Whether they’re buying bags, clothing or groceries, consumers consider a lot of factors, including quality, brand and price charged before making purchase decisions. Some look away from high prices, while others are willing to max out a credit card in exchange for a luxury label.
However, in this day and age of environmental awareness, sustainability and climate change, there is a noticeable trend of consumers who are conscious about where their money will go, whether or not their spending will, in some ways, positively impact the planet.
In a survey conducted by EY among consumers in the Middle East and North Africa (MENA), home to a population of 578 million people, the majority of respondents (63 percent) said they are more likely to buy from companies that ensure what they do will have a positive impact on the society they live in.
About six in ten (57 percent) said they will prioritise the environment and climate change in how they live and the products they buy, while nearly half (48 percent) said they will buy from businesses that benefit the society, even if it means spending more money. Another 22 percent said sustainability will be their top purchase criteria three years from now.
Nearly seven in ten (65 percent) also said they want to make healthier choices in their shopping decisions in the longer term, with 41 percent saying that health or “what’s good for me” will be the most important purchase criteria for them three years from now.
“As consumers adopt new preferences and attitudes for the future… findings show that pre-existing concerns around their own health, environmental sustainability and social impact have a significantly larger influence than ever before in their purchase decisions,” said Ahmed Reda, EY consumer industry leader for MENA.
“Consumers are willing to engage more with brands that direct their capabilities and resources to support an economic recovery in the communities they operate in.”
As its population continues to expand, the MENA region has seen rising consumer expenditures, which jumped by hundreds of billions of dollars over a ten-year period.
According to World Bank data, final consumption expenditure of MENA households and non-profit institutions serving households (NPISHs), which can include clubs, charities and professional societies, amounted to $1.8 trillion in 2019, up from $1.2 trillion in 2010.
Within the UAE, expenditures were estimated to be around $163.8 billion in 2019, while in Saudi Arabia, the biggest spender in the Gulf region, expenditures stood at $308 billion.
Factors influencing buying preferences
Consumer preferences are also changing due to the ongoing pandemic.
Among the consumers polled, about a third (27 percent) said they will continue to be wary about COVID-19 for at least a year. That’s up from 19 percent who shared the same view in the previous survey, indicating that consumers are now more worried about the health of their family, access to necessities and personal finances.
Nearly half (49 percent) of consumers in the region said they will not be inclined to leave their homes to get involved in experiences due to health and safety concerns, while 86 percent said they have changed the way they stay entertained.
Ravi Kapoor, EY consumer industry consulting leader for the MENA region, said businesses need to take such changes into account, if they want to remain profitable.
“The COVID-19 pandemic has opened up a window for change, and organisations have reacted by significantly transforming the way they work. The same is true of consumers’ everyday lifestyles, and as people around the world emerge from the pandemic, they plan to fundamentally change how they spend money and live their lives,” he said.
“Against this backdrop, companies cannot afford to stand still. Those that take bold decisions now – to address their customers’ evolving concerns, as well as new market trends – will be more successful in shaping a profitable future,” Kapoor said.
While many consumers have changed their buying preferences, there are those that still focus on affordability when making purchase decisions, with more than half (58 percent) saying that price will drive their buying decisions.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
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© ZAWYA 2021