Sentiments in Tier 2 & Tier 3 geographies are much stronger than in metros, say experts

Over the last one year, we have all watched and fascinated the growth of the digital not only in the entertainment sector but also for marketing, finance and every other. COVID-19 not only shifted the way of talking and working but also a culture of living in the digital world. This new normal medium has come a long way from being seen as a medium for amplification to being considered as a lead medium across categories and brands. This festive season, all brands, big and small, are expected to spend high on digital, especially coinciding with mega cricket events like T20 and IPL. Brands which have seen success earlier will experiment with newer formats and do 360 digital campaigns, whereas newcomers will go beyond the performance creative and enter video content to join the larger digital content game.

Though the Unlock 2.0 has taken place, cities, malls & theatres have reopened, it has not affected the digital adspends done by the consumers as well as the brands. Consumers continue to plan to shop this year, and have made choices on the categories, the brands and the products they plan to purchase. Undeniably, lockdowns have caused a shift in the behaviour of the average consumer, be it making purchases online, or shifting budgets to different channels.

According to Dentsu’s Global Forecast report, the pandemic has accelerated a clear shift to digital in terms of share of ad spend in 2020 versus 2019, with the region’s digital share of ad spend accounting for 55.7% share in 2020, higher than the global average of 48% and was the largest in terms of percentage across regions globally. India’s digital ad spend was at 27.9% share, an increase of 7.9%.

The pandemic fundamentally altered the digital advertising landscape. Marketers not only shifted their budgets from traditional to digital channels, but they also significantly increased their digital spend. They expect the resulting spike in demand to increase prices and spur competition.

Speaking on the 360 degree view of digital marketing during festival season, Megha Ahuja, VP - Digital Media Planning, Carat India, said, “Multiple brands have deferred their product launches and are counting on the festive season to drive incremental reach and sales. As a result, shopping aisles will be chock-a-block with new launches supported by high-decibel marketing campaigns. At the same time, consumer journeys have become more complex and nonlinear, and the role of digital has become more prominent across the journey. As a result, this festive season will require marketers to re-think their media strategies in order to be successful.”  

“Brands should leverage multiple touchpoints: Be visible across touchpoints leveraging Connected TV, Video, Search advertising etc. to drive active/passive discovery and leverage ‘efficiency’ related metrics to assess performance holistically. Digital channels will be crucial across the journey: ~80% of consumers' journeys will be ‘digital’ influenced and 77% of endemic journeys will involve amazon.in”, she added.

According to Prabhkiran Singh, Founder & CEO, Bewakoof, “This year’s festive season and the third quarter, in general, are very crucial for us and the industry. We plan to go heavy on top-funnel marketing investments starting mid-October where we’ll be engaging with celebrities to promote the festive collection and we’ll look to have the kind of impact Rajkummar Rao and Sanya Malhotra had for us in the past but at a bigger scale. For us, the festive season serves as a crucial window in the year for new customer acquisition and bringing back customers that haven’t shopped again with us for a while now.”
He further noted, “The Oct-Dec quarter ahead, we’re also in the process of rebranding Bewakoof and we’ll have a new look, logo, tagline along with a new set of celebrities that will promote Bewakoof. We expect our brand sales to be Rs 120 crore for the festive quarter and we’d be spending Rs 10-12 crore in digital spends.”

The pandemic has significantly influenced where marketers plan to invest in 2021. To help prevent the spread of the novel coronavirus and adapt to changes in consumer behavior, marketers plan to cut funding for traditional channels, such as direct mail and in-person events. Unsurprisingly, they plan to redirect those resources toward digital channels, such as paid social, paid search, and online video. Most e-commerce players have already gone past their pre-COVID-19 numbers. There are some categories that have recovered better than others and in this festive season, with markets opening up, consumer sentiment in the e-commerce category has still not gone down and marketers are still expecting a recovery in the categories that are more outdoor driven. Despite these changes, Online shopping is still going to play an important role in consumer’s festive buying this year and audiences stepping out in the retail space to shop will not be what it was pre-COVID yet.

Commenting on consumer sentiments this festive season with Unlock 2.0, Anjali Malthankar, National Strategy Director, Tonic Worldwide, remarked, “As far as the pandemic is concerned ‘worst is over’ is the sentiment this festive season. This is because the overall media buzz around Covid has slowed down and vaccinations are reassuring. But as far as stepping out in the retail space is concerned, the behaviour will be more for the experience, nostalgia and bonding, than for the offers, convenience and variety. Now, people are ready to buy online like pros! The inertia about online purchase was already tackled by initial pandemic days and last year people got comfortable with festive shopping online too.”

“There is going to be revenge spend by the brands this festive season, as there is a lot to catch up as far as bottom lines are concerned. We expect the spends to go up by 2X as compared to last year,” she noted.

Prasad Shejale, Founder & CEO, Logicserve Digital, observed, “Consumer sentiments are good, and people are spending. They have been waiting for opportunities to spend on things they have always wanted or had on their wishlist. The primary concern will only be about hygiene and safety. Honestly speaking, consumer sentiment was never a huge issue. They do want things and are willing to spend too. And now, they have also started to step out to shop, meet up, travel, etc. Everyone just needs to be aware of the safety precautions and follow them.”

He also felt, “With the pandemic, brands across categories are now active on digital. Hence, I am sure all the categories will continue to be active and more robust with their digital approach. With every category, either the leader or the followers are chasing visibility and growth now. Everyone wants to be seen, heard and wants to participate in their own way. Additionally, with the overlap of IPL and T20, people are sure to be making the most out of the upcoming times and looking at having a good time and enhancing their experiences with brands. And the brands will definitely explore new ways to stand up to the expectations of these consumers.”

Many brands believe that more than 20% of their sales comes from Tier 2 & Tier 3 markets. Though the overall pandemic guards are down, and the fear of Covid has reduced, Tier 2-3 will see a rise in online shopping this festive season as these cities are not high on experience shopping and festive shopping has always been about budget, variety, trends and now safety. These are all available online, compared to the offline shopping experience, which will still be low on safety. “Sentiments in Tier 2 and Tier 3 geographies are much stronger than in the metros, and they are close to pre-Covid levels. Except for a few pockets, the smaller towns seem to have fewer Covid cases than the top cities, and therefore the bounce back to normalcy has happened faster,” said Shankar Prasad, Founder & CEO, Plum.

He further remarked, “Overall we are seeing a loosening of purse strings at both the advertiser-level and consumer-level. Most of the spends are directed at new launches and conversion-focused festive offers. Thanks to strong capital-raising activities, many digital brands have their wallets full and are going all out to recapture lost momentum. Hopefully the customer will respond with his/her wallet!”

According to Carat India’s Ahuja, “People belonging to tier-II and tier-III cities have contributed the most to the growth of the digital advertising market. The pandemic fostered the demand for e-commerce purchases in these cities. Consumers have preferred to purchase from online retailers offering delivery at flexible timings while being cautious about safety and health during the pandemic. The shift in habits and behaviour is evolving as the older consumers are preferring to use cashless digital payment methods instead of cash transactions. The pandemic fueled the adoption rate of digital in India, coupled with the high consumption of digital video and the growth of regional content. The businesses have been future-proofed by being adaptive to transformation, merging different types of business models and implementing them during the pandemic crisis.”

With the coinciding second leg of IPL & T20 along with the mega festive season, brands have got a troika of opportunities on their table and have already started to leverage those. Though the much-trumpeted cricketing extravaganza which began last month in the UAE, has witnessed an abrupt fall in ratings, it has just been stressed for a while as IPL continues to have a core audience and casual viewers. “Festive season and IPL will add to the rise and rise of E-commerce, which is likely to grow by 23% as compared to the previous year and food delivery commerce in India, which is already seeing a 5X positive sentiment compared to last year. Apart from that, ease in travel restriction will fuel travel and hospitality. Along with big ticket items like auto, gold -26% Indians are planning to invest in gold and indoor essentials like electronics and home décor,” said Tonic Worldwide’s Malthankar.

Logicserve’s Shejale noted, “With the pandemic, brands across categories are now active on digital. Hence, I am sure all the categories will continue to be active and more robust with their digital approach. With every category, either the leader or the followers are chasing visibility and growth now. Everyone wants to be seen, heard and wants to participate in their own way. Additionally, with the overlap of IPL and T20, people are sure to be making the most out of the upcoming times and looking at having a good time and enhancing their experiences with brands. And the brands will definitely explore new ways to stand up to the expectations of these consumers.”

Speaking on the expectations for digital medium this year compared to 2020 and pre-Covid levels, Plum’s Prasad said, “Do not have a number for the overall market size, but expect digital spends to be 30-35% of overall spend for the broader market, and in the case of new generation brands it will be 60-100%.”

Bewakoof’s Singh noted, “The festive season is bound to get e-commerce players to put in more ad spends. The festive season is expected to bring a faster recovery in already improving sales numbers. Customers are showing buying intent. Many e-commerce players including us have already reached pre covid levels and we expect the festive season to be a competitive one and we plan to scale digital spends according to our target of 120 crore brand sales for the OND quarter.”

“Three key areas that brands focus on with digital campaigns are reach, engagement and performance. We feel a right mix of all three is crucial for a good digital marketing strategy. In our case, reach, engagement and performance share a 20:15:65 split in our digital spends,” he added.