To increase sales this Ramadan, UAE brands should implement an optimised promotions strategy, according to GfK research.
The study by GfK from 2018 to 2021 demonstrates that brands that ran comparably less-priced promotions outperformed the market and increased their revenue share.
Low-promotion brands increased their revenue share on a markedly higher level than the rest of the market in product groups which were stagnating or declining between 2018 and 2020 in terms of revenue, showing the importance of building brand value, GfK research shows.
Head of retail partnerships, META, GfK, told Khaleej Times: “Increasing the quantity of price promotions does not automatically help to increase long-term revenue share. Other factors like accurate promotion planning, brand recognition, brand equity, consistent price position, distribution and/or product features may be more important for a brand to be successful.”
Home appliances remain one of the best-selling categories during Ramadan. Also, household appliances showed growth potential last year, and the trend is forecast to continue this year despite the growing crisis concerns, said Mr Hakim.
Demand for small and large household appliances slightly dropped during the half of 2022. However, it significantly exceeded sales from the same period in 2019, showing an 18 per cent increase for large appliances and a 20 per cent increase for small appliances.
Brands with high promotional activity were the worst performing cluster in major domestic appliances and small domestic appliances sectors, GfK data show.
The retail industry has been going through a state of drastic, rapid change which has been accelerated over the past two years.
Moreover, consumers are shopping in radically new ways, with online at an all-time high. At the same time, consumer confidence is declining, leading to delays in certain purchases.
All these changes compelled retailers to rethink strategy, particularly when it comes to digital and omnichannel experiences.
“Earlier we saw the hypermarket players like Carrefour stocking only the regular PCs while the technical super stores like Sharaf DG or Virgin displaying the gaming machines. However, with the change in consumer behaviour, we now see even regular stores keeping gaming PCs as well,” added Mr Hakim.
“Retailers have evolved in the post-Covid era. For the coming years, they will have to consider four key factors to continue driving sales momentum — product assortment, price and promotions, product bundles, and retailer positioning to win in the market, GfK research suggests.”
Mr Hakin suggests all retailers follow six steps to success during the peak festive season — focusing on competitive pricing, opting for less aggressive promotions, paying attention to availability to meet the demand, becoming attuned to consumers’ willingness to pay more for premium products, adapt to changed online and offline pricing dynamics and, finally, responding fast using the latest market intelligence.
“The continuing impact of the Covid-19 pandemic, global supply chain disruptions, the war in Ukraine, and rising inflation have had a significant impact on economies around the world.
“Looking ahead, many economies are expected to enter technical recessions over the coming quarters, suggesting that the hard times will continue for some time,” concluded Mr Hakim.
