2020-06-24 17:19:00

BENGALURU: The covid-19 pandemic has magnified digital influence in the buying of smartphones and apparel, with retail brands amping up their social media presence and devising strategies to push sales, according to a new report ‘Turn the Tide’ by Facebook, Inc. and Boston Consulting Group (BCG).

With the ongoing crisis affecting movement, online purchase is expected to rise significantly, and several households are expected to curtail spends on these discretionary buys, citing income uncertainty.

The share of online purchasing of smartphones is expected to rise to 45% from 38% in pre-covid levels, the report said.

“We know that digital influence has significantly increased across the path-to-purchase – up to 70% for some categories. We are now seeing businesses convert this increased digital influence into tangible business outcomes. A significant digital acceleration has happened on the back of social media, and with more than 400 million Indians connected on the Facebook family of apps in India, we play a consequential role in the consumer journey.” said Sandeep Bhushan, Director and Head, Global Marketing Solutions, Facebook India.

“Across mobile, apparel and CPG, we are observing changes in how and what consumers buy. We expect the online sales market for mobiles to touch 45% in the next 2 years. 8 in 10 consumers are avoiding going out, which will lead to casualization of wardrobes,” said Nimisha Jain, Managing Director & Partner, Boston Consulting Group.

“…70% urban consumers for mobile and 55-60% for apparel will be digitally influenced. It’s critical that brands amp up their digital engagement and customize their proposition to win in the new normal,” she said.

Highlighting smartphones as an ‘essential’ category in consumer’s daily life, consumer spending sentiment for mobile phones continues to garner mixed responses.

Close to 29% of the respondents to the BCG survey said they are more likely to decrease spending in the next six months; 40% of which might buy a cheaper variant of a mobile phone, while 15% of them might look at a cheaper brand altogether.

The report added that the average period a customer sticks with their smartphone is also expected to increase, which earlier stood at 2.4 years during pre-covid times. Further, consumer buying behaviour for mobile phones is now triggered by pure replacement needs (of non-functional phones) rather than to upgrade operational smartphones.

There has also been a 25% increase in price salience among customers, with pricing coming across as the top choice driver for sales.

Users are more likely to now press upon the importance of online research more than ever, drawing comparisons on price, feature and performance moving forward, and even seek deals and offers on pricing. However, these trends will likely be temporary, the report adds.

Along with pricing, consumers are also expected to be more-feature conscious especially around video conferencing, with close to 70% respondents of the survey stating that they are more likely to stick with the brand choice, already in mind.

On the other hand, consumer spending sentiment on apparel shopping has been affected, even further, the report adds, with one out of two customers looking to curtail apparel spends.

Around 40% of the customers surveyed for the report state that they are planning to increase spends only during discounts or promotions, during apparel shopping. Apparel spending during pre-covid times was essentially triggered due to celebratory occasions. Now with the ongoing covid-19 crisis, there is an increase in athleisure, ‘stay-at-home’ or fitness clothing in the coming months.

Many consumers are willing to spend on apparel shopping, are looking to trade down to cheaper brands or lower variants of brands, with precautionary equipment like facemasks becoming a part of fashion accessories. With store walk-ins reducing, online shopping of apparel will see a 1.3x surge.

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