As the cost of living rises, Criteo’s Taranjeet Singh offers data and guidance for brands to understand the consumer psyche in order to seize the retail opportunity this Ramadan.
As one of the most important observances in the Islamic calendar, Ramadan is an event celebrated by 240 million Muslims in Southeast Asia. With lifestyle changes taking place during this month, there are likely to be shifts in consumer behaviour and spending habits.
While consumers are eager to return to their normal routines in a post-pandemic era and celebrate major festivals with family and friends, they are also finding savvy ways to shop in the wake of rising inflation and cost of living. In response to this, retailers who typically look at Ramadan as a period of increased sales may need to rethink their strategies to fully seize the retail opportunity and effectively engage their consumers this year.
What 2022’s Ramadan sales data tells us
Retail sales performed well for Ramadan 2022. Looking back at last year’s retail data, Criteo found that initial online sales in Southeast Asia saw a 19% increase in early April 2022 compared to the last two weeks of March 2022. Sales figures continued to rise during Ramadan until approximately one week before Eid.
Within the region, Indonesia saw a spike of 68% a week before Eid, Malaysia saw a 35% increase six days before Eid in retail sales, while there was not much change among consumers in Singapore. Interestingly, Indonesia recorded increasing sales prior to Ramadan around March 23, indicating that consumers in Indonesia may have been shopping earlier in preparation for the holy month.
Not surprisingly, the top performing product category for 2022 was apparel and accessories, which saw a 30% increase in sales during Ramadan. Among the product categories that performed well were health and beauty, home and garden, and electronics, which all saw an 18% increase in retail sales right before Eid.
Additionally, travel sales saw a general increase and peaked (+44%) four days before Eid celebrations. This might be expected as people want to gather with their family and friends for the celebration.
Consumer behaviour in online shopping also saw a change during Ramadan 2022, especially in Indonesia and Malaysia:
- Online sales at night saw a general positive trend that starts at 19:00 (Indonesia), 20:00 (Malaysia) and continued until the morning.
- Online shopping before dawn 04:00-05:00 (Indonesia) and 05:00-06:00 (Malaysia) saw the highest change during Ramadan as compared to the normal days’ performance (March 1-30).
- Decreased sales events during iftar (breaking of fast) 18:00-19:00 (Indonesia), more than regular days (no Ramadan).
- 12:00-13:00 in both countries stands out as an anomaly with the highest number of sales during the day. Consumers were shopping more as they were fasting during the lunch hour.
Guidance for retailers in 2023
As we enter Ramadan 2023, it is vital for brands to understand the consumer psyche so that they can seize the retail opportunity. Drawing upon last year’s Ramadan regional retail sales data from Criteo, here are three guidance points for brands to capitalise on commerce opportunities in the upcoming Ramadan season amid inflation.
1. Leverage the potential of commerce media
Commerce media is being positioned as the next wave of digital advertising and has the power to reach and engage consumers where they’re actively browsing and buying. According to Criteo’s The Rise of Savvy Shoppers study, 71% of global shoppers are spending more time online to search for the best offers and values before making a purchase. As shoppable moments can happen in nearly any environment, emerging environments such as retail media will continue gaining traction in 2023.
Savvy retailers know that they will need to continue expanding their media offerings to own their end-to-end customer journey, such as extending their advertising reach across the open internet and effectively looking for more opportunities to attract and retain potential customers beyond their own content walls. Brands and advertisers can also boost their visibility by engaging audiences on non-retailer properties, looping them back to the digital shelf point of purchase.
2. Time strategies to suit consumer shopping patterns
Muslim consumers will undergo a lifestyle shift during the month of Ramadan and it is important for retailers to select the right timings to reach out and engage with consumers. Criteo’s 2022 Ramadan retail data revealed some interesting patterns in the times when consumers went shopping. Online sales at night, before dawn and during lunch generally saw a significant rise in retail sales, whereas sales decreased during the breaking of fast from 18:00-19:00.
Understanding the peaks and troughs in timing is important as retailers can adapt their advertising timings and promotions to best suit consumer shopping habits during this period. For example, retailers can consider offering discounts during peak shopping periods to encourage more purchases or they may tweak and customise advertising campaigns in order to reach out to the largest audience base during peak timings.
3. Retailers need to align values with customers’ wants
Today’s consumers are becoming more cost-conscious while still holding brands to standards. According to Criteo’s study, 91% of global consumers chose product quality as the biggest factor influencing purchase decisions, ahead of free shipping (90%) and discounts and coupons (84%). In addition, consumers also value alignment with brand values such as eco-friendliness.
Understanding these insights, retailers need to ensure that they do not cut corners and they continue to provide quality products despite rising costs. Other areas of opportunity include being able to articulate clearly a point of view on sustainability which could resonate with their consumers, thereby motivating consumers to continue purchasing from them. In fact, a 2022 study by Bain & Co found that 90% of consumers in Asia Pacific are willing to pay a premium on products that had a positive impact or that were healthier.
