By Tap­ping Our Thumbs

Dig­i­tal brands are the fu­ture for In­dian con­sumers. Thus, the need for com­pa­nies to be Dig­i­tal First

The Economic Times - - The Edit Page - Ananth Narayanan

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.

Tai­lor-Made Data

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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