Social Circuitry


September 16, 2005

By Diwakar Kumar

The fast growth of digital media has amplified the potential of modern retailers to gain momentum in pushing brand building and consumption of their respective products among younger consumers. Opportunities in online brand building are particularly important to understand, given the tremendous pressure Indian retailers face in generating revenues robust enough to counter high operating costs.

The proliferation of social networking media is an offshoot of the remarkable role digitisation plays in a modern consumer’s life. The galloping internet penetration in urban India has opened up avenues for marketers to target shoppers at a minimal cost compared to traditional media of ATL advertising. The cost per contact here is lower than in any other medium, which makes it that much more ‘user friendly’ for the advertiser.

Social networking websites such as Facebook, Linkedin, Twitter etc are categorised by the users’ general information about age, sex, areas of interest, etc, which may allow branding specialists to customise and target specific audience groups. E-retailers know the dynamics of what encourages consumers to transact online, and for that they (e-retailers) pay for advertisement on social networking websites and their success metric undeniably depends on sales per pixels rather than sales per square foot in general retailing.

Weekly poll question and experts’ view
Tapping into the marketing potential contained in social networking media, however, is still fairly under-leveraged by brands and retailers in India. In response to our weekly online poll question – Have Indian retailers under-leveraged social networking media to push brand building and consumption among younger consumers?, 96.03 per cent of our audience responded in the affirmative, while the balance 3.7 per cent believe that Indian brands are doing enough to push online branding on such vehicles.

Devangshu Dutta, chief executive of Third Eyesight says, "Social networking media such as Orkut, Facebook and Twitter are still experimental as far as marketers around the world are concerned, so Indian brands and retailers are not really that much behind the curve." He further adds, "Web 2.0 is more about buzz and creating a pull, which is difficult for most traditional marketers to grasp as they are more accustomed to creating a push through the traditional media. Overall internet penetration is also a barrier."

"Lastly, the overlap between social networkers and the target audience for most retailers in India is small, which is why other media remain more in focus," Dutta underscores.

Commenting on the same, Karthik Nagarajan, associate director, IT Practice/Nielsen Online, The Nielsen Company, says, "For retailers in India, word-of-mouth buzz and focussed advertising are critical to the success of their marketing plans. Social networking communities offer both, as it is consumer-generated media and is also made up of a captive youth audience."

"In the current economic climate, it also offers the best ROI for advertisers. The continuing, astronomical rise in popularity of social networking in India further sweetens the deal. However, in India, the potential is more than the uptake as of now and this is probably a segment that will see a lot of action in the coming days," he notes.

"Over the years, social networking media – especially sites such as Orkut or Facebook – has become very trendy in India. Youth of every age are hooked on to these sites or any other form of media – thus becoming an important platform for Indian retailers to push brand building and consumption among younger consumers," says Vijay Bansal,MD, Cantabil Retail India Pvt. Ltd.

"In Cantabil, where new and fashionable international clothing lines are provided at Indian prices, social networking media is hugely useful for brand building and promote the products," he informs.

Manmohan Agrawal, MD, says, "Social networking media, be it in the form of internet sites or other, have become very popular in every part of the country – from rural to urban areas." These are also an important platform to publicise new product introductions, launches etc. In, which itself is an online store for footwear, social networking media have proved to be a boon, Agrawal admits.