In an interview on life post lockdown, Srivastava says in India, car buying is a discretionary purchase, which requires positive consumer sentiment.
Can you tell us how your business has been affected by the lockdown, so far?
In the auto industry, most enquiries are generated when a customer walks into a store. Enquiries through the digital route had already been high, fortunately. But now, the enquiries that are generated by showroom walk-ins have disappeared, and are happening on the digital medium. People interested in purchasing a car are going through the only available route right now – which is digital. We did not anticipate COVID-19 would affect us like this... The enquiry generation numbers through digital used to be around four per cent 2-3 years back, and now, we’re at 12-14 per cent.
Thanks to the lockdown, we’ve recorded around 40 per cent increase in digital enquiries, since customers are using our hyper-local enquiry management system… It’s giving us good dividends in the current scenario. We have reduced our marketing spends on ATL. We’ve reduced the amount we spend on digital. We’ve halted our spends on print, since newspaper circulation and distribution has reduced. In any case, until last year, our digital spend was 35-36 per cent. It was only 10-12 per cent a few years back… The trend was already there, but it’s been accelerated, since media consumption is now majorly happening on the digital route.
TV viewership would have gone up since the lockdown began, but we have withdrawn from that medium, as of now, for a different reason. Some of the vehicles that we were planning to launch, like the S-Cross or the new Dzire (and some CNG campaigns), have been deferred because the availability of the vehicles itself is a problem now, due to the lockdown.
When it came to media properties also, there has been deferment. We’re referring to properties such as Khatron Ke Khiladi and IPL – we’d invested a huge amount (here). In fact, it looks like some of these events might be cancelled – although, we hope that’s not the case.
We have to recalibrate our thinking about consumer choices and how they consume media, since that is changing, and we have to re-draw our advertising plans, accordingly.
We have a situation, because of the lockdown, where our overall business will be affected. There is no retail sales in this period, and when businesses do open up again, there will not be immediate sales. In any case, the auto industry had a problem the whole of last year. So, this might be a good time to redraw the budgets, and we are now looking at what reductions in the budget we can bring about. There might be a reduction in overall budget allotted for the advertising sector. So, we have to use the budgeted resources judiciously.
Once the lockdown is lifted, what will be your top 3 big priorities?
To give consumers confidence:
1) The operations of our dealership will have to change. The standard operating processes will change to give consumers that confidence on what measures we’re taking to combat the virus.
2) Our push in the digital space will increase. We’ll have to make our communication more consumer friendly to suit the digital space.
3) People will look at brands differently because their psychological map is going to change. My own thinking has changed as I’ve come to realise that the whole world can come to a standstill because of an invisible virus. Brands will also have to judge where they stand, in a post COVID-19 world. We have to map consumers psychologically to understand where there have been changes – and alter our brand communication, accordingly.
Will your market behave the way it was before the lockdown, or will there be subtle changes?
In the case of car buying, there’s a very interesting study that was carried out in China when it opened up after the lockdown. People there have shown a huge preference for personal transport over public transport. They prefer to travel via their own vehicles, rather than take a taxi or a bus to work. I’m sure this will happen in India also… This can boost demand; as was seen in China. However, unlike China, our GDP per person is not that high.
Also, in India, car buying is a discretionary purchase – not a necessity. Discretionary purchases require a positive consumer sentiment. Even simple things like going to a restaurant with your family will require positive consumer sentiment. It’s mostly negative at the moment, but the future depends on how quickly we bounce back. Salaries have not taken a huge cut, banks have liquidity, so most of these aspects – which are important for an economy to function, are in place. It’s just that consumer sentiments are not positive at the moment. The quicker they bounce back, the better it’ll be for the economy.
After the lockdown ends, the virus is not going anywhere. It has made a permanent mark on how businesses function and how consumers consume. Consumers need to be given this confidence. In the case of a showroom – doors might have to be sanitised, a car might also have to be thoroughly cleaned and sanitised after each test drive.
Will your broad view of marketing communication be different from before, in some way?
First, we discussed media choices and now, let’s talk about the messaging itself. Recently, we had Gudi Padwa in Maharashtra and Ugadi in the South. From March 25 onwards, it was an auspicious period in many parts of India. Earlier, we had made creatives on the lines of ‘celebrate the Navratras by buying a car’. That kind of messaging would have been seen as inappropriate at this time, since it’s not a celebratory atmosphere. In the digital sphere, we’d changed the tone and tenor of the message along the lines of ‘May the Goddess help us overcome these difficult times’. The message is more sombre now...
This is also a great time for brands to show compassion, social awareness and a sense of togetherness. Therefore, a lot of messaging during the lockdown will be on these lines – emphasising on how we care for the society and what contributions we are making.