In a new series Planner's Journal, we explore what the world looks like from the perspective of those in charge of mining consumer insights every day.
In the second instalment of our new series Planner's Journal, we spoke to Rohitash Srivastava, Ogilvy North India's national planning head, about brands, marketing, post-COVID world and more.
If there was one piece of advice you could give all brand marketers now, what would that be?
This is the best time to innovate your business value chain. Some things will change permanently post COVID-19. Start preparing for those eventualities today. Relook at your audience segments and channel strategy. Figure out who may need your product and service more than others, and how can you reach them - in the short-run, and in the new normal post-COVID-19 world.
What are the top 3 ways in which the Indian consumer has changed? And, how will these changes affect the way brand managers will sell to them (the consumers) in the days ahead?
People will not easily bank on their future earnings till the next few quarters, if not years. As a result, it will be very difficult to get people to bite into debt and loans. The old-world Indian wisdom of avoiding credit will come back in a big way. High-ticket discretionary spends and long drawn purchases (home, cars, holidays, premium white goods, etc.) will see a downfall. Same will apply to investments. Market facing investments may shrink. Safer, near-liquid investments will become a favourite.
Tech adoption: There will be a wave of tech adoption, even by people who were classically termed as tech laggards. Home delivery, DIY, e-commerce, e-banking, e-governance will see an impetus in the new normal. People will increasingly manage their lives virtually and remotely.
Lower middle class and lower class will get hit. Their non-essential spends will get severely cut. The urban poor and migrants will be more severely hit than their rural counterpart. This segment was a big demand driver for CPG, electronics & white goods, retail and fashion.
A couple of implications for organisations:
Rethink your value proposition: You will have to try harder to make a case for your products, especially if you are operating in the premium price band in your category. Premium products will exist, but people will look for evidence-backed reasons to pay more for your products rather than just feel-good ones. If the market gets into a long drawn recession, a fall in the consumer price index is imminent. Brands may have to restore to price cuts to maintain share and remain competitive.
Technology will play a central role in creating value for customers. The brand experience will become crucial in winning over the competition. Think - what aspects of your brand can be automated? How can you remotely sell and deliver your products and services? How can you manage the post-sales engagement remotely? How can you enhance your customer experience?
Be judicious with new launches: You need to look for real need gaps in the market rather than notional ones. Choice, novelty and variety-seeking behaviour will reverse. If your product doesn’t offer any real reason to stand out, consumers would rather stick to their old, yet comforting choices.
Which product segments will have the toughest road to recovery? And, which categories will bounce back faster than others?
Every sector will feel the heat. But most strongly hit will be discretionary, big-ticket spends, categories like real-estate, hospitality, travel, mid and premium range automobiles, premium fashion, leisure & lifestyle. Also, the lower middle class and lower class getting hit means non-essential products in the lower price range will also get affected. Even banking and NBFCs are in for a tough time.
Sectors like food essentials, grocery, personal and home hygiene, education, health & pharma, insurance, e-commerce retail may see better days sooner than the others.
Empty purpose-touting will certainly become irrelevant...Phoney, purpose wielding brands will eat dust."
Are we headed towards a world in which consumerism will become a bad word? What will happen to marketing in such a world?
It’s too early to make a prediction like that.
It’s hard for people to break out of set habit patters. Consumption, after a threshold, is also done out of habit. For example, the per capita consumption of a US citizen is around $38,000, compared to an Indian citizen’s $4,000. And for a citizen of an African country, it’s around $1,000 - such astounding inequalities can’t be explained unless you consider reckless discretionary consumption.
Unfortunately, reducing one’s consumption happens mostly per force rather than by choice. And - if one has to go by the learnings from the Great Depression of the 1930s - once the constraints ease out, people may even move on to higher levels of consumption than before. So for our times, in the short run, people may start consuming less, but that will be more due to recession, loss of income and fear of another setback, rather than a change of heart.
For COVID-19 to become a wake-up call for the world, it may need to become an epidemic of gigantic proportions. I hope it doesn’t. But yes, organisation, and that includes business organisations as well, will be expected to behave responsibly in the post-COVID-19 world.
A growing segment of people will reward ethical business practices and will be critical of exploitative ones. Consumption that harms people and the environment will face opposition from all sides - governments, civil society and consumers. We can hope and pray that in a post-COVID-19 world, we will become more sensitive and mindful of our actions. The new buzzword may just be conscious consumerism.
Do you see purpose-led brand communication increase, or decrease, in the days ahead?
Empty purpose-touting will certainly become irrelevant. Brands will have to live out their purpose through real actions than just say it through cleverly written ads. We are stepping into an era of authenticity. If your brand doesn’t add real value to the lives of consumers, no amount of purpose-led advertising can save you. Brands that innovate for value will win. Phoney, purpose wielding brands will eat dust.