The contradictory demands and expectations of Russian consumers can initially seem daunting. But winning trust can reap huge rewards since Russians are known for their brand loyalty. Here’s how to create a successful brand presence in Russia.
Russian consumers can be cautious buyers, but they’re also known for impulsive purchases of exclusive luxury products.
This may seem like a contradiction. But it’s a characteristic of Russian consumer behavior to be aware of. Here are four other things you need to know.
1. RUSSIAN CONSUMER SPENDING
After the 2008 crash, the value of the Russian ruble nosedived, driving up prices and reducing spending power. Although the Russian 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 banks aren’t particularly trusted to look after their money, Russians often don’t save. Instead, they spend 80% of their income. And 47% of items are purchased for use on the same day.
However, 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 are increasingly 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 centers.
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.
Keep in mind, though, Russia is economically split. The top 20% of the population is eight times as wealthy as the bottom 20%. You’ll need to adjust your strategy for your target demographic.
2. BRAND LOYALTY
Russian consumers are very loyal once they’ve become your customer.
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.
The high rate of scamming in Russia also contributes to this trend. 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. FAMILY-ORIENTED MARKETING
In Russia, family members can 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.
4. RUSSIAN CONTENT
Russian consumers are wary of scams, so they like communicating directly with sellers either via phone or web chat. As a result, customer contact centers 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.
You should also translate your website and product descriptions, as well as localize the price into rubles. Without this effort, Russians are far less likely to trust and buy from you.
Because of their limited disposable income, Russian consumers value price, quality, and brand reputation in making their buying decisions. But once you’ve won their loyalty, they’ll likely stick with you for years, and introduce their family to your brand as well. So be ready to prove your brand value – the reward is worth the effort.