Second wave has sparked a complex interplay of consumer trends
PremiumBrand marketers confront new consumer attitudes and preferences that may require some to rethink their market strategies
Globally, the covid pandemic has unleashed an economic recession along with offering a Pet scan for countries to identify gaps in their healthcare infrastructure. With nature taking its course, humans have had to change their ways. While the first wave of covid did shock Indian industry, it was followed by a digital Diwali and the hope of consumer behaviour regaining normalcy by the fourth quarter of 2020-21. The second wave only reinforced the fears and concerns that consumers had in 2020, while putting consumer brands in a quagmire. Covid 2.0 has put in motion three important trends: Duality of the evolving Indian consumer, the rise of nutraceuticals, and third, an endeavour by brands to ensure customer stickiness in a de-synchronized society.
Marketers are currently facing a duality in consumption trends. On one hand, consumers are leading what I call an “unbranding revolution" , which refers to their comfort in purchasing products with minimalistic packaging, an increasing preference for indigenous brands with organic ingredients that don’t factor a premium into their pricing, and their romancing of ‘upcycled’ apparel via online thrift stores. On the other hand, there is a heightened sense of brand loyalty that is driving repeat purchases.
I categorize these two as bucket 1 and bucket 2, respectively. While the first bucket comprises consumers who pivoted from the ‘brand conscious’ bucket, largely on account of a deeper understanding of product complexities and increased focus on natural products for immunity (something which covid made a priority and its 2.0 update made a necessity), the second bucket has brand loyalists who are attracted either to the convenience or usage experience of a particular brand offering. Further, as consumers spend more time at home, demand for premium fast-moving consumer goods (FMCGs) and non-alcoholic beverages has surged. As per an Accenture study done in early 2021, 58% of such consumers are either maintaining or increasing their purchase of premium brands.
This hockey-stick growth is fuelled by mindful indulgence and a desire to bring unique cuisines home. Another impetus for this growth is the rise of healthy snack offerings that boast of fortified ingredients and cater to wellness- and immunity-centric hunger pangs. With an increased role of fortified ingredients in FMCG offerings, we will see technology and innovation play a crucial role in the nutraceuticals space—which will see a greater overlap with FMCG offerings ahead. According to Narayanan K.S., an advisor to food and beverages companies, “Consumers today are overwhelmed by fears and anxieties caused by lifestyle diseases and viruses that they face daily, and are seeking ‘antidotes’ [and ways to] enhance immunity. The ancient wisdom of using herbs and spices has seen increasing acceptance and we have a number of nutraceuticals and functional foods [being] marketed as immunity boosters. Food and beverage brands are also reducing ‘unhealthy’ ingredients and incorporating ‘good for you’ ingredients to address this need. We are also witnessing the emergence of clean-label food products. Overall, this rapidly growing health-focused segment holds tremendous scope for innovation."
However, while navigating this duality of the Indian consumer, brands have had to reinvent their channel strategies, as consumer behaviour is expected to realign itself with a hybrid reality wherein the centre of consumption is one’s home. And this does not imply a simple shift from general and modern trade outlets to online sales. Rather, it calls for a new kind of customer orientation. It requires marketers to explore the nuances of social commerce as they track the digital consumer and tap organic networks of local influencers to reduce customer-acquisition cost, develop offerings for emergent hybrid realities that could solidify by 2022, forge an emotional bond with the consumer via the direct-to-consumer route, and set up the necessary digital architecture to serve the needs of this impatient and health-sensitive consumer. Legacy brands have also begun to understand that market-share gains can be made through these new channels, and some companies have even used excess cash on their balance sheets to make strategic acquisitions in such segments.
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As brands adopt this path of creating consumer experiences for a de-synchronized society, they will need to devise marketing strategies that can engage their audiences in the safety of their homes. Established brands can work towards online engagement by strategically employing open innovation mechanisms to gauge feedback, create digital campaigns and develop new products. Over the next 18 months, such a strategy could help brands put a finger on the pulse of their consumers, while ensuring engagement at a time when digital natives are displaying time paucity and declining attention spans.
A subtle trend that can be observed in this space is that insurgent brands are trying to create playful mascots and are working around colours that offer warmth and achieve a playful brand positioning, so that consumers who are fighting emotions of stress and anxiety find comfort in these offerings. It’s a unique play, and only time will tell what dividends it will reap. Observes Harish Bijoor, brand strategy specialist and founder of Harish Bijoor Consults Inc, “As the consumer trudges through charged times, the marketer needs to be sensitive. This is not the time to sell, but a time for marketing to play the role of a balm. The celebratory economy of yore is dead. At this point, marketers need to prepare for the hope economy. They need to put selling, branding and marketing on a pause for now. That’s the best approach. Be the hand-holder during tough times. When times get better, you will be viewed as a friend and not a mere hard- seller. The marketer must wear the tough shoes of the consumer and behave like one."
Shahan Sud is an investment professional at Indian Angel Network.
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