Understanding Retail Consumers

7/29/2019 Understanding Retail Consumers

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UNDERSTANDING THE RETAIL CONSUMERS


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Learning objectives

The factors influencing the retail consumer

The consumer decision making process

Changes in the Indian consumer


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The cultural differences in different countries can impact the desired

Retail Experience

Except ... The interplay of cultural mix


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What Makes Retail Shoppers Tick


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FIGURE 7.3

The Classic Segmentation Variables for

Consumer Markets


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Consumer Behaviour ...

In-Home Shoppers

Shopping is discretionary, not necessary, Convenience is important

Active, affluent, well-educated

Self-confident, younger, adventuresome

Time scarcity is not a motivator

Online Shoppers

Use of Web for decision- making process as well as buying process

Convenience is important

Above average incomes, well-educated

Time scarcity is a motivator


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...

Out shoppers

Out-of-hometown shopping

Male, young, members of a large family, and new to the community

Income and education vary

They like to travel, enjoy fine food, are active, and read out-of-town

newspapers


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Classification of Customers

Loyal Customers: They represent no more than 20% of customer base, but

make up more than 50% of sales.

Discount Customers: They shop stores frequently, but make their decisions

based on the size of our markdowns.

Impulse Customers: They do not have buying a particular item at the top of

their To Do list, but come into the store on a whim. They will purchase what

seems good at the time.

Need-Based Customers: They have a specific intention to buy a particular type

of item.

Wandering Customers: They have no specific need or desire in mind when they come

into the store. Rather, they want a sense of experience and/or community.


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Attitudes Towards Shopping

Shopping enjoyment, Entertainment

Shopping time

Shifting feelings about retailing : Shopping becomes an addiction

Why people buy or not on a shopping trip

Attitudes toward private brands


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Cross-Shopping

Shopping for a product category at more than one retail

format during the year

Visiting multiple retailers on one shopping trip


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The Consumer Decision Process


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Indian Consumer


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Reasons for Change in the Indian Consumer

Media explosion , Peer Group,

Increase in disposable income and rise of Indian middle class

Increase in the no. of earning young people

Increase in no. of working women


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Key Trends Impacting The Market

Urbanization?

How rapid is it going to be?

What is the likely impact on consumption and its growth/trends?

Changing family structures? What is the future family structure?

How is it going to impact shopping behavior?

How is it going to impact the spending power and hence consumption?

Demographic Changes?

What would be the demographic structure of India in next 5, 10, 15 years?

How is it going to impact shopping behavior?

How is it going to impact the spending power and hence consumption?


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In View Of The Rapidly Expanding Spend Categories

1. Food and Grocery

2. Clothing

3. Footwear

4. Consumer durables

5. Expenditure on DVDs and VCDs

6. Home linen

7. Home accessories

8. Accessories9. Gifts

10. Take-away/ Pre cooked / RTE meals

11. Movies and theatre

12. Eating out

13. Entertainment parks

14. Mobile phones and service

15. Household help

16. Travel packages17. Club membership

18. Computer Peripheral & InternetUsage

2004 2010

1. Food and Grocery

2. Clothing

3. Footwear


5. Expenditure on DVDs and VCDs

6. Home linen

7. Home accessories

8. Accessories

9. Gifts

10. Take-away/ Pre cooked / RTE meals


12. Eating out

13. Entertainment parks

14. Mobile phones and service

15. Household help

16. Travel packages

17. Club membership

18. Computer Peripheral & Internet Usage

19. ???

20. ???

21. ???

22. ???

1. Food and Grocery

2. Clothing

3. Footwear


5. Home linen


7. Eating out

1991

Note: The above categories account for 80% of consumer spending


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Two-faced Indian Consumers

Seeking up gradation in some categories & value in the others!

Key issue for any retailer is to identify the upgrades and value-focused product

categories to rationalize the product mix and maintain healthy margins

Consumer SpendsGrocery

Apparel

Eating Out

Upgrading

Mobile phones

HousingAutomobiles

Durables

Education

Seeking cheaperoptions


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Some myths

Myth: The Indian middle class lives in the metros.

Reality:Of the 80 million households that constitute the Indian middle

class, only 25 million are in Tier I cities. Close to 55 million belong to the

smaller towns. Mercedes sells more cars in small-town Ludhiana than it

does in Mumbai


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Myth: India is a "price sensitive" market.

Reality:For products such as Vim Bar dishwashing detergent and Head &

Shoulders shampoo, the Indian market easily absorbed price hikes of 13%

and 18%, respectively, in 2007. Yet for years, candy manufacturers have

been trying in vain to increase prices from 50p to Re 1. Value sensitivity,

not price sensitivity, is the buzzword.


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Implications

Profile of the Indian consumer is changing and so are the aspirations and

buying behavior

Consumer understanding and consumer orientation will be one of the key

drivers of future success


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Thank You !!!

Documents

Understanding Retail Consumers