In the context of a deep macro-economic shakeup over the years, from a fall in oil prices, introduction of VAT, growing competition, a more saturated retail scene and the development of KSA under Vision 2030, we wanted to understand what impact this had on the GCC luxury consumer.
In late 2019, we launched a study of which the findings are still very much relevant today and continue to drive our ongoing quest to deliver memorable experiences to our customers, wherever they are. Our research was based on 1,029 face to face surveys with local consumers who had purchased luxury fashion and beauty goods at least three times a year in KSA, UAE, and Kuwait.
The rise of off-price
From the study, we saw that while retail shopping is a key area of discretionary spending, consumers are less keen on paying full price than in the past showing that even amongst luxury, an element of value for money or even discounting, is coming into play.
Uniqueness and personalization
It is reaffirmed that luxury holds an important place in GCC luxury consumers’ lives – it is a guarantee of quality and serves as a treat or reward, serving to assert social status. However, unlike in the past, it is increasingly being used as a way of standing out from the crowd rather than fitting in. Luxury brands are used a normaliser for doing so.
Brands that are going that extra mile to delight consumers and make their experiences memorable, whether in terms of the service or unexpected elements such as gifts with purchase, are certainly becoming the preferred choice of our GCC consumers. Consumers have also become bolder and more confident, experimenting with new brands and using fashion as a means of expressing their unique style and personality. They appreciate exclusive collections and personalization and are increasingly interested in brands beyond the mainstream, preferring those that communicate in Arabic (especially one that is colloquial).
More trust in .com
GCC luxury shoppers have become increasingly comfortable with shopping luxury online, even in categories that would typically require trial before purchase, be it makeup, shoes or clothes.
Along the consumer journey, friends and family continue to play a key role in terms of information and recommendation, as does social media.
When looking back on these findings today, we find that most of these insights continue to hold relevance in 2021. While the pandemic has accelerated some of the changes we saw emerging prior to the crisis and indeed highlighted by the study, luxury will always play an important role in the lives of our GCC consumers.