Madhukar Sabnavis: Brand-builders beware!

The retail boom will change consumers in India.

The retail boom gathered momentum last year. Reliance entered the market with its first Reliance Fresh stores; the Bharati Group threw its hat into the ring with its tie-up with global giant, Wal-Mart; the Tatas started their foray with Croma, the electronics store, and the Birlas have expressed their intentions to get in as well. On the back of these entries, the Future Group has stepped up its efforts on Big Bazaar and Pantaloons and their likes and other big international players""Tesco, Carrefour and Watson""are also evaluating this market.

So what does all this mean for consumers, marketing, brands, media and communication agencies? How is the transformed retail going to change, if it does, the principles of marketing outlined by gurus like Philip Kotler in the 70s?

This retail revolution is not new in the world, even though it is new to India. But what's interesting in India is that this boom comes alongside another boom taking place simultaneously, the digital boom. The growth of technology makes life different from what it was in the 60s, when the West first experienced the emergence of supermarkets and hypermarkets. Technology, which was an enabler to make retail efficient, is today moving into becoming more front-end, to make life more enjoyable and deliver stronger experiences. So India, as it has done in many categories through the 90s, is likely to see a step change in the transformation of marketing and consumer behaviour. Hence, the implications in India could be wider than those in the West.

The emergence of self-service retail environment will transform every brand purchase from a simple "ask the shop-keeper and buy" transaction to "brand svayamvar" transaction""where the housewife will use every occasion to evaluate alternative brand offerings in the category based on advertising recall, past experience, her own psychological mindset and her mood at the moment of shopping to pick a particular stock-keeping unit (SKU). This puts a huge responsibility on the "brand" at the point of purchase to remain attractive to be finally selected. Historically, many marketers in India have consciously or unconsciously relied on the power of the retailer to drive their brands after doing a mass media blitz. And the housewife has picked up what the shop-keeper has recommended. Now there will be a shift of power and the "svayamwar" will transfer control to the housewife.

So what will brands have to consider?

First, there will be a need to study shoppers as well as consumers. Brands need to understand both to drive final sales. Just as there are consumer segments, there exist different types of shoppers. Some are "risk-averse" and buy the same brand over and over again; others are "pleasure seekers", who see shopping as part of leisure activity. Then there are the "memory and recall" shoppers, for whom the last experience of purchase or saliency of advertising make the difference, and then there is the "purposeful shopper", who goes out with a clear shopping list of categories and brands and buys accordingly. There are some who are "comparative" shoppers""the most involved ones who use every shopping opportunity to review their decisions; there would be the "self-image" shopper, for whom what she picks up makes a statement, and finally the "brand loyal" shopper, who believes one brand is superior to the others. Conventional marketing focused on the last type and aimed to make many of that type. But as retail gets significant and brands commoditised, others will emerge. Interestingly, just as in consumer benefits segments, much of shopping behaviour would be category-specific""a "purposeful" shopper in one category could be risk-averse in others and hence the need to do more detailed studies of the shoppers.

Secondly, decision making would change. Considered decisions would become impulsive; routine decisions would become considered! Clothes and fashion accessories like watches are already becoming impulsive; you see something interesting in the shop window and you go and buy it in an impulse! And monthly purchases that were once routine suddenly get re-evaluated at every purchase as the "self-help" system offers that facility. (The traditional neighbourhood shopkeeper often knew what the consumer normally bought and so either leveraged his relationship or, to increase his through-put by cutting down shopping time, would immediately push the "last purchased brand".)

Third, positioning would get a physical dimension. This is interesting, as traditional marketing has always seen positioning to be a battle for mind and heart""the psychological space. But with organised retail, the physical space would become as important""in which position within the shop the shelf is, where on the shelf the brand is placed, how easy it is to pick it up and what other products are there in its neighborhood can all affect brand choices. A study of the "target" shopper's shopping lists could reveal what are the ideal product accompaniments on the shelf for brands""there could be the monthly purchased items, the weekly ones and the daily ones""so cooking oil and brooms could perhaps be placed together!

Finally, retail will move from being a delivery channel""the means for marketers to reach the product to consumers""to a communication channel, another medium through which brands can send messages to their targets and influence their decisions. The simultaneous growth of technology will facilitate this. The outernet""the mobile and interactive billboards, outdoor TV, etc.""will open up opportunities for communication at the retail point. This is particularly useful in India, where, by culture, we are "helpless" shoppers and not a "self-help" one. Hence, as retail develops, there is a need to build an alternative to the "neighbourhood" shopkeeper's word-of-mouth advice at the end to nudge final decision. Technology will enable this development and help in providing interesting viable substitutes. Given that in most organised retail, brand building and pull creation gain pre-eminence, the same will happen in India""but advertising agencies need to bear in mind that the final pull may not come from the traditional mass media but from the new digital media emerging at the outlet! Further, as technology moves from being an "enabler of efficiency" to "provider of pleasure", it could develop to enhance brand experience at the point of purchase. Just imagine, RFID-type technology, which could enable packaging to talk, giving the brand an opportunity to involve more human senses""e.g. a coffee pack can involve the olfactory sense with aroma emission to a shopper as she sees it or a washing machine could play back a jingle""the aural sense""when viewed in the shop.

Clearly the retail boom is more than just a change in the Place 'P' of Kotler and the implications to brand builders could be more than what happened when it first arrived in the west.

Something worth thinking about!

Madhukar Sabnavis is Country Head- Discovery and Planning, Ogilvy and Mather, India. The views are personal.

madhukar.sabnavis@ogilvy.com