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Nearly 50% of Saudis are upbeat about the overall economy in 2020, compared to 39% last year, Abdellah Iftahy, Partner, McKinsey & Company, told Argaam at the Retail Leaders Circle Summit MENA Region (RLC MENA) in Riyadh.
"A jump of 10 points in one year is a big leap," he said, adding that consumer sentiment in the region is improving for the first time in 5 years.
In addition, Saudi Arabia is witnessing growth in e-commerce as consumers become discerning, more demanding for convenience and seeking value for money.
"The lower and middle-income groups are mainly driven by price and promotions, as the upper-income echelons are becoming less brand loyal,” he further explained.
Therefore, it is very important for companies and retailers to understand the segmentation of consumer behavior, he stressed.
According to Iftahy, technology is a big disruptor in the retail sector with Saudi consumers, mostly millennials, using social media channels to discover products and brands.
The technology disruption is also bringing in new competitors, which makes it necessary for retailers to offer a seamless Omni channel customer experience, he noted.
Elsewhere, Iftahy said opening up the entertainment sector will allow more Saudis to spend time and money in the country, which will support the economy.
“A lot of Saudis were spending a lot of their money on entertainment, fashion and shopping outside the county, but we are now seeing rapid creation of demand locally,” he concluded.
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