1、DIGITAL POWERS CONSUMER DURABLES A $23 Bn opportunity by 2023 July 2019 Boston Consulting Group (BCG) is a global management consulting firm and the worlds leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify th

2、eir highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve

3、sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with offices in more than 90 cities in 50 countries. For more information, please visit . Google India Private Limited (Google India) is a wholly owned subsidiar

4、y of Google LLC. It is engaged in the business of marketing social This report has been compiled using proprietary research and data from BCG choice of multiple payment options is one of the top 5 drivers Absence of in-person guidance and lack of touch TV, AC propensity for repeat purchase is over-i

5、ndexed for low ASP durables Seizing the opportunity: What does this mean for consumer durable companies? Set up investments and create right digital organization structure to capitalize the upcoming USD 23 Bn digitally influenced opportunity Given disconnect in market share and digitally influenced

6、shares reset the digital ambition. Market leaders should strive for at least fair share in digitally influenced sales to remain relevant. Aspirers have opportunity to beat the market leaders through digital leadership Drive focused interventions at individual consumer level across journey touchpoint

7、s to leverage short research window of 2-3 weeks of 80% undecided consumers Leverage 30% of consumers who post reviews online to influence 60% for whom this matters. Drive post purchase experience and amplify advocacy at scale This will require a big shift. From Digital as a channel to Digital as co

8、re of future marketing Current focus of driving purchase to Driving end to end consumer engagement Mass marketing to Personalized interventions Driving offline market share to Driving digitally influenced market share Driving company driven communication to Driving advocacy at scale DECODING DIGITAL

9、 INFLUENCE 6Digital Powers Consumer Durables Decoding Digital Influence7 8 8 Digital Powers Consumer Durables USD Bn The Consumer Durables industry is set to grow by 13% to reach $36Bn by 2023 1. Deendayal Upadhyaya Gram Jyoti Yojana Note: Exchange Rate 1US$ = INR 70 Source: Euromonitor; Press Searc

10、h; Industry Reports, BCG Analysis Air conditionersRefrigeratorWater Purifiers Consumer Durables Industry size 2023F 36 2022F 31 2021F 28 2020F 25 2019F 22 2018 20 2017 17 2016 15 2015 13 2014 12 2013 10 2012 9 Growth Drivers Middle class households to increase from 50Mn in 2018 to 80+ Mn by 2023 Inc

11、reasing disposable income Low penetration of consumer durables in India vs developed economies (Eg: penetration levels of air conditioners and washing machines is INR 20,000; Low ASP products Appliances with ASP 54 year 15%13% 19%16% 5%2% 2%2% 3% 3% 7%14% 11% 13% 13% 17% 8%5% Digitally influenced in

12、-store buyersDigitally influenced online buyers 2x 2x Metro 5% 16% 18% 18% 2x Tier-1 1% 10% 9% 14% 2x 3x 5x Tier-2 1% 3% 8% 12% 5x Tier-3 1% 4% 15% 8% 5x 3x 1%4% Source: BCG-Google Digital Influence on Consumer Durables Study 2019, BCG CCI Digital influence Study 2013, 2017, BCG Analysis Decoding Di

13、gital Influence17 1818 Digital Powers Consumer Durables Market leaders in the respective categories are not necessarily the most effective in driving digital influence. In washing machines for example, the overall market leader ranks third in terms of share of online purchases; losing out to market

14、challengers in the online space. The scenario is similar in case of other categories like air conditioners, where only 2 of the top 5 overall market leaders feature in the top 5 brands in online purchases. Challengers are leveraging digital platforms over the traditional mediums to enhance reach. Fo

15、r brands, offline market share does not translate into similar share for digitally influenced purchases Challengers are leveraging digital platforms over the traditional mediums to enhance reach 1.Euromonitor 2.BCG-Google Digital Influence on Consumer Durables Study 2019 % share by brand Washing Mac

16、hine Overall market share1 20% 10% 9% Air Conditioners 21% 18% 10% 8% 7% Brand 1 Brand 1 Brand 2 Brand 2 Brand 3 Brand 3 Brand 4 Brand 4 Brand 5 Brand 5 18% 24% Digitally influenced in-store purchases2 Digitally influenced in-store purchase market share Online purchase market share Overall market sh

17、are 18% 18% 7% 10% 10% 7% Brand 1 Brand 1 Brand 2 Brand 3 Brand 5 Brand 6 Brand 7 Brand 4 Brand 2 27% 8%Brand 6 14% 12% Online purchases2 24% 18% 17% 9% 6% 26% 10% 9% 9% 7% Brand 2 Brand 3 Brand 5 Brand 8 Brand 1 Brand 1 Brand 6 Brand 6 Brand 3 Brand 7 Decoding Digital Influence19 DECODING DIGITAL C

18、ONSUMER 20Digital Powers Consumer Durables 21Decoding Digital Consumer 22Digital Powers Consumer Durables Source: BCG-Google Digital Influence on Consumer Durables Study 2019, BCG CCI Digital Influence Study 2017, BCG Analysis - 71% All purchase transactions can be grouped into 4 broad archetypes ba

19、sed on the pathway followed for research and purchase- as shown in the exhibit. For consumer durables, nearly all digitally influenced transactions involve an omnichannel interaction: buyers typically traverse through multiple online purchase online 20% Research online, purchase offline Pure Offline

20、 Online touchpointsOffline touchpoints 23Decoding Digital Consumer 24Digital Powers Consumer Durables RAJ HI IM 22 years, Delhi Profile Digital Age Raj wishes to replace his existing TV, wants to upgrade to latest technology Create greater engagement through personalized content Decides to check spe

21、cifications online using his smartphone Interaction across channelsOpportunities OnlineOffline 6 years The tech savvy shopper 1. MBOs: Multi brand outlets Source: BCG-Google Digital Influence on Consumer Durables Study 2019, Industry interactions, BCG Analysis Tech savvy television buyer ends up buy

22、ing online owing to better prices Research Offline Purchase Online Consumer journey and opportunities for intervention Example 1: Research Offline - Purchase Online for TV Leverage digital marketing to make relevant recommendations and showcase product offerings Proactive data driven targeted offers

23、 basis past purchases, age group/income profiles Reviews from trusted influencers to overcome initial hesitation in online shopping Optimize supply chain for faster delivery Incentivize post purchase advocacy; closely manage social sentiment about the products Visits MBOs1 to check different brands

24、to experiment with new ways of cooking Personalization-tailor messages to consumer profile Consumers are increasingly searching for latest technology avails the COD option Expects next day delivery She rates the seller Gets installation support Eg: Microwave Checks with her sister who recently bough

25、t a convection microwave oven; her sister recommends to purchase from nearby store Pre-purchasePurchasePost-purchase 27Decoding Digital Consumer 28Digital Powers Consumer Durables SARIKA HI IM 31 years, Hyderabad Profile Sarika is looking to replace her fridge; to accommodate the needs of her growin

26、g family Tailored marketing to relevant age groups/ income profiles to increase product awareness Searches online using her smartphone Source: BCG-Google Digital Influence on Consumer Durables Study 2019, Google Trends data, Industry interactions, BCG Analysis Digital Age 1 year The Patient evaluato

27、r Interaction across channelsOpportunities OnlineOffline Refrigerator buyer switches offline for salesman guidance and touch touch personalized loyalty programs and offers to drive repeat purchases Searches online by the term mixer for all brands available in the category Checks on a e-commerce webs

28、ites for prices, reviews and ratings of the product; however, doesnt order online for fear of duplicate/ damaged product Visits a local store from where he has purchased kitchen appliances in the past; trusts the store more than online Seeks sales person guidance and finalizes the model Makes final

29、purchase offline Expects good after sales services from the dealer Eg: Small Appliances Pre-purchasePurchasePost-purchase 31Decoding Digital Consumer 32Digital Powers Consumer Durables Key insights accross 3 phases of digitally influenced consumer journeys Research Duration: Digitally influenced buy

30、ers typically research for upto 2-3 weeks before making the final purchase Pre- Purchase Research channel: Digitally influenced buyers use search engines as the primary source for online research; social media, online videos, blogs choice of multiple payment options is one of the top 5 drivers Barri

31、ers for online purchase: Absence of in-person guidance and lack of touch TV, AC propensity for repeat purchase is over-indexed towards low ASP durables 9 10 33Decoding Digital Consumer 34 PRE-PURCHASE PHASE Digital Powers Consumer Durables 35Decoding Digital Consumer 36Digital Powers Consumer Durabl

32、es 74% Question: How many brands were you considering at the start of your research activities? Choice of multiple payment options in Top 5 drivers Percentages mentioned are on a base of total consumers and not relative in nature, the total may exceed 100% Source: BCG-Google Digital Influence on Con

33、sumer Durables Study 2019, BCG research closely followed by writing on the brands website. Other than providing reviews and recommendations; buyers typically engage in other post purchase activities such as seeking information on installation & use, availing warranty services, downloading the brands

34、 app & searching for more/ similar offerings from the same brand. Nearly 1 in every 3 online buyers provides digital review post purchase Question: How did you share your review or recommendation? Note: Percentages mentioned are on a base of total consumers and not relative in nature, the total will

35、 exceed 100% because of choice of multiple selections to the question Source: BCG-Google Digital Influence on Consumer Durables Study 2019, BCG Analysis 60-65% in case of other digitally evolved countries such as China 51015 % of online buyers % of online buyers 32% of online buyers provided a digit

36、al review post purchase in India Interaction on social media, brand website and online blogs / forums are the key modes of review 32% 68% Posted on the brands social media page Provided a digital review Did not provide a digital review Shared a review on the brands website Shared or liked a post or

37、page of the product via social media Wrote on blogs or online forums Recorded and posted an online video review Wrote an email to the company 13% 12% 11% 11% 11% 8% 51Decoding Digital Consumer Question: What did you do after completing the purchase? Source: BCG-Google Digital Influence on Consumer D

38、urables Study 2019, BCG Analysis 26% in-store buyers and 36% online buyers look for other offerings from the same brand post purchase Approximately 36% online buyers and 26% offline buyers either research for more offerings from the same brand and/or buy more from the same brand post purchase of a c

39、onsumer durable. This propensity for repeat purchase is over- indexed towards low ASP durables as compared to high ASP durables. Product Category Washing Machine Television Refrigerator Water Purifiers Microwave Small Appliances Air Conditioner 27%34% 24%30% 24%43% 34%41% 23%34% 26%27% 26%40% 36% on

40、line buyers who look for similar offerings from the same brand post purchase 26% in-store buyers who look for similar offerings from the same brand post purchase Propensity for repeat purchase increases as ASP decreases Opportunity to cross sell through dedicated digital marketing efforts 52Digital

41、Powers Consumer Durables SEIZING THE OPPORTUNITY 52Digital Powers Consumer Durables 53Seizing the Opportunity 54Digital Powers Consumer Durables Key takeawaysHow to winCase study 1 3 5 7 9 2 4 6 8 10 Digitally influenced sale will grow disproportionately. However, it varies by categories Set up inve

42、stments and create right digital organization structure to capitalize this opportunity Offline market share does not translate into digitally influenced share Achieve fair share or strive to beat the market leaders in the future through digital leadership 80% of digitally influenced consumers finali

43、ze the brand during the research cycle, in a short window of 2-3 weeks Focused interventions at individual consumer level across journey touchpoints Lack of “in person guidance” and “touch and feel” biggest barriers to online purchase Leverage technology solutions like AR/VR to mitigate barriers 30%

44、+ digitally influenced consumers post reviews online Drive post purchase experience and amplify advocacy at scale to influence new consumers 54Digital Powers Consumer Durables Key themes to leverage the digital influence opportunity FromTo Mass marketing Personalized interventions Digital as a small

45、 channel Digital as the core of future marketing Focus on driving purchase End-to-end consumer engagement Company-driven communication Enabling advocacy at scale Battling offline market share Driving digitally influenced share What does this mean for Consumer Durable players? 55Seizing the Opportuni

46、ty 56Digital Powers Consumer Durables Align digital budgets to tap the opportunity early Case study 1 Leveraging digital and social media platforms enabled the company to drive its celebrating the new campaign and garner over a million views within a day of the launch Analytics based customized mark

47、eting efforts to tap rich available data and drive actionable consumer insights A leading multinational electronics companys digital budget went up from high single- digit figures in 2014 to 30% of its total marketing budget in 2018 Source: External reports, Press search, BCG Analysis 57Seizing the

48、Opportunity Digital initiatives to be complemented with organizational enablement to ensure success Source: External reports, Press search, BCG Analysis Case study 2 Select examples from India and globally on increasing importance of organizational enablement An American electric car-maker selling i

49、ts cars online through its website, is using social media platforms, such as Twitter, to allow customers to interact directly with the company, including its leadership A leading Indian consumer goods company re-organized itself to carve out digital business as a separate business unit to ensure right focus at senior management level A mid sized Indian consumer company set up digital brand team to enable efficient digital marketing ecosystem for larger group of brand managers & driving synergies 58Digital Powers Consumer Durables Source: Exter