The Middle East & Africa is the sole region to have exceeded expectations, despite downturns in consumer technology and durable goods sectors worldwide, following market saturation, as indicated by studies.
The Middle East & Africa exhibited robust growth, albeit with varying patterns within the region. Saudi Arabia and the UAE stand out for their strong performance, attributed to a positive consumer sentiment, according to data from GfK, a global market research company.
Globally, the consumer tech and durables sector recorded sales revenue of $813 billion last year, marking a 2.9 percent decline from 2022.
“This year, brands and marketers may benefit from various major events. The Summer Olympics and the Euro 2024 soccer tournament, in particular, are poised to drive spending, as fan enthusiasm intersects with marketing and sales promotions related to these significant sporting events,” noted Nacho San Martin, Vice President, T&D EEMEA (Eastern Europe Middle East And Africa) at GfK during an interview with Khaleej Times.
Consumer confidence is gradually improving, provided there are no unforeseen developments, remarked San Martin. “Nevertheless, real wages are stagnant, and employment turnover remains high due to technological advancements and anticipated declines in growth foreseen by companies. This will prompt consumers to continue exercising caution in their spending habits, emphasizing the crucial role that innovation will play in stimulating consumer purchases,” he added.
Given the persistent challenging conditions across all sectors and a prudent consumer environment, it is more critical than ever to identify and maximize pockets of growth, emphasized San Martin. “This entails understanding at a detailed level where and what to innovate to capture a larger share of consumer expenditure, customized by region, audience, and product category,” he added.
AI is driving transformative changes in industries spanning retail, transportation, insurance, and entertainment, highlighted San Martin. “Utilizing AI represents a potent method to discern the necessary signals and model projections to anticipate the brand’s future under various scenarios. Whether your business is expanding, enhancing resilience, or striving to elevate profit margins, AI plays a pivotal role in today's decision-making process,” he added.
Tempered by human expertise, AI harnesses predictive insights from data to propel businesses forward. “We have observed that marketers are already quite familiar with emerging technologies such as AI and ML, in addition to AI-driven software like ChatGPT, and this familiarity is only strengthening,” he added.
In an environment characterized by ever-evolving market dynamics and consumer behavior, understanding the art of brand building is imperative. “We have noticed that 70 percent of senior marketers allocate a substantial portion of their budgets toward long-term brand growth, and businesses need to contemplate whether they should follow suit and how to accomplish it. Brands need to strike a delicate balance between budget allocations for the short and long term, alongside discovering methods to secure C-suite support for their strategic plans, diving into consumer-led growth strategies to enhance brand resilience, and exploring innovative segmentation approaches to drive immediate sales growth and sustained success,” explained San Martin.
Marketers are acutely aware of the influence of mental availability and brand perception on consumer behavior, which is invaluable for businesses aiming to fortify their brands. Whether the goal is to augment brand choice or enhance the likelihood of purchases at a premium, businesses can implement the following strategies to bolster brand awareness and desirability, as outlined by San Martin.
Increase brand exposure: Boosting brand exposure through advertising, social media, and other marketing endeavors is one of the most effective ways to enhance mental availability. Consistently engaging with the target audience increases the probability that the brand will come to mind during purchase decisions.
Leverage endorsements and partnerships: Collaborating with influencers, celebrities, or other brands can confer credibility and endorsement to a brand. These partnerships will foster greater appeal to consumers and align the brand with prevailing market trends.
Build brand trust: Fostering trust through transparency, reliability, and ethical business practices can enhance brand perception. This can be achieved through product quality, customer service, and active community involvement.
Strike a balance between necessity and affordability: Effectively meeting fundamental needs at an affordable price is crucial for many consumers. Providing a trusted and affordable option will amplify the brand's mass appeal, elevating its likelihood of being chosen.
Deliver excellence: Offering the highest quality product/service and consistently delivering on the brand promise can cultivate a positive brand experience for consumers. Perceived expertise in the field will deepen brand attachment and foster heightened loyalty.
“By integrating these strategies, businesses can enhance their mental availability and brand perception, ultimately propelling sales and revenue growth,” remarked San Martin.
Brand resilience and superior promotion performance are interlinked
Every year, tech & durables manufacturers inject billions of dollars into trade spending – supporting initiatives such as price promotions, in-store displays, merchandising support, and other incentives aimed at encouraging retailers and distributors to stock and promote the brand’s products.
However, this spending is not always optimized. Instead of distributing resources across activities that amplify promotion performance to drive sales volume, value, and incremental profit, the focus often narrowly revolves around defending market share through pricing. “Marketing expenditure should be directed towards activities that yield the most significant net impact in the short and long term - not only focusing on immediate sales performance but also factoring in long-term investments in brand value,” advised San Martin.
This necessitates a comprehensive understanding of the landscape, encompassing market trends, consumer desires, and a deep comprehension of trade partners and competitors. This is where GfK can provide assistance, offering a blend of market and consumer insights enriched with advanced analytics to extract maximum value from the data,” he added.
