Changed Customer Behavior and Marketing Practices in Post-COVID-19 World

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The world has changed in an unprecedented fashion, and so has customer preference. Essential, functional, and emotional spending have taken precedence over luxury expenditure. How should the marketing teams prepare for such a world where customer preference and behavior has changed?

We aimed to find the answers from the co-founders, CMOs, Marketing leaders across India’s top players in the online marketplace, local business discovery platforms, travel & accommodation, IT, and equity investment firms.

In this roundtable we discuss

• major changes in marketing communication tone in keeping with the current scenario
• addressing business challenges in accordance with the changed rules
• anticipating and dealing with changes in consumer behavior
• reorganizing and planning for marketing & advertising spend in a post-COVID-19 world

Our speakers for the event:

• Dhruv Mathur, Co-founder, LBB
• Manan Bajoria, AVP – Growth & Marketing, Ixigo
• Tarun Davda, Partner & Managing Director, Matrix Partners
• Olive Sen, Director – Marketing, OLX
• Gaurav Mehta, CMO, Girnarsoft

Without further ado, here are the key highlights and insights from the session:

Impact of COVID-19 on consumer behavior

Urgent need to go digital from localized businesses

• Localized businesses have been deeply impacted which has pushed them to go digital more aggressively
• LBB has noticed inbound requests from local businesses doubled on a daily basis
• On the consumer side, services that required stepping out have taken a massive hit but searches related to home delivery have picked up tremendously.
• While the traffic has dropped in absolute numbers but engagement has picked up since people are spending more time at home, posting a lot of information that the community is consuming.
• The key to ensure growth right now is adapting to the changed environment and being opportunistic in taking chances

Digitization in the auto industry and renewed interest in pre-owned cars

• With discretionary spend curtailed and supply lines disrupted, the auto industry has been affected.
• The positive however is that OEMs earlier hesitant in going online are now proactively looking into digital avenues for research & discovery as well as transactions
• Owing to the changed behavior of the OEMs, the whole industry can be expected to be digitized in the next 6 months
• SEO insights are interesting as the used car segment has been getting good traction, a trend previously evidenced in China
• The trend can be attributed to lowered user confidence in shared mobility services over health concerns. Users now prefer to have their own vehicle for emergency purposes
• From a revenue perspective, March was the strongest month for CarDekho following which there has been a steep decline.

Buying & selling marketplace expects renewal in popularity of pre-owned goods

• OLX has interestingly retained traffic to the portal despite a significant dip in supply-side
• Various categories on the platform have been affected differently, with the auto being affected least while electronics and furniture have suffered majorly
• Real estate has been hit the worst-hit both from traffic and revenue perspective
• This can be attributed to the fact that neither users nor the sales teams are able to step out
• Due to the mandatory lockdown, the offline inspection centers viz. Cash My Car has also been closed down disrupting the business further
• The online buying and selling marketplace is optimistic about a bounceback to pre-COVID-19 business capacity in the next 1-2 quarters as the economic situations seem favorable to buying value for money, pre-owned goods

Lockdowns and restrictions disrupt travel and accommodation segment

• ixigo has noticed a drastic impact on their business owing to the travel restrictions
• Ixigo Trains App has taken a hit to the DAUs/MAUs, frequency of app launches/day, subsequently affecting the ad monetization revenue
• Fall in impressions and advertisers curtailing digital spends has affected the ad bidding further reducing revenue/impression to one-third of pre-COVID-19 numbers
• Limitations imposed (e.g. airlines planning to keep the middle seat empty) will mean hiked prices to make up for reduced inventory thus reducing demand again.
• Business travel is expected to reduce with personal travel taking time to bounce as consumer confidence has taken a severe hit

Various industries noticing a permanent shift in consumer behavior

• Travel & mobility sector is expected to have a slow recovery with unavoidable business travel likely to start sooner than leisure travel
• The change in behavior can be attributed to dip in consumer confidence combined with worries of a 2nd and 3rd wave of the pandemic
• Businesses will need to change plans depending upon recovery models viz. U, V, or L shaped.
• Investors suggest planning for 3-4 months of zero revenue, 3-4 months of 30%-40% recovery, 3-4 months of 80%, and 80-100% of pre-COVID-19 revenue after a year.
• Brands bouncing back quickly like China’s Didi (revenue back to 80% of pre-COVID-19 peak) have done so by gaining back consumer confidence
• Didi provided sanitized cab offering with camera detecting if the car has been cleaned before, temperature check of the cab driver, mandatory masks for the driver and rider along with gloves and disposable hand sanitizers
• Private mobility (self-drive vehicles) is expected to go up while shared mobility (taxis and public travel) will take more time to bounce back.
• Similarly, with health concerns looming large two-wheeler used vehicle purchase is expected to see a spike
• In the e-commerce space, certain categories like online grocery delivery are benefitting with increased digital interaction between consumers and local vendors
• The telemedicine app industry has seen greater acceptance by the doctor’s now more than ever, as they are happy with video-consultations, virtual waiting rooms, recorded online medical history, a library of drug combinations for diseases, etc.
• These one-time shifts in user behavioral trends are expected to stick forever unlike a fad

Solving for consumer’s lack of trust once normalcy returns

Gaining consumer trust in the usage of pre-owned goods

• In the current scenario, it is essential for a business like OLX to gain audience trust in using pre-owned goods given the overwhelming health concerns
• OLX is planning internally on how to implement safety checks in peer to peer selling to build consumer trust
• The brand might have to intervene in peer to peer selling for ensuring proper sanitization
• Such efforts are much easier implemented at inspection centers Upcoming project ‘OLX people business’ which deals with staffing of blue and grey collar employees will aim to resolve the delivery problems amid lockdown
• Business models will change and evolve depending on recovery systems, i.e. U or L shaped recoveries

Curating user experience to address the changing customer dynamics

• Auto classifieds have relied on a Low Touch Model which comprises of users taking charge of the whole buying and selling process of used cars
• Curating experience for used cars purchase is essential to gain the trust of the consumers and address the changed dynamics
• CarDekho is working with dealer partners to provide a curated experience to the users in their offline Gaadi stores, whether it is hygiene or documentation
• The aim is to make the user experience low touch while offering high touch, high engagement from the delivery perspective.

How to grow business the right way during these times?

There are 3 phases any business should consider right now:

• Phase 1: How to cut burn, manage runway, communicate with suppliers, clients, teams, stabilizing the company, expecting the worst-case scenario. Matrix Partners created a quadrant with COVID-19 impact and cash in the bank as two parameters. Different strategies were devised for companies falling in different quadrants
• Phase 2: Examine if the product is going to be relevant or not in the post-COVID-19 world. Figure out the use cases and work on them. Add or tweak product offerings or pivot depending upon the above assessment
• Phase 3: Figure out how to take advantage of the fact that market share has been brought down to zero (due to the pandemic). Decide what does it take for you to gain a disproportionate market share? What would you do today if you knew this is where the market will start. Do whatever is necessary to accomplish that, whether it means strengthening teams, reprioritizing product roadmap, etc.

Adapting marketing communication in response to changed user behavior 

Understanding your user and churning content to delight them

• Focus on the customer segment, understand your consumer, and make a dent into their anxieties instead of using the same ‘stay home, stay safe’ narrative.
• The key is to figure out where your business wants to gain disproportionate market share and try to be super relevant to the users
• Try to cut through the clutter by adapting your marketing communication effort to pick a topic and provide delight to the users through that.
• One example can be how VCs are supporting businesses, helping them learn and communicate with each other, and advising them to be in their mind space.
• LBB has recently launched a program called ‘local gifts’ which enables users to buy gift cards from favorite local businesses (which customer can use later) to help the struggling business survive during these tough times

Focus shift from one category to ancillary ones might yield results

• Insurance wing of Girnarsoft, InsuranceDekho is benefiting from great returns
• The brand is now looking at consumer behavior, the goals driving that, and are adapting their Marcom strategy on top of that
• Health and safety sentiments for oneself and family will increase in an uptick of insurance policies (purchase of used cars as well as new entry-level cars)
• The brand is also focusing on ancillary services of used cars, standardizing the buying and selling experience and organizing the used car industry

Strengthen customer relationship through informative communication

• Ixigo stopped sending sale communication i.e. cashback offers and instead focussed on travel safety advisory, a checklist to follow while traveling via flights/trains
• The brand reached out proactively to customers and informed about travel policy changes
• Introduced dedicated sections for COVID-19 news and a live tracker (which gets maximum clicks in a day) to keep the user engaged by providing legit information
• Ixigo’s communication revolves around COVID-19 do’s and don’ts, explainer videos, debunking myths about COVID-19, refund policies, latest travel updates, and more
• The communication has noticed good organic and huge social media traction
• Ixigo has added a section about airline advisory, which is updated with information about policy changes, reaching out via WhatsApp about changes in bookings made, etc.

Rethinking marketing budgets, driving more business from existing customers, and figuring out key spend areas

Spend wisely and on cash positive and good ROI assets

• Marketing spends at LBB haven’t been curtailed but has become more focused and is driven by product change, market share orientation, and performance orientation
• Telemedicine and other categories are still advertising because it is a land grab opportunity
• CPM/CPC rates and ad shares are dropping. Users will leverage it since these are never seen before bid rates
• With big advertisers from some verticals stopping advertising, others are leveraging the open inventory
• In fact, LBB hasn’t noticed any change in spend patterns of vendors who advertise on their platform except a slowdown in decision-making time
• Some of these advertisers have already planned for the post-COVID-19 situation, figuring out what to do, and they’re certainly not stopping thinking about marketing and advertising.
• There has been no change in the tactical approach at LBB but the marketing strategy has been adapted according to the behavioral changes of the user such as increased community engagement.

Online selling and buying marketplace prioritizing product innovation

• For brands like OLX, the focus is on product innovation rather than marketing
• The brand is, however, reaching out to existing customers via empathy-driven communication and driving CSR fundraising initiatives to help the migrant workers
• The new user acquisition and performance marketing activities have taken a back seat.
• The brand will start marketing spends once lockdown eases and things go back to normalcy
• OLX is informing users about the validity extension of their listing and subscription packages

Building a platform based on genuine connections rather than advertising spends

• A lot of marketing spends at Girnarsoft and it’s offerings like CarDekho have been curtailed
• Only project-based marketing where partners want advertisement done on their behalf are operational
• User acquisition efforts have been put on the back burner for now.
• The organic play is going strong with the brand at 70-75% of traffic even now
• The focus is on investing in building the brand which is the best defense against any upheaval be it a crisis or competitor pressure In the B2B domain, the brand is extending insurance to regular dealers through InsuranceDekho
• The aim is to help the stakeholders with their working capital as an outreach program On the B2C side, the brand is ensuring that the video content churned out brings positivity to the users and in turn are getting a lot of love and traction from the audience
• Girnarsoft is focused on building a platform through genuine connection rather than a transactional connection generated through advertising.
• The brand has in fact doubled down on content marketing efforts as this is the right time to do a lot of these things

What is the biggest priority in the next 3-6 months?

The immediate priorities for the brands affected by the pandemic are to ensure cutting costs in order to extend the runway, devising contingency plans to revive the business, survival planning, tweaking the business models to be ready by the time normalcy returns. This is also the best time to implement a good operating rhythm, cultural agility, and decentralizing decision making as much as possible. Brands should also focus on understanding the new, thereby figuring out business solutions according to changed consumer behavior.

In conclusion, the speakers also shared their takeaway on remote work and its future. While most felt that there has been a boost in the productivity of teams like marketing, technology, and product, they lamented the lack of human contact, cumbersome process of setting up meetings. The unanimous feeling was that certain teams like sales need to get back on the ground owing to a more customer-facing aspect of their role. Most companies will now be more open to WFH scenarios and workspaces will be used for operational reasons that can’t be achieved at home.

What’s Next?

Check out the highlights of our exclusive virtual roundtable on the impact of COVID-19 on Indian businesses Find out how the global coronavirus pandemic affected the acquisition and LTV of apps in Europe? Wondering what is the coronavirus business impact on your vertical? Find out in our geography and business vertical specific COVID-19 impact quadrant! Register now to learn the tips of driving successful customer-centric marketing in the post-COVID-19 world!