The Gulf’s retail landscape is entering a significant inflection point as brands prepare for this fall’s shopping season. Perhaps the most transformational shift this year is in consumer purchasing behaviour, influenced more than ever by a young, digital-savvy generation.
GenZs and Millennials now make up two-thirds of the population in countries like the UAE and KSA, commanding a spending power of over AED 350 billion and SAR 1 trillion, respectively.
Naturally, brands are keen to capitalise on this spending potential. But it’s not just the size of this audience that is significant. Nor is it enough to just know whether they are purchasing in-store or online.
This shopping season, successful brands must understand how this audience is influenced across the consumer purchase journey through a combination of digital innovations and real relationships.
Let’s take a look at the first part of this equation, digital innovation. Younger shoppers, specifically GenZs, are now leading the way in leveraging mobile tools to make their shopping experience more convenient, connected and customised.
It is why omnichannel remains the favoured way to buy. In the past three years, studies have pointed to e-commerce growing faster in the MENA region than anywhere else in the world, with 91 per cent of people saying that they regularly shopped online last year.
That said, this generation still values brick-and-mortar stores as destinations for shared experiences. In such spaces, it’s all about blending tactile engagement with the benefits of modern tech, pursuing a more personalised and efficient shopping journey.
This comes as no surprise when considering that 89 per cent of shoppers in the GCC have been found to use mobile-enabled tools while shopping.
In particular, mobile-enabled augmented reality (AR) has now emerged as a game-changer for interactive and immersive shopping. A recent study commissioned by Snap Inc. revealed that in Saudi Arabia alone, 90 per cent of shoppers expressed an interest in AR lenses for in-store use.
Meanwhile, more than 80 per cent of those in the MENA region say they are interested in using AR to interact with a product before buying it.
‘‘REAL-TIME, UNFILTERED CONTENT FOSTERS A SENSE OF AUTHENTICITY THAT IS HIGHLY APPEALING”
POWER OF CLOSE CONNECTIONS
The second imperative for brands in reaching today’s tech-savvy generation comes down to real relationships.
In this region, friends and family have always held significant sway over our purchasing decisions. In markets like KSA, for example, we’ve seen amongst Snapchat’s more than 22 million monthly active users that consumers continue to rely on their trusted inner circle for decision-making.
Today, 8 in 10 shoppers in KSA say personal recommendations are as, or more important, to their decision making compared to three years ago. A staggering 91 per cent also believe family and friends to be the most trustworthy source of information.
In fact, shoppers in KSA are nearly 8 times more likely to consider their close friends and family as their single most influential source in purchase decisions compared to influencers and celebrities.
This path to decision making has only been elevated by consumers’ access to technology. Shopping conversations with our closest friends are now most likely to be happening online and on social media.
This should factor into a brand’s strategy for where and how to show up in the shopping season. For example, digital platforms that foster close, real relationships create an environment where people are more likely to share what’s on their minds. They are in turn more likely to influence their circle of trust through what they are sharing.
When people build their online worlds around their closest friends and family, they also feel happier. In that environment, you’re more likely to trust what you see and to pay attention to what you see.
As it turns out, this mindset has a halo effect for brands. The inclusion of real-time, unfiltered content fosters a sense of authenticity that is highly appealing to users. We’ve found through various studies that an environment built on real friends makes people more likely to pay attention to a brand’s message, recall the message and act on it in response.
Brands that leverage this environment effectively can thus build genuine connections with their audience. Brands would do well to remember that success in this year’s shopping season is about more than just offering the best deals.
There’s a retail renaissance being led by a young generation that is both tech-savvy and values authenticity.
Digital advances in areas like AR offer ways to create more interactive and personalised experiences. When those are presented on platforms that foster close connections relationships, brands can find that most elusive of feats – real influence.
By Farimah Moeini, Head of Industry – Retail and e-Commerce at Snap Inc. in MENA