How brands unlocked their marketing budgets during festive season

• Nikhil Mathur, Managing Director of GfK in India writes how the consumer sentiment improved during the festive season and why marketers should continue investing on digital marketing.
• With the drastic alteration in media consumption, this festive season offers opportunities for marketers to connect with consumers like never before.

The global Covid-19 pandemic has profoundly changed the world as we know it. Lifestyles have changed, consumers are buying differently and, in many instances, thinking differently. Supply chains have been challenged and retailers are closing doors. Consumers in every part of the world are now looking at products and brands through a new lens. COVID-19 is reshaping the entire retail industry in real-time, rapidly building consumer preferences that have never been easy to change. It is safe to say that new habits formed now will endure beyond this crisis, permanently changing what we value, how and where we shop, and how we live and work.

Consumers are deeply concerned about the impact of COVID-19, both from a health and economic perspective. People are responding in a variety of ways and have diverse attitudes, behavior and purchasing habits. With increasing concerns about individual safety, customers are shifting towards the deep end of the online commerce pool and have shown a remarkably high level of dexterity and comfort in online shopping. According to GfK Consumer Pulse Report, 69% of consumers now prefer the online channel of purchases to avoid crowds.

Additionally, the home culture is likely to outlast the Covid-19 phase. It has significantly resulted in a huge business opportunity across product categories. Consumers are buying electronics to support this lifestyle, thereby creating a sales boost in the industry. The @home lifestyle has put the spotlight on the importance of “convenience” shopping, governing the kind of products consumers will buy. This factor has given a big fillip to digital commerce, as new consumers migrate online for grocery shopping – a growth that is likely to survive beyond the pandemic. Our survey indicates that 44% of consumers consider online as their most preferred purchase channel for mobile/smartphones, even after the lockdown situation eases, while 73% prefer buying consumer electronics/appliances from e-commerce websites and 26% prefer buying from brand websites.

These changing trends in consumer buying behavior and the increasing preference of purchase channel towards online retail has created an unprecedented challenge for companies seeking to engage with customers. Whether changes in marketing direction are motivated by market and industry conditions, changing consumer behavior or the need to stay competitive and cost-effective, it is highly recommended that companies focus on increasing their marketing efficiencies and customer retention. This is also reflected from GfK study highlighting that 84% of manufacturers plan to invest in online commerce for 2020 as a response to the changing business climate.

Unsurprisingly, the pandemic has hit the marketing industry hard. According to the GfK survey, Branding and Marketing in the New Abnormal, 73% of marketing leaders across Asia stated that their marketing budgets have decreased, with those in FMCG and healthcare experiencing the hardest hit. Simultaneously, marketing KPIs have also shifted, with maximizing the marketing effectiveness increasingly becoming the most important KPI for marketers. It is important to note here that while most of the KPIs in the pre-covid times focused on both the online and offline retail, the approach now has shifted. Digital transformation is now considered as one of the top priorities (56%) of marketers. This shift was reflected in freeform answers around how KPI measurement has changed, with respondents indicating a ‘shift to purely digital tactics’ and a ‘shift to online businesses”. Indeed, as online sales from changing consumer preferences continue to grow, we can expect this need to focus on digital transformation to continue. While KPIs may not have changed, their form has. Marketers’ desire to move towards digital platform reflects the need to focus on internal and external channel tracking, measurement, and effectiveness.

With the drastic alteration in media consumption, this festive season offers opportunities for marketers to connect with consumers like never before. Consumers are discovering brands on social media, and businesses need to focus on solutions that are relevant for the new normal, such as hyper-localization, creating virtual experiences, re-looking at the media-mix to build efficiency and effectiveness.

Moreover, the lockdown has only increased user’s media consumption habits, with an increased viewership for OTT content, urging brands to invest in some relevant touchpoints to help them achieve their targets. Not surprisingly, industry experts are advising marketers to leverage social media to drive brand discovery this season. With discretionary spends decreasing and value-consciousness increasing, marketers need to enter the consumer’s consideration set, eventually helping consumers in their purchase decisions.

Brand managers are trying to strike a balance in offline and online retail experience giving the importance of both the purchase channels. Hence, as brand managers are focusing on product innovation strategy to allure the consumers, they are equally invested in the retail innovation to address vast swathes the nation.

Getting digital right

In this post-pandemic environment, it is important to have a roadmap that reflects the pace of digital adoption:

• The digital efforts of brand marketers should quickly focus on using data analytics to respond to evolving customer needs, improve business operations and increase agility to fulfil customer expectations across multiple touchpoint.
• It is also crucial for brand marketers to benchmark their digital channels against competition and identify the metrics that are relevant for the brand purpose. Look at the bigger picture and set quantitative and qualitative KPIs to achieve overarching brand objectives.
• In addition, bolster your digital competencies to deliver speed and innovation, and create authentic and meaningful experiences for your audiences in order to achieve long-term brand success.

The crucial factor here is innovation; marketers who don’t realize or understand this or cannot innovate fast enough will perish and those who can adapt themselves, will sustain and thrive.