Around 1,500-odd consumer durable stores have opened up in green zones across the country and guess what is selling the most? Dishwashers, vacuum cleaners, food processors, coffee machines and personal hygiene products such as electronic razors and epilators. Neeraj Bahl, MD and CEO, BSH Home Appliances, says that his company has met its monthly target of dishwasher sales in just seven days. "There has been a surge in demand for dishwashers. People are now understanding the value of a well-equipped kitchen after staying at home for an extended period. Kitchen and bathroom are the two most ignored places in Indian homes."
Discretionary spends are likely to get impacted on the other side of the coronavirus lockdown. While a consumer may think twice before upgrading his/her air-conditioner, TV, refrigerator, consumer durable majors believe that with concepts such as work from home are here to stay, the average consumer will spend to make his/her home more comfortable, as he/she would be spending more time at home than ever before. Therefore, consumer durable brands going forward plan to invest a lot more on convenience products. "Working from home implies multi-tasking, which will lead to demand in products which will help people multi-task," says Manish Sharma, President and CEO, Panasonic India and South Asia. So, from robotic vacuum cleaners to intelligent washing machines, which will enable consumers to efficiently use water and detergent, Panasonic plans to fast-track some of its new launches. Also, on the cards is the launch of MirAle (Future Of Living Space) in Japanese, as part of which the company will partner with builders to launch smart homes.
Godrej Appliances, which has high-temperature wash options in its high-end fully-automatic washing machines, is now extending it to its semi-automatic machines. "Hygiene will be a huge area of concern for consumers and washing clothes at a high temperature is a proven way of killing germs," explains Kamal Nandi, Business Head and VP, Godrej Appliances. Godrej is also planning to launch refrigerators with more storage space as staying and working from home would mean more cooking and need to store.
Similarly, Bahl of BSH Home Appliances, also expects a surge in its mixer grinder, which has stone pounding blade. "It is patented to us and gives the effect of a traditional sil-batta," he explains. "I see a bump in demand for washing machines, dishwashers, and larger refrigerators. People who are missing conveniences will fill up, while those who already have TV and washing machines may not want to invest in new ones," agrees Ritesh Ghosal, Chief Marketing Officer, Croma.
But if discretionary spends dip and pay-cuts and job losses become a reality, will consumers invest in a high-end dishwasher or a robotic vacuum cleaner? Innovations will be democratised so that the consumers get the best value, says Sharma, of Panasonic. Godrej, for instance, has democratised its high temperature wash technology and made it available for its semi-automatic washing machines. However, Bahl of BSH believes that mass and mass premium will take a hit post the lockdown and growth will mostly come from premium products as consumers of that category would have the spending power.
Consumer durable head honchos are not expecting a sustained surge in demand. They expect pent up demand to surface post the lockdown, followed by sluggish growth. "If the COVID situation doesn't improve in the next couple of months, Diwali and New Year could be sluggish," says Bahl.
DIY (Do it Yourself)
Necessity is the mother of invention and the consumer durable brands have reinvented they way they offer after sales services to consumers. Godrej Appliances during the lockdown has launched a service called Remote Assist, through which if a consumer called its call centre with a maintenance complaint, the call centre employee tried to assist the consumer by encouraging him/her to try solve the problem on their own. "If it's a minor problem, the call centre executive would guide the consumer on the phone and try to sort it out. He would even send the consumer a video tutorial. We have solved over 7,000 complaints through voice and video assistance," says Nandi.
"For the first time in our history we have solved 1,500 cases through video support. These were problems as simple as something getting stuck in the drain-pipe of the washing machine," adds Bahl.
Sharma says that after-sales services in future will be a hybrid model, wherein, even after the lockdown, his company would solve all those problems that can be attended to through a video or phone call without sending the technician to the consumer's home. "The technician will go to consumer's homes only if it is really required."
The future will see an increased off-take of digital sales, as the fear of the virus would force people to stay indoors and the durable majors are gearing up for the same. Durable retailer, Croma, is working with TCS to launch its own app which will enable consumers to see inventory across all its stores and shop accordingly. "We are creating a mechanism to request a call back from the store and creating a mechanism to close the sale without going to the store. This also enables appointment-based shopping at a store. We are also planning a video chat option where you will be able to walk the aisles of a store," explains Ghosal of Croma.
However, bulk of consumer durable sales happen out of traditional multi-brand stores which don't have digital infrastructure. Godrej, says Nandi, is helping their traditional dealers to set up web sites. "We are creating digital content for our trade partners, we are giving them e-catalogues so that they can start generating leads digitally."
Panasonic, says Sharma, is first focusing on supply chain efficiencies. "We need to have a focus on inventory management. We have accelerated real-time connection on our platform so that we can see our trade partners inventory and they can see ours. This will enable us to uplift their skills and help them manage their inventory both online and offline."
While trade partners will have to learn to adjust to the new normal, Bahl of BSH expects brands to focus much more on their own omni-channel platforms. "This will lead to a surge of brand stores as consumers will not want to go to a crowded place to shop. They will browse online, choose the product and then go to the brand store to touch and feel it."
Consumer durables sales in the first quarter of FY21 is expected to dip anywhere between 40-50 per cent, and their bounce back depends entirely on how India is able to tackle the invisible enemy called Coronavirus. For the time-being all that cash rich companies can do is to understand future consumption trends and innovate accordingly.
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