Retail news that keeps industry pros in the know
Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.
A walk around the newly opened VIA Riyadh mall in Riyadh, Saudi Arabia, is enough to see that the once-closed country is now open to international luxury businesses, as part of the government’s ongoing top-down liberalization efforts to lessen its economic dependence on fossil fuels. The space is home to retailers from Tom Ford and Dolce and Gabbana to Elie Saab and Zimmerman.
In 2022, Saudi Arabia's fashion market was worth over €2 billion (~$2.15 billion), and only continues to grow as brands like Prada and Tiffany’s expand their presence with mono-brand outlets in the country.
This trend has also opened up opportunities for international retailers looking to enter the country.
But while it’s clear that the Saudi Arabian customer has a taste for high fashion, consumers in the region are also unique in their likes and dislikes. And for an international retailer, knowing how to approach them is key to being successful in the country.
“Brands won’t necessarily have the instinctual understanding of what people want that they have in their home market, and may not know which sub-groups or demographics to really focus on,” Sonnet Frisbie, lead analyst for EMEA at Morning Consult, told Retail Brew.
Breaking it down: There are two types of consumers in Saudi Arabia: locals and expatriates, and they want different things, Frisbie said.
Expatriates make up about one-third of the population in Saudi Arabia and are spread across diverse occupations with “significant buying power,” according to Frisbie. For the most part, they want experiences that are meaningful, entertaining, and relaxing that “they can share with their spouse and kids,” she said. “The idea many Westerners have of expatriates in the gulf is of young, single men. That doesn’t really bear out in the data.”
Saudi citizens on the other hand want a luxurious, personalized, and thought-provoking experience. “It makes sense that we saw Saudis relatively more interested in things like art exhibits, shows, and expos, and glamping compared to expats,” Frisbie added, citing recent research from Morning Consult.
But whether the customer is a Saudi citizen or an expatriate, Frisbie says, there is one thing that the country as a whole values when it comes to luxury: continuous engagement.
“A lack of attentiveness and engagement in a shopping experience may be seen as a deficit of status,” Frisbie said. “These kinds of cultural differences are really important to understand in any market, but especially for luxury brands who are in some sense selling an experience.”