Consumers in the UAE cite convenience enhanced shopping experience and competitive pricing as the main motivators driving them back to brick-and --mortar stores as the retail sector bounces back to vibrancy.
Since the onset of Covid-19 in 2020, consumption habits across the globe have undergone a fundamental transformation. In the UAE, there has been a rapid acceleration in the adoption of online shopping and spending in the past 18-months.
“While e-commerce has not slowed down, as retailers invest in creating a safe environment and competitive pricing of their goods and services, we see consumers returning to their trusted stores for an enhanced shopping experience,” said Debashish Mukherjee, partner, Consumer and Retail at Kearney Middle East.
What is happening now is that as Covid-19 cases continue to decline, residents are regaining confidence in in-store shopping. This is according to a Kearney study in which UAE respondents cite convenience (51 per cent), enhanced shopping experience (49 per cent) and competitive pricing (44 per cent) as the main motivators driving them back to brick and mortar stores.
Major retailers believe that bricks-and-mortar retail has come back with a bang post-pandemic with most consumers expressing a desire to return to in-store shopping.
According to a recent study conducted by AlixPartners, survey found that while nearly one in two consumers around the globe expects to permanently change their consumption habits due to the effects of the 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.
The study by Kearney reveals that over the last quarter, 34 per cent residents have increased their spending on non-essential items by over 25 per cent. This is compared to only 23 per cent respondents who reported an increased spending in June. This increase reflects the forecast issued by Dubai Chamber of Commerce and Industry earlier this year, which estimates store based retailing to grow at a CAGR of 5.7 per cent.
“This year, we’ve seen online retailers start offering discounts as early as the second week of November with Singles’ Day sales, rather than the traditional kick-off on Black Friday. With online, in-store and omni-channel retailers going head-to-head for customer acquisition, building stronger brand connections will become integral. We expect retailers to start offering more in-store experiences; whether it is self or automated check-outs, click and collect, or store-in-stores concepts, consumers today are looking for new, more engaging ways of shopping,” said Mukherjee.
The most popular categories for instore purchases were those which required physical inspection, including footwear (53 per cent), home or casual wear (37 per cent), and work clothing (35 per cent). When looking at motivating factors for online shopping, time saved (49 per cent) was the largest driver. This was followed by ease of purchase (37 per cent), Covid safety/restrictions (37 per cent) and ease of delivery (37 per cent).
This research was conducted as part of a series of independent surveys by Kearney, the leading global management consultancy that explores trends in key sectors that contribute towards and support the region’s economic development.
A similar survey by Visa also 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.
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