Vadapalli, CMO of online furniture retailer Pepperfry, revealed that the company brought down its ad spends from Rs 170 crore on advertising in FY19 to Rs 120 crore in FY20
The festive season is sure to have revived ad spends, which witnessed a dip in the first half of the year. Online furniture retailer Pepperfry ramped up its marketing spends this festive season by making an appearance on television after nearly one-and-a-half years. The brand is back with a couple of festive spots and says that sales levels too are higher 50-60% than pre-lockdown levels. In conversation with exchange4media, Kashyap Vadapalli, Chief Marketing Officer & Business Head, Pepperfry opens up on festive advertising in the new normal, post-Covid marketing mix, advertising budgets and how digital is bolstering its position in the market.
Edited excerpts below:
Share with us Pepperfry’s festive marketing plans this year. Given the various new complexities brands have to navigate with Covid, how are they different from the previous years?
Therefore, to engage with our consumers further, we decided to adopt a multi-pronged marketing strategy for this festive season. For the first leg of the season which began in August, we launched a huge digital campaign ‘Swadeshi is Great’, across all digital and ambient media and supplemented it with a Swadeshi Sale on the website. The overarching theme of the campaign was around promoting and celebrating the expertise, craftsmanship as well as the rich lineage of Indian artisans. Through the campaign, we encouraged consumers to buy Swadeshi furniture not only because they are Indian but also because they are superior.
After seeing the remarkable response of the first leg, for the second leg of the festive season, we launched our ‘Family Times= Pepperfry Times’ TVC-led campaign, which was also amplified across digital platforms and was supplemented with a sale. Our key objective behind the Diwali campaign was to highlight how this year, individuals will be celebrating Diwali indoors with their loved ones and the role furniture plays (directly or indirectly) in creating those moments and memories that bring the family together. Along with the campaign, we introduced new products with attractive offers and discounts to cater to the increasing interest of consumers towards the category.
Taking cognizance of consumers growing interest towards the furniture and home décor category, we are optimistic of surpassing revenue levels of the previous festive season by 20% – 30%.
The brand spent over Rs 170 crore on advertising in FY19. What have been the ad spends in FY 20? How much has Pepperfry planned to allocate for the festive season?
FY19 was an investment year for us from a Brand Building and New Launches perspective (Brands/Collections/Studios) and we invested heavily in marketing and saw a big jump in revenues. In the next year (FY20), we brought this down to about Rs 100-120 Cr.
Typically, the budget split looks like 70:30 wherein the larger share is allocated to digital. However, this festive season’s budget is 50:50, wherein the budget is divided between traditional avenues (i.e. television) and digital and new-age platforms. We had allocated around Rs 20-24 Cr for this festive season (August to November).
How is digital bolstering your position in the market today?
The fact that we are a digital-first marketplace with a strong omnichannel business model, helped us in swiftly recovering after the lockdown regulations were eased.
Given consumers’ apprehensions towards stepping out coupled with a rise in need for functional as well as aesthetical home improvement products, we saw them actively researching and buying furniture online. We witnessed an upsurge of 40-50 per cent in the time spent by consumers on the site and page depth.
Also, with more individuals shifting to online shopping, we witnessed an increase in our online business which soared to 120% of pre-lockdown levels. This increase in interest towards the category was uniform across cities, however, our first-time-buyers (FTB) business grew at a faster rate than repeat buyers in Tier-2 cities. Overall, our FTB business contribution increased ~500bps for Tier-2 cities and beyond.
While during the first two months (March and April) of the lockdown we witnessed a dip in sales, business picked up swiftly with the ease of lockdown regulations in May. The growing interest of the consumers reflected positively on our sales volume- with 40% of pre-lockdown sales in May, 70% in June, 85% in July and then a full recovery at 100% of pre-lockdown volumes, in August. Currently, the sales levels are 50% to 60% higher than pre-lockdown levels.
We use the entire digital marketing stack in our consumer-facing efforts and they form the mainstay of the reach/frequency and impact that we generate. We use digital for brand building (thematic video ads deployed on video platforms supported by rich media and interactive display creatives), we use digital for top of the funnel awareness activities for sales and promotions via video/display and text, we use the AI/ML led sharp targeting to reach customers for mid and lower funnel visits and conversions across search, social and content marketing.
What are the mediums the company plans to leverage this festive season?
During the initial days of the pandemic, i.e. the period between March-May, we focused primarily towards digital and owned mediums like email marketing, push notifications and social media platforms like Twitter, LinkedIn, Facebook and Instagram.
We tailored our messaging to make it more relevant, engaging and interesting for consumers from a brand and situation perspective. For instance, since movements were restricted, we aimed at addressing the challenges through tips like how to maintain furniture, DIY décor ideas, safe ways to rearrange your furniture and so on. We witnessed an increase in consumer engagement, through these themes. Additionally, in line with our brand personality of being pioneering, intelligent and conscious we looked at the content that helped the audience get up to date with the latest in lifestyle choices with a focus on the home through a series of expert interactions. We used interesting formats such as quizzes and trivia to keep the curiosity alive and to achieve high engagement levels.
Thereafter, as lockdown regulations eased and the interest towards our category gained momentum, we decided to adopt an integrated campaign approach, which covered traditional avenues like television as well as digital and new-age OTT platforms like YouTube, Facebook, Instagram, Twitter, Hotstar, et al. Our rationale behind this was to emphasize and highlight the brand’s portfolio, features, et al to existing and new customers.
With competition adopting digital and going omnichannel, how do you plan to differentiate yourself in the market?
We are the pioneers and leaders in the omnichannel furniture play in the country – we get more than 10 million visits each month on our digital platforms and our 60+ network of Studios covers 20+ cities that draw tens of thousands of footfalls. No other player in the country is anywhere close to us in terms of these numbers of reach. Pepperfry’s curated and wide-ranging catalogue is the most well-researched and specialized in the industry and caters to all pockets in terms of budgets and all design styles in terms of aesthetics.
Our in-house big-box logistics network which consists of 3 hub fulfilment centres, 17 distribution centres and more than 400 owned vehicles along with a dedicated 250 member carpenter desk makes us unbeatable when it comes to service that we provide our customers.
All these points are a testament to the fact that we have been the harbingers of omnichannel furniture retail and service in the country which has also helped us in entrenching our position as the market leader in the category. We believe that we will continue to lead on the parameters of supply, service and specialization and consumers will surely continue to respond positively.