Studio Pepperfry footfalls are back to last year's levels says its chief marketer Kashyap Vadapalli

“Today, in October, footfalls are back to last year’s levels…” said Kashyap Vadapalli, Pepperfry’s chief marketing officer over a call. 10 days ago, the digital-first furniture marketplace released three ads; each extolling a particular offering: professional delivery and assembly, warranty, and cashback. There's hope in the air.

As per Vadapalli, the domestic (home) furniture market is anywhere between 15 to 25 million dollars. Out of this, almost 85 to 90 per cent of it is unorganized (carpenters, contractors, interior designers, no ready purchases). About 10 to 12 per cent is the organized players where people buy ready furniture.

Regarding online furniture, it took off in 2013-14 and by the end of 2019, and would have reached about two to two and a half per cent share of the overall market and one-fourth to one-fifth of the organised sector.

Speaking about the recent months, the chief marketer remarked that in August and September, the period before India's festival season starts, interest in the category was up 50 per cent on the online site and actual transactions for the business up by 15-20 per cent.

Founded in 2011, Pepperfry is one of India’s leading online furniture marketplaces and competes with the likes of Ikea, UrbanLadder, Flipkart, and Amazon. Vadapalli joined Pepperfry in 2013 after spending nearly five years at e-commerce giant eBay.

After a few fumbles over muffled hearing and voice breaks, we (afaqs!) managed to spend a good 30 minutes with Vadapalli and tried to decipher how Pepperfry waded through the messes of the lockdown, if the face of its consumer has changed, and its plans for the festival season...

Edited excerpts:

The three-ad campaign aims to normalise online furniture buying and bust myths (too expensive, assembly issues, quality, etc.). Do you agree with this line of thinking?

I wouldn’t use the word ‘normalise’. When people stayed at home, they realised the need for furniture: study table, office table... The first thing they did was search online because they did not want to travel too much during the pandemic. So, we didn’t need to tell people to buy furniture, or to go and buy online; these two trends were already happening.

What we needed to talk about was Pepperfry’s unique propositions. The service aspect, i.e., when the delivery is scheduled, when the carpenter arrives, how does the assembling bit happen, are the people who enter your home to deliver the furniture wearing masks… We’ve developed a robust and efficient system.

Pepperfry is a marketplace. From brands like Godrej and HomeTown to small merchants, everybody sells on our website. We insist on a warranty for every item, and it’s something we’ve worked on for the last couple of years.

We also wanted to talk to our customers about offering them rewards (cashbacks). The customer is already browsing online and the job we needed to do was ensure that Pepperfry’s USP stands out.

People bought work-related items during lockdown because they were inside, working from home. What are they buying now?

If you look at the most popular items throughout the year on the website, in terms of numbers, they are chairs, shoe racks, wall shelves... Now, people tend to buy big-ticket items during Diwali, like sofa sets, dining sets, wardrobes. This particular month (October), we’ve seen beds as the most popular item, followed by lamps and lightings, sofa sets, chairs…

Earlier, people would go out to meet friends, but it is riskier now. So, they are meeting at home and realise that they need additional chairs or a better-looking dining set or a comfortable sofa...

Are people availing the ‘Home Services’ offering (disinfection, pest control and cleaning services) with their furniture purchases?

We launched the service in collaboration with Godrej Hicare earlier this month. This is the season when people clean and whitewash… This time around, they will do it a bit more due to the pandemic… We see it as a trend that will happen over the next few weeks, and will continue through the quarter.

Young professionals have moved back to their hometowns. Young couples may have moved to more affordable locales, like Goa or somewhere in Uttarakhand, thanks to WFH. Has the face of the Pepperfry customer changed?

No, it has remained the same. Yes, we’ve heard of people who have moved back to their hometowns, or affordable places… At some level, it’s a temporary phenomenon. Many offices now offer hybrid working and people are coming back.

From a number’s perspective, the response has been higher from our top two cities – Bengaluru and Mumbai. The top eight metros account for almost 80 per cent of our business, while the 20 per cent comes from outside the top eight cities. The rebound after the lockdown has been stronger in the top eight cities.

Our customer is in his/her mid-30s, well-travelled and online savvy and who’s concerned more about trendiness and design, and not about if the item will last 10-15 years.

Furniture shopping is an in-store experience and the lockdown changed everything, even for your Studio. Are people visiting again?

We shut down our Studios mid-March and reopened them in June. Once we reopened, it took about two months, from mid-June to mid-August, before footfalls returned. Today, in October, footfalls are back to last year’s levels.

We’ve 60 studios in 20 cities. They contribute to a third of our business. Pre-COVID, it used to be 37 per cent, now it’s around 30 per cent. A couple of months ago, it fell to a low of 15-20 per cent.

Typically, good customer interaction in a Studio is hour-long, especially when a transaction happens. We’ve seen that people are spending that amount of time… So, consumer behaviour has rebounded.

The lockdown posed certain challenges and you executed a certain strategy in response. The festive season brings its challenges. How did you tackle things then and how will you tackle things now?

We couldn’t operate in the first two months because the government had classified us as `non-essential’ and we had to shut down.

We shifted gears and began to educate customers about hygiene, how to maintain furniture, we conducted masterclass series with our designers, where we spoke about how to decorate, rearrange your home… The focus wasn’t on selling through heavy discount, it was about empowering customers through education.

We had stopped our performance marketing campaigns, but we consciously chose to talk about the brand through the very top of the funnel awareness level campaigns. Once the markets began to open in August, we started to blend the brand talk with performance marketing and sales enablement campaigns into our communication strategy.

Regarding the festive season, we know the customer is out there to buy. To ensure you get the biggest share of the customer’s wallet, sales campaigns are important and, at the same time, campaigns that paint your brand in an interesting light are equally important.

At present, our focus is a blend of top of the funnel awareness building through quirky advertising around the brand supported with sales messages and performance marketing on the digital side.

Disposable incomes have reduced. Are people buying?

Yes, incomes have reduced and some people will postpone purchase decisions. But, at the same time, a lot of people are acutely aware of the fact that their house needs a new sofa or a new study desk… Furniture is a discretionary purchase to a certain extent and at some level, it’s a necessity. People are not holding back on the furniture they require.

Going forward, what’s driving your budget?

For us, if you look at an annual kind of window, then digital would be 75 per cent of our spends. Television is done strategically, like two or three campaign bursts a year. Digital will be always on and performance marketing will happen every single day. Digital branding campaigns on social media and video platforms will be present every month. From a spend share perspective, 70-75 per cent is on digital and 25-30 per cent is on traditional media.