The Middle East & Africa is the only region to outperform despite declines in the consumer tech and durables sector across regions after saturation, studies show.
The Middle East & Africa saw strong growth, but with different trends within this region. Saudi Arabia and the UAE are delivering strong performance due to a positive consumer mood, according to data from GfK, a global market research company.
Globally, the consumer tech and durables sector saw sales revenue of $813 billion last year, which is 2.9 per cent down on 2022.
“This year, brands and marketers could receive a boost from a number of big events taking place. On the social side, the Summer Olympics and Euro 2024 soccer tournament both have the power to boost spending, as fans’ euphoria meets with the marketing and sales promotions surrounding these types of major sporting events,” Nacho San Martin, vice president, T&D EEMEA (Eastern Europe Middle East And Africa), GfK, told Khaleej Times in an interview.
Consumer confidence is cautiously improving, provided there are no further surprises or shocks, San Martin said. “That said, real wages are not increasing, and employment churn remains high because of technology changes and growth declines forecasted by companies. This will keep consumers relatively cautious in their spending behaviour, throwing greater importance on the role that innovation will play in triggering consumers to make a purchase,” he added.
With all sectors continuing to face challenging conditions and a cautious consumer landscape, it is more important than ever to be able to unlock and maximise the pockets of growth that do exist, San Martin said. “That means knowing at a granular level where and what to innovate to maximise your share of consumer spending, tailored by region, audience, and product category,” he added.
AI is bringing transformative change to industries as diverse as retail, transport, insurance and entertainment San Martin noted. “Using AI is a powerful way to identify the signals you need and model projections that predict the future of the brand under many scenarios. Whether your business is scaling up, building resilience or trying to boost profit margins, AI has a vital role to play in today’s decision-making process,” he added.
Tempered by human expertise, AI mines predictive insights from data to drive businesses forward. “We have seen that marketers’ familiarity with emerging tech such as AI and ML, as well as AI-powered software like ChatGPT, is already strong – and becoming even stronger,” he added.
In a landscape where market dynamics and consumer behavior is constantly evolving, understanding the art of brand building is crucial. “We have seen that why 70 per cent of senior marketers allocate a major portion of their budgets to long-term brand growth, whether you should too, and how to do it. Brands need to strike the perfect balance between budgeting for the short- and long term. They need to discover how to gain C-suite buy-in for your strategic plans, dive into consumer-led growth tactics that enhance brand strength, and explore innovative segmentation methods for immediate sales boosts and sustained success,” San Martin said.
Marketers are well aware of how mental availability and brand perception can impact consumer behavior is valuable for businesses looking to strengthen their own brand. Whether they want to enhance brand choice or increase the likelihood of buying at a premium, businesses could implement the following strategies to help increase brand awareness and appeal.
San Martin lists the following tips for brands to boost their appeal.
Increase brand exposure: One of the most effective ways to improve mental availability is to increase brand exposure through advertising, social media, and other marketing efforts. Consistently showing up in front of the target audience will increase the likelihood that they will think of the brand when making a purchase decision.
Leverage endorsements and partnerships: Partnering with influencers, celebrities, or other brands can lend credibility and endorsement to a brand. These partnerships will help increase appeal to consumers and make brands aligned with market trends.
Build brand trust: Building trust through transparency, reliability, and ethical business practices can help improve brand perception. This can be achieved through product quality, customer service, and being active in the community.
Balance need and affordability: Consistently meeting core needs at an affordable price is essential to many consumers. Being able to offer this trusted and affordable option will help the brand establish mass appeal increasing its ability to be chosen.
Deliver excellence: Providing the best quality product/service and consistently delivering on the brand promise can create a positive brand experience for consumers. Perception of being an expert in the category will help achieve greater brand attachment and increased loyalty.
“By incorporating these strategies, businesses can improve their mental availability, and brand perception, and ultimately drive sales and revenue growth,” San Martin said.
Brand strength and above-average promotion performance go hand-in-hand
Every year tech & durables manufacturers invest billions of dollars in trade spending – funding activities such as price promotions, in-store displays, merchandising support, and other incentives designed to encourage retailers and distributors to stock and promote the brand’s products.
However, this spend is not always leveraged to best effect. Rather than balancing spend across activities that increase promotion performance to drive sales volume and value and incremental profit, the focus is too often on merely defending market share through pricing. “Marketing spend needs to be focused on activities where they will achieve the greatest net effect short and long-term – not only considering instant sales performance but also taking long-term investments into brand value into account,” San Martin said.
This requires a genuinely holistic grasp of the landscape that incorporates the market trends, the needs and wants of consumers, and an in-depth understanding of trade partners and competitors. This is where GfK can help with a combined offering of market and consumer insights enriched with advanced analytics to get the most out of the data, he added.