While businesses were challenged in 2020 by the pandemic, it also opened doors for opportunities and innovation for the consumer durables industry. The first few months of lockdown were challenging, but the latter half of the year proved beneficial for those who adapted to the evolving market realities. While we are optimistic that the growth momentum will continue into the summer months, brands will do well to keep a close watch on evolving consumer needs and align product innovation to truly thrive in the post-pandemic world.
In an exclusive interview with IndianRetailer.com, Kapil Kohli, President (Retail), Usha International, talks about the impact of COVID on the consumer durables market in India, and what are the trends to be observed in 2021. He further elaborates on Usha Retail’s outlook and strategies for 2021.
Impact of COVID on the Consumer Durables Market in India
There are multiple ways in which the year 2020 has impacted all of us, in India and around the globe, each of us faced challenges as individuals, as homemakers, professionals, and as businesses, no one remained impervious to the effects of COVID-19. In India, businesses took a hit due to the Coronavirus outbreak, experiencing a sharp downturn and impacting the consumer durables industry at large, and within that, retail. For us, these last few quarters have been V-shaped, in the first quarter we fell extremely drastically, however, the following two quarters have been very good for us and we are now on the upward slant of the V and back on the growth path.
What we did observe during these last few quarters began with closed stores, zero sales, to changing consumer patterns, the acceleration towards digital adoption, and much more. While the initial months hit us really hard, we were been quick to reassess and respond continuously, in some cases on a day-to-day basis, and innovating and revamping operations to stay relevant in the new environment, without losing sight of consumer needs. We were fully focused on adapting to the ‘new normal’ with agility and also made relevant investments in digital adoption, marketing, and brand promotion strategies. Usha’s retail business is expected to close the Jan-Mar quarter at a 65% growth. On average, we will close the year at a double-digit growth YoY.
Trends to Observe in the Consumer Durables Sector
Here are the trends likely to be witnessed in 2021:
- Consumer engagement on digital platforms is here to stay. The accelerated digital adoption and the growing importance of online in the browse-to-buy purchase path of the consumer makes it critical for brands to cater to this space. At Usha, we have been focused on creating unique retail experiences for our consumers by offering seamless services on online platforms like Brand Stores, engaging demo videos across product categories, A+ Content, and more.
- As people began spending more and more time at home, with families, due to the restrictions in movement first mandatory then self-imposed, it left them with a lot more spare time on their hands than before. This in turn spurred them to find new passions and hobbies or reignite old ones giving rise to a whole new generation of chefs, bakers, sewists, interior designers, and more. This resulted in a rise in demand for personalized products like niche kitchen appliances, sewing machines, decorative lighting, amongst others.
- The last few quarters have also taught us that the co-existence of online and offline channels only complements each other and proved beyond doubt that they will grow hand in hand. So while on the one hand consumers will make greater use of the internet, social media, online search, and e-commerce touchpoints, on the other there will always remain the need for touch and feel. So, in 2021, brands need to strike a balance in the growth of their offline and online presence – an omnichannel ecosystem is a way ahead.
- Another trend that is here to stay is that of hyper-localization, a trend already popular in tier II and tier III cities, and now being seen increasingly in metro cities as well. Therefore, constantly adding to our existing product portfolio in a hyperlocal scenario, along with hyperlocal service, is something that we are doing as a brand.
- Lastly, a trend that is being observed across our sector is the increasing demand from small towns and rural India.
Retail Strategies that are Helping Usha International Carve a Niche for Itself
The people of India have reposed their trust in Usha for over 85 years, and seen Usha products in their homes for generations. It is the very same trust that was reiterated as consumers chose us as the preferred brand during these last few quarters, giving us constant cause to cheer. Our endeavor has always been to develop world-class products that are in sync with consumer needs and modern-day living. New products are developed based on consumer insights, emotional, cognitive, rational, and aesthetic, and also taken into the consideration consumer experience. Our customers understand that the premise of all our products stems from catering to their needs and aiding a healthy and active lifestyle.
Keeping consumers at the core of everything, we were also extremely cognizant of our product development and marketing strategies during the time of Covid. We kept our brand values at the forefront of all our initiatives and ensured we followed the government-mandated safety guideline with sanitized and contactless deliveries when needed, giving precedence to the wellbeing of our consumers and employees over all else, and we will continue to do so. We led with agility, adapted to change, and pivoted where required, to win the consumer’s trust and serve them the best we can.
Distribution Strategy Going Forward
We are now back to business as usual, and as any mature business we have our expansion strategy in place, and while it may be tweaked keeping the new ground realities in mind, it is being implemented to ensure we continue to be on track.
Our strategy is to focus on diversifying our existing product portfolio, extending more product offerings, and strengthening our partnerships across regions as we introduce customized region-specific products to reach out to larger audiences across the country. We will continue to adopt a comprehensive multi-channel approach, all the while ensuring the perfect equilibrium between digital and physical strategies.
We are also strengthening our display and assortment along storefronts so that consumers can explore the display from outside without the need of stepping inside the retail outlet. This is based on our insight that customers these days do not venture out to just 'check things out' but with the intention to buy almost 100 percent of the time.
Omnichannel Ecosystem is a Way Ahead
Our just opened store in Guwahati offers our consumers in the North East a whole new experience and bears testimony to our commitment to omnichannel growth. While the digital acceleration brought on by the pandemic, and also spurred us at Usha to streamline the digital path-to-purchase for our consumers, we understand there is wisdom in balancing the clicks and bricks model of the business and there is wisdom in adopting a hybrid version. Brands excelling on omnichannel category management, evolving their routes to market, and early adopters of digital-led-route-to-market models will have a clear first-mover advantage in both shaping point-of-sale service level expectations and in leveraging the power of analytics.
Speaking of first-mover advantage, Usha was the first company to take online bookings for coolers, starting this within weeks of the lockdown being announced as the summer season was already on, we knew customers were looking for trusted solutions as they dealt with the uncertainty of the pandemic-created environment. As soon as deliveries were allowed, the customers received their products in time for respite from the peak summers.
Usha Retail’s Outlook and Strategies for 2021
Besides what I have mentioned above, in 2021, we at Usha retail are looking at the new realities, new needs, aspirations, new emotional environment, and consumer behavior to ensure that we are able to deliver outstanding products that aid real needs in a post-pandemic world. We have been continuously innovating and revamping operations to stay relevant, and the fact that it has resulted in a 65% growth in retail sales in Q3 and the sell-in vis-à-vis sell-out ratio for Q3 proves that we are on the right path. We will continue to grow both offline and online. I do believe that unified commerce is another area we will be devoting our energies towards, as that is very much a part of our future.
Usha products will remain the quintessential companions that will help consumers’ multi-task and stay hygienic. It is also an opportune time for companies to offer value-based products that are not only convenient and connected but ensure durability and quality too.