As a Snapdeal delivery executive reaches a customer’s home, a stubble-sporting Aamir Khan in a white sweat shirt gushes, Yeh deal bhi kya cheez hai.
A Flipkart advertisement shows the company fulfilling wishes of a set of everyday people with the tagline, “Ab har wish hogi poori.” (Now every wish will be fulfilled).
These recent advertisements by the top e-commerce companies highlight how they are trying to build their brands by establishing what in marketing parlance is known as an emotional connect with customers.
That’s a change from the discount-peddling or sales events-led approach to e-commerce marketing that was widely criticized by experts for being unimaginative and failing to encourage loyalty among customers.
Until now, a majority of the ads by e-commerce companies showcased the wide variety of products they offer, fast and free delivery services and new launches but mostly massive discounts, which leads shoppers to be transactional rather than loyal.
“Most of the e-commerce ads are what we call customer seduction ads; these ads basically grab eyeballs and are meant to get you quick sales,” said Santosh Kanekar, former marketing head at liquor company Diageo India. “E-commerce companies haven’t done much in the next two phases. The second phase is customer persuasion, where you are trying to pull in customers with a more rational proposition than say, 80% discounts. Finally, you have the brand-world kind of approach that the likes of Coke and Apple came up with in the 80s and 90s. With these ads, you build real loyalty and become aspirational. If you really want to become a top consumer brand, you need to do these two things.”
But given that the sales strategy of e-commerce companies is customer acquisition at any cost, it leaves e-commerce companies little room to put their marketing theories into practice. Unlike Coca-Cola or Apple Inc., products and services of e-commerce have little differentiation, which limits the ability of marketing professionals to try bold but potentially iconic advertising such as those by Apple that mocked Microsoft Corp. and International Business Machines Corp. in previous years.
Still, e-commerce companies say they are trying.
“The Flipkart brand stands for great service and for not letting you down and our new ads build on this,” said Shoumyan Biswas, head, offline marketing at Flipkart. “We want to improve inclusiveness in shopping and we want to build strong emotional connect with our customers, both existing and new ones. Our har wish hogi poori goes a long way toward communicating this.”
Snapdeal uses a combination of ad tactics, including sales events and brand building or emotion-tugging ads, said Idimadakala Srinivas Murthy, senior vice-president, marketing.
“We’ve seen a great response to our ‘Dil ki deal’ campaign which shows the connection we’ve built with customers. At the same time, we will continue to do periodic sales-driven advertising. Our goal is to be the strongest and largest brand in the Internet ecosystem in India,” Murthy said.
Marketing can account for as much as 40% of the spending by Flipkart and Snadpeal, which have together received roughly $3 billion in cash from investors over the past 18 months. The two companies are involved in a bruising market share battle with the Indian unit of the world’s largest online retailer Amazon, which has also been spending aggressively on advertising.
The marketing blitz by these large e-commerce companies propped up ad spending in the country over the past year, similar to previous ad wars such as those between Coca-Cola and Pepsi, telecom companies and soap makers.
However, rather than producing cheeky TV or print ads that were seen in the previous ad wars, e-commerce companies are increasingly using competitive advertising to one-up each other.
For instance, while Flipkart extensively advertised its Big Billion Day sale for more than two weeks, leading up to the sale last October, Amazon and Snapdeal rode on the back of this advertising by responding with last-minute newspaper ads.
On the day of Flipkart’s Big Billion sale, Snapdeal was running ads saying, “For others it’s a big day. For us today is no different.” Followed by “check Snapdeal before you buy.”
So though Flipkart reported gross sales of $100 million on that day, Amazon and Snapdeal also pulled in their highest-ever single-day sales. Flipkart responded in a similar fashion during Snapdeal’s much publicized India Mobile Day last month.
“Earlier, you had yearly marketing plans; now you have to do real-time marketing and innovate on the go,” said Dheeraj Sinha, chief strategy officer (South and South East Asia), at advertising agency Grey India. “All large ad plans now have a containment strategy (to respond to rivals’ ads). How do you get back the attention is part of the thinking now.”
While the growth of digital media has significantly increased the role of technology in marketing, Flipkart and Snapdeal have both tapped marketing heads with a traditional background in the packaged consumer goods sector. Biswas of Flipkart and Murthy of Snapdeal cut their teeth in large consumer goods companies such as Hindustan Unilever Ltd and Coca-Cola. Amazon’s marketing head Manish Kalra represents the New Age marketing professional, having spent a majority of his career at companies such as Dell Inc. and Makemytrip.
“These days in marketing, it’s not that much about where you’re working as it is about four key skills. You need to have strong consumer orientation, an ability to learn fast, you need to be both analytical and creative, and you need to be able to collaborate with different teams. These are the key abilities a marketing leader needs to have rather than, say, a tech or FMCG (fast moving consumer goods) background,” Snapdeal’s Murthy said.