Mid-Ramadan: In Indonesia, brands still have time to market to at-home customers - study
JAKARTA – We’re halfway through a Ramadan that for most of us has been spent in lockdown or mass social distancing. Regardless, there’s still time for brands to maximise exposure to the consumer at home, Anish Daryani, founding partner and President Director of M&C Saatchi Indonesia told Salaam Gateway.
The Indonesian office of the international advertising agency network recently released its analysis of Ramadan consumer behaviours that have changed this year due to restrictions imposed to curb the spread of COVID-19.
“Sectors such as FMCG, healthcare, telco, e-commerce have naturally gained during the COVID-19 pandemic. In contrast, travel, hospitality, hotels/restaurants/catering, retail, infrastructure, and real estate have been hit the hardest,” said Anish.
The advertising agency’s analysis broke down the fasting month timeline for marketers and advertisers into four: pre-Ramadan, first and second week, second half of the month, and Eid al Fitr.
“It’s not too late to implement a new strategy now. Depending on the sector category, brands can adapt their marketing strategy to fit into the different phases of Ramadan,” Anish added.
As we enter the second half of the holy month, sectors that can still reach at-home customers include F&B, FMCG, hotels/restaurants/catering, e-commerce, telco, retail, finance, fashion and consumer electronics.
Beyond Ramadan, brands and companies can still use these new ideas and strategies as the COVID-19 crisis persists.
WHAT ARE PEOPLE BUYING?
A recent study from AI-enabled experience management platform SurveySensum found that customers will spend 32% less in Ramadan this year, based on a small survey of 500 people in 10 major Indonesian cities.
“67% of our respondents believe their current Ramadan budget will be much less than last year with an average budget reduction of 43%,” SurveySensum CEO Rajiv Lamba said in a webinar on April 29.
“Meanwhile, 20% say they will spend the same amount and only 13% of consumers say they will spend more this Ramadan. Overall, as Eid al Fitr is approaching, they are more worried financially,” he said.
Purchases of products such as jewelry, smartphones, home furniture, motorcycles, toys, and cars are expected to decline sharply. Islamic goods such as quran and prayer mats, fashion and shoes remain on consumers’ shopping lists, according to the survey findings.
This finding partly supports M&C Saatchi Indonesia’s analysis that said Ramadan “splurging” has turned to self-protection and social charity. “[W]ith the crisis going on, people no longer care for new clothes,” it said. Instead, they are looking for cotton face masks, self-care products such as vitamins and other supplements, giving to the less fortunate, and average earner is only buying essentials.
Gift hampers during COVID-19 are likely to include products for hygiene and wellness instead of the usual snacks and food. The study also anticipates care hampers to be sent not only to family and relatives but also to the less fortunate and non-government organisations (NGOs) that can help manage donations.
Healthcare brands can leverage this by becoming a part of the consideration as preferred gifts. Complementing these are air purifiers, essential oils and disinfectants.
As the retail sector has no option but to provide products online, now’s the time to switch to deploying omnichannel approaches. For example, stores can offer personalized shopping experiences to serve the higher-end customer, or virtual reality shopping experiences.
Brands should also move to holding larger stock keeping units (SKU) as consumers move away from buying things in small sachets and smaller quantities due to movement restrictions.
M&C Saatchi also recommends brands and companies focus on how to value-add customers’ at-home experiences during lockdown and Ramadan.
“For consumer electronics, since the home will become the center for Eid activity, they can encourage people to decorate their homes with new electronic devices,” said Anish.
“The new habit of stocking up ingredients, cooking at home, work from home and study from home as part of the family activity has also influenced the sales of refrigerators, cooking appliances, and more productive items such as budget laptops, tablets and so on. Companies can also bundle it with free work from home data plans or software and applications,” he added.
E-COMMERCE FLASH SALES
E-commerce is expected to reap gains year-on-year of 15-20% during this pandemic period.
As more people turn to social gifting either for family or charitable causes, e-commerce platforms and brands can make use of this opportunity to make gifting offers available.
With the banning of the mudik, which is the annual tradition of travelling home for Eid al Fitr for tens of millions of Indonesians, people will want to “overcompensate for their absence”, said the M&C Saatchi study. “E-commerce platforms and brands will make gifting offers available to people. Logistics companies will align resources to fulfil this requirement,” it said.
E-commerce can also capitalise on the traditional Ramadan bazaars moving into consumers’ living rooms. Online stores or companies could think of creating create flash sales during the prime times of iftar and suhour, both for essential and lifestyle products.
FINTECH FOR ZAKAT
The COVID-19 situation demands people go online to use fintech platforms to pay their zakat and other donations, according to M&C Saatchi’s study.
While there will still be some “zakat pickup services”, Indonesians will have to pay their obligatory tithes via apps and internet banking services.
But most of the last mile of zakat giving will still be done in person. Zakat distribution officers who carry out the work of handing over donations to beneficiaries will have to wear full protective equipment.
As in other countries, Indonesians are urged to pay their zakat well before Eid so the contributions can be distributed sooner to those in need.
It is also the time for fintechs to responsibly serve those who need loans due to lost income and jobs.
WINNERS: TELCOS, DIGITAL
Telcos and digital channels are already winning as people started working from home weeks before Ramadan.
Further, the banning of mudik will lead to massive online traffic of virtual calls as people re-connect with families back home.
“For telcos, they can encourage people to stay connected with their significant others and encourage innovative ways of sharing internet or talk time quota,” said Anish.
During the fasting month, brands would want to focus on reaching customers through digital ads on various platforms.
TRAVEL: SELL NOW FOR LATER
The travel sector can still make money by selling tickets that can be encashed as soon as travel bans are lifted to prevent irrational price surges.
This includes selling plane, train and bus tickets for the year-end combined mudik in December. The government pushed back the Eid al Fitr collective leave to December due to concerns that the annual exodus could further spread the novel coronavirus.
BEAUTY: NO MORE FACE-TO-FACE
Sectors that have traditionally substantially served customers face-to-face have to adapt.
Beauty advisors can shift online or provide virtual consultations, suggests Anish.
Brands could even use key opinion leaders or influencers, and offer DIY home-pampering packs with step-by-step guides during Ramadan amidst the lockdown to appeal to customers who cannot get access to facials or spas.
(Reporting by Yosi Winosa; Editing by Emmy Abdul Alim [email protected])
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