The Indian Society of Advertisers (ISA) recently organised the first of a two-part webinar series titled Brands and Consumers: 2021 and Beyond, in association with the Free Press Journal and ABP Network. The series aims to understand the strategies devised by top brands to tackle the challenges of the COVID-19 pandemic and look beyond it.
On February 24, prominent marketers from across industries - all ISA members – took part in the first session on ‘Manufacturing’. It was moderated by Sunil Kataria, ISA Chairman and CEO – India & SAARC, Godrej Consumer Products Limited. He was in conversation with (in alphabetical order) Anil Viswanathan, Senior Director - Marketing (Chocolates), Insights & Analytics, Mondelez India Foods Pvt. Limited; Anuj Poddar, Executive Director, Bajaj Electricals Limited; Gaurav Jeet Singh, General Manager – Media (South Asia), Hindustan Unilever Limited; Shashank Srivastava, Executive Director, Maruti Suzuki India Limited and Suparna Mitra, CEO - Watches and Wearables Division, Titan Company Limited.
The knowledge partner for the webinar is Mogae Media and Laqshya is the outdoor partner.
Sunil Kataria: On behalf of the Indian Society of Advertisers, I welcome you all to this session on Brands and Consumers: 2021 and Beyond. We are still in the middle of a Black Swan event of our lifetimes, which has actually challenged each one of us, our family members, society at large, in a very existential way. Hopefully, we will come out of it together very strong, as a society, as a world. The implication of this event is far-reaching, and for us marketing professionals, the challenges and opportunities are endless. Before I open the panel for discussion, I invite each one of you to share a couple of thoughts on what are the implications that are going to face us in a post-COVID era, in 2021 and beyond from a consumer lens.
The biggest changes in the consumer are going to be Constrained, Conscious and Connected. The constraint piece has a physical dimension to it - from the euphoria of spending quality time with family members always being in the house together, it's reaching a stage where all of us are looking for our own spaces. Some people may have gone through a constraint on financial resources with industries badly hit, lay-offs, or freeze on hikes or salary cuts. The non-white collar mass of the country faced huge challenges with reverse migration, so there is definitely a financial constraint across strata of society. There is also emotional constraint due to social distancing - consumers are not ready to meet in the old way, as social events and milestones get redefined.
People are getting conscious about health and safety, self-improvement and people on the planet. There is huge consciousness about how we are treating our planet, how sustainable we want it to be in future. We’ve seen strangers helping each other out as consumers. Then, COVID has given a new meaning to connectedness. In the absence of physical, social touch-points, what has really come to our rescue is social media and digital connectedness. Entertainment has taken on a new meaning, with multi fold rise in new platforms of entertainment. There are new forms of content in both the audio and video space. With shopping in the traditional way not possible in the last year, modern trade has got structurally redefined. People are wary of coming together in large gatherings. We are also wary of physically travelling a long distance to shop. The e-commerce game is taking shape in a big way and we have the new connected shopper.
It's all about the 3C consumer in 2021 and beyond - a constrained consumer, a conscious consumer and a connected consumer. I would like to hear all the panelists and their views from their own industries, as well as what they see in this new consumer, the opportunities and the challenges, and how we navigate them.
Anil Viswanathan: At Mondelez, we always believe in being consumer-centric and having the customer at the heart of everything that we do. It's been a challenging year, but we've come through it, and are quite excited about the future. We keep tracking what the consumer is doing; for example we do an annual ‘State of Snacking’ study globally, including India. It tells us that in 2020, people are snacking more, and that's good news for all of us in the food business.
Now, home is where the party is. People are rediscovering life at home. People are nesting, people are cocooning. This is going to impact how consumers interact, lead their lives, their attitudes and behaviors. Brands need to take cognizance of it. Home is becoming central to many things that brands can do. Repurpose, re-target reframe. The role of the family is changing, the role of the kitchen is changing, and all of that is providing wonderful opportunities for brands.
Then, we see people seeking reassurance, trust, quality. There’s been a disruption - a fundamental reassessment on what's important, what's good, what's bad, an overarching desire for security, health and safety. As a result of that, big brands, brands with purpose, brands which have meaning are definitely seeing much greater engagement with consumers. The big implication for brands is to form their own authentic voice.
Now, we can't just talk about reach and engagement, we're talking full funnel, partnerships, and O2O - online to offline. Brands need to draw a clear line as to what is acceptable and what is not, and they need to be accountable. We as marketers and the industry at large, including the ISA, are working towards finding ways through which we can make our spends more accountable, and the brand's voice and messaging much more accountable.
Anuj Poddar: The consumer is not a consumer, he's a human. We’re dealing with people, and they have needs. Let's understand the psychology, let's understand how are we fulfilling these needs at a very non-jargonistic, simple level. What consumers claim and what you see and read on social media is not actual human behaviour. A stark example of that is all the noise that you hear and see and read around the anti-China sentiment, that is not the reality in the marketplace. Just a month after the anti-China furore, Vivo reported its best or highest ever sales of mobile handsets as a Chinese brand. That's the power of the Indian consumer speaking with his with his or her wallet. As marketers, our job is not to sit in judgement. Our job is to actually distill through this superficial layer of what's being spoken or presumed to understand what's the underlying behavior, and then act on that.
The dominant narrative was that people are cutting back on all kinds of premium luxury splurges, but reality is different. But consumers are not one homogeneous set of people. There's a large enough segment of consumers that were not affected on income or cutting back on spends. In fact, constrained by all the restrictions around them, they were actually looking for opportunities to overspend. Postcard Hotels, a boutique luxury hotel, had its best ever business. Jumping on to the
COVID bandwagon became a fad. But we need to pause and ask, is that really core to our brand purpose? Is that furthering our brand objectives? Else, you’re just wasting your marketing money.
I hold ourselves guilty of cutting back marketing spends, holding back many things; but it is not a time to cut back marketing spends. In fact, make the best deals out there, and you could actually make your dollar or rupee stretch a lot longer.
Gaurav Jeet Singh: Adding to one more C - consistency is something that comes through in everybody's thinking. Consumers seek out the comfort of the known. The paradox is, when we try to be a marketer, we somehow are uncomfortable with the comfort, especially in a new situation. So, for example, there was talk that big large brands which provide that comfort to consumers should get the right kind of focus, the right kind of attention.
The broad three consumer segments in which we operate in India are the top 10%, almost 40% all FMCG consumption would be in the top 10% of India. And that had a very different world view of what's happening around them than the bottom 10%, which was living a very different life. The medium that had the highest increase in consumption from its baseline anytime in the past was television. A TV series shot about 30 years back became the most watched programme on TV. Just the comfort of going to those channels is another C for you, and the consistency of being present on those channels becomes very critical. That comfort for a top 10% households would be a Netflix series and the OTT part, for the middle 50-60% households, it would be regular television viewing that became even more dramatic and pronounced, and the bottom layer which perhaps went to the DD Free dish and watched what they always wanted to watch. Everything else that was fringe remained fringe. The two take-aways from this whole journey for me is the comfort of the known, and consistency.
Shashank Srivastava: The pandemic has accelerated globalization and digitization, which has impacted our lives, our businesses. Marketing scholars call this the Great Dispersion. It means that you get rid of all unnecessary friction costs throughout the value chain and deliver the product and service, whenever and wherever it's needed the most. I like that term somebody used - homebody customer - customer confined but very connected. They expect similar experiences across all their purchases, including automobile, and we have to embrace this dispersion. In the auto industry, it is a little trickier as it is a high value item and a discretionary purchase. Today 95% of the inquiries for an automobile start on the Internet. Almost a fifth of our sales is through digital. But 94% of the people still visit showrooms. It is not about digital, but phygital. We have tried to digitize the 26 touch-points from the time a consumer thinks of buying a car to the time he actually takes delivery of the car. In fact, three touch-points were not digitized before the pandemic, related to financing of cars, which we have done very recently with our unique e- finance platform. We have immersive technology which can give you almost real experience of a physical test drive. Conspicuous consumption has become conscious spending, and that has changed the product mix for the entire industry. We have digitized processes to take care of this. We are actually doing a predictive modeling about consumers, how likely they're going to buy a car, which cars they're likely to buy, how much will be the conversion ratios. Tools like AI and ML are enabling us to understand the consumer deeply. Trust still remains the most important part. The pandemic has taught us to be agile, to be customer-oriented and also to use technology tools to increase efficiency across all functions.
Suparna Mitra: The first six weeks of lockdown was a sudden shock. As we moved into May and June, there was no earthly reason for anyone to buy a watch. We pulled out all stops in innovating and imagining what to do next. Our communication was about the things we've done to make the shopping experience as safe as possible. We realized that while people were locked down, they were feeling a lot of emotions towards their loved ones and all the missed milestones such as graduations, birthdays, anniversaries, new jobs, etc, that they were not able to celebrate. We used that for the Titan Gift a Smile campaign, exhorting people to reach out and thank loved ones with a gift. We also did this campaign called ‘Let's Get India Ticking’. It was not a watch campaign, but a category agnostic, brand agnostic campaign about getting consumption back. By June-July, it seemed like we would never ever come back to normal; and it would be great if we could reach even 70-75% by the festive season. A trend we noticed was that there was no international travel and no big parties, and people had enough money to buy things. In Q3, we are at roughly 90% of what we were last year; we realized that as a marketer you have to go out and give people reasons to buy, and continuously innovate. So we came up with Titan Pay, a contactless payment watch and more smart-watches because that's what people want. I'm saying something very different from what the others have said, which is - the more things change, the more they remain the same. Though people are still not taking unnecessary risks, they are very much in consumption mode.
Sunil Kataria: We have five pretty interesting and different points of view. Now I would like to get all the panelists together for a discussion.
All of you have talked a lot about brand trust and that trust is the most valued currency right now. But there is one dichotomy which is parallelly playing out - you are also seeing a lot of digital native brands, which consumers had never heard of. They are coming into play, on the back of e-commerce and the kind of growth these challenger brands are throwing up is more than the consumption stories of larger brands. So how do you see this parallel narrative co-existing?
Anil Viswanathan: I don’t see a dichotomy there, both of them can peacefully co-exist. The point around trust is possibly a bit broader and a more long-term point. What the digital ecosystem is providing is a much more level playing field for start-ups or new brands. Some digital native brands are doing well as something in them is making them trustworthy and unique.
Sunil Kataria: Okay, that's interesting and definitely different. Any thoughts which you would have on this, Gaurav, as you are present across many categories which actually are competing with many challenger brands?
Gaurav Jeet Singh: Absolutely. It's a huge opportunity in terms of the physical and the mental reach that new digital platforms can give. It’s happening at a massive scale, but at a meaningful level, it's happening in the top 15-20% households. We call all the start-ups as one bunch of disruptive new digital native brands. For every one brand, there is a huge long tail of a lakh brands that never sell beyond 70 /80/ 90/ 100 units. Now, the reality is that these brands that have been successful fulfill a need more efficiently and effectively and consistently than anybody else. Some of these brands have done that, over a period of time. It’s about the cards that you're dealt and how you play them. What has happened is, entry barriers have reduced, distribution barriers have reduced, and your ability to reach consumers through media has reduced. So a Rs 100 plan can be put on Instagram today, or on Facebook, or any of the GDM, which would not be possible five years back, to get any kind of meaningful scale. So those are the changes in opportunities.
Shashank Srivastava: It depends on the product category. There are product categories where consumers tend to be more experimentative. Today, that is being made possible. In the auto category, for example, there are a lot of barriers - in fact only 30% of the total money which a consumer pays is for the cost of acquisition of the vehicle. So, you have to build brand loyalty over a period of time. That means you have to keep them satisfied. Obviously, trust will be very, very important. During the pandemic, we never advertised about our products in the beginning. We kept telling them what we were doing to make PPE kits and ventilators, to build trust at that time in a different way. But, of course, it depends on the product category.
Sunil Kataria: Every marketer has to make sure that the core is not starved while nurturing the future. So, how do you see this story going to pan out, going forward? I'm not taking into account the opportunistic launches that happened in many spaces.
Suparna Mitra: Yes, the core itself has changed, and then it's a matter of redefining the core and then moving ahead. Certainly for the discretionary category, like watches and variables, innovation and new product has to be the growth driver. For us, there are some core products which get consumed for specific reasons or occasions. But office-wear, that is also a big driver of sales, is not something that is coming back, at least not in the way that we had thought. But what we do find is that it has morphed, and therefore, core itself is something that is dynamic, it has shifted. Smart marketers have noticed the shift, and adjusted themselves.
Anuj Poddar: Last year, we developed air-coolers made for cleaner air, anti-bacterial, anti-germ with honeycomb filter technology and had a campaign TVC all shot. Just as we were rolling that out, COVID happened in March. We pulled it back because running that campaign at the start of COVID seemed very opportunistic. We actually brought that campaign back a couple of months later, but we couldn’t have shot the campaign post COVID, though when we first put it out, we got some backlash that you're making this up. Across product categories, the health theme can be treated as niche in a certain product as a feature or as core when it’s integrated fundamentally. But it has to be meaningful; not gimmicky.
Sunil Kataria: In many marketers’ minds, authentic meaningful conversations take the shape of opportunistic quick digital campaigns. So how do you get your marketing teams to avoid this urge and do things which are genuinely meaningful? Any advice on how you hold that back?
Anil Viswanathan: Speaking for the group here, we are lucky to be custodians of some wonderful brands. That clearly provides a North Star for brands to evaluate being consistent and being authentic. The other important thing is to keep the consumer at the heart of it. Be clear about what the consumer wants, and be a bit more choiceful in your messaging.
Sunil Kataria: It finally boils down to the consumer being at the heart of it all, and that’s what we all exist for. Thank you all for a very engaging conversation.
Catch the second webinar on ‘Services’ live 5 pm onwards on Wednesday, March 3 on the YouTube channel of the Free Press Journal and ABP Live.