Consumer Psychology And Marketing Strategies For Luxury Retailer In UAE

For a UAE start-up of your choice from this list (https://gothelist.com) you need to prepare a report to the owner of the start-up, giving a consumer psychology inside on their marketing strategies and suggesting improvements in order to achieve their goals.

You will need to use consumer psychology frameworks, concepts and current research in the field pertaining to all stages of the consumer experience—from:

(a) seeking and acquiring information, to

(b) evaluating it and using it to form attitudes and make decisions, to
(c) translating those attitudes and decisions into behaviour (or not), to
(d) assessing past experiences and using the assessment to inform future behaviour.

Consumer Psychology and Luxury Retail in UAE

The company chosen for this assignment is The List. The List is a retailer for luxury products and wishes to enter the United Arab Emirates (UAE) markets. The entry of a luxury retailer involves different marketing strategy because the luxury brands are quite different from the normal ones. Earlier the retailers had a very easy job that is to target clients with deep pockets (Farrag, 2017). However, this perception has changed today and for a luxury retailer it is utmost important that they understand their audience and accordingly be able to deliver goods, products or services of value to the customers consistently.

Luxury retail has changed from hunting for wealthy clients to providing the clients with emotive as well as intimate experience. There has been a slump in the luxury retail sector due to a number of reasons. The enthusiasm of the consumers has declined and compounded with the financial as well as geopolitical instability are the primary cause for the slump. In order to lure in the declining consumers of luxury retail, the retailers are focussed to pay close attention to matters of details (Coste-Manière et al. 2015). Luxury retails have a simple understanding. The customer does not pay price for the product or the service itself. Rather they pay for the immersive experience.

UAE has become an attraction for the retailers because UAE is a growing economy and that is sustained by the higher rates of consumption. The country also enjoys a large percentage of population living in urban regions due to lower financial risks. The country has developed superb and excellent infrastructure. Perhaps the most critical information pertaining to the growing demand in luxury retail sector is that the youth market which is emerging as a style and technology conscious audience in the UAE market (Makkar and Yap, 2018). These consumers have been responsible for driving the retail industry.

UAE is a very special country for the luxury retailers as both the men as well as the women do participate in purchasing luxury goods or services. The current market forecast has revealed that the UAE can be expected to grow and develop further. The UAE consumers have no inhibitions on spending/. The consumers are known to indulge themselves in buying gadgets, jewelleries or spirits (Kazim, 2018). Another reason why it is viable to open a luxury retail store in UAE is because they want to compete with the high end shopping malls by opening luxury retail stores in second or third tier shopping malls.

It is not necessary that quality of a product or service is linked with innovation. People sometimes get confused in the necessity to invest in innovation. Luxury items may have its origin from classical approaches and it may not be necessary to prevalently use technology in the stores. To a retailer selling luxury products it is necessary for them to have experience that is necessary in selling the subtle attributes of the product. Innovation is necessary to make it possible for the consumers to interact with the retailer brand (Makkar and Yap, 2018). Innovation will help the company to stay afloat in the market place and assist in handling the evolving consumer demands.

Marketing Strategies for Luxury Retailer in UAE

To sell a product it is sometimes necessary to have a story to it. This idea is very applicable to the luxury retail brands such as The List. The story may be anything like origin of the brand. However, the story provides the customer a sense of authenticity when purchasing a luxury product. In order to achieve the differentiation, the backstory will help in establishing the brand or the organisation to be believable (Prayag and Hosany, 2014). The consumers will have a greater confidence while approaching the company. It is necessary for brands to realise the full potential of participating in the various stages of consumer journey.

In present day context, luxury does not mean using extremely affluent products but rather it is a representation of ability to create a better, much intimate and highly personalised approach (Seetharaman et al. 2017). This means that The List needs to create an experience based on the individuality of the consumer and not make it an interpretation of luxury that is focussed on wealth of the client (Katsaiti et al. 2017). The demographics is evolving rapidly and it is very critical to keep in mind how the brand actually communicates to the consumers. The evolution of digital markets and terrifying ability of the consumer to research and acquire a product has made it necessary that luxury retailers make more purposeful efforts.

A luxury retail brand like The List is a symbolism for quality, authenticity, lineage, taste and social status. In order to create a high level of brand value the company can actually leverage the various retail elements such as heritage associated with the product, origin, level of craftsmanship, scarcity in the market and finally number of prestigious clients purchasing from the shop (Kassim and Zain, 2016). The organisation can not only involve in digital marketing but should also promote word of mouth promotions from the the existing customers to increase their market reach.

The above mentioned recommendations is necessary to be kept in mind as they have been made by observing the consumer psyche in UAE. In the UAE society, only people of certain stature, personality, position and societal image purchase luxury products (Prashar et al. 2015). It has been observed that the peer groups and family members are the key influencers in the decision making process of the consumers (Joghee and Dube, 2016). In order to enter UAE market, The List needs to keep in mind the social as well as the cultural considerations that shape up the consumer’s buying behaviour as purchasing luxury products and services is an important trend in UAE.

UAE has been ranked 5^th globally where the consumers indulge in luxury purchase. The UAE society has associated itself with brand values as the upper classes in the society has adapted to enjoy luxury items (Al-Salamin and Al-Hassan, 2016). As compared to Europe where the age of serious luxury purchase decisions is 40, the age in UAE is 20. This in turn means that the middle class of the society is more exposed to the elite market which makes people belonging to this segment to adopt themselves to the societal trends and get involved in purchasing luxury goods as the society is highly sophisticated (Alserhan et al. 2015).

Recommendations for Luxury Retailer in UAE

Many of the consumers in UAE have disposable income which facilitates their luxurious shopping splurges. The evidences of extravagant living has been even recorded in historical books. The UAE has been reaping benefits from economy sustained due to the rich oil reserves which are also partly responsible for development of the current culture in UAE (Gil, Michael and Johnson, 2016). The mix of ethnicities, cultures and lifestyles in the society  has resulted in changing the consumer behaviour observed in UAE. This means that a common consumer has moved from making a purchase in the traditional marketplace to luxury stores which house high end brands.

The immigration of Europeans has led to several changes in the way of life of the people living in UAE (Rodrigues, Barros and Martins, 2018). Since the country was mostly dependent on trade, there was a pre-generated notion that products from Western countries were much better in terms of quality. These kinds of perceptions have been passed down over the decades and carried forward by Emiratis which makes it understandable why there is a trend of purchasing luxury goods (Alserhan et al. 2014). The role of family is another influencer as it shapes up the belief system, personality and ethics of an individual. An individual is strongly influenced by their family in matters of luxurious purchase as it reflects the family stature in the society.

References

Farrag, D.A., (2017). The young luxury consumer in Qatar. Young Consumers, 18(4), pp.393-407.

Coste-Manière, I., Garcin, J.B., Merheb, M.B. and García, S.G.M., (2015), June. MIDDLE EAST CONSUMER BEHAVIOR IMPACT ON STRATEGY OF INDEPENDENT LUXURY BRANDS. In (2015) Global Fashion Management Conference at Florence (pp. 270-274).

Makkar, M. and Yap, S.F., (2018). The anatomy of the inconspicuous luxury fashion experience. Journal of Fashion Marketing and Management: An International Journal, 22(1), pp.129-156.

Kazim, A., (2018). The Emergence of Hyper-Consumerism in UAE Society: A Socio-Cultural Perspective. Perspectives on Global Development and Technology, 17(4), pp.353-372.

Makkar, M. and Yap, S.F., (2018). Emotional experiences behind the pursuit of inconspicuous luxury. Journal of Retailing and Consumer Services, 44, pp.222-234.

Prayag, G. and Hosany, S., (2014). When Middle East meets West: Understanding the motives and perceptions of young tourists from United Arab Emirates. Tourism Management, 40, pp.35-45.

Katsaiti, M.S., Ahmad, K.A.A., Tajuddin, H.M. and Abdulrouf, S., (2017). Determinant of Households Consumption Behavior in UAE: A Comparison of Nationals and Expatriates. European Scientific Journal, ESJ, 13(16).

Kassim, N.M. and Zain, M.M., (2016). Quality of lifestyle and luxury purchase inclinations from the perspectives of affluent Muslim consumers. Journal of Islamic Marketing, 7(1), pp.95-119.

Joghee, S. and Dube, A.R., (2016). BRAND IMAGE & REFLECTIONS: AN EMPIRICAL STUDY IN UAE WITH CAR BUYERS OF UAE NATIONALS. International Journal of Economics, Commerce and Management, 4(3), pp.401-414.

Alserhan, B.A., Halkias, D., Boulanouar, A.W., Dayan, M. and Alserhan, O.A., (2015). Expressing herself through brands: the Arab woman’s perspective. Journal of Research in Marketing and Entrepreneurship, 17(1), pp.36-53.

Gil, L.D.A., Michael, I. and Johnson, L.W., (2016). Comparing the luxury attitudes of young Brazilian and Emirati females. Middle-East Journal of Business, 11.

Alserhan, B.A., Bataineh, M.K., Halkias, D. and Komodromos, M., (2014). MEASURING LUXURY BRAND CONSUMPTION AND FEMALE CONSUMERS'RELIGIOSITY IN THE UAE. Journal of Developmental Entrepreneurship, 19(02), p.1450009.

Al-Salamin, H. and Al-Hassan, E., (2016). The impact of pricing on consumer buying behavior in Saudi Arabia: Al-Hassa case study. European Journal Business and Management, 8(12).

Seetharaman, A., Niranjan, I., Saravanan, A.S. and Balaji, D., (2017). A Study of the Moderate Growth of Online Retailing (Ecommerce) In the UAE. The Journal of Developing Areas, 51(4), pp.397-412.

Prashar, S., Raja, A., Parasaran, V.S. and Venna, V.K., (2015). Factors prompting impulse buying behavior: Shoppers in Dubai. The East Asian Journal of Business Management, 5(3), pp.5-15.

Rodrigues, P.L., Barros, T. and Martins, C., (2018). The Value of Luxury: Social, individual and functional dimensions. International Journal of Marketing, Communication and New Media, (4).