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THE IMPACT OF COVID-19 ON ECOMMERCE

COVID-19 shifted the whole ecosystem of markets and has made an impact that can be deemed long-lasting. Consumer behaviour has seen a change, purchase decisions have seen a shift and the usual flow of businesses is left disrupted. But along with the many disruptions, this pandemic has brought about changes and enhanced technological growth. The eCommerce and marketplace sector have specifically witnessed this growth.

The pandemic has accelerated India’s e-commerce market almost threefold and sped up growth that is pegged to be around $85 billion by 2024, even with other sectors being negatively impacted. 

India has seen a rise in the number of FTUs or first-time-eCommerce-users in India, who had previously been inhibited to shop online. Some eCommerce platforms like Amazon, Flipkart and Snapdeal have even returned to the level of pre-COVID time. Other eCommerce players like Grofers, BigBasket, Lenskart, etc have also seen a rapid increase in various services. Many new players are entering into this marketplace noting the opportunities available. eCommerce companies can further expect: 

  1. An influx of online shopping: 

As stated with a record number of FTUs in India and brick-and-mortar and kirana stores closed and with lower footfall than usual, there is an increase in sales on eCommerce platforms.  There has been a switch from malls and supermarkets to eCommerce for everyday commodities. Companies can use this to their advantage and provide good deals. Companies like BigBasket had seen such an influx and demand of goods that they had to restrict access to their website to existing customers only, while Grofers – a rival, had faced a similar situation.

A conversation with TN Hari, Head of HR from Big Basket in April 2020 helped gain insight into changing consumer behaviour and adaptations to the new normal. As rightly predicted, the shift from offline to online in all sectors has been perceived as the need for the hour.

  1. More efficient and convenient models:

Online shopping offers the convenience of not having to go out to shop and waste time waiting in lines and scrolling through items, all it takes is just a click on a button to purchase a product that will be delivered right at your doorstep. However, eCommerce platforms should ensure efficiency in logistics and supply chain flow. Myntra’s End of Reason Sale had integrated and collaborated 400 offline stores of more than 60 brands. The items that were purchased shipped directly from the brands’ stores to the consumer’s doorsteps. Allowing for a more seamless supply chain and providing convenience to the consumers. There is also a significant rise in the number of convenient shopping models like BNPL gaining prominence among the Indian consumers.

  1. Increase in essential and corona virus-related products:

Shopping habits and consumer behaviour has seen change during the pandemic. Ecommerce companies are being required to sell essential items as a way to have an edge and meet consumer demands. Products like soaps, sanitizers and health care items have a market of its own now. ePharmacy has seen an increase in India, with numerous investors looking on ways to invest in ePharm companies. Amazon has also noticed the shift in consumer behaviour and adapting to the pandemic is said to have prioritised delivery of essential items garnering appreciation and an increase in its sales from customers. 

  1. Digital transformation: 

Kirana stores have been the crux of Indian System. But, now with the virus outbreak, people are looking out for alternatives. This has offered digitalisation and upskilling of Kirana stores to adapt to changes. Companies like Flipkart in an attempt to streamline this unorganised sector have tied up with these stores for provisions and delivery while still supporting their development. 

This pandemic has gauged a segment of shoppers that previously have not purchased online to now rely on it. Consumer buying habits are constantly changing and companies need to follow efficient ways to get FTUs hooked on while still retaining existing customers. 

With the rising adoption of Omnichannel solutions across sectors and focus on digital transformation eCommerce companies have seen and will continue to see tremendous opportunity and growth amidst COVID.

Key Factors to Help Brands Decide the Right Discount for Products during a Sale Period

Starting a business and taking it forward requires a good amount of planning and implementation of novel ideas. Through various advertisements and other promotion techniques, the glory of your brand can be propagated by the word of mouth. Among the many strategies they take up, the most attractive one for the customers is the discount offers for their favorite products.

Nobody likes the idea of losing money even if it’s for the purchase of their favorite products. People always look out for discounts because it provides a feeling of not losing so much money even though it may be only partly true in reality. Since its crucial point in marketing and sales, the company should give proper care while deciding the discount rates for different products.

Providing discounts for materials is a great way of luring customers into your shops and gaining desired profits. But any action done without proper research and calculations can be of fatal impact to you and your brand’s financial structure. Any mistake could result in the deterioration of your name and product.

Therefore it advisable to look out for the necessary details before granting discounts to customers. First of all, align all actions to a fixed list of objectives. The right amount of background work on tentative discount rates and corresponding profit reports can help you taste success. Following are a few steps you should focus on:

The category and quality of your brand 

It is crucial to identify the category of your brand before placing it under any discount rate. For instance, if a particular product of yours falls under the category of fast-moving consumer goods (FMCG), it is not desirable to fix a high discount rate. It also directly depends on the quality of your product and brand name. If it is not premium, then the rate of discount should solely be focused on the available stock and target income. ‘Buy one get one free’ offers are the best ones to implement in such situations. 

The season of the market 

The requirements by customers vary a lot with corresponding to the seasons or festive occasions. The retailers have to keep these in mind while deciding on the discount price. This has to go in tally with the availability of products. In case you need to empty the old stock of products, then devise a plan including mass discount rates. The sales should be controlled according to the intake and response from buyers. 

The aging of your product 

Since the sales market is a very unpredictable place of action, the businessmen should be alert and vigilant. You have got the responsibility to sell off as many products as possible and also devise a plan for dealing with those which couldn’t get sold. While providing alluring discount rates, no compromise should be made on the quality of the product. This shouldn’t be leading to the dissatisfaction of customers. There should be a proper balance between the two.

In desperate cases where the product is aged a lot, some compromises need to be made while fixing its discount price. The resulting tension can be solved by clubbing them with other products and providing combo offers. If you are planning to get rid of your liquidation stock, the end of season sale (EOSS) is the best way to go about it. Flash sales during festive seasons can also help in increasing customer response.

Keeping up with the annual target 

Before starting on a business venture, the primary work should be done on the paper regarding the flow of income. A record of the total earning, income, and expenditure should be kept up to date. The profit and loss (P&L) statements should be monitored every month. Based on the balance sheet, the discount offers should be implemented to cancel off payment loss. If in any case the revenue target of the previous month is not met then it should be added and compensated in the next month’s sales. The discount rates in flash sales should be fixed accordingly.

Eying on the competition 

Before fixing the price of a particular product of your brand, you should be aware of other rival brands offering competition in the same area. The difference in prices of the two brands can make a huge difference collectively. By understanding and analyzing the trends in the market, you’ll get a clear picture of how to implement the plan. Even the slightest 1% increase in your discount price can result in a massive profit gain for your brand.

By keeping all these points in mind and acting accordingly, you could surely devise a plan and fix the discount rates for the products in a way that ensures final profit.

THE BUY-NOW-PAY-LATER MODEL IS HERE TO STAY, AT LEAST THESE ECOMMERCE GIANTS THINK SO

The pandemic has seen major shifts in the market and one among the many are payment methods. In the pre-COVID period, consumers opted to pay for over 60% eCommerce transactions in cash (Cash on Delivery), but after the pandemic, it is safe to quote that the vast majority is opting for digital transactions. This digitalisation has led to new developments in the eCommerce marketplace. With various companies trying to woo consumers, a number of options are being offered to enhance the buying experience of consumers and make it more convenient.

One such option that is taking this industry by storm is the Buy-now-pay-later payment method. This feature allows the consumer to purchase the service or product at that instant and as the name suggests pay for it later or in installments. Further delving into the topic, a few companies take an interest in the cost of the product while others take the principle as credit. The credit from Buy-now-pay-later service is essentially the same as a credit in a credit card, but with a digitalised disguise.

Various Indian companies have jumped on the BNPL wagon, with an attempt to have an edge over their competitors.

FLIPKART

Flipkart, an eCommerce heavyweight has also featured the buy-now-pay-later scheme. Although, the working of this service is still in the beta stage, and is only available to certain android users. The working of it allows customers to purchase products up to a predefined credit limit without having to pay immediately. However, the outstanding amount needs to be paid by the 10th of the next month.

“Everybody loves shopping, and everybody loves shopping on Flipkart. But, scrambling for cash for COD purchase or getting out your debit or credit cards for online payments and typing in OTPs every time you make a purchase can be a hassle. If only there was a simpler way to make all this easier. Well, now, there is.”

Flipkart

Features:

  • Instant credit up to ₹5,000
  • 30-second application process
  • One-click checkout
  • Zero cost up to 35 days
  • Single bill for all purchases

With the festive season fast approaching, the BNPL option may just be the feature that lets people let loose and shop to their heart’s content.

AMAZON

eCommerce giant, Amazon, has also launched a pay later feature to its Indian customers. Under these payment options, customers can avail credit with zero interest rates on any listed products. The customers are provided with an option to repay the amount in monthly installments up to 12 months. However, there are various requirements in order for a person to avail of Amazon’s pay later option including being 23 years old and above, providing valid identification along with their PAN card, bank account number, etc.

Key Benefits:

  • Get an instant decision on your credit limit by the lender.
  • Credit card details not required.
  • No processing or cancellation fee.
  • No pre-closure charges.
  • Seamless checkout on Amazon.in using Amazon Pay Later payment option.
  • Simplified tracking of expenses and repayments on the EMI specific dashboard

The Pay Later feature is also a mobile-only experience that enables a smooth buying experience on the app.

PAYU

LazyUPI, a product offered by PayU Finance, is also following the Buy-now-pay-later model but has integrated it with a UPI. This unique digital service works on the same lines and offers credit across online and offline platforms. It allows customers to make part-repayments and has a minimum amount due along with conventional interest rates. These services have provided opportunities for start-ups to model around the buy-now-pay-later option and have given a fresh sense of innovation to mobile wallet services and eCommerce platforms. Various eCommerce platforms including  Big Basket, Myntra, MakeMyTrip, etc, have integrated this service into their sites.

Key Benefits:

  • One tap payment
  • Settle payments every 15 days
  • Repay with EMI
  • Integrated across 250+ sites

The buy-now-pay-later concept in layman terms is similar to that of a credit card. However credit cards too are evolving into the BNPL model, as it fits better with millennial consumers that are looking for convenience and affordability. Credit cards offer high rates of interest and low transparency, but with few eCommerce platforms offering a zero-interest-rate and a long payback period, one can certainly understand the rave behind this service. 

While BNPL offers convenience consumers should look out and align themselves with certain habits to ensure maximum efficiency:

  • Note the limit and have only one BNPL account at a time
  • Budgeting needs to be made important to avail the BNPL option
  • Be committed to repaying the companies to avoid interests

The Buy-now-pay-later model is not a new concept and can be compared with the Indian Khata system, where customers were allowed to pay the entire bill at one-go which was typically towards the end of the month. This age-old concept was given a digital spin and the buy-now-pay-later model was created. With the disruptions and numerous opportunities that lie ahead, brands need to keep an eye out for this service and invest to integrate it with their current functioning.

BRAND ROUND UP: COMMUNICATION POST-COVID

Communication has always been an integral part of a brand. It echoes the clear, authentic and consistent tone of your brand to the consumers. It most often offers insights, the brands goals and values and creates an intimate relationship between the brand and its consumers. With consumers returning back to the new normal, markets being slowed down and few even being shut down, it becomes important to communicate in the most apt way possible to your consumers. 

A few brands have successfully found their way to function in this ‘new normal.’ 

Tata:

Marketing Post-COVID, requires creativity and out of the box thinking. As seen in Tata Sampann campaign ‘Har Din Haldi, HarGhar Healthy,’ with an aim to promote Tata Sampann’s turmeric powder while still being in sync with the thoughts. Talking about the benefits of various Indian spices, including Turmeric that helps in boosting one’s immunity it launched the campaign. Additional collaboration with Pride of Cows mill in Mumbai, it stressed the importance of Haldi Doodh for immunity.  

KFC:

Aligning themselves with the new communication normal, KFC along with DDB launched the ‘KFC You Soon’ playlist. This was a creative campaign that serenaded its customers through a playlist. This film highlighted barcode scanners, dispensers, chairs, etc exclaiming how they’ve missed their consumers, the campaign further delves into the new norms it would follow including social distancing. 

Bacardi: 

Having a consistent tone is always important in brand communication. Bacardi has seemed to have found that with its latest campaign ‘Roomates’.  The film stays true to Bacardi’s light brand tone and features the story of three real roommates and how they make the most of their quarantine. Relatability is the emphasis of this campaign with the roommates doing at-home activities, the film further encourages people to do what makes them move even when the world takes a pause. 

Big Bazaar: 

Resonating with consumers, and creating a valuable message is what Big Bazaar does in it’s recent Ramadan Campaign. The Campaign titled as ‘Ibaadat Bhi, Hifaazat Bhi’ (prayers with safety), was created, shot and conceptualised during the lockdown. Echoing with the views of the consumers, Big bazaar further emphasised with its made at home campaign the importance to sanitize and maintain social distancing while still offering its festive greetings.

This pandemic has highlighted that consumer minds are ever-changing and brands need to adapt and adjust accordingly, thus, in order to strive in the Post-COVID era, brands need to invest and emphasize efforts on few things, they are:

  1. Social Media: Online activity has seen an increase and is being seen as a primary source of communication, marketers should note its advantage and create content accordingly.
  2. Remote customer service: Adjusting communication channels solely based on emails and apps will be important. Brands need to integrate their service team with online means to provide their consumers with seamless support.
  3. Educate your audience:  educating the public about sensitive information, will help build and retain trust with the consumers. 
  4. Communication needs to be empathetic- Being empathetic to consumers needs and fears will go a long way, messages and campaigns need to resonate with the thinking of the consumers to be successful post-COVID. 

Post-COVID, brands more importantly than ever need to adapt and adopt new communication strategies that will render success. Brands need to stay connected to both consumers and employees and be vocal, consistent, and add value with each campaign that it communicates. 

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