Mideast consumers rein in spending

New reports suggest that companies must harness new technology to adjust

Consumers in the Middle East are becoming more cost-conscious, with purchasing behaviours changing rapidly, according to consulting giant McKinsey.

Geographically, the recently released Global Sentiment Survey covers 80 per cent of the world’s consuming class, according to McKinsey, with over 28,000 respondents in total.

Speaking at the Retail Leaders Circle event in Dubai yesterday, McKinsey’s retail practice leader Peter Breuer said that respondents in Saudi Arabia reported that in 2017, they were increasingly looking for ways to save money, and increasingly looking for sales and promotions, compared to previous years.

Respondents in Saudi Arabia also said that they were using loyalty cards and coupons much more heavily in 2017, compared to 2015.

Questioned twice last year, once in April and again in October, those surveyed reported a marginal alleviation of some cost-cutting measures the second time they answered the survey, with concerns over spending appearing to be more pronounced in April.

And instead of trading down in terms of brands, consumers remained largely loyal, instead looking for ways to buy their preferred brands for less.

In general, McKinsey say, Saudi Arabian consumers believe that they have cut spending across all types of retail, including convenience stores, discounted stores, and hypermarkets.

The latter saw the smallest decline, at only 2 per cent, while convenience stores saw a reported reduction of 45 per cent over the previous 12 months.

According to the report, retailers investing in analyticsdriven decision-making are significantly outperforming their peers.

Biometric tech demand

Elsewhere yesterday, payment technology provider Visa released a report suggesting that 98 per cent of UAE consumers are keen to use biometrics, such as fingerprint recognition, for payments.

The survey also found that 89 per cent of consumers are already familiar with biometrics, with 55 per cent using fingerprint recognition on a regular basis. More than half (56 per cent) are interested in paying for goods using eye scans.

Perhaps most surprisingly, over three quarters of consumers would switch away from companies in the future that don’t offer biometric authentication, Visa said.

Neil Fernandes, head of risk for Visa in the Middle East and North Africa, said in a statement: “For the payments industry, now is the time to integrate biometric technology into banking apps and customer payments experiences.”