Due to a sluggish start to the fiscal year with steep corrections in the market, the pressure on this year’s festive season is huge. In this brand-exclusive series, we speak to brand custodians to understand their FestiveBrandBrief22 for the upcoming season, which, despite the slow start to the year, is likely to provide a much more high-spirited and profitable fiscal.
In this exclusive FestiveBrandBrief22 interaction, Bharati Balakrishnan, Country Head and Director – India, Shopify, speaks about the growth of ecommerce across brands and outlines Shopify’s brief for the 2022 festive season. She highlights how merchants are optimistic about growth and underlines the importance of a robust online presence and website.
Bharati Balakrishnan is a Consumer Internet and Retail leader with deep experience in building and scaling online and offline retail businesses. Her early experience includes strategy consulting and investing, followed by a decade’s deep operating experience in India’s start-up ecosystem.
She has built, managed, and turned around P&Ls of both brick-and-mortar retail chains and scaled e-commerce platforms. She has completed her graduation from the Indian Institute of Management – Ahmedabad.
Excerpts from the conversation.
What is your 100-word Brief for this festive season?
The festive season is right around the corner and despite the challenges caused by the pandemic, merchants are optimistic about growth.
It’s important to go back to the basics during peak sale season – we have seen good brands do this in three steps:
Step one is to make sure your tech is set up right and working, and your campaign managers are all set up and integrated right. Always good to zero base these, pre-season – it’s like spring cleaning before Diwali!
The second step is to plan with deep rigor your assortment, inventory availability and re-run forecasts, and sensitivity to pricing strategy. Equally plan deeply how your supply chain is going to work, including pre-sale and post-sale, from the warehouses to the homes of customers.
Once step one and two are done and ready, invest all your energy in… Marketing – pretest promotions collaborate with influencers, other brands, and other sources of traffic; focus on getting your brand messaging right for the season, across all social media. Build systems and processes to measure what you spend – it also helps you change strategy quickly if something does not work.
Would you recommend more and more brands should also have, in time for the upcoming Festive Season, their own E-commerce platform on the web or app, online, for direct selling to consumers? Why?
There was never a better time for a brand to own its own ecommerce platform, via its website and app. Through the pandemic, your own website has become important for three key reasons.
It is now the first place to discover your brand and your products. Marketing and branding budgets moved online meaningfully during the pandemic, and consumer behavior followed. Consumers will even more now, see a hoarding or a print ad and search for the brand website and browse thoroughly, before even making a decision to go into a store.
It is often the only channel that provides instant direct consumer feedback on new campaigns and product launches, and smart brands use this to iterate before they go to bigger channels
It is an important sales channel as you scale up the brand, and depending on the category and price point, your own website could drive 30-50% of overall revenues, especially in the early years.
Shopify has been in India for over eight years now, and we’ve been focused on the same mission — helping merchants start, grow, and manage their direct-to-consumer (D2C) stores to unlock the growth opportunity of global commerce.
In India, we are for the old and the new and the small and the big. We help both new merchants start their business on Shopify, and also partner with large-scale, high-volume retail businesses like GoColours and Duroflex that are radically transforming their respective industries to best serve their customers.
It was around the mid-2010s when the first wave of D2C brands emerged in India, resulting in the dominance of Indian cosmetics and skincare brands. Companies that all of us grew up with – Lakme, Colorbar, Coloressence, Himalayas – now stand alongside exciting new names like Wow Skincare, JuicyChemistry, Kulfi Beauty, and Sugar Cosmetics.
It’s been exciting to see how these brands have grown and evolved over the past three years, which gave the sector massive tailwinds to work in our favor. This brings us to what I call phase three – the present – when D2C brands are really blowing up, having raised $783.7 million in 2021, a jump of 251% over 2020.
As a result, categories that exist online, and definitely not give birth to brands online have now suddenly become stable bets. So things like fitness accessories, gardening equipment, kitchen accessories, fashion accessories, costume jewelry, these were really small categories or non-existent categories, even like three, four years back, and they’ve suddenly become large enough to have brands being born online first.
The second thing that is really close to my heart is how a lot of the traditional brands, which did not take ecommerce seriously, or make it a business priority, have started rethinking that approach.
The pandemic was the catalyst that made traditional Indian companies start taking a serious look at their online presence and website being more than just a source of corporate information.
It’s now the source of brand discovery and experience, marketing, customer engagement, and most important of all, a crucial sales channel at a time when Indian consumers have grown accustomed to the convenience of online shopping. It’s as if they had an “Ah-huh” moment, like when we sit in traffic and see a roadside advertisement, and start Googling the website.
In fact, Shopify merchants in India are experiencing strong domestic and international growth as retail returns to pre-pandemic levels and Indian consumer confidence improves, generating a 78% increase in business activity and supporting nearly 200,000 jobs in 2021.
Our goal is to remove the barriers to entry for Indian merchants and simplify complex commerce challenges for both merchants and consumers. India is a mobile-first society, and the first time local consumers discover or interact with your brand will quite definitely be online and on your own website.
How have your brand- and your brand marketing strategies evolved in these past two years of the pandemic?
Over the past two years, there has been a major change in the ways and locations where Indian customers purchase. While the majority of millennials in Tier-1 metro areas regularly shop online, Indians from Tier-II and Tier-III towns are also beginning to look and purchase online.
In fact, Shopify’s Festive Shopping Outlook Report 2021 found that more than half (53%) of millennial consumers from non-metros in India strongly preferred online shopping. And, more broadly, three-quarters (77%) of Indian consumers plan to shop online during the festive season due to the convenience it offers.
India has a natural build-up of festivals from Raksha Bandhan, to Ganesh Chaturthi, followed by Dussehra and eventually Diwali that builds towards the consumption season. Offline retailers have matched this for years, and now we are seeing this play out more aggressively online as well.
Building and protecting your brand is key to standing out from the crowd during the festive season, however, managing brand perception and having a real impact is more difficult than ever. Consumers will write off a brand after one mistake and shop elsewhere.
Perfect planning, though, can help brands build momentum around their festive season campaign but also protect them from festive fatigue among consumers.
For instance, a merchant could add a new page to their store titled, “Rakshabandhan Sale”, where they list all the things that are on sale during the season. The use of product labels to draw attention to the things on sale is another smart but subtle strategy for seasonal marketing campaigns.
They’re a simple design element that helps consumers easily identify the items that are on sale among the hundreds that may be available so consumers don’t feel overwhelmed by choice.
Reminders are also important to encourage consumers to take advantage of seasonal discounts on purchases they’ve wished listed or added to their cart. But, it’s critical that brands carefully time, space out, and distribute the messages to prevent any damage to the relationship they have with their customers.
One hack is to reach out to your existing customers and encourage them to refer their friends to your store in exchange for rewards-based offers like exclusive discounts and product bundles.
What is the perfect media mix for your brand?
The growth of festive season shopping will undoubtedly increase over the next few years as consumers save up to spend during annual sales from their favorite brands. For merchants, now is the time to set up your online store and create deals and discounts on products of interest during the period.
Customers spend money where they spend time, so it’s critical that brands leverage all channels to reach new customers and encourage existing customers to return. This includes investing in your online storefront, but also promoting your offers and products through email, social media, SEO, SMS, WhatsApp, and web push notifications.
But, the true hack lies in making these deals and discounts time-sensitive to encourage people to take advantage of seasonal discounts before they end.
Which are the most important categories that will see a big uptake in the upcoming Festive season?
We expect there will be strong demand for food and beverage, consumer electronics, fashion, and apparel, as well as growing demand for trending categories such as fitness accessories, gardening equipment, kitchen accessories, and costume jewelry.
