We enter the year 2017, with the continuing effects of demonetisation, which affected the nation towards the fag end of last year. The e-commerce space witnessed an initial lull on the back of the cash crunch but players immediately devised strategies to overcome a dip of almost 30 per cent in the online sales post the note ban. Their plan involved--- giving out-of-season discounts, running exclusive cashless offers, strengthening the manpower, replenishing stock to meet the surge in demand and reintroducing cash on demand. Therefore, communication towards the end of the year highlighted more on the cashless sale offers and also the year-end discounts on their sites. Other than Amazon, which spoke about their #AdjustNoMore proposition, players like Snapdeal, Flipkart or Myntra were quite transactional.
Other than the festive season, last year was quite a slow year for players in this category. The reasons being, most of 2016, these players had to deal with heavy losses and valuation struggle and as analysts predicted there were no astronomic ad spends. In addition to this, there was a dip in sales reported after the introduction of the Department of Industrial Policy & promotion (DIPP) policy in March. But activities improved during the festive season, when we saw, players opening their purses and spending heavily.
Snapdeal allocated Rs 200 crore marketing budget on a 360 degree campaign spread over two months. It was part of a rebranding exercise which included a new logo and their brand campaign titled ‘Unbox Zindagi’. Droom, an online automobile market place even spent around Rs 100 crore on marketing blitzkrieg during the same time. Communication during the festive season thus remained focussed on the on-going sale wars. However, the only brand that managed to stand out in terms of their messaging strategy during this time was eBay which used the emotional route to connect with consumers. The brand advertised after a gap of three years and highlighted sensitive issues like sex, gender bias and religion with an attempt to break stereotypes.
Did the communication help to build brands or was it mere tactical?
We spoke to advertising and branding experts, in order to understand, if the communication in the e-comm space helped to build brands or was it only discount led, which mediums worked better for them and their expectation on how marketing will evolve this year.
Rajesh Ramaswamy, Executive Director, Lowe Lintas felt that communication in 2016, was more towards re-assurance. To allay the fear of online shopping, giants in the e-commerce space like Flipkart and Amazon took to educating the consumers and trying to lure them with offers like- easy returns, COD and 100 per cent original products.
Flipkart through their campaign ‘Flipkart matlab Bilkul Pakka’ used popular actors like Amol Palekar and Namit Das to highlight some key features about shopping on their site. Amazon even through their narrative ‘Apni Dukaan’ highlighted the consumers’ dilemma before shopping online. Commenting on this trend, Ramaswamy added “A lot of people are still sceptical about buying things online, so attempt was to remove the misconceptions and educate the consumers. However, I feel, while the biggies took the task of educating the consumers, the smaller brands went straight into brand building.”
According to Sumanta Ganguly, Executive Vice President, LinTeractive, a lot of these players focussed on talking about their respective ranges, like Amazon says ‘More than 6 crore products’ and eBay talks about having ‘More than 10 crore products’. He highlighted, “Communication has actually moved from adoption to sales, it is no longer about how I give my consumers the cheapest products, but reasons to choose me, even if I can’t give you the cheapest product. What they have missed on is engagement with the consumers. They have not only stopped innovating on their products, but also on their deals.” Flipkart also this year used their kids to promote their special offering- Flipkart Assured.
He clearly feels that Amazon is leading the game till now, not only because of their communication, but also their endeavour to innovate with products like Amazon Prime and others. “They know how to segment their consumers and give value to them. This space is still in an expansion mode and it is therefore very important to reactivate the old consumers and with their loyalty programmes, they can win the trust of their consumers. From the communication point of view as well, their attempt is to make shopping an everyday affair, by highlighting small human insights like ‘Shop for yourself’,” he cited.
Which medium was most effective?
Last year, in general there was reduced ad spends and the category players because of few challenges on their way, were forced to spend less in advertising. In fact, according to the revised Pitch Madison numbers, e-commerce ad spends for H1’16 fell by 37 per cent as compared to spends for the same period in 2015. The report further stated that the e-commerce’s category’s contribution to overall adex fell from 7 per cent in H1’15 to 4 per cent in H1’16. It even highlighted that reduction in e-commerce ad spends could be a reason why television ad spends have just grown 11 per cent in H1’2016 as opposed to a predicted growth rate of 20 per cent for the year.
Commenting on which medium was the most effective, Jagdeep Kapoor, Chairman & Managing Director, Samsika Consulting said, “Communication should be something which attracts the attention of the consumers and not distract them. I feel on print, the big brands in the e-comm category have been rather distracting; they have been creating more noise and less communication. It has been more about the price discounts, which was obviously less strategic and more tactical. Huge money was spent, but communication was reduced to mere leaflets.”
He further added, “On the other hand, communication on TV was far superior, brands brought in elements of memorability- like jingles which can last with the consumers for long and the beauty of most of it was that they were without celebrities. I felt, TV sold the brand and while print sold the deal.”
How will communication evolve in 2017?
Anil K Nair, CEO & Managing Partner, Digital Law & Kenneth Saatchi & Saatchi feels that, 2016 saw the e-commerce brands moving towards a more sustainable positioning based brand building communication laced with emotion and consumer insights. However, the exigencies of the market place sometimes force their hand to have periodic tactical sale communication and that will always keep on happening.
He further elaborated, “Given the slowdown in funding and belt tightening by these brands, there will be greater merit in using a hybrid model of short term traffic drivers coupled with medium to long term brand building efforts.I believe that demonetisation and digitisation will augur well for e-commerce in India bringing in more consumers into the fold and a lot of first timers. It will do well for the ecommerce brands to build on trust and continue building emotional equity and making ecommerce buying part of their daily routine and behaviour.”
Echoing similar views, Ramaswamy from Lowe Lintas is of the opinion that in the coming year, it will become a comfortable space, with more and more brands entering this category and there will be less need for companies to educate their consumers on the ease of online shopping.
Below are few links of ads:
Easy Returns on Amazon:
Flipkart (Bilkul Pakka):
Snapdeal (Unbox Zindagi):