How Saudi Arabian shoppers are gearing up for the ‘new normal’? - Gulf Business
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How Saudi Arabian shoppers are gearing up for the ‘new normal’?

How Saudi Arabian shoppers are gearing up for the ‘new normal’?

Saudi consumers while venturing out more than in preceding months, still prefer to retain several preventive measures while shopping in stores

The Covid-19’s impact on the economy cannot be undermined by any individual or organisation. Every experience has been different, depending on course of action taken, and the agility of response.

The universal response to the crisis was to ‘Stay Home, stay safe’ – one that entailed working from home, being less dependent on external agencies and maintaining high hygiene standards.

This behaviour translated to increased dependence on communicating online, cooking at home, shopping in neighbourhood stores, spending more on groceries and household essentials.

The GfK Consumer Pulse Study which commenced in April tracked all these changes and other corollaries such as increased sales of electronic consumer products like tablets, laptops and mobile phones but, more significantly, GfK’s weekly research kept track of the consumer pulse mapping continuously changing conditions, mindsets and attitudes that create new opportunities and challenges for brands.

A look at the week-on-week results of consumer perceptions mapped by GfK in Saudi Arabia highlights the move towards ‘the new normal’.

Braving the new normal, but with caution
By the end of June, Saudi Arabia’s citizens and residents were venturing out much more than in the previous three months. Findings towards the end of June registered concern for the announced VAT revision which contributed to a significant spike in shopping, especially for clothes, small household goods, smartphones, air purifiers, as well as computers and its accessories. An increase in demand for insurance products was also noted, attributed to imminent VAT regulations.

At this stage, the preference for buying clothes and shoes from stores spiked even more – good news for retailers who have been hit hard. It’s interesting to note that consumer preference for offline shopping has been confirmed week-on-week by the GfK studies starting April.

The Study cautions retailers on customers’ expectations to prioritise safety.

By early June, wave 4 of the survey, 45 per cent of respondents expressed fear of direct infection – a marginal increase from the previous week.

Saudi consumers indicated their preference to retain several preventive measures applied while shopping in stores – with masks and social distancing practices considered key requirements. Other requirements include access to disinfectants for hands and baskets and continuous communication about the safety measures followed to reassure customers. The studies show retailers that it is imperative to address irritants like long entrance queues and check-out lines.

An ambivalent time for brands
A key indicator of consumer behaviour returning to normal according to the GfK Consumer Pulse Study from April to June, was consumers’ reduction in stocking up on goods although demand for personal hygiene products, cleaning agents, fresh food, frozen food, and bottled water remained high.

Another outcome – which may be good news for some brands and not so welcome for others – is the impact on brand loyalty. As manufacturing and supply chains were disrupted, some leading brands were out of stock during the crisis so that consumers were compelled to try options from competitors.

GfK’s latest findings indicate shifts in brand preferences as one-third customers found new favour with replacement products and stuck with them.

The research further confirms that the ‘new norm’ will include a higher disposition to work from home, shop online and use live streaming entertainment channels.

Respondents claim that they will value time with family and friends more going forward.

A renewed sentiment for credit
One of the most significant changes tracked by GfK in Saudi Arabia’s ‘new economy’ was the higher demand for credit cards. Previously, some market segments showed resistance to credit cards as contrary to the beliefs of many in the kingdom with an aversion to debt and interest payments.

However, since the pandemic’s environment resulted in a higher propensity to shop online and avoid using cash, behaviour has changed. Credit cards were more in demand in May and June – a welcome relief to at least one part of the banking sector.

Rebound in regional travel
From the very first week of the survey, respondents have shown eagerness to travel, suggesting a quick rebound of the travel sector. This could create an opportunity for Dubai, Abu Dhabi, and other neighbouring destinations to receive an influx of Saudi tourists.

Every crisis is an opportunity
For many, the predominant belief is that the only way out of the crisis is a vaccine.

Full market recoveries remain uncertain as optimistic forecasts indicate a recovery in Q4 2020, others cite 2022.

However, crises can be catalysts for change and the consumer pulse needs to be tracked regularly to stay on top of the situation.

The late Peter Drucker once said, “Every single social and global issue of our day is a business opportunity in disguise.”

His word echo true to this day, and companies need to be aware that how they respond to the crisis heavily impacts their image and future.

Rahul Dixit is the marketing and consumer intelligence lead – MENA region for GfK

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