You are here: Home » Management » Features » Marketing
Business Standard

Digital, promotions can influence $20 bn in sales

Online pre-purchase activity lowered offline (other media) interactions and drove up personal store visits of the shopper

Adrian Terron 

As consumers are increasingly influenced by the internet, it has become imperative for marketers to disrupt established brand behaviours by leveraging digital avenues more often. At the same time, running promotions and providing consumers good experiences when they shop, can open up sales opportunities worth $20 billion (1.24 lakh crore), according to our insights across key categories in urban India.

The share of the Indian wallet is highly influenced by factors in the marketer's direct control. For example, in the FMCG space, 80 per cent of shoppers will buy a different item from what was originally planned. Today's shoppers are empowered by choice and refine their decisions based on market-place disruptions. Knowing the factors that motivate shoppers to take action will ensure a company's products stand out.

Recent research indicates more than half of shoppers across five industries reviewed (FMCG, movie, travel, automotive and loans), accessed the Internet for pre-purchase decision-making, even thought the percentage of e-tailing as part of total retail sales is still small. Both men and women are equally inclined to being influenced by digital sources.

In FMCG, online interactions translated into more than 50 per cent lower offline interactions. For online movie planning, TV and newspaper review incidence fell by more than 40 per cent. Conversely, Internet pre-purchase activity motivated greater personal and store-visit interactions in the travel, automotive and loan industries. For these high-ticket items, online activity prolonged decision-making.

But converting surfing to selling requires more than a strong brand. Internet strategies need to be complemented with other forms of traditional media as part of brand-building, since shoppers are more inclined to buy online when they know the brand. The better functionality of a product, then, can be more important than mere brand flamboyance.

According to market analysts, using promotions can influence $10 billion (Rs 62,000 crore) in sales. For FMCG products, promotions influenced 34 per cent of shoppers to make a bigger purchase than planned, and four in 10 shopped for groceries earlier than anticipated. Across a variety of food categories, on average, more than half the shoppers purchased a different product than usual due to promotions.

In fact, a good deal can prompt consumers to buy more, buy earlier and buy different than otherwise intended. To disrupt normal behaviour, however, promotions need to be used tactically and strategically - such as creating the right deal at the wrong time by promoting when others are not. Additionally, tapping into consumers' natural curiosity to experiment with new products and offering savings incentives can drive un-planned buying.

Promotions also need to be offered on regular-use, low-differentiated items because consumers love to save to splurge. Promotions should be timed to create consumption opportunities that make routine and festival purchasing patterns more exciting.

Good experience can turn plans into purchases. Positive staff interactions in the auto sector prompted 73 per cent of shoppers to change their initial purchase decision. Pleased patrons spread the good word. This kind of brand advocacy prompts positive feelings extending far beyond the initial sale and often represents the life-blood of strong brands.

Market analysts also believe that marketers should consider creating offline social networks with satisfied shoppers. This is important because such shoppers are twice as likely to advocate FMCG, movie and travel brands and five times more likely to support automotive brands.

Ultimately, when it comes to quality connections, it's about being approachable and never rushing to close the deal. At the end of the day that's what wins customer loyalty.

The author is Executive Director, CR and BASES, Nielsen India

First Published: Sun, December 01 2013. 21:29 IST