The e-grocery segment is among the busiest and most competitive spaces today. Pawan Sarda discusses brand Big Bazaar.
The online grocery market has been one of the busiest ones over the last 16 months. Competition is stiff, as offline retail brands like Future Group’s Big Bazaar, Reliance JioMart, DMart, etc., rival online native brands like Grofers, BigBasket, among others, to win consumer loyalty.
To this end, Big Bazaar has been investing in its online delivery pipelines and has been storied for its two-hour delivery promise that’s been firmly in place, since April this year.
The company delivers products across segments like grocery, fashion, kitchen utilities, toys, luggage, FMCG and household/home care.
"We aren't dependent on warehouses. We are like a local player for our customers, whether they want to buy grocery items, or a shirt for that Zoom meeting."
In June, it reportedly touched 50,000 online orders per day.
What puts Big Bazaar at an advantage is its offline store strength – 286 outlets across 150 cities.
We spoke to Pawan Sarda, group CMO, digital, marketing and e-commerce – Future Group, about brand Big Bazaar. Sarda has been spearheading online and offline for all retail formats, and also driving e-commerce businesses for last five years.
Big Bazaar has a two-hour delivery promise in place. Many of your rivals have made similar promises. Is this ‘promise of speed’ something that users have come to expect? To what extent does it move the preference needle?
Every platform makes promises. But when it comes to online shopping, I don't think customers should wait after ordering. They should get it immediately. It's a consumer expectation.
That's why we put out this promise, because we can make it happen through our sheer store strength size (286). We aren't dependent on warehouses. We are like a local player for our customers, whether they want to buy grocery items, or a shirt for that Zoom meeting.
How has the response to this promise been? There were reports of Big Bazaar touching 50,000 orders per day in April…
It's similar. Our frequency is good. We see our customers shopping nearly five times a month.
The two-hour commitment applies to all your verticals, not just grocery. Surely, maintaining uniformity across diverse segments (vegetables, apparel, hygiene products, etc.) is challenging?
We are a hyperlocal platform due to the presence of our stores. We have tied up with logistics partners like Grab, and a few more delivery partners.
"For the last three months, 50 per cent of our traffic has been on the app. It's growing substantially. It's nearly 5-6 million visits every week, overall (including app, m-site and desktop)."
But the other exciting thing is that in addition to metros, tier-two cities like Patna, Bhubaneswar, Nagpur, as well as smaller towns like Darbhanga have taken this up. That's very encouraging as our presence in so many markets helps address a larger customer base. That has helped us reach the sweet spot…
What are the shopping-related insights at play here?
Earlier, the customer came to us twice a month. But their frequency changed due to both our being online and the two-hour delivery promise. So now, the same customer shops with us four times a month, from home.
The second interesting thing is that the basket is not restricted to kitchen items alone. Say, the consumer needed some occasion wear during the COVID-induced lockdown, or otherwise, we were able to address that need gap.
Also, during the lockdown, our ticket size online was almost Rs 1,200 to Rs 1,250. Compared to others, it was one of the highest. It continues to happen even now.
I hope that now, the customer will come to the store; even if they don't want to, they can shop online and still be within our ecosystem.
Which vertical got more traction since the launch of this service?
Grocery was number one, as some customers needed it instantly. Within grocery, fruits and vegetables constituted 35-40 per cent of the bills.
The customers are buying what they need every week. But with festivities and other occasions, we also saw fashion and other categories pick up.
Consumers’ buying behaviour has gone through waves of its own during the pandemic. Can you share with us some of the trends that stand out?
At the beginning of the pandemic, we saw bulk buying, which later came down. Then, people started experimenting with food as they cooked gourmet meals.
As far as the second lockdown is concerned, there was no panic buying… customers bought what they needed.
The other pattern is – during the lockdown, celebrations of any kind moved inside houses. As a result, occasions led to slightly more premium buying, like chocolates and pasta, for a certain set of customers.
Initially, we saw more of home-wear (loungewear like night T-shirts and shorts) being picked up in the fashion category. As things open up, people are purchasing casual shirts and bottom-wear, like jeans.
Grofers recently diversified beyond grocery, into segments like home decor, durables, appliances, apparel, etc. The end product is very similar to Big Bazaar’s verticals, isn’t it? There’s also stiff competition from offline players like JioMart, DMart, Spencer's, etc. What will drive differentiation from now on?
As an organisation, we see things differently. Modern retail penetration in India is 18-20 per cent, whereas online retail penetration wouldn’t be more than 4-5 per cent. There's huge scope for everybody to explore.
A lot of consumption is being created. But from a competition and threat point of view, it's too early. We are at the stage of creating an ecosystem. So, we don't see anything as threatening.
Our biggest advantage is frequency – our customers shop with us four times a month. If he/she can't come to the store, he/she can still shop with us through the app. That has really helped.
With respect to differentiation, everyone's creating their own way. For us, we are the only hyperlocal brand that can deliver in two hours. We’re a national level player, with one of the highest penetrations because of our stores and city reach.
Coming to the Big Bazaar app, where does most of your traffic come from?
The first touchpoint is the m-site, or mobile site, through which discovery happens. Ninety-five per cent of the traffic comes from there; the rest is through the desktop. The app download takes place after the first purchase. Then that creates frequency.
For the last three months, 50 per cent of our traffic has been on the app. It's growing substantially. It's nearly 5-6 million visits every week, overall (including app, m-site and desktop).
Fifty per cent of the traffic are new users. Our top 15 cities contribute to it. This is not a surprising number, because we're still a relatively new player.
Give us a sense of Big Bazaar's marketing mix…
We use television to up our top-of-the-funnel marketing. For our two-hour delivery service, we did a huge campaign.
But we've always believed in digital and invested in it. Our strategy is a combination of TV and digital. We were the first ones to do a 24-hour Facebook Live campaign for our big sale, like China. Even with Google, we have done something called Smart Search, where we gave coupons for our searches and brought customers to our store.
Now, it (digital) has become more important, since we are in the world of performance marketing. We have to be there for the clicks and conversions.
The strategy working for us at this point is social, as we've been able to reach out to our customers. This is because one of our big challenges was to announce that we are online. Our initial strategy was social-focused.
We’re also trying new things – we are investing in Google and YouTube. Initially, the idea was to reach out to our set of customers and create conversion. Now, that's happened.
YouTube is becoming very important.
What about influencer marketing?
It does play a role. But in the case of Big Bazaar, it's mostly YouTube, more than Instagram. Influencers are primarily homemakers. On YouTube, some of them rate us and talk about our promos.
Spends wise, it's not substantial, as a large part of our money goes to performance marketing.
How do you allocate your media budget across platforms?
Currently, our spends are almost 30-40 per cent on digital. The rest is a mix of press and TV. As retailers, press is another important medium for us.
Even for our week-long Sabse Badi Savings campaign, the media mix included TV, press and digital.