Satish N.S, Senior Vice President – Sales & Marketing, Haier Appliances India source news
how the consumer durables company reinvented its entire marketing wheel on account of the pandemic. He also spoke about the recovery of the non-metro markets being faster than metros and how being aggressive in all markets offered an opportunity.
Personally and professionally, what has been the impact of Covid-19 on you? How are you balancing the two?
With ‘work-from-home’ becoming the new norm after Covid-19, it’s best to say that our personal and professional lives are now merged. Since there are no physical boundaries separating work and home, the lines are blurred. In a situation like this, where everyone is trying to grapple with this new normal, it’s become all the more important to try and create a healthy work-life balance and help our team members do the same. Not only will this ensure better productivity during working hours and weekdays, it will also help us all in spending quality time with our families.
The impact of the lockdown was more visible in the metros when compared to the non-metros. Is this sentiment being reflected in the resurgence being witnessed in the non-metros?
Yes, the impact of the lockdown in the non-metros was less as compared to the metros. Not only this, even the economic impact of the pandemic was quite less in the non-metros.
Due to rapid digital adoption and increased awareness, customers in non-metros were able to bounce back in terms of discretionary spending much sooner than their counterparts in metros. This is probably one of the reasons why non-metros started performing better.
Another factor that could have played a major role here was that the dependency on government services is higher in non-metros in comparison to the private sector. The government sector has not been impacted by factors such as salary cuts which automatically led to consumers either spending similar to what they were before Covid-19 or rather more in the non-metro cities.
The lockdown has seen significant shift in consumer behavior across categories. Do you see this change in behavior as a permanent shift?
The changes in consumer behavior due to Covid-19 can be classified in two genres: permanent and forced. The first one is, some changes will stay permanent as staying virtual which will be the norm for a much longer period. Online shopping has been at its peak during the times of the lockdown and it is here to stay at least for the purchase of small-sized daily items. It is needless to say that, the pandemic has brought a digital revolution. We would have never imagined everything going online so quickly, like online education & virtual school classrooms. Moreover, there are certain fundamental changes that are getting accelerated. For example, in pre-Covid times, people used to prefer visiting the shop floor to get information about a product (especially in the case of consumer durables). Today, with digitization, people want to avail all the information they need online. This trend is here to stay.
Other than this, some of the forced changes like maintaining social distance, being at home most of the times also play a vital role in altering consumer behavior. But these are temporary changes and once the situation normalizes, people will return to shopping malls, visiting friends and attending parties.
In your perspective, what will be the drivers of growth for the Consumer Durable category?
After FMCG industry - especially the grocery sector, consumer durables industry has been one of the fastest to recover. The reason behind this recovery is that the average time spent by individuals at home has gone up.
From our own experience at Haier, the sales of large refrigerators saw a sudden peak that we ran out of our inventory for this category which is priced between Rs 65,000-70,000. This was because the lockdown and uncertain conditions have forced people to store more and more food items.
Factors like unavailability of the house help during lockdown to ensure everyone’s safety, has encouraged people to invest in products like a dishwasher, a bigger refrigerator, fully-automatic washing machines, etc.
Similarly, since more time is being spent at home, the living room has become the new entertainment centre, and we have seen a huge surge in demand for our large screen televisions across categories in metros as well as non-metros.
Overall, be it our industry or any other industry, the categories which address anything related to hygiene and convenience will definitely grow much faster.
The physical touchpoint has come down. How can we recreate the physical experience digitally?How are brands thinking strategically about the digital touch points that are emerging?
The last few months have been disruptive for the consumer durables industry simply because it is an industry where people want to touch and feel the product, before investing in it.
This was a challenge for us. In the past few months, the pre-purchase cycle has completely changed. The customer used to go to the shop floor, talk to the salesperson, understand the product they wanted, come back home and discuss with family and friends, before buying it.
Secondly, earlier people used to prefer going to a large outlet/showroom to purchase a home appliance. Now, people are buying locally, and we have suddenly seen a resurgence in smaller outlets in the distribution channel. People do not want to take a risk, and are willing to pay more and buy from the neighborhood stores.
The third important challenge was post purchase. Earlier, if someone bought a refrigerator or an LED television, our engineer would visit customers’ houses and set up the product as per their requirements. Now, all these three parameters have completely changed.
In the pre-purchase cycle, we had to make everything digital. Earlier, varying from brand to brand, 90 - 93% of consumer durable sales were from the offline channel and about 10 - 7% from online. Now this 93%, that was completely physical (through catalogues, brochures, in-store product demonstration, etc.) has shifted to digital. Seeing this shift, we had to quickly update our website with product videos, virtual demos and product e-manuals. Secondly, we had to ensure our distribution channel was equipped for the surge in consumer demand. If customers are going to the neighborhood stores, are we present there? If we had to advertise, where do we advertise? There was no live activity happening, no original content on television, no outdoor or print advertisements, especially in the metros. This meant that digital was the only medium available and we had to shift our marketing strategy for approach entirely to cater to this new normal. It has been a huge change, as we had to completely alter our entire marketing approach.
Coming to the post purchase cycle, once a product is delivered to a customer’s home, they want to start using it immediately. With the lockdown and social distancing norms, our challenge was to address how do we do it without our service engineer being physically present there? Even if we upload an unboxing video, each customer has a different problem and question. We had to reinvent the wheel, wherein we had our service engineers available on video calls to guide the customers through the entire process of setting up the product.
If you were to have told me in March that a day would come when we would demonstrate our products with unboxing videos, none of us would have believed it.
How does the market prioritization model change, particularly since the metros are still not back to normal?
As a sales or a marketing professional, you can't wait for the market to wake up. You have to be optimistic and find which market is working. We have been pushing our entire distribution channel in the upcountry and especially the rural markets.
With the lockdown and restrictions in the market, the sales team at Haier is investing a lot of time in research where we actually map daily market data and shops/counters that are open or closed on a given day. Also it is important to pick up the best mode of communication in these times for each respective market.
We have experimented in the upcountry market to see how digital campaigns worked for a particular product. For example, in Kerala newsprint was not affected, and the reach was around 80%-85%. With no live events happening and with the onset of Onam, we used print and tried different combinations with digital to complement it.
So, basically what you're saying is, go where the sales are.
At the month end, we need to look at the sales numbers and wherever we can get the numbers from, we chase for sales there. That's how we have been prioritizing and moving ahead.
During the lockdown, we stopped advertising in the metro markets, but continued advertising in the non-metros. For Onam, we have invested in high impact and high visibility advertising across print and digital properties of leading publications in the state. Wherever we see an opportunity, we've been quite aggressive to move ahead in those markets.
What is your advice to the marketing community?
The process of purchase and post purchase has changed. As a marketer, you need to clearly study the behavior change - in whichever product or category you are working in. Further, how you adapt to the new digital platforms is also crucial, since digital is not about e-commerce alone. It’s about the way you communicate with your consumers and the medium you choose for doing so.