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Rethinking retail this Ramadan, by Redseer Consulting

Understanding the opportunities Ramadan brings to retail, the 2022 approach.

By Redseer Consulting’s Sandeep Ganediwalla, Akshay Jayaprakasan, Abhishek Rajput, Kayan Hammoud.

Consumers don’t just spend more in Ramadan, they spend differently, and brands need to take note.

According to our research consumers are also spending this newfound free time for almost an hour more on social media. All this results in significant changes in shopping behaviour; whether it’s preparing your home and stocking your pantries and kitchens for receiving guests during the Holy Month or planning for gift giving at the end of the month during Eid Al Fitr celebrations. Ramadan is one of the most anticipated months for the region; it is a period of coming together, preparation, and sharing meals and meaningful moments that witnessed a significant change in behaviour as consumers have more free time at their disposal.

What may slide under the radar for many is how deeply intertwined this retail period is with digital consumer behaviour. With  60%+ of online shoppers planning on increasing their spending across all sectors this upcoming Ramadan, brands have to adapt to capitalize on the opportunities brought forth by this evolved digital behaviour.  In other words, it’s time to get proactive and prepare for the Holy Month.

We looked into three critical questions to help brands understand what to focus on
while planning for Ramadan:

1.              What are the key activities that consumers are trying to do during Ramadan this year?

2.              What formats are most influential in consumers’ decision making?

3.              What brand endorsements should be sought during Ramadan?

Family Connections and Community at Heart

As Ramadan and Black Friday account for ~40% of MENA’s e-tail, let’s begin by understanding the critical aspects that set Ramadan apart from Black Friday. The most obvious difference is the nature of purchases taking place. During Ramadan orders are far less catered to personal needs and transactions at an individual level, rather the entire shopping experience merges with family and group experiences. Orders take place far more frequently – at a group level – (family/friends) and in bulk.

This behaviour is clearer when examining the most significant motives to purchase this Ramadan. For example, cooking & buying sweets for gatherings, and decorating one’s home are cited as the most extensive purchase motives among more than a third of Ramadan shoppers.

This overarching sense of coming together aligns with community-driven commerce; whereby users exchange product and brand experiences. Not to mention that more than half of these consumers are looking to buy gifts during the Ramadan period, the incidence of last-minute/ impulse purchases increases. In Ramadan 2022 we expect more than 30% of consumers to make last-minute impulse purchases.

Keep it Short and Sweet

Consumer data has overwhelmingly shown that, when it comes to content influence on purchasing decisions, this coming Ramadan, consumers heavily favour short-form content (video content < 2 min).

This shift further indicates that consumer mentality has evolved beyond heavy and time-consuming purchase research into a more lighthearted manner of product information acquisition. The value-added proposition of creators (i.e. social media influencers) that prioritizes entertainment and connections is at the core of this new consumer mentality transition.

Creators Create Bridges

One of the most prominent themes to look out for this coming Ramadan is creator endorsements across all sectors. This newly founded preference highlights that consumers can better connect with these creators as opposed to celebrities. Consumers now seek like-minded individuals regarding potential purchase options as they can relate to both the creator and the published content.

This consumer enthusiasm towards genuine connections further emphasizes the importance of brands partnering with these content creators on suitable platforms to better communicate with their consumers.

So, What’s Next for Brands?

When it comes to short-form content, relatable creators and strong engaged communities TikTok has emerged as one of the leaders to look to.

Our research shows that consumers are expected to use TikTok not only for connecting with the community,  for entertainment and education, but also for shopping research (>55%) during this Ramadan. Furthermore, this behaviour is not restricted to Gen Z and is seen amongst Gen X and Gen Y.

Given the importance of short-form video and creators this Ramadan, we spoke to Jochen Bischoff, Head of Business Partnerships for Consumer Industries at TikTok to get his perspective on the trends Tiktok is observing on the platform.

He shared that an overarching sense of coming together aligns perfectly with the core values of TikTok that prioritize connecting like-minded individuals.

“TikTok has emerged as a channel triggering trial and purchases with consumers. Endorsements like #TikTokMadeMeBuyIt, #TikTokMadeMeTryIt, or #TikTokMadeMeReadit are found on the shelves of physical and virtual retailers by now.

TikTok triggers joy in people through its creators, creativity, and entertainment value. During Ramadan, people appreciate entertainment exponentially, giving brands the opportunity to build genuine consumer connections.

We believe that tapping into the creator community is a decisive element to driving relevance, an important add-on to reach during the cluttered Ramadan period.”

It is evident that consumer behaviour and needs have changed. Short-form channels where creators make recommendations to their community are very influential in decision making during Ramadan, and TikTok has built an ecosystem that can help brands effectively reach their consumers via a community that is constantly engaged.

Source: “Unwrapping Ramadan 2022” study across UAE and KSA markets by Redseer Consulting.