AN ASSESSMENT OF THE IMPACT OF COVID-19 PANDEMIC ON CONSUMER BEHAVIOR AND RETAILERS' BUSINESS MODEL IN THE KINGDOM OF SAUDI ARABIA

Abstract

This study aims to explore the impact of COVID-19 on consumer buying behavior and shifts in retail business models within the Kingdom of Saudi Arabia, in response to the challenges introduced by the pandemic. The study had several objectives, including examining the global impact of the pandemic on retail consumers, analyzing variations in the effect on luxury and essential products, investigating the strategies employed by physical store retailers to address the consequences of COVID-19, and providing recommendations for retailers to operate sustainably in the future. To achieve these objectives, the study utilized a mixed-methods approach, integrating quantitative and qualitative research. Data was collected from 180 consumer respondents via a quantitative survey questionnaire and from eight retailers through one-on-one interviews. Reliability analysis was conducted using Cronbach's Alpha. Subsequently, the data was evaluated through frequency and cross-tabulation methods, while interview transcripts served to corroborate and contrast the quantitative findings. The study revealed that the COVID19 pandemic significantly altered consumer shopping patterns. There was a heightened demand for groceries, essentials, health and hygiene products, while non-essentials and luxury items experienced reduced demand. Consumers showed a preference for online retail platforms over traditional brick-and-mortar stores. Based on these findings, Saudi Arabian retailers are advised to exploit a hybrid model, blending online and physical stores in the post-COVID period, and to establish multiple online sales touchpoints. Luxury retailers, in particular, are encouraged to diversify their portfolio range to include value-for-money options, leverage social media marketing to promote their offerings, and improve consumer perceptions around online purchasing, specifically in the areas of delivery and return policies.