Compared to a year ago, 47% of Saudi consumers feel their finances are better off compared to 39% during the same period in 2023, revealed NielsenIQ, a leading global consumer intelligence company, in its mid-year report.

The Mid-Year Consumer Outlook: Guide to 2025 report said that for most the main case of their financial strain is the increased cost of living. Increasing food prices are a top concern (30% 2024 vs 28% 2023) for most Saudi consumers; around a 1/3 of consumers (32%) will shop more often at discount/value/lower-priced stores.

The report, identifying macro catalysts across industries, anticipates that global consumers will spend $3.2 trillion more in 2025, representing nearly 6% growth compared to 2024, according to World Data Lab.

In KSA, there are signs of growing consumer confidence and resilience, despite the increased cost of living. KSA consumers are willing to spend more on at-home experiences to save on restaurant and entertainment expenses (72%).

At the same time, they would try a new brand because of its lower price (72%) or purchase a product that has innovated to make it as affordable as possible (69%), while more than half of KSA consumers (59%) will choose to purchase private label products more than ever before.

On social and AI trends, the report shows that 62% would leverage AI to automate and speed up their everyday shopping decisions and would search social media (66%) for product information before a traditional search engine.

Pavlos Pavlou, NielsenIQ Managing Director in the Kingdom of Saudi Arabia, said: "The impact of AI on consumer trust is nuanced.

“While many consumers are open to AI's role in lower-stakes activities such as product recommendations or automating routine shopping tasks, concerns about data privacy remain a significant barrier.

“To build trust, businesses should prioritize strong data privacy and security measures, clearly communicate how AI is used and how customer data is managed, offer the option for human interaction when preferred, and start by implementing AI for simpler tasks to build confidence gradually.

“By leveraging AI to provide personalized and valuable experiences, and regularly sharing the benefits and safety of AI, companies can foster greater trust in these technologies.”

Top Trends for 2025

Readiness for AI: 63% of Saudi consumers would avoid sharing personal details in virtual interactions because they do not trust data privacy with AI technologies, but 63% would accept an AI recommendation about a product, i.e. Siri on iPhone, Amazon Alexa, etc. (40% globally).

Similarly, more than half (56%) would purchase a product or service you have only examined or experienced through Augmented reality or virtual reality.

Health & Wellbeing conscious: 71% of KSA consumers will start or increase their intake of vitamins and supplements to support their health and wellbeing. At the same time, half of KSA consumers would consider using a medication or drug to support weight loss, i.e. GLP-1 agonists like Ozempic (30% globally). Moreover, 63% would spend more on products that help with relaxation and anti-stress.

Omnichannel evolution: 71% sought out a new product in-store or online because of something seen on social media, with 70% using social media as their primary source to learn about new products and services. Interestingly, more than half of consumers (58%) would change brands based upon the recommendation of a social influencer or purchase a product by participating in a live-stream shopping experience on social media (57%).

Hot commodity costs: Snacks and confectionery (22%), as well as pre-made meals (20%) are sectors consumers aim to spend less on in the next 12 months, while fresh foods remain high on their shopping preference list.

 “Consumers are seeking value with every purchase in multiple ways. They are spreading their spending in purposeful ways, and their habits and behaviours are changing fast in response to economic trends and new technologies,” says Lauren Fernandes, Vice President, Global Thought Leadership, NIQ. - TradeArabia News Service