Dubai: Will UAE shoppers finally get around to spending on fashion and tech in the next few weeks? Or will they stick to the grocery as they did for the better part of this year?
The iPhone-12 related deals, where the retailers and online portals have come up with ultra-competitive monthly payment plans, could convince many to finally commit to a purchase that is not a household appliance. Or, at least, that’s the hope among the retailers.
But for fashion, it may require some convincing. A survey by Carrefour found that party dresses and evening wear could see a fall in end-of-year popularity due to the social distancing measures in place. (The authorities have made repeated calls on residents not to lose sight of COVID-19 related safety protocols even during the holiday season.)
Even then, are fashion sales ready for a comeback?
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Good time to pick
Fashion industry sources say that shoppers have, since August, spending more on clothes each successive month. While this may not compensate for the lack of demand during April to June, retailers insist that fashion spending is not a lost cause this year.
Industry trackers seem to echo this view. RedSeer Consulting puts 2020 online clothing and accessories sales in the UAE ending close to $1.5 billion and up 40 per cent on last year. Again, much of that will be driven by the promotions and discounts online and store retailers can come up with.
“Online fashion customers conducted around 70,000 transactions per day and we expect in November this will go up to 90,000,” said Sandeep Ganediwalla, Partner at RedSeer. “We expect peak sales to come this month driven by Singles Day, Diwali and White/Yellow Friday.”
Making up for lost time
While grocery was the runaway winner this year, more shoppers are shedding their concerns about choosing clothes via online stores and without a chance to see whether it made for the right fit and look. But fashion shoppers and retailers still have to factor in the three lost months between April to June.
More than 50 per cent of buyers are planning to buy something this White/Yellow/Black Friday. Of the people planning to buy this quarter, 40 per cent people explicitly stated they will buy fashion and related products such as clothes, shoes, watches
Not so fast
But there are some who maintain that clothing sales will run a distant second or third even during the peak end-of-year sales. Nielsen Global, the market research consultancy, reckons that 76 per cent of consumers in the UAE (and 70 per cent in Saudi Arabia) would reduce their spending on clothes this year.
“Consumers are reworking their budgets and adapting to changes in local living restrictions as they prepare for Christmas and New Year festivities,” said Andrey Dvoychenkov, Nielsen Global Connect Retail Intelligence lead for Arabian Peninsula. “Their shopping behaviour has already reset with reduced spending on clothes and luxury items.
“Considering the new norms with lack of external events, prevailing work from home, online schooling and fewer tourists, the trend may well continue for the next 8-12 months as consumers are likely to have a savings mindset developed since the first-half of this year.”
Image Credit: Nielsen Global
That reading on consumer behaviour will send a chill down fashion-focussed retailers’ spines. Already, some mid-tier brands have shut down their physical stores and will now be focussing exclusively on online channels. Multiple sources say that clothing related sales at physical stores are still down 35-40 per cent from pre-COVID-19 times.
“The lockdown was a tough period in the fashion market, primarily because of the lack of occasions to wear new purchases,” said Ganediwalla. “The health of the offline retailers was particularly badly impacted during the lockdown.”
“However, physical store retailers are planning to launch aggressive promotions in the last quarter to boost sales.”
Will that be enough to divert traffic away from shopping heading online to pick their next fashion label or accessory? Or for even something more mundane as office wear? Will online keep trumping all before it?
UAE consumers prioritised daily essentials and focused more on health and hygiene accompanied by prolonged home stays during the first few quarters of this year