically make operations faster, but the speed needs to be usable inside a controlled environment. If an agent cannot follow policy, log its actions, flag discrepancies, and escalate exceptions correctly, then it simply moves the risk somewhere harder to see. Well-designed AI agents can reduce delay by supporting documentation checks, rule-based workflows, anomaly flagging, and routing complex issues to the right human decision-maker while maintaining auditability.

For instance, Yango Tech’s AI debt collector agent can support repayment workflows, structure payment plan discussions, apply pre-set compliance rules, and manage routine follow-ups while flagging exception cases. A document analysis agent can review procurement files, compare them against required fields, and flag inconsistencies. The limits of disconnected tools are exposed very quickly in high-pressure environments, and businesses need systems that can work inside the operational environment that already exists.

Why digital workers are becoming relevant

In volatile conditions, where teams are stretched, leaders do not benefit from more dashboards or longer reports. Current industry findings show that organisations can lose 30 to 50% of efficiency to repetitive tasks. Too many skilled employees still spend time gathering updates, moving information between systems, or preparing routine reports instead of focusing on judgment, service recovery, and problem-solving. AI agents can absorb that repetitive load and help teams concentrate on higher-value work. They can surface relevant data from multiple systems, summarize key trends, identify pressure points, and reduce the delay between an operational change and a management response. Their role is to help leadership reach judgment faster, with better operational visibility and less reporting friction.

High-pressure environments reveal which technologies can support real execution. AI agents are most useful where organisations need to operate at a scale, speed, and consistency that people alone cannot sustain manually. But that only works when the system is designed with the right guardrails. Service quality, oversight, escalation logic, and traceability cannot be added later as an afterthought. Companies like Yango Tech create production-ready AI agents for high-pressure and fault-sensitive environments and help organisations deploy them in a governed, resilient, and reliable way under real operational strain.

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WHAT RUNNING AN AI-ENABLED CAMPAIGN TAUGHT US ABOUT MARKETING IN A REAL CITY LIKE DUBAI

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By Khaled Nuseibeh, Hala CEO

Artificial intelligence has quickly become part of the marketing conversation. New tools promise faster production, lower costs and endless variations of creative output. But for companies operating in real-world services, the technology itself is not the most important question. The real question is whether it helps communicate what actually happens on the ground.

In mobility, that distinction matters. When someone books a taxi, the experience is defined by whether the car arrives when it is supposed to. If it does not, no campaign can compensate for that. That reality shaped how we approached Count on Hala, a recent campaign designed to support new user acquisition while reflecting how the service operates across Dubai every day.

Hala runs hundreds of campaigns each year across different customer segments. In a fast-moving, highly competitive market like Dubai, speed and adaptability are essential. Artificial intelligence provides companies with a way to move faster, scale creative output and respond to changing market dynamics without losing clarity or relevance.

The campaign used AI across the creative execution, generating visuals, layouts and voiceovers for content deployed across out-of-home screens and targeted digital channels. However, the strategic direction, messaging framework and approvals remained firmly with our team.

Rather than positioning AI as the centre of the campaign, we focused on communicating measurable operational insights such as pickup speed, fleet scale and reliability. Messages such as “90% of taxi pickups in under five minutes” or “Meeting in 20 minutes? Taxi in 3” translated everyday service performance into clear, relatable moments.

Early campaign indicators reinforce the impact of this approach. In the first month following the launch, Hala recorded a 27.8% uplift in bookings, 19.2% increase in new users, and a click-through rate approximately 5x higher than previous campaigns, reflecting stronger engagement with the campaign messaging and visuals.

AI allowed these insights to be translated into creative assets quickly across multiple formats. But the technology itself was not the story. Running the campaign highlighted several practical lessons about how AI fits into busy marketing teams today.

1. Build campaigns around operational performance, not creative concepts

AI will amplify whatever information it is given. If the underlying service is inconsistent, the campaign will expose that quickly. For this campaign, the creative concept began with operational data, pickup speeds, fleet capacity and everyday travel scenarios across Dubai. These insights formed the foundation of the messaging rather than an abstract creative idea. In sectors such as mobility and transport logistics or aviation, marketing cannot exist separately from operations. Customers experience the service within minutes of seeing the campaign. If the message and the experience do not match, a brand’s credibility will quickly disappear.

2. Use AI to produce campaigns faster without changing the strategy

The campaign began with a simple idea: reliability. In a city like Dubai, where people are constantly on the move, everyday convenience matters. Artificial intelligence helped the team turn that idea into campaign content much faster than traditional production would allow. Instead of coordinating multiple shoots, locations and long approval timelines, operational insights could be turned into clear messages quickly. Lines such as “Meeting in 20 minutes? Taxi in 3” could appear across digital screens, social media and billboards within hours rather than weeks. The team still defined the message, tone and brand standards, while AI helped speed up how quickly those ideas could be produced and shared across the city.

3. AI creative for billboards and outdoor advertising still needs technical expertise

One common misconception about AI-generated creative is that it removes complexity from production. In reality, it often introduces new challenges. Early AI-generated visuals worked well for digital placements but were not always suitable for large-format outdoor advertising. When scaled for outdoor displays, some images were grainy and lacked the resolution required for high-visibility formats.

Achieving the required quality meant using several paid subscription tools and refining outputs across multiple stages. AI can accelerate creative exploration, but production expertise remains essential to ensure the final output meets the standards expected of large-scale advertising.

4. AI marketing still requires strict legal oversight and brand governance

The faster content can be produced, the more important governance becomes. Before launching the campaign, strict internal guidelines were established around how AI could be used. These covered cultural sensitivity, representation and compliance with UAE advertising standards.

All platforms used were vetted to ensure appropriate commercial usage rights, and every output was reviewed in collaboration with legal teams before publication. Regardless of which tools are used, the brand remains responsible for everything that appears in a campaign.

5. AI allows marketing teams to focus on insight-led storytelling rather than asset production

The most noticeable shift from the campaign was internal. Traditionally, marketing teams spend significant time producing individual creative assets. AI changes where that time is spent, instead of focusing on manual production, the team concentrated on identifying the insights that matter most to our customers; people who are moving around the city, whether its short journeys or tight schedules, their need is for reliable transport in everyday situations.

Artificial intelligence then made it easier to translate those insights into multiple creative executions across different formats. For a platform operating in a competitive market and running campaigns across multiple audiences throughout the year, that shift can make a meaningful difference.

In almost every sector, AI is already moving from experimentation into everyday systems across the region. Airlines use it to manage disruption. Logistics companies use it to anticipate congestion. Governments use it to plan infrastructure and transport networks.

Marketing will inevitably follow a similar path. AI will not replace traditional production or human creativity. Photography, filmed content and real-world storytelling remain essential, particularly when authenticity and emotional connection to your customer matters.

While we continue to embrace AI within our creative processes, it has not and cannot replace the creative agencies we work with. Human intervention, intuition, and creativity remain at the core of everything we do.

What AI can do is remove some of the friction in how campaigns are produced, allowing teams to respond faster while maintaining accuracy. Dubai is often described as a testbed for new technologies. In reality, the city simply demands that systems work under pressure, across different languages, cultures and moments of high demand. If an AI-enabled campaign can operate effectively in that environment, it is likely to work anywhere.

For companies exploring AI in marketing, the lesson is straightforward: focus on operational reality first. Technology should support how the business performs, not distract from it.

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FIVE BUSINESS FUNCTIONS ALREADY POWERED BY AI WORKFORCE

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Across the GCC, the real question is no longer whether organisations are using AI, but whether AI is actually doing the work. Most deployments still sit at the surface, assisting employees without changing how execution happens. AI is now moving beyond individual task support into structured workforce roles, where it carries responsibility across workflows, follows business logic, and executes within real enterprise systems. Gartner projects that by 2028, 33% of enterprise software applications will include agentic AI, up from less than 1% in 2024.

In the GCC, organisations are under pressure to scale faster, maintain service continuity, and improve cost discipline without adding unnecessary operational complexity. Digital Dubai recently launched the AI Workforce Transformation Program (AI+) to help train 50,000 government employees for an AI-ready workforce.

Shaffra, an AI research and applications company building autonomous AI teams for enterprises and governments, is already deploying this model across the region. The company highlights five business functions where AI is actively executing work inside organisations.

1. Customer service

One of the first functions to absorb AI as a workforce layer is customer service due to high-volume, time-sensitive, process-intensive requests every day. Autonomous AI Teams can handle routine queries across chat, email, WhatsApp, voice, and ticketing platforms while classifying urgency, routing cases, escalating exceptions, and updating records in real time. They can also pull customer history and identify recurring patterns linked to churn, complaints, or policy friction. Customer service teams have handled up to five times more queries through autonomous execution. This shifts customer service from a reactive support function into a continuously operating system that can absorb demand without linear increases in headcount.

2. Revenue operations

A more meaningful transformation is now happening in the commercial engine. Autonomous AI Teams can continuously monitor pipelines, detect stalled deals, flag procurement delays, identify pricing sensitivity, and improve forecast quality using live activity signals rather than backwards-looking updates. They can also support CRM hygiene, proposal workflows, approval chains, and internal coordination between multiple departments around account progression. PwC’s 2026 findings show that 45% of UAE CEOs are already using AI in demand generation across sales, marketing, and customer service. Leadership gets a clearer view of where revenue is genuinely at risk, where process friction is slowing conversion, and where intervention is needed before exposure turns into loss.

3. Human resources

In HR, recurring administrative work, policy enforcement, documentation, and employee support often follow structured paths that can be executed better when properly designed. Autonomous AI Teams can screen applicants, coordinate interviews, manage onboarding steps, answer routine employee questions, and flag missing approvals or documentation before delays compound. They can also support review cycles, workforce planning, and identify bottlenecks and process gaps early. Recruitment timelines are reduced from weeks to hours, while HR leaders review high-impact decisions.

4. Finance and accounting

In the financial department, AI needs to operate reliably within structured processes without compromising strict governance. Autonomous AI Teams can process invoices, support AP and AR workflows, follow up on missing information, review expenses against policy, and coordinate reconciliation and month-end close activities. They can also surface anomalies, identify unusual transaction patterns, and flag control exceptions for review. AI helps increase throughput while preserving auditability, approval discipline, and visibility across the finance operation. This allows finance teams to increase processing capacity without compromising control, shifting their role to oversight from execution.

5. Business operations

The most strategic application sits in business operations – where delivery, dependencies, handoffs, service levels, and internal performance come together. McKinsey’s finding that 84% of GCC organisations have adopted AI in at least one business function suggests the region is already moving into broader integration. Within operations, Autonomous AI Teams track workflows across systems, detect bottlenecks, monitor KPIs and SLAs, identify resource overload, and trigger interventions before issues become delivery failures. They can also support oversight by summarising status, escalating likely delays, and coordinating cross-functional execution in real time. Across Shaffra deployments in the Gulf, organisations have reported up to 80% reductions in operational costs and more than 2 million manual work hours saved monthly.

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