Bricks-and-mortar retail bounces back in UAE

The survey found that while nearly one in two consumers (44 per cent) around the globe expects to permanently change their consumption habits due to the effects of the Covid-19 pandemic, in the UAE one in three consumers have permanently altered their buying habits



Shoppers walk along Lexington Avenue in the eastern Midtown section of Manhattan in New York City. — AFP file photo
Shoppers walk along Lexington Avenue in the eastern Midtown section of Manhattan in New York City. — AFP file photo
by

Issac John

Published: Mon 22 Nov 2021, 6:15 PM

Bricks-and-mortar retail is bouncing back in the UAE with a bang post-pandemic with most consumers expressing a desire to return to in-store shopping, according to a study conducted by a leading international consulting firm.

The survey found that while nearly one in two consumers (44 per cent) around the globe expects to permanently change their consumption habits due to the effects of the Covid-19 pandemic, in the UAE one in three consumers have permanently altered their buying habits, with 53 per cent intending to resume pre-pandemic shopping habits, underpinned by strong optimism about the vaccination programme.

Across all categories surveyed for the study by AlixPartners, a higher proportion of consumers indicated appetite for more in-person shopping over online, including for groceries (42 per cent) and clothing (37 per cent) as the pandemic subsides, compared with those expecting to shop more online in those categories.

A recent survey by Visa found that consumer confidence had rebounded in the UAE in the wake of rising optimism about a faster economic recovery with most residents becoming increasingly comfortable in spending on non-essentials, luxury items, dining and travel. The Visa survey revealed that attitudes and preferences of consumers also have undergone significant changes over the past 18 months since the outbreak of Covid-19.

“Consumers are shopping more online but the return of in-person retail in Q3 2021 shows that Covid-19 has not been the end of bricks-and-mortar retail as many predicted. Some 83 per cent of UAE consumers are optimistic about vaccination programmes compared with 71 per cent globally, of which 53 per cent intend to resume pre-pandemic spending patterns while 30 per cent feel like the pandemic has permanently altered their spending behaviour,” AlixPartners survey report said.

Meanwhile, online home entertainment and food delivery services continue to benefit from Covid-19 spending patterns.

Consumers in the Emirates are shopping for groceries with an increased emphasis on value with 44 per cent looking for discounts more often, as well as convenience and health.

Shoppers are reducing conspicuous consumption to focus on values with 41 per cent shifting consumption away from non-essential categories and 41 per cent also reducing consumption to be more sustainable.

AlixPartners polled more than 1,000 consumers across the UAE, alongside a global survey in nine other countries — China, France, Germany, Italy, Japan, Saudi Arabia, Switzerland, the United Kingdom, and the United States.

“Consumers have widely had to learn new behaviours and adopt new habits in their daily lives during the pandemic. What is more, with over half of the consumers surveyed in the UAE reported feeling very or extremely concerned either about their finances (59 per cent) or physical (57 per cent) as well as emotional health (53 per cent), this far-reaching feeling of vulnerability will cause many of these new behaviours to outlast the pandemic, which will drive consumer behaviour and influence the ways retailers can respond,” said the report.

Karl Nader, managing director at AlixPartners Middle East, said the consumer priorities survey reveals that significant numbers of consumers will experience long-lasting changes in their buying behaviours, including nearly one-third of consumers in the UAE. “The pandemic has fast-tracked the evolution of consumer trends and behaviour and as it continues to change, it is imperative for consumer-facing companies to understand what is causing these changes and how to adapt to them.”

“In the UAE, the return of demand for in-store shopping shows that brick-and-mortar retail remains the key. Retailers must embrace this recovery and adapt their business models to encompass a seamless omnichannel experience, where in-person shopping and online offerings bring together the best of both worlds,” said Hisham Abdul Khalek, director at AlixPartners Middle East.

— issacjohn@khaleejtimes.com


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