Price, quality or sustainability? Know what your customers want

Consumers in the UAE have the highest proportion of ‘quality appreciators’ and the lowest proportion of ‘cost-conscious’ consumers as compared to some European countries, according to a new report by Alvarez & Marsal in partnership with Retail Economics.

The report suggests that UAE consumers are less likely to compromise on product quality for lower prices and are more inclined to sacrifice convenience or the shopping experience. Across all retail categories in the UAE, consumers place the highest value on emotion-driven attributes of value such as sustainability and experience.

According to the survey, 12 percent of UAE consumers are supporting social causes and shopping with purpose by seeking out products and brands that align with their values. Moreover, 12 percent of shoppers expect meaningful interactions with retail brands, as well as entertainment that adds value to the whole experience.

Within the UAE, 42 per cent and 24 per cent of consumers perceive quality and price as an important factor respectively. These consumers are expected to trade down to private-label and own-brand products and even switch from supermarkets to discounter operators.

James Dervin, MD, Alvarez & Marsal Middle East said, “Our analysis suggests that the UAE consumer currently has a different set of priorities compared to the majority of European peers. In our survey, the UAE demonstrated the highest proportion of quality appreciators, while also having a keen focus on customer experience and a consistent bias towards emotion-driven value attributes.”

“Price appears to be a comparatively low-priority factor in decision making, with limited expectation that this will change in the forthcoming 12 months. Changing consumer preferences coupled with emerging trends such as seamless retail channels, personalisation, evolving operating models, digitalisation and flexible supply chain models will likely further shape the retail landscape in the UAE and are likely to have long-term implications. Recognising emerging trends and responding proactively, and with agility, can help retailers create a winning strategy for the coming decade,” added Dervin.

Read: Majid Al Futtaim survey reveals what visitors expect from malls

According to the survey, the pandemic has also influenced how shoppers see sustainability. Nearly 8 per cent of UAE consumers say they now consider the environmental impact of their purchases more.

Across the five countries surveyed, younger consumers are most likely to prioritise sustainability, with 12 per cent saying it was the most important factor when making purchasing decisions – compared to an average of 9 per cent across all generations. In the UAE, nearly 49 per cent say they are willing to pay more for sustainable products, while 15 per cent significantly more and 34 per cent a little more.

Erin Brookes MD and head of Retail, Europe, A&M, said, “While price and quality are key factors when making purchasing decisions, the expectation from consumers that retailers act in an ethical and sustainable way continues to grow. Although investment in sustainability will be required, innovations in the industry, such as upcycled or pre-loved ranges, demonstrate that ethics and sustainability can also create commercial opportunities.”

Also read: Over 50% of UAE consumers to go cashless by 2024 – Visa