E-commerce is going to boom in the coming time

Prof. Ashita Aggarwal, Professor of Marketing, S.P. Jain Institute of Management & Research, explains e-commerce in India has grown more during lockdown as against a year before that. Companies like Amazon, Reliance, etc., are trying to cash this opportunity through strategic sales, buyouts, and collaborations. She adds that brands can leverage AI & ML to maximize their profits and how customer reviews will be a significant driving force for shopping behavior.

Prof. Ashita Aggarwal, Professor of Marketing, S.P. Jain Institute of Management & Research

IBT: What are digital natives and digital immigrants, in your opinion? What were the factors that led to their growth over the years? How has COVID-19 impacted social media consumption among these groups?

Prof. Ashita Aggarwal: Digital natives are born in an era of digital technology, including Gen Z, born after the 2000’s, and many of the millennials who were born in the late 1990s. Technology is an integral part of their lives. Whereas, digital immigrants are people like me, who were born before 95-96 and are used to the manual way of doing things. They are not born in times of technology but adapted to it over time. This graduation was either a professional requirement or a way to survive in changing times as the entire context and the environment evolved.

The world is becoming boundary-less, and businesses have gone digital. Even traditional agriculture and manufacturing is becoming digitized. COVID-19 has accelerated the trend of digital adoption significantly as people had to use digital technology to connect and survive. Now there are more immigrants than the natives. Everything is moving online from education to connecting with our family and friends, shopping, and work.

People also were home and yearned to be in a social context. They were spending more time on social media platforms. As they were mostly indoors, there was a lack of fresh content for their social media handles, and hence they started recycling content like ‘missing my memories from last year vacations or a get-together’; ‘throw-back pictures, etc.” The other option was to exaggerate small routine things and activities at home like ‘baking a cake for all’; ‘playing with pets’ etc. I believe that the immigrants who were there before more as social listeners now could contribute more than before. The natives who were already contributing, it’s just that now they had to find the mundane or the recycled stuff to contribute.

IBT: While there existed a significant number of digital natives before the pandemic, the number of digital immigrants has burgeoned of late. What impact will this (rising popularity of social media and digitization) have on consumer behavior?

Prof. Ashita Aggarwal: Consumer behavior, whether for the natives or the immigrants, has changed. We have been living in this pandemic world, with partial or full lockdown for several months. It has been long enough to alter some habits and behaviors. Many people say that once things are back to normal, and we have the vaccine, people will move on, and everything will go back to point zero. I think that people will go back to their pre-pandemic habits, and things will resort to what they were, but it will not be a complete reversal to point zero because there are ingrained habit changes that will come about, for sure.

People, whether natives or immigrants have tasted the convenience of the digital world. Cases in point are online shopping or comfort with digital payments and mobile banking. Push marketing by e-commerce platforms, including massive discounts, exchanges, returns, cash on delivery, etc., will further shift the preference towards online platforms. E-commerce in India has grown more during these lockdown times as against a year before that. We can see how companies like Amazon, Reliance, etc., are trying to cash this opportunity through strategic sales, buyouts, and collaborations.

Indians were a ‘more’ touch-and-feel customers. Though digital natives were slightly more comfortable with online shopping and digital payments than immigrants, the times of COVID-19 has changed that. People had to shift online for essentials, but even the non-essentials sales increased due to fear of going out and shopping in retail markets. For example- Jewellery is a high-risk category product to buy online because people only buy jewelry after they see and touch it and from their family or known retailers. But, Tanishq, a jewelry brand, has seen a considerable increase in online sales during the pandemic time. So, we can safely assume that the perceived risk has decreased if people make jewelry purchases online.

The convenience of shopping is another phenomenon. Not just online/e-commerce purchases, but Dunzo, Swiggy, etc., started delivering necessities at home from our nearby retail outlets.

The other impact of this is customization. As people were leaving a digital trail and mark, suddenly, companies had end-to-end transaction data. Previously, people may explore online but shop offline, and hence data on every customer was incomplete. This vast data has changed data analytics and its usage in business. Businesses can know what you want to buy and what you will like and where you will buy!

Social media platforms like Facebook & Instagram, OTTs like Netflix and Hot Star have emerged as platforms for advertisers to show their ads and for brands to invest for search. Entertainment preferences have changed. I am not sure how people will feel going to cinema halls now when they can’t choose the movie/ show they want to watch, the time they want to watch, pause if they need a break or change if they are bored!

It’s not just customers but also the businesses that have changed. They have realized how they can do their business differently, how they can cut costs, how it’s not essential to travel for everything and things can be seamlessly managed even remotely.

But there is a consequence of all this. People are also fatigued by the digital world, and I think many are feeling like that. So, it’s also possible that we may see a significant decline in people active on Facebook or Instagram, or other digital platforms. They will yearn for physical meetings, contacts, and gatherings. They will want to travel rather than enjoy virtual tours. Hence brands like zoom may have seen explosive growth, but post-pandemic, there could be a significant drop before things begin to stabilize and get to equilibrium.

IBT: How can brands leverage technologies like AI & ML to gain insights into consumer behaviour?

Prof. Ashita Aggarwal: For AI and ML to be successful, there are two fundamental requirements. One is that you need more data points; that is, you need more human data to make more realistic predictions. And the other requirement is that you need more data on various issues. It’s not just the volume but also the kind of data you have. So let’s assume that there are 15 steps in the customer journey from the point of exploration to purchase. I would need data on all the 15 steps to make more accurate and realistic predictions. Otherwise, the machine or the computer will find it challenging to connect the dots. So, the predictability and validity of my data will go up when these two conditions are met.

With the rise in virtual transactions, there is more data and more foolproof information of the entire customer journey. All the companies, especially e-commerce like Amazon or the companies that have gone online to sell their products, have better predictive analytics with more information. They will give more customized choices and options so that fulfillment becomes easier and more seamless.

This is possible because they know the pattern of consumer purchase. They can now bundle the offers to persuade consumers using this data. It is a win-win situation for both as it increases the overall value and brings down the cost of delivery. However, I have a word of caution here because what we tend to think is that what works today (abnormal situations) can be a hundred percent replicated to the usual times. It doesn’t happen that way. Machines may not be able to make this distinction, but we humans have to.

The other thing is that the power of customer reviews will become more critical because the customer wants to reduce the risk of buying the wrong product, and I think companies will spend a lot of money on urging and persuading their customers to write a review identifying the online influencers. Many mobile applications are rewarding their fulfillment people, delivery people, and the stores based on reviews that come by. So, the entire value chain is now driven towards getting more and more digital influencers.

AI & ML will help the brand track consumers’ locations and help map the people’s behavior in an area. This information can be sent to the physical stores so that tomorrow when customers go to a physical store, the merchandise could be more customized to meet their needs. Companies start saving a lot of money because they know exactly what people are looking out for and what they will buy. This will bring efficiencies in merchandise planning, sales force deployment, and loyalty program designs.

Lastly is the use of ‘chatbots’. If you see any website today, the first interface we consumers have is with a chatbot- robots helping you solve your query or assist you in the purchase. Machines are replacing humans here and hence bringing greater standardization. Data is able to tell us the typical complaints which a consumer may have and processes to solve those complaints. This will bring down the cost to the organization and the time taken to resolve customer issues, thus enhancing customer satisfaction and experience.

IBT: What different marketing strategies do brands need to evolve to reach out to digital natives and migrants? What new age innovations can brands resort to in order to enhance their customer engagement?

Prof. Ashita Aggarwal: People were already looking out for information online. But with growing social media platforms and greater engagement, these platforms are almost run and managed by the customers. Previously it was like ‘my store is mine, and the customer was a guest.’ That’s not the case today; the consumer is already online and on social media platforms. You as a brand are going there with your offer. So, the brands have now become the guest. This should make the brands more humble and realize that it’s essential to empower your customer today rather than inform them of your offering. A brand’s role has changed from being a host to that of a guest on the social media platform.

Also, how you measure the impact of your marketing efforts will change. Previously, when I was advertising on television, it was all about reach efficiency. How many people can I reach with my ad? But on social media, it is about ‘sharing and commenting.’ I do not measure the impact of my social media investments on merely the reach or the impressions but on the number of shares, retweets, likes, or comments. So, my content strategy will change from – “I can do this for you to say let’s do it together”. Your content will be more customized to what people like to hear and what people will share.

IBT: How can marketers adapt their teams, mind-sets, and processes to meet changing consumer preferences while defending their businesses from both traditional and new competitors?

Prof. Ashita Aggarwal: As we all are evolving towards a more digitized world, mindset change is critical. The teams need to be more empowered today so that they can make decisions in the field. As customers are more aware and connected, salespeople need to make decisions on the floor. They need to be adaptive, customer-oriented, and more aware of competitive offerings because now you don’t determine; the consumer determines.

Whatever may have happened, the core of the business has not changed, it is the execution which has changed. The competitive space has changed. In the past, a marketer would choose it’s competition and position the offering against them. But today customer is online and so are many small remote businesses which marketers are unaware of. So let’s say women apparel brand feels that ‘W’, ‘Global Desi’ and ‘Biba’ are my competitors. But the customer may be aware of a small boutique retailer in Ahmedabad who can give similar quality but customized to the customer’s taste. Brands have to be more open and have more agility and an open- mindset.

Companies can also cut their cost because they realize that you don’t need so many resources or people to do the business. Organizations will now be looking for people who bring in those skills which machines can’t do. And the most important is the ability to connect with humans. Adaptability and to be able to empathize with your customers is more important in today’s times than ever.

IBT: Given the consumer-choice overload, it’s increasingly difficult to win and hold their attention. In such a scenario, how can brands evolve creative content to maximize customer engagement and their ROI?

Prof. Ashita Aggarwal: Consumers have a small attention span because they are busy and because probably, they already know what they want. The human mind is hard-wired to simplify information and straight hunt for clues related to their need. The reason we’re saying that they have a short attention span is that they exactly know what they are looking out for. They are hard-pressed for time, and hence quick, short, to-the-point information becomes critical. So brands have to understand what the customer is looking out for and customize their content accordingly.

But brands today overload the customer with information, and hence the customer switches off. Brands have to start focusing on customization. They need to simplify information and focus on what’s really important so that customers can remember them. If you are able to follow this strategy in all your communication and brand building processes, I think, even if customers have a less attention span, they will still want to come to you and spend time with you.


Dr. Ashita Aggarwal is a professor of marketing, a branding enthusiast, consumer insight consultant, consultant and researcher of consumer-brand relationships and design thinking trainer. She has over 21 years of experience in corporate and academics.

Dr. Ashita has worked in the area of Business & Marketing Strategy, NPD and Branding and Communications strategy. She consults organizations (FMCG, Services, Retail, Durable etc.) on brand and consumer strategy and has carried out research assignments with organizations across various sectors on consumer insight and marketing strategy.

Dr. Ashita She was the head the marketing department at SPJIMR and spearheaded initiatives to make it one of the top three marketing departments among Indian business schools. Currently is the head of one-year full-time PGMPW program at SPJIMR- the only program in the world catering to returning women and is now been recognized worldwide. Dr. Ashita Aggarwal has taught courses in executive programs at business schools in USA and Germany. She is also Harvard Business Publishing (HBP) trainer of simulations as teaching pedagogy in India. She has published multiple case studies based on her consulting and research experience and some of them have won international awards and adjusted as bestsellers.

Dr. Ashita has conducted several training programs for corporate in the area of Branding, Consumer Insight Generation, Sales Promotion and Marketing strategy for businesses including consumer goods, durables, telecom, pharma and B2B. She has conducted training programs for IAS and IPS officers in the area of Interpersonal skills and Team Building.

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Anirudha
Anirudha
1 year ago

Nice insights Madam…
Going forward Digital platforms & connect are going to get more and more significant across industries . So a sort of blended approach ( not completely ignoring the Traditional approach) seems to be a good way forward

asrao
11 months ago

Very clear Prof Ashita. Customer acquisition cost is down but customer retention is tricky.

Gaurav Mishra
11 months ago

Very deep understanding of online consumer behavior and change of brand promotion. Liked the interview and always keen to see more knowledgeable articles from Dr. Ashita.

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