RIYADH: Saudi consumer expenditure will remain stable in 2024, contrasting with downward trends in Europe, the Middle East, and Africa, according to a report.
Consulting firm AlixPartners analyzed the changing customer sentiment in Saudi Arabia and forecasts that unlike the EMEA region – which is set for a 37 percent drop – shopping habits will broadly stay the same.
While overall spending is expected to stay consistent, the study notes a widening gap in monetary attitudes based on wealth.
Lower-income consumers intend to limit their budgets, while higher-income groups anticipate increased expenditure.
According to the report, consumers in Saudi Arabia are anticipated to allocate a substantial portion of their budget, with 54 percent for groceries and 40 percent for clothing in 2024, reflecting trends observed in the previous year.
The increase in grocery spending was consistent across most age groups, except for individuals aged 55-64, where spending changes were minimal. This demographic showed the least fluctuation, possibly due to their dependents attaining financial independence.
It also delved into omnichannel solutions, which play a vital role as consumer spending shifts across various channels and product categories.
In Saudi Arabia, online delivery is widely embraced, especially in the clothing and consumer electronics sectors, particularly among higher-income groups.
Digital payment methods are preferred, with preferences varying based on income levels and age.
“Companies must consider these factors when tailoring marketing and promotional strategies to invest in the right areas,” the report stated.
AlixPartners noted that customer personalization and loyalty are increasingly valued by shoppers in Saudi Arabia, underscoring the significance of personal interactions in brick-and-mortar stores and sustaining the dominance of traditional retailing over e-commerce.
Enhancing store staff training and improving customer service capabilities will be crucial initiatives for many retailers.
Additionally, the report underscored that the use of technology, particularly Generative AI, is emerging as a key factor in enhancing the online shopping experience, especially in sectors where consumers typically prefer testing products in person.
Saudi Arabia is witnessing rapid adoption of artificial intelligence tools for research purposes. Consumers in the region are highly interested in shopping technologies and convenient solutions, such as efficient delivery, diverse payment options, and accessible product research tools, “that have already become the norm in Saudi Arabia.”
