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Back on track, by Reprise’s Riddhi Dasgupta

Reprise’s data science and analytics director, Riddhi Dasgupta analyses the data from last year’s Ramadan and predictions for 2021.

The much-awaited Ramadan 2021 is predicted to be similar to the Ramadans of old, with marketers looking forward to investing once again in media. Despite slowly returning to normal life, people have adapted to the new normal. Reprise has evaluated past years’ trends on consumer sentiment and purchase behaviour and will be shedding some light on media ad spends and what to expect from 2021.

Consumer sentiments

During the pandemic, consumer sentiments hovered around extreme cautiousness towards personal finances owing to potential job cuts and salary reductions.

As a result, people have started prioritising needs over their wants, resulting in the purchasing of essential products only.

Also, consumers have started showing keen interest in discounted products and have started to become more price-sensitive in their purchase decisions.

A study from YouGov clearly distinguished the consumer sentiments and buzz over the two markets, KSA and UAE, by categories. Sentiments around the categories pertaining to hygiene (Dettol), telecom (STC) and everyday essentials (Johnson’s, Lifebuoy, Close-up, Lipton-Yellow, etc.) saw a predominant buzz in the region, as well as on the travel/airlines (Emirates) category with ease of restrictions during Ramadan.

Want to know more about how brands and consumers will be spending their money and time this Ramadan? Join our Ramadan webinar on 7 April.

 

Purchase behaviour

Last year consumers found an alternative to their regular offline shopping in online websites and apps, further fuelling the region’s e-commerce industry. During Ramadan 2020, both UAE and KSA consumers spent less on apparel, shoes and accessories, and gifts. Post-lockdown they were willing to spend more on them.

Even with the easing of restrictions, studies from Choueiri Group, Snapchat and Twitter on Ramadan 2020 found:

40 per cent in UAE and 39 per cent in KSA have shown their motivation and preferences to shop in-store for immediate purchases.

Seven out of 10 people spent less during Ramadan 2020 compared with previous years in KSA.

More than 50 per cent of Snapchatters in KSA purchased their cosmetics and beauty products online, while one in three purchased them in-store.

Snapchatters’ interests during Ramadan were mostly for food and groceries, along with household products and appliances, and less for automobiles and travel.

With 45 per cent of Twitter users claiming they would spend more during Ramadan, 36 per cent still consider discounts and promotions as a factor in their shopping.

Media ad spends

As lockdown measures were introduced, advertisers rolled back their advertising investments immediately. Offline ad spends declined as much as 66 per cent compared with 2019, with a 43 per cent decline in TV.

A quick year-on-year comparison of 2019 and 2020 from Reprise suggests:

While other advertisers were holding on to their budgets owing to Covid-19, the telecom and chocolate sectors leveraged the opportunity of pandemic Ramadan. These spends were driven mostly by STC & Ferrero, respectively, in TV.

The car category, previously a top spender, was hard hit during the pandemic and declined by 35 per cent (online). The top advertisers were GM, Toyota and Nissan.

Face care (online) declined 60 per cent; servicing companies declined 52 per cent.

Baby products such as diapers increased by 2,711 per cent (online); computer and accessories increased by 738 per cent (online).

The Covid-19 lockdown had caused a historical drop in oil prices. In several countries, this affected the advertising industry as linear ad volumes declined by 17 per cent, with digital growing by 4 per cent in the region.

So what’s next?

Brands can continue to engage with audiences online, especially during Ramadan, as people still rely on social apps to discover brands, products and services.

It is important to have a healthy media mix, as balance between short-term gains and long-term objective is key to designing a successful marketing strategy.

In-store shopping habits are expected to return this Ramadan, while product research and discovery will predominantly remain online. Brands should adopt both: outdoor and in-store to capture higher footfall and digital media for product discovery.

With a lot of Ramadan production put on hold in 2020 and work-from-home still being voluntary, TV consumption is bound to increase this Ramadan as the occasion remains a key month for most advertisers who are currently active on media.

This year, with fewer restrictions and the Covid-19 vaccine being administered, ad spending is expected to recover with all media platforms being accessible. Brands will be enticed into refocusing their linear media (TV, radio and outdoor) activities.

Shifting budgets to online had been a quick fix for some brands to maintain salience levels last year. Magna Global estimates KSA and UAE will grow by 20 per cent and 11 per cent respectively.

However, with the huge financial impact of Covid-19, consumers are more than likely to remain price-sensitive and discount-oriented through 2021.

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