Our digital spends have increased to almost 25%: Shashank Srivastava, Maruti Suzuki
At the unveiling of the dentsu-e4m digital advertising report, Shashank Srivastava, Executive Director, Maruti Suzuki shared insights on building a future-ready business through digital transformation
At the virtual unveiling of the 5th edition of dentsu-e4m digital advertising report and conference, Shashank Srivastava, Executive Director - Marketing & Sales, Maruti Suzuki, gave a keynote address on the topic ‘Driving Business Outcomes in a Digital-First World’. As digital has taken a centrestage in the life of consumers, Srivastava shared his insights on building a future-ready business through digital transformation.
Commencing the session, Srivastava compared the Covid-19 pandemic with a black swan. He shared, “This was the year of the black swan. In fact, in 16th century England, the dictionary mentioned black swan as an impossibility. But it was only towards the end of the 17th century that Dutch explorers invested in Australia, and they saw a black swan and that is how it is said that till the time you do not know of an event, you think it's impossible. This pandemic was sort of a black swan. Of course, we had a big pandemic about 100 years back, but the qualities of a black swan event is that it's unexpected, it has a major impact, and also it is rationalized by hindsight.”
Elaborating further on the impact of the health crisis on consumers and their behaviour, he said, “We had new vocabularies during this lockdown, which came out of this black swan event, words such as lockdown, WebEx, quarantine, work from home, etc. So it changed the way we approached our lives, the way we worked and indeed the way we thought. And this is not just about us as people, it is also about our consumers and in some cases, the businesses we work for.”
“Most of the consumers were confused, anxious and insecure. And as I mentioned earlier, it’s a black swan event so nobody really knew when this was going to end. There were many changes in consumer outlook and behaviour - they were seeking greater control over their journey, whether it is in terms of their lives or in the type of products they buy or the process by which they buy. They were also seeking greater empowerment and knowledge, seeking greater convenience.”
Talking about the automobile industry and how the pandemic boosted the demand for private vehicles, he remarked, “One big thing which happened was people were moving away from public transport and shared mobility to personal transport. And that actually helped the industry because there was a greater demand for personal cars. Having said that, there was also loss of jobs in some instances, loss of incomes and bonuses etc. So there was this contradictory requirement of an increased requirement for personal transport, but less money at hand.”
Srivastava also stated that the media consumption landscape too evolved dramatically. “We saw print coming down completely, OTT and digital platforms going up. And also trust and value became the new drivers of choice. Ultimately, we found that it is the brand trust at that time, which was probably the major driver for choosing the product. In fact, we used to talk in our meeting that trust is the new currency for brand differentiation and that is how we started our journey. During the lockdown, we didn't really know which direction the pandemic will move. So we started with a war cry - Ready, Resolute and Resilient.”
Sharing further about Maruti Suzuki’s CSR initiatives during the initial phase of the pandemic, he said, “We actually got involved not in making cars but ventilators. Our supply chain people or production guys were out to help and collaborate with some organizations for making ventilators because that was needed at that time. Our machines were being used for making PPE kits and so on.”
“And when things started getting better, we had to shift to something which we call Rethink, Reimagine and Recalibration. Automobile actually is quite a complex business. We have products for which components come from different vendors all across the country. We have many core functions including design. We had to digitise it and had to adopt new technologies, for not only just interaction and communication, but also for vehicle production itself. And that also made us realize that there is an increasing role of data and analytics,” he shared.
During the session, Srivastava also highlighted that the automobile sector has had the same business model for the last 100 years. “You have component manufacturers giving components to an OEM, who then decides to assemble the vehicle. These assembled vehicles are transported to different dealers, dealers through their sales executives sell those vehicles to the consumer. This has been the structure for 100 years, it hasn't changed. But now with this changing environment, we thought that the structure of the business itself will change and we need to rethink given the current situation,” he said.
Citing an example of the brand’s recent launch event, he highlighted how the entire event was pulled off virtually. “We had the launch of S-Cross 1.5 litre BS6 engine vehicle sometime in August. Normally, we have launches where we call all the stakeholders and hold a press conference and have a party. As all of this was not possible during the pandemic, our entire launch this time was done digitally. In fact, we gathered more audience than we would otherwise and at a much cheaper cost. For CRM or for logistics, we had to adopt an absolutely different practice than what we had done so far.”
Srivastava believes that digital capabilities are the big business differentiators and also the big disruptors. “Digital is not just a buzzword that everybody is talking about. It has to enhance efficiencies; lead to productivity and savings; it should increase collaboration - there are a lot of cross functional efficiencies that you need to build in; it has to be holistic and people-centric. We talk too much about data but we need to be mindful of the fact that as far as consumers or employees or your collaborators and vendors are concerned, they are all real people. So whatever technologies we adopt, we have to be mindful that they have to be people-centric.”
Sharing about Maruti Suzuki’s digital journey and how auto industry operates, he said, “Rethinking and Reimagining were the basis of our digital transformation - rethinking the way we work, reimagining the way we will connect with consumers and what the business would be. In the auto industry, while the core product is automobile, there are a lot of other things involved like design, manufacturing, marketing, logistics, supply chain, finance, etc. So the important thing is to have an error-free production to maintain quality. And also remember that the go to market time, which used to be about 7-8 years for any new model, has to be cut down because of the fast changing consumer preferences.”
“We are actually producing a car every 13 seconds and dispatching 5000 to 6000 cars every day. In order to make this massive coordination and operation, we have 50,000-plus employees, 3000-plus outlets in about 2000 cities. We have 15 million inquiries which we handle for our consumers. So I think it's a massive operation and cannot be done now, without the active transformation through digital means and database actions.”
Srivastava also highlighted the brand’s recent digital initiatives and revealed that 95% of consumers research online before coming to the showroom. “In the new normal, we had digital solutions for hiring. Unlike other companies, Maruti Suzuki never stopped hiring even in the pandemic period, we actually hired more than 300 people who joined us during the lockdown. And that was possible only because we did the induction as well as orientation virtually. We also did a complete digitization of the learning and development function. And we had a lot of those health and wellness apps for very stringent health monitoring.”
“The modern auto consumer has drastically changed over the years. In fact, due to the economic growth, the consumer is now younger and more of a lifestyle seeker. It's not just that he wants a car to move from point A to point B, but it's also that it is an extension of his personality. He has become more aspirational, experimental and tech-savvy, which means that we have to follow through not only in the media consumption choices that he makes, but also the nature of devices he uses in order to communicate the type of social media interactions. Hence, our interactions and transactions are all digitized now,” he added further about the changing consumer behaviour.
“The approach to purchase a car has changed drastically. Now 95% of the consumers research online before they even come to the showroom. 80% of the car buyers use it as a research destination. 60% research online to find the dealer. Now remember the dealer part is actually at the bottom end of the purchase funnel. Earlier, digital was thought to be affecting the top end of the funnel and we were using it, but now it is also at the lower end and that is the basis for the hyperlocal programme for managing inquiries that we started very recently.”
Concluding the session, he shared how Maruti Suzuki has mainstreamed digital for digital consumers. “1/4th of our spends is on digital as we understand that today the consumer is digital savvy, which is why at Maruti Suzuki, there is an increasing shift to digital both in the overall business as well as marketing efforts. And that's reflected in our digital spends as well. It's been increasing now, almost 25%.”
“There has been a five-fold increase in digital inquiries to sales. Earlier, digital inquiries were just 3% of our total inquiries, they have now increased to almost 40%. So the distance from 3% to 15% was done in three years till the pandemic started. And post pandemic in three months, it came from 15% to 40%. So that is the sort of acceleration which the pandemic has brought in the consumer shifting to digital. Therefore, we have also kept pace. In fact, 17% of our retail is actually attributed to digital inquiries now, which is massive.”
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