Regional interest in Black Friday falls as pandemic changes shopping habits

Shoppers in the UAE and Saudi Arabia plan to spend less during this year’s Black Friday sales extravaganza due to the changing nature of consumer habits, but remain the biggest spenders in the Middle East and above the global average, according to a new study.

The average intended spending total per shopper in the UAE and Saudi Arabia is a considerable $380 and $322, respectively, according to research by Simon-Kucher & Partners.

Although spending is down 3 per cent and 18 per cent, respectively, it is still higher compared with other parts of the world; the US, for example, has an average of $270.

A key reason for this decline is Covid-19. The study revealed that 60 per cent of consumers agreed that the pandemic influenced their shopping behaviour, planning less in advance, having lower budgets and being less interested.

“Retailers should avoid entering price wars on promotions – it is a short-term measure with high long-term cost. Instead, they should adopt a customer-centric pricing approach to address the needs of customers by providing them with the right prices for the right products,” said Lovrenc Kessler, managing partner for Mena at Simon-Kucher & Partners.

Black Friday, the Friday after Thanksgiving in the US, is when retailers offer big discounts at their physical stores, eventually pouring into their online platforms. This has spawned local equivalents – Amazon’s White Friday and Noon.com’s Yellow Friday, for example – as retailers compete to attract buyers with rock-bottom prices.

The event has started earlier every year, some retailers even running it right through November, hoping to cash in on shoppers who do not want to get caught in the holiday rush.

The pandemic has accelerated the rise of e-commerce in the region. About 80 per cent of young Arabs shop online frequently, compared with 71 per cent in 2019, according to Wamda Capital’s research.

Additionally, 50 per cent of those aged between 18 and 24 in the Middle East and North Africa have been shopping more online since the pandemic began.

A report by Research and Markets, meanwhile, showed this has also led to an increase in demand for last-mile deliveries, as businesses digitalise to keep up with changing consumer habits. The market in Mena will potentially experience its revenue growing 18.48 per cent between 2021 and 2028, according to the report.

Covid-19 also brought permanent changes in consumers’ shopping habits, Visa research showed, with 64 per cent in the UAE and 61 per cent in Saudi Arabia reporting an increase in their online spending. More than 87 per cent of respondents in both markets said they will continue to shop online, even when the pandemic is over.

Awareness of Black Friday is extremely high in the GCC, with about 98 per cent of those surveyed in the UAE and Saudi Arabia aware of its occurrence, Simon-Kucher & Partners’ study showed.