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    Covid-19 a black swan event; consumer trust more important than short-term sales: Madison’s Vikram Sakhuja

    Synopsis

    Real estate, jewellery and fashion too would be impacted by sentiment with consumers postponing high-value purchases.

    Digital Viewing
    “With digital viewing expected to increase, advertisers should invest in staying close to the consumer. The silver lining in this pandemic is that consumers are open to advertising. Building trust is more important than short-term sales, and messaging needs to be controlled and not viral,” he wrote.
    The coronavirus is a black swan event and in these times, marketing spends become unpredictable and short-term, Madison World group chief executive Vikram Sakhuja said in a report on the likely impact of the deadly Covid-19 outbreak.

    “With digital viewing expected to increase, advertisers should invest in staying close to the consumer. The silver lining in this pandemic is that consumers are open to advertising. Building trust is more important than short-term sales, and messaging needs to be controlled and not viral,” he wrote.

    The report said while e-commerce businesses will increase specially for daily essentials, consumers would be less distracted, more mindful of messages and open to promotions. “They will buy what they need rather than desire, and given the uncertainty will have a tendency to hold on to their money,” Sakhuja said in the report.

    Categories which will bear the direct brunt are the ones involving social contact. Thus airlines, railways, tourism, restaurants, retail, auto, out-of-home and cinema become casualties. “We don’t expect Covid-19 to have an incremental adverse effect on FMCG. Here, supply chain issues, rather than consumer headwinds, are the factors to watch out for. Most financial institutions could go slow on dispersement of retail loans. This is expected to have negative impact on sales of durables and mobile phones — categories that are fuelled by easy availability of zero-interest EMIs,” the report says.

    Real estate, jewellery and fashion too would be impacted by sentiment with consumers postponing high-value purchases.

    Over and above the visible impact of IPL, another Rs 3,000 crore of events are facing cancellation.


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