MODERATOR: SANTOSH DESAI, MD, FUTURE BRANDS
How do you describe the journey of the past four months through the eyes of the consumer. Any thoughts on how consumer mindset will evolve?
SANJIV MEHTA, CHAIRMAN & MD, HINDUSTAN UNILEVER
Our lives are disrupted, interrupted and people are still coming to grips with it. No one thought that this is the way the world will turn out to be even as early as March. These are some clear discernible trends. First is the fear factor. People are worried about their lives, jobs, eroding wealth and health. Covid cocooning or home cocooning is second. Obsession with cleanliness is third. We used to invest crores of rupees in this market every year teaching people to inculcate right hygiene habits. The world has now conspired and people are washing hands, cleaning surfaces, veggies and fruits as an obsession now. Fourth is contactless culture. As Asians, we like hugging but today we maintain a distance of six feet. About 75% of Indians are value-seeking and opting for lower unit packs now. The last trend is protection. People are protecting their families in a holistic manner.
CK VENKATARAMAN, MD, TITAN
We are clearly seeing an improvement in small towns and medium-sized cities due to the (low) level of Covid and the mental make up of the people. People in cities appear to be more anxious. Sharing of messages on the pandemic has increased fear and anxiety keeping people at home. In India, jewellery is a very good investment because of the rising price of gold. Whenever the economy is in crisis, gold jewellery tends to benefit. I am sure that is helping us. We are thus seeing a better and a logical recovery in jewellery than watches.”
SANJAY GUPTA, COUNTRY HEAD & VP, GOOGLE INDIA
I have seen a massive adoption of digital and technology in the country. In the last four months, we have squeezed in four years of change already. As per Nielsen data, people are spending close to 4 hours a day on their smartphones compared with less than 2 hours a few years ago. Even small businesses have adopted the change dramatically where smaller stores have used WhatsApp and Google Maps to engage with customers and APIs to connect with companies like Swiggy for delivery. Fear factor among consumers is strong but it also resulted in action. While on one hand people have fear of coronavirus thereby increasing the number of (internet search) queries on its impact, equally, the searches for life insurance and new languages to learn have increased dramatically on the engine. Fundamentally, there are two massive forces working – fearfulness and openness to change and experimentation.
MARTIN SCHWENK, MD & CEO, MERCEDES BENZ INDIA
If you look at the situation right now, the world is very different from what it was in March. The impact in India is very heavy; there were a couple of months where we basically couldn’t sell any cars. We have to understand that the customers’ first and foremost concern is regarding safety and security. A lot of our customers are business people, who are worried about their families as well as their employees and the viability of their businesses. And I think that has caused a lot of hesitation and it will take some time to really go back from this scenario to something which was there before. Our customers will come back but I can also understand their concern about getting their private lives organised and their businesses set up to withstand the current storm.
LEADERS IN LOCKDOWN
Both Sanjiv Mehta and Sanjay Gupta said they stayed strictly at home since lockdown was announced. They share their quick personal learnings from this new lifestyle.
Gupta noted how the lockdown has challenged his assumptions and limited mindset of doing business.
“I joined Google in January, just before the pandemic hit us. Growing up in the last few decades and having worked for various companies, the assumptions of what is work and home are blown to pieces. I used to believe travelling is critical to get work done and would take a flight a week over the last decade. I haven’t stepped out of my main door for the last four months. But the reality is that work is running well. We are still signing big deals.”
For Mehta, staying at home since March 17 and still running the business is a different feeling. “Something as mundane as driving down to work seems like a strange phenomenon now,” he said.
SANTOSH DESAI: The pandemic has been a transformative event that caused significant mindset changes such as frugal living to the utilitarian form of consumption. What is the arc of change going forward?
Adoption of technology is here to stay because it is convenient. From a lens of brands, purposeful ones will stand out as they go beyond the functional benefit and will get embedded in the memories of consumers much more than otherwise. Focus towards hygiene, immunity, fitness and wellness will remain. While the obsessiveness of using sanitisers will go, washing hands multiple times a day with the humble soap and water is bound to stay.
People will revert back to many things. When China opened, there were queues outside restaurants. People are indeed going to step out. However, till the vaccine is developed the fear of the virus will remain. Most importantly, what will happen in a few quarters from now would also depend on the trajectory of the virus.
I think some things will accelerate, like the adoption of digital — online sales, services, ecommerce — everything. We had a very good position as a society, I would say when this crisis hit because there was a lot of groundwork for this already laid and it will accelerate now.
When we look at things that will stay back on this side, I am convinced that people will come back to luxury. Indians are very valuebased.
They appreciate their brands. There is a lot of love for Mercedes. I have seen already that this will not be lost, people will just find different ways to access it. In the past, sales were only handled through brick-and-mortar stores but in the last two months, a lot of it got more digital. With luxury, it’s hard to say that you need it, but the want will not go away. And the want – to visit a restaurant, to travel, to own a luxury car – I don’t see this will go away.
While we are hearing a lot of conversation about simplifying life, I somehow feel that it has a lot to do with the strange circumstances that each of us are living under at the moment. In a year from now when we feel safe to step out, functional living may not be such a long-standing thing.
SANTOSH DESAI: With digitisation and technology emerging as an integral part of lives and several new users added to the digital population during the pandemic, the panel took a moonshot and voiced the deeper implications and long-term ramifications of the increasing embrace of the digital.
There has been leapfrogging of several concepts in digital retail. Things which were green shoots a while back have started to appear mainstream because of the exponential adoption of digital. Demonstrating an expensive necklace through a video to our customer who in turn takes a chance placing the order online and having a Rs 15-20 lakh worth piece home delivered without having touched it and discovering that it is perfect has debunked myths and broken mindset barriers. Whether it is Try-At-Home or video demonstration, collect from store or endless aisle – multiple aspects of omnichannel have leapfrogged. It is a good place to be in because this would not have happened in normal times. While we are gunning for Q4 of FY21 to return to normalcy, adoption of digital has been an exciting positive intervention.
Though the short-term challenges are very high, two factors which are working for India is that we are a low internet penetration country at about 33. Rapid digitisation will accelerate the numbers. After the initial hiccup over the next 6-9 months, consumers will adopt digital and technology resulting in a massive shift. So, we are optimistic about India as an opportunity. Interestingly, people are adopting digital in a way we didn’t expect them to leverage. During the pandemic, people are using mobile phones to make payments through UPI which is supposed to be much down-the-ladder activity. We had 1.34 billion transactions in the month of June, 80-90% higher than the same period last year. This is the shift in the last 3-4 months.
There are new users and people are getting access to quality. Apollo 24/7 started teleconsultation which gave Indians from different towns and cities access to the best doctors across the country. I never thought people will order cars online. Hyundai in June got 20,000 enquiries from mobile phones and sold 2000 cars online. This is happening in a bigger way in Tier 2 and 3 cities. The new users are embracing technology with less fear and more openness.
We have for certain seen more and more activity in the online space. All manufacturers are trying to be where the customers are. The customers cannot be in the showrooms at the moment, but they are in front of their screens, so we have all put a lot of effort in reaching there. I can say that it has paid back to some extent because the customer confidence has been achieved and we see some growing back of the business. We have seen customers who would do online booking of top-luxury models which we thought at the beginning would be impossible to sell online.
SANTOSH DESAI: With work-life balance transitioning into work-life symphony where both are intertwined in a way that at times it is difficult to extricate one from the other, the esteemed panel comprising leaders of large institutions with a diverse set of people, listed traits that organizations need to demonstrate going forward and strategies to plan the future to keep businesses on track in such a crisis which caught all unaware.
The need for speed and agility followed by resilience are foremost traits. Work from Home will be a hybrid model. There could be many jobs which can be done best from home. But human beings are social animals and not everyone has a big house or a study from where they can work. People do need to step out and go to the office just for the ambience it creates. What really stands out during such a crisis is the leadership that is displayed. Leaders need to have brutal optimism. They need to be brutal about being frank of the challenges ahead and optimistic with credible hope and a strategy to be able to get out of it. Leaders need to be calm and be willing to delegate.
To get an idea about what the future might look like, we can look at how other countries are developing. We can look at what is the forecast on GDP and the economy. Then we look at what we can do here domestically in order to chart a path which can bring us back on track. Our products carry a lot of the brand and a lot of the emotions. So, for us it became clear very early that we should further separate our products and essentially remain on track with our product planning with the assumption that the mid- and long-term development of India will be very strong.
And then what we can do is try and understand what the customer wants. The customer wants a safe environment for the sales experience, for customer service and after-sales. And then we think of the worries that the customers have. And there you have financial questions. We try to pan out a full set of financial suites, which we call ‘Wishbox’, in order to help take out some of the churn.
The respect for each other’s time in organisations has substantially increased. The manner in which we are organizing ourselves around work and taking decisions has substantially improved. You start and end web meetings on time. You don’t interrupt or interject as you stay mute during them. You are starting to learn to listen more and take decisions for which you attended the meeting.
The world is facing the same challenge, at the same time, and at the same scale. This is happening for the first time from both the business and people’s points of view. But there is so much to learn if organizations are agile and open to changes around. We took a lot of things for granted and made assumptions. Our society was built on the idea if you are okay then life is good. This pandemic has shown you cannot live in isolation. Everybody has to be good for the whole world to be good. Equality is the big theme pushing the world to be together. The issue of Black Lives Matter pushed the question that every life matters around the world.
SANTOSH DESAI: What are the biggest learnings of the last four months as leaders of large companies?
Marketers often forget that consumers are people first. One of the underlying desires today is to feel joy. Companies that provide that joy and help liberate home bound people from their state of mind they have reached, will do better. It is a reinforcement of deep understanding of consumers as people before one starts segmenting them. Feelings and innermost fears of consumers must be valued over their purchase behaviour.
One thing during this pandemic that has strengthened my belief is possibilities and optimism for the future. As a company, we want to explore how to deploy technology for social good. Our fundamental focus is on agriculture in India and how we can apply AI in this sector that contributes 15% of India’s GDP. The poorest have been hit the hardest.
So, our focus is on how do we do something meaningful that has a lasting impact on society in the time to come.It is right to say that this pandemic is not a black swan event. It is more like a stampede of black elephants. The UN environment chief, Inger Anderson, had clearly articulated that there was never more opportunity for pathogens to travel from animals to humans than it is today. Whether it was misplaced optimism or denial but we never wanted to take it seriously. If we keep giving lip service to climate, it could turn out to be much worse than this pandemic where cities would be washed away. These are the lessons we as a society need to imbibe. I am a firm believer of capitalism but I also firmly believe that the inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries. The poor are facing the brunt of the pandemic.