Online shopping is increasingly becoming an integral part of the way we shop these days. Hence e-commerce players are attracting stratospheric valuations, largely on the basis of GMV (gross merchandise value), which is defined as the value of goods sold on a platform without factoring in discounts and returns.
Business owners often talk about market share with great reverence, treating it as the “holy grail” in measuring the success of an enterprise. Given the exponential growth rates in e-commerce, one may argue that acquiring greater market share makes more sense from a valuation perspective.
However these questions now stare us in the face:
Should revenue growth be the only metric that figures in discussions about valuation?
What are the indicators of the company’s long-term health?
Where do long-term relationships with the customer figure in the scheme of things?
In other words, when will companies start focusing on “mind share”?
Mind share matters Mind share, very simply, is the amount of space that the brand occupies in the minds of the customers. Increasing mind share is all about increasing desire and ultimately demand.
Shifting the focus to the customer and providing a differentiated value proposition is the first step. On a long-term basis, companies need to invest in building their brand equity by engaging the customer in an experience that he/she finds compelling.
How do companies go about doing this? One way could be by providing the human touch to their brands. Providing the “human” element to the buying experience is a huge challenge. People ultimately end up buying from people and hence it is important to humanise the brand. Some companies did make a sincere attempt to do this during the recent festive sale with their head honchos actually delivering packages to the customers.
Humanising the brand However, the question remains: Is humanising the brand just a concept that CEOs of these companies will discuss in board room meetings? Is it just a pipe dream? Or are there actually approaches that can be adopted by e-commerce players to achieve this objective?
To understand this aspect, one has to go back to the basics. We do know that people develop relationships with others over a period of time and with repeated interactions. If we extrapolate this to the world of e-commerce, then it does appear that there are two important dimensions that e-com players must consider when they go about “humanising” the brand:-
Relationships develop with repeat purchases
These repeat purchases happen over a period of time
So what do e-com players need to do to make this happen? They need to recognise that fundamentally a brand is much more than a product. It has to go well beyond product/service features which provide a set of functional benefits at a certain price-value equilibrium. It needs to have a distinct personality of its own and more importantly, it needs to also provide some “emotional” benefits. It needs to invoke a feeling in its buyers. For example, in recent times, some specialists such as Urban Ladder have attempted to do this in their communication and have struck a chord with consumers quite successfully.
Urban Ladder’s tagline, “Your furniture knows there are some things you cannot leave home without,’’ where the protagonist in the commercial remembers to take everything he needs from the foyer racks and almost leaves home without his baby!
A good way of understanding what is meant by humanising a brand is to imagine that the brand is actually a person. Each of us has relationships of various types with other people and these relationships are developed because:
We “like” the other person’s looks and personality
But more importantly, we appreciate what the other person can do
We also share a common set of beliefs, because we belong to the same nation, or state or college, share similar social status or religious disposition and such.
Strengths, limitations Just as any human being has a set of “strengths” and “areas of improvement”, the same is the case with brands. Also, brands cannot be “everything” to “everybody” because there will always be a few things that a brand cannot do. Maruti Suzuki is a classic example of a brand which appeals to consumers going in for fuel-efficient cars with great performance, but its attempt to stretch the brand beyond the mid-size sedan have met with limited success. This is quite simply because the consumer for a premium car has a different set of needs and imagery association requirements. It is important to recognise this while going about “humanising” the brand and in the context of defining how a brand will “emotionally” connect with its TG.
Brands such as Tanishq, Amazon, Renault and HDFC Life, to name a few, have been able to do this successfully in recent times, through a combination of interesting initiatives at various customer touchpoints.
E-commerce players clearly have their task cut out as they attempt to differentiate themselves by improving the quality of the human touch! We are unlikely to witness a case of “winner takes it all”, but it is quite clear that for any brand to be successful in the long run, the focus has to shift to winning the battle in the minds of the consumers, and for that to happen, companies need to start focusing on “engaging” with their consumers in meaningful “conversations” centred on the brand. Ultimately, it is a combination of market share and mind share that will determine the long-term success of any brand.
Rajesh Gopal is Director, Digital Engagement, Vertebrand Management Consulting, Bangalore