How e-commerce players can brace themselves for a Ramadan sales surge
- Current market conditions imposed by Covid-19 means e-commerce is surging right now
- But another spike approaches – Ramadan – making the next two weeks a doubly-lucrative time for prepared retailers
- How can they prepare?
The convenience, choice and competitive pricing of e-commerce has seen it steadily ramp up over the years.
Continuing to grow, it’s become a multi-trillion-dollar industry worldwide, dominated by giants like JD.com and Amazon, while even the smallest retailers have their own online operations thanks to the evolving software and logistics solutions available.
In the midst of a pandemic, it’s had a further spurt of growth. Consumers are largely on lockdown, while social distancing measures mean non-essential retail – sectors like fashion, health & beauty, and entertainment – have had to sub out their physical operations for an online presence where possible.
For e-commerce players who are prepared and reactive, it’s a lucrative time. Web traffic is surging more than 50 percent globally, there is plenty of demand and still consumer money to spend, and those who can negotiate supply chain disruption to get products to doors can win big.
With Ramadan now beginning and lasting from April 23 to May 23, APAC retailers could face an additional spike as Muslims look online to prepare for the festivities amid lockdowns that have uncertain ends in sight, but are likely to extend beyond the festival.
“Online commerce has now become the lifeblood of Asia Pacific’s consumers as they move online whether it’s for work or everything else due to the global health pandemic,” Criteo’s director of account strategy for large customers, SEA, Hong Kong and Taiwan, Pauline Lemaire, told Tech Wire Asia.
“This trend will continue especially during Ramadan where more people are expected to turn to online shopping to prepare for this religious event.”
Not only is this another boon for business, Lemaire added, it’s a chance for retailers to demonstrate their readiness and commitment to supporting a large chunk of consumers in the region; “Brands and retailers are now presented with a new frontier to help shoppers maintain their traditions, assure, and prove that business continuity is in place at the same time.”
‘Unprecedented sales surge’
Given the uncertain circumstances, it’s difficult to predict what consumers will be looking for and how much sales could ramp up throughout the period, but retailers could be faced with an “unprecedented sales surge”.
Last year, Malaysia and Indonesia, for example, saw a 106 percent increase in e-commerce activity during Ramadan, according to Criteo, while preferred products may switch from Health & Beauty and Electronics, Toys & Games, to ‘quality-of-life’ oriented goods for comfort and entertainment.
“Brands and retailers need to think about the type of products which can complement an indoor-heavy routine or build an experience in a social distancing economy as more people spend their time at home,” said Lemaire.
“It is also critical for brands and retailers to consider how their offerings should be presented at this point in time. For example, ads showing products that are suited indoors should be favoured over those depicting outdoor activities or crowded places.”
As well as ensuring the right inventory is in place and being pushed across the right marketing channels and the logistics systems are in place to cope with the demand, retailers should also consider the best time and modes to target consumers.
Shopping happens more frequently when the sun is down; online web traffic starts to increase at 3am, indicating that shoppers begin to browse for their purchases when they wake up to prepare for the day. At 4am, retail sales are 3.5x higher in Ramadan compared to an average day. But sales drop at 6pm when Muslim shoppers preapre for their first meal after a day of fasting.
And while desktop sales account for more than 80 percent, mobile use increases during Ramadan as consumers use online religious app for prayers, grocery and food delivery services, entertainment and communications.
With Ramadan set to arrive in unprecedented circumstances, retailers and their marketing teams must be prepared to capitalize on the circumstances. Here some final considerations:
# 1 | Monitor category trends closely
Marketers need to pay even closer attention than before to know what is happening and what would matter to consumers during this period. They should focus on expanding segments such as home-based learning, remote working, home fitness and entertainment.
# 2 | Drive conversations with today’s context
While creating campaigns are still feasible, it needs to be around products which are most relevant to consumers. Campaign calls-to-action should focus on inventory, last-mile delivery and experience.
# 3 | Engage the audience
Explore interactive ad formats to engage with key shoppers as people spend more time at home and are looking to be entertained.