Perspective | What does a celeb get on the table for e-commerce businesses?

A keen observation on the growing internet trends in the country show that e-commerce as an industry has been witnessing, phenomenal growth in the last couple of years. Innovative marketing stunts have spurred the trend of e-commerce portals joining hands with Bollywood stars for promotional purposes.

No qualms that ‘Bollywood’ brings with it, a well-established mass appeal which creates the right platform to gain visibility as well as drive traffic and eventually sales on the portal / site. Leading e-commerce portals as well as start-ups are now jumping on to this bandwagon as this they foresee this strategic partnership for the long run. With an aim to grab more eyeballs and eventually sales, e-commerce companies, small or big, are seen casing themselves with stardust through activities varying from branding to creative alliance and investments.

In reality, the ever growing trend of collaborating with prominent film personalities is observed to be a common trend in e-commerce now. Lenskart.com had recently launched an ad campaign with two new TVCs featuring famous VJ-turned-actor Purab Kohli. Similarly online retailer Yepme.com signed on Farhan Akhtar as a brand ambassador and Actor Ranveer Singh is endorsing Myntra's in-house casual wear label Roadster. Another emerging venture in the race - Foodpanda.com is banking on big-name celebs / stars to win them customer attention by roping in Yami Gautam to support their online campaign “Food for Soul”.

In this edition of Adgully Perspective, we talk to industry players and brand experts to get our queries resolved. We asked them – what according to them is the need of a celebrity endorsement when a consistent growth is witnessed? Also, while these portals have started advertising on television, only recently, how have they managed to pay the high cost of celebrity endorsements as well? How, according to them is this strategy viable?

For this purpose, we spoke to industry personnel like Peyush Bansal, CEO & Founder, Lenskart.com, Kunal Kishore Sinha, Founder and Director, Value 360 Communications; Saurabh Parmar, CEO & Founder, Brandlogist; Yannick Colaco, MD, NBA India; Rohit Chadda, CEO and Co-Founder, Foodpanda and Praveen Sinha, Co-Founder and Managing Director, Jabong.com 

Bansal believes that a brand needs to be very clear of what it wants to accomplish by leveraging a celebrity. Baring few big players (who are spending a lot on TV); most of the smaller online players are going through a typical funnel where they are trying to solve build awareness and consideration for their products/services.

Parmar says, “E-commerce in India has been more about building scale or if you were to put it another way- get enough traffic/user base to eventually get invested. Unfortunately margins and business viability have not been the major focus which is a major concern currently.” 

When asked, does the celeb factor help in boosting sales, he said, “Celebrities help a brand achieve cut through with the audience – it aids brand recall and ‘top of mind’ awareness. Partnering with right celeb will help the brand generate interest and intended response - in case of e-commerce this means visitors on the site which eventually translates into sales.”

Being a public relations personnel, Sinha believes that Celebrities have always had the clout to be impactful ambassadors for the brands they endorse as their fan following is likely to associate a positive image and credibility with the product or service they testify for.”

Sinha believes that when it comes to e-commerce brand tie ups with films, it is definitely a win-win situation for both. “Mutually beneficial collaterals can be worked out to ensure that while the film or celebrity promotes the e-commerce brand through in-film advertising or a TVC, the film gets equal mileage on the website through click and win movie/premiere ticket offers, sale of film merchandise and ‘meet and greet the star’ opportunities which further promote the film,” Sinha added.

Colaco, who has recently opened a retail store in India in association with Jabong opined, “I think every brand has their own way of marketing themselves. Hiring celebrity brand ambassadors is a marketing tool that some use and a lot of brands don’t. Given that our players are global celebrities, we don’t see the need to separately hire celebrity brand ambassadors for our marketing efforts. It also helps that there we have celebrities from different industries who are fans of the NBA and thus love talking about the game, a case in point is Abhishek Bachchan.”

Praveen Sinha stated, "I think, we all know how a consumer gets inspired with Bollywood celebrities hence associating with them avails alot of oppurunities in terms of connecting to our consumers. We did it with Yeh Jawani Hai Deewani, Bhaag Milkha Bhaag and Main Tera Hero recently. The day movie was launched that particular collection was available online on our website. It's not that they are helping in promotion but also through them your products gets showcased. It's a global trend, there is no clear maths whether it's really  helping raising the bar of profit generation but yes it helps driving inspiration." 

As like other E-commerce players Chadda also believes that more than adding value in terms of sales and growth, the celebrity helps the brand build/strengthen reach, credibility and better connect with the target audience. He said, “Yes of course celebrity endorsements might help in boosting sales but more than that it is important for a brand to first build in reach and credibility in the highly cluttered E-commerce market to stand ahead of the curve which will automatically help in achieving high growth and sales numbers.”  

E-Commerce players believe that the e-commerce segment in India is expected to witness a compounded annual growth rate (CAGR) of nearly 40% by 2015 as per estimates. This has made the market fiercely competitive and every e-commerce player is engaged in a game of one-upmanship and grabbing as much share of the customer base as possible. However, an IMAI report suggest that e-commerce portals get quantifiable traffic, where some portals boast double digit growth over the last two-three years and others stand consistent in the game.

Expressing his views here, Bansal said, “The use of celeb should not be tactical but strategic and it should be because one is trying to solve a certain business/brand problem. In case of lenskart.com, we wanted to reach out to online shoppers and educate them that now they could also shop for their eyeglasses online on lenskart.com. We needed to use a protagonist who our audience will identify with and would sound believable; this is where we decided to associate with a celebrity as it adds a layer of credibility to entire messaging/communication. A celebrity acts as catalyst in the entire marketing mix and multiplies the impact from any campaign.”

Praveen Sinha here opined, "I think we should do it rightly and we will find a measurement to prove it or not. Results are not generated automatically but need time to generate it. First point in mind is whether youth is getting inspired by the stars and if yes how many of them actually buy it. Jabong is so big today, and overall transaction is huge too. The growth is not dependent on one film or so as their are loads of small steps that we follow, strategic analytics and consumer feedback helps." 

Though associating with Bollywood is not new in a country like India; but as reported in our segment Perspective, Adgully understood that e-commerce portals were in a mad-rush of acquiring ad-spots on television, only recently. So the question now is how have they managed to pay the high cost of celebrity endorsements and how viable is this strategy?

 "I think, it is viable. It might appears expensive it's about collaborations. But yes branding will never help you generating revenue numbers," Praveen believes. 

On this, Bansal opined that brands need to check their scores on following parameters to find whether they have improved for them post a celebrity endorsement like: top of mind recall, preference and imagery but also improvement on these brand matrixes means more traffic and better conversion. Secondly, especially e-commerce brands need to manage the problem of brand stature of their brands vs. the celeb. If the awareness for brand is low it would be suicidal to attempt endorsement with big celebs because than the celebs will outgrow the brand and the desired cut through will be difficult to achieve – it might end up as an expensive and nonviable choice to begin with,” Bansal said.

Since Sinha has in the past handled some e-commerce clients on the public relations front; expressing his views on how these clients are willing to make large spends on bringing celebs on board, he opined, “It is understood that while celebrities are massive crowd pullers, it is not wise to simply sign on a celebrity because you wish to promote your brand. Careful deliberation must be done to ensure that the celebrity being appointed has an image that complements the motto or brand identity.”

As told by Sinha, “We have had some of our clients tie up with celebrities to innovatively publicise their new collection of products, change the perception of a brand, focus on new features or advantages and of course popularise the brand overall. These reasons, in some cases, justify a large spend on bringing a celebrity on board. In the recent past, Nargis Fakhri associated with our client Fashionandyou.com which led to a significant increase in sales for the exclusive apparel she endorsed on the site. Recently, Purab Kohli has been roped in by yet another of our clients, Lenskart.com where his affable and contemporary charm appeals to a young audience as well as fits in with the urbane, vibrant and chic collection of eyewear the brand currently sells on its site.”

From e-commerce point of view, Bansal believes that one needs to look at stars who might be new or yet to break out in big league, but are popular for certain trait in their audience and will fit the intended communication. This will ensure brands get good Return on Investments from celeb endorsement in both short and long term.

Looking at all the above mentioned points, is it fair to say, that a celebrity more than boosting sales help in getting more traction and building more reach of the brand?

“The challenge with ecommerce & celebrities is the challenge with any celebrity endorsement. The brands connect with the celebrity is often not clear & since most celebrities end up endorsing so many brands, credibility is an issue. It will probably boost sales but I am sure there are other better ways to build a brand. As long as ecommerce brands are heavily funded they will continue to blow money & grab eyeballs. In the end it's the service & the user experience which establishes the brand,” Parmar opined.

Sinha said, “It is definitely a given that a popular celebrity will prove to be a good brand ambassador for driving attention towards your brand in the initial stages. However, experts would agree that such a move is no guarantee to sustaining good business in the long run. After the initial push, what will take your business forward is finally the range and quality of offerings, reliability, delivery and after sales service, word of mouth and customer feedback.”

Though our panellist were quite reluctant in sharing growth and sales numbers, looking at the rush of ‘slotting in’ celebrity, the trend seems to have been proved to be profitable for e-commerce players as the marketing and promotion strategies become more effective in a country where superstars are followed and praised to a large extent. But this is also a fact that how many people believe that Salman or Sachin actually use the travel portals they endorse, isn’t it?