March 15, 2024
(press release)
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The Middle East stands in a unique light during 2024, with a contrast of growth-focused and innovation-driven economies as well as politically challenged circumstances. Despite broader developments it continues to welcome new streams of residents which is evolving the consumer landscape in the region. In this article, we will be exploring three consumer lifestyle trends that will be most impactful for the region, including the adoption of generative AI and the desire for convenience in wellness regimes. Consumers will ask AI for inspiration and shaping purchase decisions The massive adoption of generative AI (gen AI) since 2023 cannot be ignored. Gen AI tools have turned into co-creators for consumers, influencing how they make decisions and ultimately their choices and expectations of product and brands. It’s very evident that gen AI will be deeply woven into consumer lives in the Middle East. Increased usage of gen AI platforms across daily life will eventually start impacting consumer expectation regarding product discovery, search functions and overall user experience – including satisfaction with products available on online shopping platforms. Investments in the region also seem ripe for gen AI as nearly 53% of industry professionals in the region plan on investing in the technology over the next five years, according to Euromonitor International’s Voice of the Industry Survey 2023. Value hacking without compromising aspirations While headlines around inflation show a mixed picture for the region with expected improvement, a common consumer sentiment expected to stay across the board is more price consciousness. Therefore, while companies will focus on leading economies such as the United Arab Emirates, Saudi Arabia, Kuwait, and Qatar to bank on a positive economic outlook and growing consumer base, it would still be harder to sell to consumers in these markets.
Value hacking will emerge as a new financial mindset where the consumer would hunt for the best deals, extending beyond the price tag. This would mean smart approaches to maximise budgets without sacrificing quality and skimping on what one really wants. This would need new approaches to innovate around affordability and cater to the highly informed consumer types. Stepping up incentives may appear to be an attractive way to play for businesses with a continued trend towards reward-based loyalty programmes. During 2023, many brands increased partnerships with loyalty aggregators such as Blue Rewards in the United Arab Emirates. The platform enables shoppers to earn not only exclusive benefits, but also instant cashback offers without any subscription cost. However, with a competitive loyalty landscape, where rewards are a norm, businesses should strive to meet the consumer’s quest for value. Wellness Pragmatists will look for real results The wellness industry has evolved at a rapid pace in the Middle East, from the emergence and growth of beauty and wellness brands to fmcg players using wellness and promising claims in their products. However, the market has clearly seen high saturation across claims. While most consumers would rely on recommendations from friends and family, influencers, and product reviews on online websites during 2024, consumers will take a realistic approach. Companies would need to present products that easily fit into lifestyles and require little time or effort from the consumer to ensure product efficacy. In retrospect of this development, over 46% of online consumers in the United Arab Emirates stated that they would strongly prefer products with proven efficacy over lower price in 2023, compared to over 40% stating so in 2022 Source: Euromonitor Voice of the Consumer: Beauty Survey, fielded June to July 2023 The main objective for the consumer would be to move away from multi-step regimens, time-consuming treatments and less effective products. Not to mention, this would also lead to consumers looking for products and solutions that deliver immediate results. For example, weight loss supplements experienced growth of 8% in the United Arab Emirates during 2023, as consumers switched to these products instead of meal plans and diet routines to gain immediate results. This was the highest growth experienced by the category over the last five years. Wellness pragmatism may, however, unfold in two ways for businesses, with the likelihood of increased brand equity for existing products, where consumers would stick with products that have proven results, or develop greater tendency to try new technologies and treatments given existing levels of dissatisfaction with desired results. Brands and companies, thus, need to play safe when adding new products or removing products from their portfolio. Indeed, the importance of understanding consumers cannot be overstated. When consumers undergo changes, it precipitates shifts in what they buy, how they make purchases, and where these transactions occur. Therefore, to navigate this dynamic environment successfully, decision-makers must be attuned to the evolving consumer preferences, ensuring adaptability and strategic alignment. Stream our webinar, 2024 Consumer Trends to Watch, to learn more about the top consumer trends and how these shifts will reshape industries this year.
Local and regional players such as Etisalat and Botim have already introduced their GPT-powered chatbots. However, we are yet to see more integrated functions on mainstream digital commerce platforms such as Amazon, Noon and Talabat. The region is seeing budding start-ups leveraging AI across various areas, especially fashion recommendations with many young shoppers managing their shopping decisions through these platforms. Businesses working with these start-ups or integrating similar solutions will see great momentum during 2024, in winning consumers in a crowded marketplace.
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