By Tapping Our Thumbs
Digital brands are the future for Indian consumers. Thus, the need for companies to be Digital First
We are going through some interesting times in India. Our GDP is expected to grow at 7.5% in 2017-18, which is remarkable considering the global GDP growth is at 3.5%.
The Indian middle class with a higher disposable income is expected to double by 2025 to $550 million with rising Internet penetration. There are over 450 million Internet users in the country today — only 28% Internet penetration. 80% of this Internet consumption is through mobile phones that has led to a digital revolution in the country. This revolution has touched all aspects of the life of Indians: across healthcare, fashion, banking, eating out, booking movie tickets and finding a life partner.
In developed markets, leading global brands have realised the impact that digital has on a brand. They adopted ‘Digital First’ strategies to help them grow. Companies such as spectacles-seller Warby Parker and fashion and beauty retailer ASOS started online first, built a robust brand, and then expanded to physical stores.
In Asia, after the success of the Chinese ecommerce sector, the next big market is India. One of the biggest industries to be impacted by this revolution here is retail. Digital has enabled people to shop by just tapping on their phones, without having to visit a physical store. Indians from far-flung corners of the country now have access to the best of brands, which are delivered right to their doorstep.
It has made companies realise that they need to reimagine the way they do business and engage customers. They need to go beyond traditional retail formats and television advertising to reach digitally savvy customers.
The Shop That Never Closes
With people, especially the ‘millennials’ and the latest ‘Generation Z’, consuming more than half the information around them digitally, the time is ripe for brands to leverage this opportunity and create consumer journeys online. This is particularly relevant for these consumers who share their consumption stories online.
Building brands in India used to be very difficult due to the fragmented nature of the market and lack of consumer data. In recent times, we have seen this change. Roadster, an outdoor lifestyle brand, is completely online, and is now among the fastest-growing apparel brands in India. This was made possible by using the consumer data to create products to cater to consumer needs, and leveraging manufacturing capacity to ‘Make in India’ quickly, with high quality.
The cost of communicating with customers, or selling a brand proposition through digital channels, is also dramatically lower in compari- son to mainstream media such as television and print advertising. Brands that create strong digital experiences continue to attract new customers and gain their loyalty, as evident by the number of digital touchpoints that continue to increase by 20% annually. More offline customers are shifting to online, and younger, more digital-oriented shoppers are joining the ranks of these consumers each year, as a McKinsey study confirms.
The key now is to sustainably build a strong brand on social platforms with consistent communication. Digital First brands are going to be the future of brand-building in India. These brands are quick to scale. The success is visible. The aforementioned Roadster is already a .₹ 650 crore brand with 2.5 million customers within five years and counting.
Such brands have been built suc- cessfully through effective storytelling that connects consistently with the brand’s principles. This is enabling them to register over 80% growth each year, which is far ahead of established conventional, older brands.
The key ingredients to building Digital First brands are:
Engaging Content: With approximately 400 hours of videos uploaded on YouTube every minute, 100 million hours of videos watched on Facebook every day and three million photos shared on Instagram every hour globally, it is very important for a brand to create a compelling story and a seamless digital experience to break the clutter. The content should be engaging, bite-sized and interactive to allow consumers to communicate with the brand and provide suggestions and feedback for improvement.
Consumer Insights: Online brands must leverage data science to understand their consumers ‘deeply’: their preferences, spending and shopping patterns, geography, etc. This will enable the brands to tailor their products in line with customer needs and help build the brand faster.
Leveraging Technology: Technology can truly disrupt the way fashion is accessed and consumed. For instance, an entire product life-cycle — right from predicting demand and trends, design, managing production, replenishment, and determining the most optimal pricings — can be done through artificial intelligence (AI). This helps reduce time to manufacture, and cuts down wastage in the system.
Successful, global and Digital First brands will be built in India over the next decade, with these elements.
The writer is CEO, Myntra-Jabong
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