Brands Girdle Up to Woo Revenge Shoppers

The past two years have witnessed irreversible changes both in consumer behaviour and the business environment, which together may have decimated many markets. The pandemic now stretches on to another year, but the bleak markets may just be a thing of the past. With the festive season around the corner, brands are in  a mood for window dressing and advertising budgets seem to be more generous this year than in the past.

The hitherto moribund retail markets are showing green shoots of consumer enthusiasm. According to a report by the Retailers Association of India (RAI), retail sales across the country continued to recover in July 2021, reaching 72 per cent of the pre-pandemic levels of July 2019. Meanwhile brands have learnt some lessons from the year gone by and have a better sense of what to expect during what is normally, the most profitable time of the year. While the months of celebrations ahead for Dussehra, Navratra, Eid and Diwali, raise hopes of a splash by consumers, market watchers remain cautious. Will shoppers brave the threat of a third wave of Covid-19 and step out of the safety of their homes after the devastating second wave of the pandemic?

Harkirat Singh, Managing Director, Aero Club, says the uptick in business activities had led to a swift rebound in retail sales. “The upcoming festive season will further propel retail due to pent-up demand and easing of restrictions. We foresee sales to reach pre-Covid levels by the end of this year,” he says.

Revenge Buying Lloyd Mathias, Business Strategist and Angel Investor, expects an acceleration in the retail sector since consumers have held back buying during the prolonged lockdowns. As things stand now, the next few months should have fewer instances of Covid cases than were evident during the past 18 months. Also, with the pace of vaccinations picking up, India’s chances of escaping a severe third wave are improving. Mathias expects a sizable spurt in retail sales in the pre-festive period of September and October.

Harish Bijoor, Brand Guru and Founder, Harish Bijoor Consults, asserts that the season ahead is bound to unleash the latent consumption potential of the middle-income-group in India. “We have just seen this with Onam in Kerala. There is a latent hidden revenge consumption that is waiting to jump out of the locked Covid box. Marketers need to be ready with inventories and offer to catch it as it happens,” he says.

E-retail Shines
Covid-19 has inevitably accelerated digitization and given a fillip to ecommerce. Ecommerce scores over offline sales in terms of convenience and hassle-free doorstep delivery. A report titled How India Shops Online 2021 released by Bain & Company shows how India’s e-retail market is driving a 12-month acceleration in e-retail penetration, which was at 4.6 per cent of the total retail market by the end of 2021. This acceleration was even higher in the top eight metro cities where online shopping is more common and where one in three people shopped online at least once, last year.

Currently at $810 billion, the Indian retail market is the fourth largest in the world and is quickly evolving to include a sizable e-retail component. Despite a two-month national lockdown and multiple prolonged disruptions in regional pockets over the year, the Indian e-retail market saw a 25 per cent growth to reach $38 billion. Fashion, electronics, general merchandise, and mobiles continue to be key gateway categories for new online shoppers.

Vikram Agarwal, Managing Director, Cornitos agrees that the e-retail segment is expanding, given the spurt in online shopping, attractive offers and discounts offered by the brands and increased investments with many new players entering the market and existing brands launching their own ecommerce platforms. Cornitos too joined the online retail bandwagon last year, which saw its sales surge. It strengthened the brand’s  relationship with consumers and helped them reach more pin codes across the country.

Bharath Sastry, CEO, Vistaprint India, feels that the pandemic has structurally changed the industry in many ways. “Most importantly, it’s going to be the case of the ‘e-tail wagging the dog’. Digital presence is now no longer an option for most industries. Businesses need to embrace digitization either partly or wholly and e-tail is poised to expand into all categories, products and consumer occasions,” he says.

The year 2021 is expected to usher in an era of more diverse online offerings, with marketplaces, direct-to-consumer brand sites and social commerce playing a key role. Businesses must ensure that this more complex online landscape complements their overall retail offering which needs to span the digital and the physical.

Not to forget, the growth of online commerce does not imply the death knell of  the brick-and-mortar model. Rather, an omnichannel model is expected to gain currency wherein both models will continue to exist to provide a holistic experience to customers.

By all indications, consumers seem to be gearing up to celebrate the upcoming festivities. A recent survey by The Trade Desk and YouGov in August, titled Festive Season Pulse 2021 mapped consumer sentiment through responses from over 1,000 people aged between 18-45 years across the country. It found that 91 per cent of Indian consumers are planning to make purchases during the upcoming festival season and six in ten are interested in learning about new brands during festival season sales.

Apparel and accessories emerged as the top preferred purchase categories across genres. While women are looking at buying groceries, health and personal care, consumer durables and makeup and fragrances this festive season, men are eyeing consumer electronics, groceries, health and personal care products and home appliances, the survey revealed.

It also showed that 82 per cent of respondents had shopped online at least once a month during the past six months, and nearly one in four had made online purchases several times a week or more often.

Dawinder Pal,  Head of Marketing, Bikano, Bikanervala Foods, emphasizes that with a significant shift toward online shopping over the last few months, consumers would expect more rewards, loyalty programmes and the convenience of ordering from home. “This has become the science of consumer logs which works on acquiring new consumers as well as retaining the existing ones. Also, a personalized shopping experience that caters for products and services according to consumer needs must be the prime focus area,” he points out.

Experts also maintain that festive season sales present an ideal time for brands to capture the attention of  both ‘brand switchers’ and ‘brand loyalists.’ “Hence, as more retailers adopt customer-centricity as their core philosophy, product diversification and superior experience will help brands retain a competitive edge. Omnichannel marketing will thrive in the post-pandemic era with technology as an enabler to ensure operational efficiency and provide curated experiences to customers,” points out Singh.

For Sastry, premiumization, personalization and environment-consciousnessness will be the areas where consumers can expect brands to contribute significantly. Covid-19 has reaffirmed the significance of extensive engagement with customers in a bid to retain them and promote brand loyalty.  As they say, the customer is still king.

Consumer is King 
Customer experience, rather than just superior products and services, has emerged as a key focus for marketers to boost sales and impact the bottomline of businesses. Health and hygiene have also taken centre stage, with retailers leaving no stone unturned to provide a safe shopping experience to customers.

Advocating a holistic focus across areas, Pal urges marketers to look at creating and selling an experience and not just a product. “Product marketing is not going to entice the consumers during this time. Being the festive season, consumer expectations would be high. Therefore, creating something experiential for the consumer would be imperative,” he says. Pal encourages marketers to think beyond the traditional sense and engage in social listening to understand their consumers.

Nakul Kumar, COO and Co-Founder, Cashify, believes that it is important for marketers to build an offer that ensures that consumers choose their brands over that of competitors. “Offers and real-time customer support should be the key focus areas. A lot will also depend on the safety aspect of the shopping experience,” says he.

Pal plans to allocate 20 per cent of his company’s total annual marketing budget for the festive season, indicating that marketing budgets will expand this year. Mathias corroborates the assumption. He says he expects most brands to loosen their purse strings in anticipation of the first relatively open festive season in two years. He predicts increased spending in FMCG, FinTech, ecommerce and lifestyle products.

Agarwal suggests that brands strategize to drive sales during this spell. “With the opening of offline stores and individuals visiting the stores now, focus on these on-ground store sales also need to be taken into consideration. Also, brands will pan out the ad spends on digital, store branding, and consumer offers. The budget will be decided as per the response received, but the focus will still majorly be on the digital and social media platforms,” he says.

All signs point to a better market for brands in 2021. As Mathias points out, “Marketers, as always, must stay watchful of consumer trends, and at the same time do their utmost to make their brands visible during this key festive buying period.”