The biggest festival season is fast approaching and online marketplaces are pulling out all the stops to get customers’ attention. Ecommerce biggies such as Flipkart, Amazon and Snapdeal along with other online players are expected to collectively burn Rs 2,000 crore in the next few months leading to Diwali.
Last year around the same time, the money spent on marketing and promotion was Rs 1,300 crore. Despite that, Indian ecommerce companies faced a lot of flak as they failed to predict demand during Diwali last year. Several logistical issues floated on top and customers & etailers were an unhappy lot. To avoid repeating the same episode, etailers are prepping up in advance.
How will the money be spent?
- Focus on print and digital advertisements
- On celebrity endorsements
- Contrary to last year’s 60%, this year only 35% of the budget is reserved for television marketing
- Order for packaging material and other supporting supplies has been doubled
- Hike in commission rates for coupon companies and cash-back sites
Offline VS Online, again!
While many big retailers have started working on their omni-channel strategies, this Diwali will still be about offline vs. online. Mainly because brick-and-mortar retailers’ omni channel plans are still in the nascent stage.
Plus, online sales had slowed down a little in the first quarter of this FY. So etailers will make sure, they recover from the slump during this Diwali.
A senior executive from a top retail firm said, “It is very likely they (ecommerce companies) will come with a bang and they will come with no holds barred for sure. Omni-channel strategies of the likes of Future Group and Shoppers Stop are not going be in place during Diwali this year, so it will be really online versus offline.”
It’s not just the biggies, but start-ups backed by generous investors are also spending huge chunk of their funds on advertising without worrying about returns. According to Navin Khemka, Managing Partner at media planning agency, Maxus, “Unlike the general market sentiment of slump, advertising in media is seeing a significant up-swing. Almost all advertising (inventory) has been blocked in the October-December quarter. A lot has to do with emerging categories in the online space. Online advertisers are neutralising losses of traditional advertisers and leading to huge spurt in demand.”
Traditional retailers are too planning new offers and introducing fresh products in order to compete with etailers. Will this pay off? We’ll find that out this Diwali.
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