ISA CEO Conference: Strategic consumer mapping key to retail growth: Prasun Basu, Nielsen
Basu, President South Asia, Nielsen Holdings said for India’s growing retail industry, marketers need to adopt holistic, robust and agile solutions to tap into growing consumer demand
Picture this. India’s GDP has grown by 50 per cent in the last five years, as compared to global GDP growth of 20-25 per cent, according to Nielsen data. Indeed, the research agency suggests that India is well on its way to becoming the third largest economy by 2030 at $6 trillion. This points to strong macro-economic fundamentals from a consumer, media and retailer standpoint, which are all interconnected.
In a session at ISA CEO Conference on ‘Unlocking the connectedness paradox’, Prasun Basu, President South Asia, Nielsen Holdings said, “A rise in per capita income by 8-10 per cent, coupled with lower inflation has led to an increase in the net buying power of consumers.”
He continued, “Furthermore, with prices more or less stabilising, there is an increase in consumer confidence and empowerment leading to aspiration, evolution, and demand for more acquisitions by the consumer.”
However, tapping into this growing consumer demand effectively is where the connectedness paradox comes in, with fragmentation in the multiple channels of purchase – be it online or offline, and within those many sub-parameters, like pre-store targeting, in-store digital experiences and more. Again, today the customer loyalty patterns are also changing –from erstwhile loyalty leading to purchase decisions to an interchanging of the two today, with purchase leading to loyalty, thanks to experiential, in-store trials and experiences and more. That said, customer loyalty is also coming down, making the concept of loyalty even more challenging for marketers.
Moreover, with one-third of global shops and stores being in India or roughly 10 million shops and stores, the retail market in India is expected to double in the next five years from $100 billion in 2017. To put this in perspective, while the Indian GDP is growing by 50 per cent, retail is growing by 100 per cent. Within this, traditional trade is huge, with a lot of other channels coming in across sectors and therefore the omnichannel market is set to grow from $990 billion in 2017 to $1770 billion in 2022.
This strong growth comes on the back of decreasing smartphone prices and data costs, with the amount of cellular data consumption increasing by 20 times in three years from 1 GB to 18 GB. At the same time, a large amount of infrastructure changes – be it road construction that enables distribution, traditional trade, financial inclusion, etc is also contributing to rapid retail growth.
Thus, there is growth being witnessed in both the offline and online space. And herein lies the challenge in connecting all consumer points in traditional, online and omnichannel space, to target consumers who are now increasingly looking for personalisation, while also contributing in the rise and fall of brands. While this means more programmatic and audience buys from a media standpoint, content creation from a consumer standpoint and service offered from a retail standpoint, understanding the size of price for each business action and then taking decisions for the business action is key.
Let’s look at some interesting statistics. Post GST, there has been a sudden rise in smaller players. Secondly, factors like a young population numbering 340 billion or three times the size of all the Southeast Asian nations, a middle age population of 1.05 billion, and an elite and affluent population of 49 million, coupled with the fact that the top 10 lakh cities contribute to half of consumer expenditure are other important demographics. Moreover, while video streaming has gone up by 13 times in the last three years, digital payments and shopping online has not, with traditional methods of shopping still holding fort, even as cash and circulation figures are back to pre-demonetization times. Thus, both methods of shopping co-exist in equal measure, posing challenges to marketers as well as supply side challenges to cater to the scale, depth and diversity.
However, despite the myriad challenges, there are a few things for marketers to keep in mind in order to resolve the connectedness paradox which exists between media, retail and the consumer. “This includes personalisation of content, strategic media buying, grabbing opportunities across demographics and using technology like analytics to tap into consumer demand. Finally the solutions need to be robust, holistic, and agile with a total media view and total consumer view and marketers need to think about this at both an operational level, as well as at an industry-level,” concludes Basu.
Instagram, LinkedIn, Twitter, Facebook & Youtube