BASES, a NielsenIQ business, has released the findings of their latest study that highlights how open consumers are to new business models in the durables and electronics industry in India and other countries post the pandemic.
With the objective to understand how durable goods manufacturers can keep consumers engaged and enhance their experience post the pandemic, NielsenIQ BASES finds among different business models, Product Service Systems (PSS) to be the most future proof for consumer durable brands. The global study, conducted in US, Germany, Brazil and India, highlights that engaging the customer throughout the product’s lifecycle by adopting new business models will prove to be beneficial for brands.
“Extending the relationship between a company and its customer, beyond point of sale, opens up new opportunities for brands to interact with customers to understand customer demographics, gather important performance and usage feedback, and deepen the customer relationship by better responding to their needs,” said Vidya Sen, South Asia Lead, NielsenIQ BASES.
In order to deliver personalized services for their customers, brands must look at options that are fulfilling a user’s needs. The study talks about two variations of product service systems (PSS).
Ownership of a product is transferred but additional services are offered to consumers.
Ownership of a product remains unchanged, but usage is made available to consumers.
In India, the COVID-19 pandemic reinforced that consumer goods companies need to evolve how they engage with distributors, retailers, and end-consumers to drive growth and boost profits in the coming years.The study finds out that, from investing in new digital capabilities to updating business models, to making CX a critical competitive differentiator, could help brands keep consumers engaged and deliver on their expectations.
“In India, adding services, customization, automation, or leasing options provide manufacturers the opportunity to introduce more on-going revenue streams. Depending on the business model, manufacturers can add small additional revenue throughout the product life-cycle or shift part of the investment to the usage period as is the case of leasing models,” said Vidya.
Product automation is universally appealing
Product automation model ranked number one not only in India but also USA, Germany and Brazil. Indian consumers, for whom having the latest technology is always important believed that product automation is the way to go for consumer durable brands as it will allow personalization and provide an efficient outcome.
While Pricing was important for consumers in USA, Germany and Brazil, product quality, support and aftersales service stood out as crucial factors for Indian consumers when it came to automated products.
Personalized beauty care products are of interest to consumers across the world
Within the personalisation space, personalised beauty focussed devices generate maximum focus in India while oral care and cooking appeal in the US and Germany. A personal care appliance that collects info and suggests improvements to the personal care routine or a toothbrush that analyses teeth and suggests products for oral health needs or even a hair dryer that analyses hair and suggests treatments/styling product is what appeals global consumers. The study also reveals that, contrary to belief, consumers do not rely on celebrities and influencers while making decisions of buying such products. The research finds that communities of like-minded consumers and professionals appeal to consumers equally.
Embracing circular economy model
As consumers become more discerning and more demanding of businesses to be responsible, they’re pivoting towards companies that engage in circular practices. For consumers this means buying durable products that are recyclable or made with recycled materials; keeping them in use for a long time through effective maintenance and repair, or ensuring responsible end-of-life actions so that little to no waste is generated. For businesses, this includes developing products and business models that eliminate waste by design, reducing the use of raw materials, and planning for return/recovery of products and packaging, among other actions.
In India, consumers see manufacturers of large durables, electronics and small kitchen appliances as a better fit for the circular economy. However, pricing remains a great concern for them as they are not comfortable spending an extravagant amount on sustainable products.
Pay per Use is Preferred
While the Pay per Use model has been tried and tested successfully in the technology sector, NielsenIQ BASES research suggests that the model holds the potential to be accepted by brands in the consumer durables sector too. With more and more consumers demanding flexible payment options and innovative yet cost-efficient products, the consumer durable brands in India have the opportunity to offer products that cater to the customer demand and at the same time have a unique payment model.
NielsenIQ BASES is a leader in helping companies build brands through innovation, renovation, strategy, and go-to-market optimisation, and is a trusted partner globally, and across industries. BASES helps maximise brand success end-to-end through advanced predictive analytics, behavioural science, proprietary databases, expert advice, and agile, digital technology platform.