Digital medium making 'rapid' strides in traditional sectors

Traditional brands sidestep convention to adapt to changing customer behaviour, drive better returns on advertising, and promotion budgets

A few months back, Volkswagen India wanted to test how effective its digital ads were at driving inquiries at its dealerships. It partnered with Nielsen to measure the impact of its new communication methods and tools–new video formats such as bumper ads to boost visibility for its offers and dealerships in cities/suburbs and display ads through the Display & Video 360 feature to drive calls and walk-ins to dealers in Tamil Nadu. The result: 12 per cent increase in overall inquiries at a 54 per cent lower investment than print.

Renault India conducted a similar experiment and found that its digital campaign drove a 23 per cent increase in qualified leads at a 19 per cent lower cost per lead compared to print.

These examples are not isolated cases, but an indicator of the rapid strides that digital has made even in traditional sectors that many believed would take years to make the switchover, according to a report by Google and Kantar TNS (How digital is changing the game for India’s auto and retail industries). While the shift from online purchase of clothes to cars isn’t around the corner yet, there is clear evidence that the digital medium has changed automobile purchase cycles radically.

According to the report, even though all auto purchases happen offline, 90 per cent of car buyers research online before setting foot into a dealership. And once they are at the dealership, 65 per cent of car buyers continue to research on their smartphones.

S Swaminathan, CEO Hansa Cequity, notes that the automobile companies are aware of the changing pattern of purchase cycles and are rapidly evolving their marketing techniques and spend to ensure they have the relevant mind space. “Before digital presence became common, purchasers would rarely have time to research about vehicles before they actually bought it. Now however, there is a constant need to access feedback and reviews on automotive products so that the buyer reaches the dealership fully prepared and dealers are aware about this change,” he said.

“Online video is also playing a bigger role in the car-buying path to purchase, with 80 per cent of car buyers using it as a research destination—second only to search at 89 per cent. And the majority of car buyers who watch online video take a follow-up action, such as checking a dealer’s website before going to the showroom,” stated Google India Head of Auto research Shalu Jhunjhunwala in the report.

The big shift in the auto industry has been driven by the sharp changes that have come about in consumer behaviour, buyers now want all the relevant information at their fingertips, no matter where they are. This is also changing the retail industry as consumers are seeking an omnichannel experience.

Consumers are thus less likely to identify a brand as a pure digital entity or an offline presence, they look for the brands they follow wherever they are. This has led to Google seeing a 50 per cent increase in searches for “stores near me,” signalling that online searches for stores have become an integral part of the modern shopping experience, the report said.

Hence when Home Centre, the retail chain owned by the Landmark group, wanted to drive walk-ins and incremental sales while improving omnichannel return on ad spend (ROAS), it moved spends to digital in two key markets. The brand ran campaigns on search, served bumper ads on YouTube, and remarketed to users on the Display Network. Home Centre saw a 19 per cent increase in offline sales and a 20 per cent increase in online sales at the same total media spend as print.

Among the areas where companies seem to spend most are influencer and experiential marketing said Swaminathan and added that most consumers spend a lot of time on reviews. As a result, blogs and reseller platforms like Cardekho and Bikewale get a lot of traction which turns advertiser interests towards these platforms. “The idea is to be present where the users are influenced most in the initial stages of search discovery and comparison during the purchase cycle, because beyond that there is little that can be really changed,” said Swaminathan.  And brands are taking heed, tracking their customers’ digital footprint and mapping their expectations more closely than ever before.