COVID-19: UAE's 2020 holiday shopping sees consumers and retailers change their ways

So, what do you think the hottest selling holiday season purchases will be? If you thought it would be the latest smartphone or fashion accessory, you got that wrong. According to a poll of likely consumer spending plans by Carrefour, they are more likely to spend on kitchen appliances and fitness equipment (it’s a big time for treadmills and yoga mats). An equally likely possibility would be “work-from-home” essentials, such as micro-computers and phone accessories.

So, in effect, what Carrefour is saying is that consumers will be sticking to what they were buying through the lockdown months. The changes in lifestyle and work habits brought about by the COVID-19 are not going away soon.

Another trend that showed up on the UAE’s online shopping radar will continue its run… and nothing seems like impeding that growth.

Grocery sales through online channels should end the year billing $1.2 billion, and making up 5 per cent of the UAE’s overall grocery market. That’s exceptional as the category’s contribution was less than 1 per cent as recently as March. This category will keep on growing as more players enter, and the big names finally get a handle on collecting the orders, putting it together and then delivering it.

After a few years of getting talked about as the Next Big Thing – and failing to measure up – “omnichannel” is finding a place in the UAE’s retail universe. The hypermarket operators have been the fastest to get this up and running, thus allowing shoppers to place their orders and then come over to collect them at their convenience. Hypermarket operators have an edge in launching these services, as do online giants such as noon and Amazon. But should individual retailers be spending heavily to build up such capabilities?

Ajai Kumar Dayal, a retail industry veteran who has seen it all, is a believer. “The inevitable move is towards omnichannel business, simply because that is how customer buying is changing. But that is still a far cry from where businesses here are right now. Many retailers have reached the stage of multi-channel business, but real omnichannel where all different business channels re-integrate, work together and support each other. That is still only being done by a few.”

Fashion has had a difficult year, with the pandemic forcing shoppers to refocus their attention on more urgent matters than what they should be wearing for Christmas. Retailers – in the online and offline universe – are fighting back. “During our three-day 11.11 sale we offered customers buy-one-get-one-free on fashion, which proved popular,” said Maya El Ayach, Growth and Digital Strategy at noon. “Customers can expect even bigger offers across fashion during our Yellow Friday Sale, kicking off on November 23.”

noon introduced the fashion-focussed app Sivvi, which offers delivery within three hours in Dubai and on the same-day in Riyadh.

Meanwhile, another retailer that’s big on physical presence is working on developing its online exposure via the app. Landmark’s Styli, interestingly, does not overwhelmingly focus on its Splash or Max merchandise, but instead focusses on value-for-money ‘private labels’. “Online fashion sales are seeing growth quarter-on-quarter,” said Nirmal Jain, CEO of Styli, which was launch in October last year. “By our reckoning, it’s growing at 40 per cent ahead of the peak holiday buying season. Fast fashion drives volumes, and we are seeing that happen quite a bit in Saudi Arabia and the UAE.”

Each additional month spent with COVID-19 as a threat influences consumer behaviour in some way or the other. Add to that concerns over job situations and which adds to the uncertainties clouding the retail sector. Nielsen Global Connect, the market research consultancy, says it will have a bearing on end-of-year purchases. Gift baskets are going to get smaller, while consumers will be more willing to spend more on themselves.

So, which route will UAE shoppers take in the next few weeks? Will they indulge, engage in that much talked about 'revenge shopping' ways? Or will all of it be more passive?