Forward planning and deferred spending seems like a thing of the past. For a growing number of Indians, impulse planning is the new trend. The growth and maturity of digital technology has propelled Indian consumers to act on impulse planning or unplanned spending — from relationships to shopping, instant gratification is the new norm. Indian millennials are the key players in propagating this trend and are known to binge-buy and indulge in impulsive planning. Notably, Generation X is catching on fast with the trend.
The impulse in decision-making is mostly surrounded by millennials. This can be seen in a Morgan Stanley report 2014 that 52% of millennials are more likely than any other generation to report making impulse purchases simply to pamper themselves. To hone in on the Indian market, in addition to showing impulsive and compulsive buying behaviour, Indian consumers are dealaholics and hardcore value for money-seekers. Thus, trading is second nature to India’s millennials.
Millennials are increasingly looking at discerning or standardised experiences; even if the purchase decision was driven by impulse. So, while making their decisions, millennials desire absolute flexibility, however, they will display zero flexibility when it comes to service levels. Impulse is no substitute for unpredictable service. This is the essence of impulse planning — it is a genuine phenomenon in India and has huge implications for brands.
This phenomenon of impulse planning yet with the paradox of seeking pre-determined, standardised experiences represents a deep socio-economic and attitudinal shift across India, particularly within the millennials. An Infosys study drawing insights from Indian consumers and retailers highlights that while 90% of consumers admitted to impulse purchasing, even though occasional, 69% consumers believethat consistency of customer service is an important consideration for their purchase decisions. This indicates that consumers want complete freedom to choose, change and decide at a moment’s notice, but that flexibility is not extended to quality and service consistency, which remains non-negotiable.
Deloitte’s 2016 survey revealed that 72% of 18-34-year-old consumers have higher expectations for customer service today than they had just one year ago. It’s important for brands to understand that millennials extensively follow brands, making up their own minds about quality, value and customer care via social media, online reviews, communities, search engines and other avenues, rather than being told what they should think and feel based solely on advertising and marketing messaging. Thus the level of customer service for a millennial today must exceed their expectation as research shows that 68% of 18-34-year-old consumers would stop doing business with a brand due to a single poor customer service experience.
Interestingly, the travel and hospitality sector in India is also witnessing the phenomenon of impulse planning. From backpacking to luxury travel, solo to multi-generation group travel — the requirements of Indian travelers’ are varied and complex. However, there is a huge disconnect between demand and supply of quality living spaces, forcing travelers and city-dwellers to compromise on location, comfort and pricing. It is therefore, the need of the hour to seamlessly bundle technology and talent to fix this problem, so that people and property are in perfect equilibrium. Growth and maturity of digital technology and easier access to the Internet have triggered impulse planning manifolds. With a steady rise of a new class of information savvy travelers connected to the great World Wide Web of Information on their smart-phones, tablets and laptops, consumers are increasingly confident of their bargaining positions. Super affordable rooms, hassle-free experiences — everywhere, every time is the new order and they are non-negotiable.
In my own experience, there is no better way to drive standardisation than the use of technologically converged digital applications. Be it the booking of hotels, check-ins, checkouts, room service, reaching out to local concierge services and allied services such as hiring a cab — all can be done via apps. For both hotels and guests, apps are convenient, cost-effective and swift. The convenience and speed of apps can be gauged from the fact that barely three or four taps and a few seconds are required for bookings to be confirmed. With the same standards extended to the rooms and services, travelers need not have any apprehensions about the actual conditions of the rooms upon arrival. As smart technology gains ground globally, the hospitality sector should adopt these at the earliest.
Even while services are standardised, innovation needs to be at the heart of ensuring exceptional experiences. Innovation provides a great opportunity to cater to customers, even if the purchase decision is driven by impulse planning. For example, the average youth of today is heavily inclined towards travel, and a major chunk of his/her income is spent in the travel and hospitality sector. Today, Asia is home to at least 60% of the world’s millennials, who are expected to reach their peak of spending power in the next decade. A survey done by the Singapore Tourism Board revealed that 64% of this group opts for completely independent travel arrangements on leisure trips. Companies will have to ensure that they consistently innovate to be relevant to this ever evolving group of customers.
Impulsive planning has opened up an altogether new culture of consumption, across segments including the travel and hospitality space. Plans usually happen at the spur of the moment. We will continue to see a surge in bookings from impulse travelers both within leisure and business segments. At the same time, we will stand witness to an emerging paradox in that even as travel-planning cycle reduces further, the expectations from on-ground suppliers and agents will be of delivering a non-negotiable and predetermined experience. Digital technology has transformed the expectations of consumers who seek total flexibility in purchase decisions with zero room for error in service-experience.
(The writer pictured above is Founder and CEO of OYO)