The Effect of Digital Transformation on Customer Satisfaction in the Retail Sector of Dubai

Abstract

The retail industry digital transformation has transformed consumer experience by using technologies like the digital payment systems, personalization technologies based on AI, and the omnichannel retailing. Although the literature indicates that these technologies have the potential to increase customer satisfaction, little research has explored such correlation in the specific retail context of Dubai, where luxury and mass retail coexist, consumers are multicultural, there is a high level of digital infrastructure, and stringent data privacy laws are in place. Through this study, the researcher examines how digital transformation affects customer satisfaction in Dubai through four aspects: digital payments, AI-based personalization, omnichannel retailing, and data privacy and security. The data were collected using a positivist approach based on Expectancy-Disconfirmation Theory through the administration of structured questionnaires to retail customers and analyzed through reliability analysis, descriptive statistics, correlation, and regression analysis. Findings revealed that all the four digital transformation factors have a positive correlation with customer satisfaction, with omnichannel retailing being the most significant predictor (β = .373), followed by digital payment systems (β = .261), data privacy and security (β = .192), and AI-driven personalisation (β = .107). Such results indicate the significance of integrated shopping experiences in pushing satisfaction in the technologically advanced and diversified retail market in Dubai. The research adds to the theory by applying Expectancy-Disconfirmation Theory to a digitally transformed, culturally diverse retail setting and offers practical advice to retailers regarding what technology investments to focus on first in order to achieve the greatest customer satisfaction without causing privacy and cultural insensitivity.