The Indian government's recent move to demonetize Rs. 500 and Rs. 1000 notes has led to a deficit of physical cash in the country. The situation has also put pressure on businesses to find quick solutions to substitute cash transactions. While brands across sectors have been promoting digital payment solutions to their consumers, they have also been tying up with merchants to create innovative solutions, and using digital marketing tools to better engage with consumers. There has been a 50-70% increase in digital marketing post demonetisation. Owing to the cash-crunch, brands are now in a race to continually improve and fine-tune their content to promote digital payments. Brands are also luring consumers through offers and discounts on card payments and net banking transactions.
Opportunity for E-wallet sector
There has been a very visible surge in the promotions of e-wallet brands in the aftermath of demonetisation. Brands in this sector are capitalising on the situation to acquire new consumers. With demonetisation and the physical cash deficit, people now are more open to using e-wallets for digital transactions. Many e-wallet brands have tied up with various merchants, both online and offline, to promote digital payment solutions. For example: a renowned e-wallet brand tied up with an online cab booking service to provide credit services for a week. Now, e-wallet brands are expanding their target groups which were earlier limited to specific demographics. Consumers are now more open to trying out digital payments for their various daily activities like paying utility bills, mobile data recharge, booking cabs, making retail purchases, etc. Another strategy that e-wallet brands have been using to draw in consumers to experience their platform has been 'cashback' services.
Mobile has been the most used tool by e-wallet brands for digital marketing and their digital spends have increased threefold. Brands have been engaging with consumers through push notifications or SMS to inform them about their services and benefits. Post demonetization, brands in the e-wallet industry have been aggressively using digital marketing through a segmentation approach. Brands use marketing technology to send promotional offers and discount offers to interested consumers based on their age, likes, etc.. For example, if a consumer falls in the age bracket of 18-30 years, an e-wallet brand, by means of marketing technology, will send them information about discount offers in coffee shops or on movie tickets.
BFSI builds consumer loyalty
There has been a massive upheaval in communication, especially in the BFSI segment, from the onset of currency demonetisation. The government had earlier allowed cash withdrawals of Rs. 4500 on ATMs. This was later reduced to Rs. 4000 and now the withdraw limit is finally at Rs. 2500 per week. It became crucial for banking firms to deliver these notifications to their customers on time. The banking sector relied heavily on marketing automation to keep their consumers informed and updated about information pertaining to cash withdrawals, deposits, account information details, etc. where the information had to be shared with consumers in a time-sensitive manner. BFSI companies also needed to inform their consumers about their banks being operational on weekends. Hence, through digital marketing tools, primarily on mobile such as SMS, push notifications, IVR etc., banks were able to communicate effectively with their target audiences and keep them informed of all developments.
Marketers from these sectors have also introduced regional language SMS as a tool to tap Tier II and Tier III markets and have transcribed brand messages in as many as 11 regional languages post demonetisation. Another marketing tool used by the BFSI sector has been the automated voice IVR platform. This platform enables better engagement with consumers from rural markets. Banks have also introduced toll-free numbers for consumers to find out their account balance and details on their last three transactions. Email and SMS have worked best in Tier I markets, SMS as a core tool is working well with Tier II markets, and the IVR medium is popular in Tier III markets.
The retail sector sees a drop in communication
There has been a significant slowdown in communication and promotions from retail and e-commerce players. A majority of e-commerce purchases are made using the cash-on-delivery option, and so the shortage of physical cash is a challenge for many of these brands. As a result, e-commerce brands have temporarily withdrawn their promotions on digital platforms for new consumer acquisition. However, they are promoting digital payment offers on cards and net banking for the orders that are in the pipeline, in order to bring their consumers on the platform.
In the offline retail sector, brands have been proactively associating with e-wallet companies to allow virtual payments for their products. While SMS and email have been the most used marketing channels for brands in this sector since demonetisation, offers and discounts have been the main drivers for increased transactional clicks and conversions.
The graph: digital communication post demonetisation
While this bold move by the government to overcome counterfeiting has been largely appreciated, it has also created a huge opportunity for brands to carefully examine which digital tool gives them the best results and ROI. The e-wallet segment has seen an increase of more than 120% in the volume of digital communication messaging sent to consumers. Similarly, banking firms have also increased their digital communication by 200-300% owing to the recent developments. On the other hand, there has been a drop of over 20-30% in the digital communication from e-commerce and retail brands. SMS, however, continues to be the most preferred digital marketing tool for almost all sectors.
Banking firms are leveraging marketing technology tools to automate communication workflows due to the large amount of communication that has to continuously go to consumers. They are also using MarTech to ascertain their customers' preferred medium of consuming information. Based on these data points, banks send information to their consumers on their preferred medium whether it's email/SMS/push notifications, etc. Consumers are gradually opening up to experimenting with e-wallet transactions and are now more aware of how to use e-wallets for transactions and utilize various offers on credit cards/net banking, etc. Therefore the idea of going cashless, as witnessed in most western countries, may grow in popularity here. Going cashless and embracing digital will give brands a platform to identify which channel gives them the maximum response from consumers and will help them manage their digital spends in the future. While carrying physical cash was a risky affair for consumers, adopting digital can help them rest assured about their monetary security. It is therefore, a win-win situation for both brands and consumers.
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