Shifts in UAE consumer behaviour are here to stay

12 July 2021 3 min. read

The Covid-19 cloud still lingers above consumers in the UAE: A new Kearney study reveals that spending remains cautious while a sustainable shift to online shopping is expected. 

Kearney has been using broad-based consumer surveys to trace purchasing patterns in the UAE since the Covid-19 outbreak last year, looking to quantify some of the unprecedented changes that have unfolded due to an economic squeeze, risk of infection in public places and a wider shift in perceptions. 

The impact has been tangible: back in April 2020, Kearney discovered a distinct preference for spending on essential items – while non-essential purchases across clothing, electronics and entertainment were on the decline. Another key change was that most activity moved online – including a major boom in the e-grocery market

Spending on essential vs non-essential items

Many expected these changes to be short lived: in principle, lockdowns would ease the infection rates, vaccines would immunize, and things would go back to normal. More than a year into the pandemic, the first two expectations have rung true, although ‘normality’ seems to have taken on an entirely new meaning.

In fact, nearly three-quarters of respondents to the survey reveal that they have adapted their purchasing patterns to a “new normal,” which entails several factors – as explained by Debashish Mukherjee, partner and head of consumer industries and retail at Kearney in the Middle East. 

“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.” 

Motivations for online shift of purchasing

Starting with the essential versus non-essential breakup: UAE consumers continue to significantly increase their spending on food, groceries, health and wellness, while non-essential items continue to fall out of favour.

And online remains a solid favourite too – across most product categories. Again, many expected the shift online to be a risk-aversion tactic from consumers, which would subside when infection rates dropped. Yet, Kearney’s survey shows that the biggest motivation for online shopping now is convenience rather than safety – signaling that the shift might be here to stay. 

At the same time, Mukherjee highlights how a sustained shift to ecommerce doesn’t necessarily mean peril for brick & mortar retail. “The physical store still plays a strong role across all categories which require the customer to touch, feel and try the product.” 

Online vs offline preferences

Balancing this need to physically examine products with other considerations of safety and convenience will be a key task for consumers going forward, while retailers scramble to keep up with these nuanced, dynamic and highly complex new preferences. 

“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; however, 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,” concluded Mukherjee.