Entering Russia as a foreign brand can be daunting. But earning Russian consumers’ trust will pay off – they’re highly loyal. Here’s how to cultivate a successful brand identity in Russia.
Russian consumers are cautious. Plagued with fragile banks and online scams, they’re looking for security and value for money. At the same time, they’re prone to impulsive purchases of exclusive luxury products to show off their wealth and status.
This may seem like a contradiction. But it’s a circle you can only square by understanding Russian consumer behaviour. Here are four things you need to know.
1. SPEND TO SAVE?
After the 2008 crash, the value of the rouble nosedived, driving up prices and reducing spending power. Although the poverty level has decreased in the last 10 years, it’s still above average. Russian consumer confidence hasn’t recovered either. In 2018, 61% of Russians believed the economy was in recession – a 10% increase from 2017 and the highest figure in Europe.
Unsurprisingly, Russian spending habits have been affected. Because they don’t trust the banks to look after their money, they don’t save. Instead, they spend 80% of their income. And they want to exercise their spending power now before further disaster strikes – 47% of items are purchased for use on the same day.
But this doesn’t mean they’re into retail therapy. Only 16% of Russians enjoy shopping – 10% less than the global average. Shopping is needs-based, and consumers want to maximize their investment by purchasing high-end, long-lasting products.
Russian consumers have also started looking for local shopping opportunities, where local brands can adapt their prices more easily to the economic situation. As a result, Moscow and St Petersburg have become retail centres.
So what does this mean for your brand? To appeal to Russian consumers, emphasize your products’ value and reliability. And if you’re a luxury brand, justify the higher price tag by proving you’re a worthwhile investment.
Of course, bear in mind Russia is economically split. The top 20% of the population is eight times as wealthy as the bottom 20%. If this is your target audience, you’ll need to adjust your strategy accordingly.
2. LOYAL FOLLOWERS
If that sounds depressing, there’s a silver lining: Russian consumers are very loyal once they’ve become your customer.
You know those round-the-block queues Apple’s iPhone launches are famous for? That’s the kind of loyalty Russian consumers regularly demonstrate. The high premium Russians place on value means once they’ve tried and enjoyed your brand, they’ll keep coming back for more.
The high rate of scamming in Russia also contributes to this. If you can prove you’re not out to steal consumers’ money, you’ll gain long-term leads. So it’s well worth investing in your image as a trustworthy brand.
3. MUM’S THE WORD
In Russia, family members could be your biggest brand advocates. Over half of Russian consumers regularly shop for their entire family – 8% more than the global average. To compare, just a third shop for themselves.
That’s why brands are increasingly focusing on families in their marketing strategies.
For example, Nivea launched a body cream in 2014 featuring a skating family on the packaging. It was part of a campaign to fund the rebuilding of abandoned local ice skating rinks. And in 2016, H&M launched a collection of school uniforms, promoted by celebrities’ children wearing dark jackets and white shirts. The campaign was such a hit it was repeated in 2017.
So if your target market is a young man, don’t just tell him what he could be if he buys your product. Tell his mother how it will improve her son.
4. RUSSIAN – THE LANGUAGE OF TRUST
Russian consumers are wary of scams, so they like communicating directly with sellers either via phone or web chat. As a result, contact centres are a must. But you’ll need to fully localize your post-sales support and hire a local communications team – Russia has one of the lowest English proficiency levels in Europe.
Of course, you should also translate your website and product descriptions, as well as localize the price into roubles. Otherwise you’ll have no need for a good post-sales experience – Russians are far less likely to buy from you in the first place.
Russian consumers are complicated. Their limited disposable income means they value price, quality and brand reputation highly. But once you’ve won their loyalty, they’ll likely stick with you for years, and introduce their family to you too. So as an international brand, be ready to justify your higher price tag – the reward is worth the effort.
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