UAE shoppers hope for a confidence boost with end-of-year shopping spree

Dubai: Will the wave of online and in-store promotions in the coming days revive UAE consumer confidence? The hope among retailers is that it would.

It certainly could do with some improvement after consumer confidence dropped to 92 points in the second quarter from 110 in the fourth quarter of 2019. This is based on the market research consultancy Nielsen Global's sentiments tracker. Confidence was badly shaken by "job prospects, which are facing a decline from 46 per cent in fourth quarter 2019 [and] down to 39 per cent in second quarter 2020 for the region", no doubt shaken by the pandemic and the subsequent impact on the economy.

Which is why the level of buying that happens during the end-of-year promotions will have an oversized role in deciding the pace of recovery. “Upcoming festivities are going to look very different for consumers depending on where they live, what restrictions they face and how COVID-19 has changed their spending habits," said Andrey Dvoychenkov, Nielsen Global Connect Retail Intelligence lead for Arabian Peninsula.

"The reality is that the ‘golden quarter’ - the crucial holiday trading period - is already underway and with the continued spread of the virus and ongoing restrictions, this year’s festive period will be unlike any other.”

Four clear patterns

Nielsen reckons that shopper behaviour will be dicttated on four patterns, which are:

● Basket reset: Holiday spending and gifting will be refined based on what and who are considered essential for each consumer. This will require retailers redefine what’s festive and capitalise on the broadened assortment of what consumers might consider “giftable” this year. 

● Homebody reset: Gatherings will be smaller and with many planned at the last minute. This might see the introduction of so-called ‘single-serve celebrations' that cater to needs for convenience, health and budget consciousness by offering serving sizes and packages conducive to small or socially distanced gatherings. This type of behavior has grown after the pandemic, with 57 per cent working from home, 50 per cent cleaning their houses, 48 per cent engaging in cooking or baking, 38 per cent enjoying online entertainment and 28 per cent shopping online.

● Rationale reset: Consumers will spend more on themselves, prioritising self-care this year. There is also scope for just-in-case solutions that cater to consumers who may be waiting to see whether they are able to physically celebrate a festive occasion or not. Consumers in the region spend less on clothes (46 per cent), takeaways (43 per cent) and out-of-home entertainment (37 per cent) while there’s an increased focus on savings and paying off debt .

● Affordability reset - Online shopping will power more holiday consumer behaviours than ever before creating a need to convert impulsivity. With limited physical touchpoints with consumers, it’ll be vital to create spontaneity, even in an online environment. Consumers have increased their last online shopping frequency by 10 more check-outs (18 check-outs in Q2-2020 vs eight check-outs in Q4-2019 ) in comparison to their online-shopping frequency before the pandemic. Similarly, trips to convenience stores have risen from two visits before the pandemic to six trips in the latest period.