Increased vaccinations and continued protective and social distancing measures will be key to rebuilding UAE consumers’ confidence to visit public places moving forward, according to new research.
A study commissioned by Kearney reveals that as spending habits continue to evolve, UAE consumers remain cautious, with 46 percent expecting the effects of the pandemic to last at least another year.
It also highlights that expenditure on essential items has shown a sustained increase, while spending on non-essentials including clothes, bags and accessories continues to decline.
According to the study, 73 percent of consumers have changed their shopping habits to adapt to the “new normal”, with a larger portion of women reporting changed habits (81 percent) than men (67 percent). Those aged between 30-45 recorded the highest change (80 percent) followed by those under 30 years of age (73 percent).
When looking more closely into how habits have changed, 23 percent said they have reduced expenditure on essential items by up to 50 percent compared to pre-pandemic.
However over a third (34 percent) of respondents said they have increased spending by over 25 percent.
Conversely, spending on non-essentials has decreased by 41 percent, with only 23 percent of respondents increasing spend in this area.
Within the essential items category, 16 percent of respondents have upgraded to higher priced, better quality items, with the highest increase shown for fruits and vegetables (30 percent), as well as meats and dairy (22 percent).
A fifth of respondents have highlighted that they expect to spend more on non-essentials in the coming months, particularly on activewear, workwear, casual wear, footwear, evening wear and bags and accessories.
“The pandemic has fundamentally changed the way consumers view health and safety measures and efforts. As residents adopt to the new normal, hygiene and hygiene transparency have become vital. Spending is being driven by the easing of restrictions, higher awareness of health and wellbeing, and expectations to return to the office,” said Debashish Mukherjee, partner and head, Consumer Industries and Retail Practice at Kearney Middle East.
The survey also showed that e-commerce continues to penetrate all categories. It said UAE consumers are now more comfortable purchasing essentials online compared to last year.
When questioned about the motivations behind this, convenience (58 percent) was the main driver, followed by Covid-19 prevention measures (25 percent), assortment of products (13 percent) and price (4 percent).
While increased vaccinations and continued protective and social distancing measures were the key drivers of restoring consumer confidence in visiting public places, a contactless in-store experience (16 percent) and alternative shopping options (9 percent) such as click and collect, were highlighted as other methods of shopping that would increase confidence.
Mukherjee added: “For UAE consumers, convenience is driving online purchases with Covid-19 concerns becoming a secondary factor, indicating the sustenance of the online shift.
“However, the physical store still plays a strong role across all categories which require the customer to touch, feel and try the product. Retailers will need to adopt a differentiated strategy to make consumers feel safe in stores. UAE consumers are heavily indexed towards vaccinations and protective measures but this will vary across markets and its essential for stakeholders, mall property owners and retailers to monitor the evolving face of retail to ensure they stay relevant.”
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