Consumers more likely to buy local products, prefer e-commerce platforms, says research

Consumers in the Middle East more likely to buy products with health benefits and value for money in mind

The COVID-19 pandemic has severely impacted the dynamic relationship between brands and their customers, effectively altering the consumer shopping behaviour, according to a joint meta-research conducted by Galal & Karawi Management Consulting (G&K) and Orient Planet Research, the market research unit of Orient Planet Group. The research suggests that consumers in the Middle East are more likely to buy a product with factors such as health benefits, and value for money in mind. The research highlights an increased preference for local and sustainable products.

It has also found that consumers are opting for purchases from e-commerce platforms that offer more choices at competitive prices, apart from home deliveries guaranteeing higher safety through social distancing. A wider use for e-commerce and home delivery of goods has been estimated to amount to six times up to 10 times more of average annual growth in 2020 alone.

“We believe that the consumer behaviour has changed for good and will never return to the pre-COVID norms, even after the pandemic is over. The omni-channels will have the upper hand where customers have the option to receive a standardized rich shopping experience, whether at the store or online. This is the new normal. Retailers need to be mindful of this disruption and reinvent themselves to suit the new consumer expectations in order to survive in the market,” explained Asem Galal, Managing Partner of G&K.

Nidal Abou Zaki, Managing Director, Orient Planet Group remarked: “The logistics nightmare created due to the pandemic has made the markets and the consumers equally aware of the need to promote local and sustainable products whenever possible, not only to guarantee higher availability but also to support the local economy and provide employment opportunities.”

The year 2020 has been particularly hard on top global brands such as GNC, AT&T and Victoria’s Secret, which witnessed massive closures of retail stores across the globe. Laura Ashley and Debenhams also join the brands which have suffered fatal blows.

During the holiday season in the US, the number of shoppers in 2020 was 186 million, a decrease from 190 million the year before. Moreover, average purchases amounted to USD 312 per consumer versus USD 362 in 2019.

The ripples have been felt in the Middle East as well. The region has seen unprecedented shift to online purchases as well as increased usage of online grocery and food delivery platforms. As early as April 2020, Majid Al Futtaim (MAF) reported a three-fold increase in online orders. Consequently, delivery staff members were one of the few jobs that experienced growth in hiring over the past nine months.

However, all is not doom and gloom. Towards the second half of this year, with enough people vaccinated, researchers are expecting the effects of the pandemic to, at least, begin to subside, breathing new life into businesses and the economy.

Now, brands and retailers are faced with an upward task to understand the new consumer behaviors brought about by the pandemic. It is imperative for retail, online or hybrid businesses to up their game in order to retain their markets in 2021 and beyond.