If 2014 was the year to wait and watch, 2015 is turning out to be the year of planning and action. While optimism is tempered, business leaders recognise that it is undoubtedly time to make moves that will define the direction of business in the years to come. The Union Budget 2015 set the ball rolling by taking a mid-term view of growth as against a populist promise of immediate benefits. Moreover, what will truly differentiate the next few years, will be the willingness of businesses to pay heed to the lessons and trends of the last couple of years and translate them into winning strategies.
At Nielsen, our view across key sectors from the consumer lens and proximity to the way strategic and tactical decisions are made, allows us to identify the key trends that will echo this year and the dynamics that will define the way each of these key sectors reshape their fortunes. And yes, the starting point of this decision-making needs to focus on the consumer – whether they’re bigger decisions on where a company is headed or about connecting with customers – much of the thinking revolves around your consumer. Several trends contribute to this overall outlook, but here is our view of some trends that will define businesses going forward.
Nearly 130 million people use smartphones today, and with this number expected to cross 500 million in the next five years or so, India has become one of the world’s fastest growing smartphone market. The growth presents a good opportunity for digital content aggregators, advertisers, app developers and online streaming companies to engage users through relevant mobile-led strategies. By giving affordable internet access to consumers across India, smartphones have revolutionised the way people stay connected, shop and consume entertainment. As a sign of a maturing smartphone market, Indian consumers have begun to use their smart handsets to make banking transactions, do business and make high-ticket purchases of equipment and consumer durables. While brands have already started customising offerings to make mobile viewing and transacting easy, this is headed to become more of a norm than an exception this year.
According to Nielsen Informate Mobile Insights, shopping apps are growing at a faster pace than mobile sites. In the calendar year of 2014, apps grew by three times, while mobile shopping sites grew by about 1.3 times. From utility apps like GPS and health tracking, to leisure and entertainment apps like social media and shopping, apps have made life a whole lot easier and more fun. The real insight lies in the figures that show an equal popularity of shopping apps among large and small-town users, as well as among male and female users. In fact, mobile shopping apps are used marginally more by males than females. This is a trend that is all set to escalate and keep stakeholders in the digital arena on their toes.
The already booming e-commerce market is only set to grow further and faster in the future. According to the Associated Chambers of Commerce of India (ASSOCHAM) Survey 2013, the size of e-commerce in India was $2.5 billion in 2009, and is expected to touch as much as $56 billion by 2023. The factors behind this meteoric rise are funding by venture capitalists, diversity of merchandise available and the deals and discounts available when shopping online. Convenience and the option of Cash-on-Delivery (COD) are icing on the cake. As things stand now, e-commerce players, now cash-rich because of funding, are becoming big advertising spenders and television sponsors. 2014 saw the start-up landscape in India flooded with over 300 venture capitalists investing over $2 billion. We expect funding to keep flowing into e-commerce start-ups, as well as new entrants in the e-commerce space from every industry.
The digitalisation wave has swept across most of industry in 2014 with a promise of a lot more to come. One of the biggest foreseeable trends is ‘embedded technology’ - the integration of technology across products to make them more relevant to consumer expectations. Marketing innovations across all conceivable categories will be driven by technology, including ones that have nothing to do with the digital platform. Products ranging from say toothbrushes to automobiles will have embedded technology that seamlessly integrates content and communication to win with consumers.
Payment banks, launched by the government in 2014, aim to make banking accessible to consumers in areas where bank branches do not reach. By authorising telecom companies and modern trade outlets to fulfil basic financial needs and services, the government seeks to bring the large unbanked Indian population into the banking fold. While the government has launched the Jan Dhan Yojana and made provisions in the new budget encouraging personal investment by consumers, the effort is matched by consumers as well. Reportedly 1.5 crore bank accounts were opened in the first few days of the Jan Dhan Yojana scheme. The JAM trinity of Jan Dhan Yojana, Aadhaar and Mobile access including payment banks, will encourage cashless transactions and consequently digitisation of money.
While economic uncertainty typically saps demand, smart marketers have discovered a niche that bucks the trend. A section of savvy consumers, who are on the lookout for the best the market has to offer, is driving the sale of premium and super premium products. Premium products cost between 20% and 70% more than their regular counterparts, while super premium products are at least twice as expensive as the category average. With embedded technology fast gaining popularity, it is these customers who will be early adopters in driving sales in future.
Video content is now consumed on demand and on the go. Driven by the growth of smartphones, high speed internet and the predictive feature in social media, video consumption on the small smartphone screen will skyrocket. This is a trend that will be driven primarily by the younger audience who seeks access to premium content or customised and niche content. Marketers and brands will have to focus on speed, quality and pricing strategies to make the most of this trend.
Communication and content will have to come together for brands to keep pace with consumers. It is not enough anymore to get the point across to consumers; social media demands brand responsiveness. Content needs to be added to the communication mix to demonstrate value to consumers who are on the lookout for more than basic hygiene. Stories, videos, contests and technology will come together to engage consumers, as the measure of brand success will partially be its ‘virality'.
Consumers are increasingly getting restless, prompting brands to focus on new launches, re-launches and ‘varianting’. In this endeavour, products that are cognisant of energy efficiency will have an edge with consumers. Savvy marketers have been picking up on this trend, with consumer tech companies launching products that are consume lesser amounts of power. In the automobile space, manufacturers are keen on addressing consumer concerns of fuel cost and environmental implications along with energy efficiency and stringent emission norms. With the National Electric Mobility Mission Plan for 2020 promoting electric and hybrid vehicles, this could be an exciting new segment to look out for.
Markets are getting increasingly fragmented, and even neighbouring pockets within one large city may behave differently from each other in consumption patterns and spending habits of consumers. The method of identifying and differentiating markets needs to evolve from the over-simplified urban-rural, metro-small towns divisions, to a more microscopic one. The marketing need is a granular approach to correctly identify opportunities and then offer customised marketing, distribution and communication plans to drive sales.
Making products and services available everywhere through digital and e-commerce platforms and delinking distribution solely from physical channels will become the norm with the smartphone as the protagonist of this trend. Simultaneously, companies will get smarter and more precise with their offline distribution strategies, by linking distribution to geospatially prioritised consumer segments.
Sectors and categories everywhere will see the unprecedented emergence of start-ups and challenger business models. From regional players to venture capitalist - backed competition, new and enthusiastic entrepreneurship will ensure dynamism, consumer choice and competition all at once.
From the Make in India campaign and the launch of Digital India and various other initiatives, 2015 is well and truly on its way to be the anchor year for the decade ahead. And there couldn’t be a better inflection point to re-boot marketing and make it more effective in its entirety.