Tuesday 23 April 2024
 
»
 
»
Story

KSA defies EMEA ‘consumer spending reduction trend’ in 2024

RIYADH, February 27, 2024

While economic uncertainties persist globally, consumer spending in the Kingdom of Saudi Arabia (KSA) is expected to remain steady in 2024. This is in contrast to broader EMEA trend forecast where 37% of consumers plan to spend less in 2024 compared to 2023. 
 
The findings are part of The Critical Consumer 2024 report by global consulting firm, AlixPartners, that provides a comprehensive analysis of consumer sentiment and preferences across the Kingdom and wider EMEA region for the year ahead.
 
The report dissects how consumer sentiment has shifted in Saudi Arabia, and identifies five areas of focus where spending habits are shifting:
Spending intentions: While overall spending is projected to remain stable, the report identifies a growing divergence in spending attitudes based on income. Lower-income consumers plan to tighten their belts, while high-income groups anticipate greater spending. The data highlights age as a key factor, with 18–44 year old leading the charge in increased spending across various segments.
 
Category Evolutions: Consumers are increasingly adopting prudent measures by spending less in select categories such as electronics, toys and sporting goods along with avoiding impulse purchases. Instead, there is a prevalent inclination towards capitalising on promotions, reflecting a strategic shift in spending behaviour in navigating the evolving economic landscape.
 
Shoppers in KSA are anticipated to continue allocating a higher percentage of their expenditure to groceries (54%) and clothing (40%) in 2024, similar to last year, with a greater proportion of shoppers intending to uphold their current spending levels. The uptick in grocery spending was consistent across most age groups, except for individuals aged 55-64, where minimal changes in spending were recorded. This demographic experienced the least variation, possibly attributed to their dependents achieving financial independence. 
 
Omnichannel targeting: Omnichannel solutions are critical as consumers shift spend across channels and categories. Online delivery is widespread among KSA shoppers, with the highest frequency observed in the clothing and consumer electronics sectors, particularly among the high-income segments. Digital payment methods are preferred, but preferences vary based on income levels and age. Companies must consider these factors when tailoring marketing and promotional strategies to invest in the right areas.
 
Customer personalisation and loyalty: Shoppers in KSA are increasingly valuing personal interactions at brick-and-mortar stores, maintaining the dominance of traditional retailing over e-commerce. Store staff training and customer service capabilities development will become a critical initiative for many retailers. 
 
Use of technology: Generative AI has emerged as a crucial factor in enhancing the online purchasing experience, especially in sectors where consumers traditionally prefer testing products in person. The fastest adoption of AI tools for research is being observed in Saudi Arabia. Consumers in the region are displaying keen interest in shopping technologies and convenient solutions that are already become the norm in Saudi Arabia, encompassing convenient delivery, payment options, and accessible product research tools. 
 
The Critical Consumer 2024 report offers invaluable insights for businesses aiming to navigate the evolving landscape of consumer-facing industries. To help businesses thrive in this challenging environment, AlixPartners conducted an extensive consumer priorities survey across seven EMEA countries, including France, Germany, Italy, Saudi Arabia, Switzerland, the UAE, and the UK. Between October and November 2023, over 10,000 respondents were surveyed, by YouGov for AlixPartners, and provided insights into their personal purchase intentions and shopping preferences for the upcoming year.--TradeArabia News Service
 



Tags:

More Retail & Wholesale Stories

calendarCalendar of Events

Ads