Travel and entertainment categories lead the way in online shopping in the UAE
In a recent online survey conducted by Nielsen, nine out of 10 UAE respondents say they have ever shopped online, and travel and entertainment categories seem to dominate this space. Two thirds of UAE respondents stated that they have purchased travel products or services online (67%) while 40% said they have bought event tickets online, which are higher than the Africa/Middle East regional average (41% and 24% respectively). Many in the UAE have also ranked fashion (40%), and IT/mobile items (38%) as the most sought after items through e-stores.
Consumables, on the other hand, still have some way to go before consumers are comfortable buying these items online. These include consumer packaged goods such as products for baby and young children, medicine and health care, household cleaning products and fresh groceries. In the UAE, 65% of respondents stated that they prefer to buy fresh and household groceries at a physical store and will not consider buying them online. Images simply cannot replace the physical look, feel and smell of these products. When asked on the level of willingness to utilize digital options to order groceries online for home delivery, only 16% cited they are already using, 39% are definitely willing and 30% are somewhat willing.
Nevertheless, online grocery shopping still has the potential to grow. While not being able to hand-pick fresh groceries is a clear barrier to online adoption, if quality assurance is guaranteed, the allure of purchasing groceries online will expand. The survey revealed that a money-back guarantee is the most effective strategy to encourage shopping for consumables. Many of the UAE respondents stated that a guarantee of a full refund for fresh produce that do not meet expectations would definitely encourage (46%) or somewhat encourage (40%) them to buy their fresh fruits, vegetables, meat and dairy online.
Helping consumers make product choices
When it comes to information sources to influence purchasing, not surprisingly, the most effective source for fresh-grocery and personal-care products in the UAE is the traditional touchpoints. Forty-one percent stated that visits to a physical store help them decide which fresh groceries to buy, and the percentage is 36% for personal-care and beauty products. This is consistent with the global average, 44% for fresh groceries and 39% for personal-care and beauty products. For durables, store websites top the list of sources when it came to fashion (49%), while 50% cited brands websites as the most influential source of information for consumer electronics.
Utilizing digital tools to activate consumers in store
As the most widely cited information sources used in purchasing consumables are visits to physical stores, there are digital enablement options for retailers to consider to further influence consumers in making their purchase decisions in store. More than half of UAE respondents (56%) stated that they are already using or definitely willing to use online or mobile coupons, while 53% are already using or willing to login to store WIFI to receive more information on offers if these were made available in store. Fifty-four percent are already or definitely willing to use retailer app or loyalty program app on their mobiles to receive information and offers while in-store.
“Digital has disrupted the traditional retail ecosystem and e-commerce is fast evolving, while increasingly, reshaping consumer behaviors. This global phenomenon will only accelerate, in this part of the world. In the current connected marketplace, in order to stay relevant to consumers’ lifestyles and shopping occasions, manufacturers and retailers should continue innovating their business models and digitizing their marketing efforts to incorporate various digital tools for activation,” said Arslan Ashraf, Managing Director, Nielsen Arabian Peninsula and Pakistan. “The way forward is to blend the best of both online and offline channels to connect better with the shoppers. Physical store is a good avenue to advertise and promote the online stores especially for consumer electronics and fashion products, while digital channels can be useful in augmenting information on variety of the product lines, offers and promotions.”