 "Pay")
The view from the ledge, as one year falls by to let another in, is one of rapid transformation writes Roosevelt D’Souza
It is safe to say that businesses aren’t operating in the same environment that they were at the beginning of 2016. Consumer sentiment and therefore behaviour, has undergone a sea change.
Caution has converted to prudence, and nonchalance has made way for watchfulness. Digital has become the new normal and easy-going consumers have become more discerning, informed and vocal. All this has drastically changed how people react, buy, sell and make connections. Considering that consumption patterns underpin a chunk of innovations in Indian industry, insights into their behaviour can provide key strategic direction for businesses.
Figures in for October 2016 indicate that Indians are hooked to their smartphones. They spend 196 minutes a day on the device on both calls and data. Active usage, including mobile commerce, time spent on online messaging apps and social media platforms, has increased by a telling 33 per cent. Another aspect is that cellular data consumption has plateaued at one GB a month, but data consumption on Wi-Fi has jumped three times that of October 2015 figures, to 20GB a month. Increasingly, public spaces, malls, restaurants etc., offer free Wi-Fi, fuelling deeper and more pervasive consumption of Internet on the go.
Expectedly, all that additional data consumption supports another trend. Video streaming is steadily gaining ground and is up from 70%in November 2015 to nearly 85%in October 2016. The time spent also rose by nearly three times in the same period.
Mobile payments have risen by 35%from last year, and the demonetisation drive in November, has only added to the segment growing in the near future. A significant increase in the usage of shopping apps has been witnessed in the mini metros and Tier I towns, rising from 69%in November 2015 to 81%in October 2016.
Demonetisation has shaken things up for industry and consumers alike. Statistically, one in two housewives and two out of every three students feel deeply affected by the turn of events. For organisations, a clear consequence is the impetus to digital growth. Adoption of alternate payment methods have risen by a steep 15%in the month following the announcement.
Lack of availability of cash and the trouble over middle-denomination notes, has led to cut backs on discretionary spends resulting in consumers seeking out retail options that offer payment options other than cash. This has resulted in modern trade gaining significantly over traditional trade stores, most of whom have not yet made digital payment provisions.
Consumers have predictably taken to social media to air their views. People have felt and expressed far more positive sentiment than negatives, though there are concerns over the length of time taken to normalise execution. 74%of sentiments expressed online were positive, against 16%that were negative. 10%of consumer sentiments expressed online were neutral.
Consumers have spent cautiously on FMCG in the first half of 2016. The demonetisation drive has amplified this sentiment. Housewives, students and middle-class working professionals are feeling the immediate impact as they ration the cash in hand and make more frugal purchase decisions.
Consequently, marketers are struggling for a larger share of wallet. On their part, brands are rationalising their wide array of offerings, down-trading and pushing mass brands.
Retailers are pushing their mass private labels that are a less expensive alternative to reputed brands across categories. This has resulted in consumers being left with limited choice on the shelves.
Against this backdrop, shoppers are economising, dropping frills and maximising value. According to our studies, 60%of grocery shoppers are sticking to essentials, avoiding extras and holding off on impulses. They are also buying in bulk to avail discounts. Today, deals are more important than the shopping experience. About two-thirds of shoppers actively seek out promotions irrespective of the channel they shop in, and ‘better shopping experience’ makes way for ‘discounts,’ ‘long open hours’ and ‘variety of brands and assortments’ in the consumers’ list of priorities.
Shoppers are increasingly visiting only one modern-trade store and opening up to private labels. More than half the shoppers who’ve bought private labels have done so because of price, but significantly 48%also believe that the quality of private labels is as good as well-known brands. However, traditional trade remains strong on the back of trust, home delivery and credit facility.
Lastly, Indians are big on freshness of grocery items, so though online shopping is picking up with the addition of three internet users every second, this isn’t rubbing off on the grocery segment.
The year has been fraught with challenges, starting with sluggish growth and ending with demonetisation. Hence, companies that manage to innovate and quickly adapt to current market sentiments are the ones to take a lead in the New Year. Communication becomes key as that will let the consumers know that brands and manufacturers and retailers are aware of the current sentiment and will address the same in a way that continues to make the consumer feel like a king.
The author is managing director, Nielsen India
This is the third of a series of articles on media, brands, advertising and marketing that looks back on 2016 to look forward to 2017
Next: Local vs global brands: For India, by India
