Pointers from "Indian Wallet & Brand Share" report

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Pointers from "Indian Wallet & Brand Share" report

Post  Anand on Sat Aug 16, 2008 3:14 pm

“On an average, the youth spend almost the same amounts annually on apparel and accessories as the elders in their household,” reveals the IMAGES-AC Nielsen study on The Indian Wallet & Brand Share. The book ascertains spending behaviour among the top-end urban customers in India, with a special emphasis on the youth segment.

The Wallet & Brand Share report is a macro view of the spending shares of adults (25-50 years) and youth (16-24 years) among the top 2.3 per cent of urban India households. It is meant to provoke and trigger thoughts that can develop into consumer insights – ultimately meant to help brands and retailers better position their product offerings, their store locations as well as their brand communication strategies so as to maximise their returns on investment.
An eye-opening investigation into consumption patterns of India's premium consumers, the mega research study captures the aspirations of the top-end socio-economic stratum of the country – a truly brand-conscious segment.
“This study derives significance from the fact that this is a period of rapid growth of retail in India and there is every possibility that un-informed or ill-informed investment strategies may go wrong – the study helps gain immense insights into consumer spending behaviour,” said GD Singh, director of Images F&R Research.
The Brand Share Report, the second part of the book, is based on the IFA 2007 Consumer Study that received more than 1.1 million responses from 177 cities in India and abroad. It is a detailed report on the most admired fashion and lifestyle brands across gender, consumer age-groups, and zones.

Insights: Youth • More than half the amount of disposable income with the youth is from working; though only 28 per cent work… enough motive for the youth to start working sooner than later… and spending more

• Youth spends almost the same amounts annually, on an average, as their households, on apparel and accessories!

• Scope to target products for this “most happening” segment; what about “youth stores?

• Youth spends doubly more than their households on internet usage; landline telephones are passé compared to the mobile phones, never mind the expense!

• Does this suggest the use of multi-channel retailing to generate more youth footfalls?
Insights: Men and women • Though men and women have equal intensity in shopping for childrenwear; for infantwear men are clearly much higher

• More men buy women westernwear than women. Are we targeting the right audience?

• Young men tend to spend almost 3 times as much on gifts as young women. Is the target for “gifting” predominantly the male?

• Average annual credit card payments is Rs 62,220; for young adults this is a whopping 1.21 lakhs; females are even higher
Think through these… About 6 per cent of wallet share is spent on children's education; however, spends on school uniform is negligible

Is there scope for innovation in school uniforms?
About 12-13 per cent have home or auto loans, but only 7 per cent have durable loans

Is there an opportunity to innovate on loans for durables and other high-ticket items?
Delhi has the highest spends on self-transport

Will parking space become a critical variable in deciding which mall to go to in Delhi ?
Demographics and psychographics are determinants of consumer behaviour across diverse regions. Zonal analysis shows:
• South leads in terms of working youth and their disposable incomes are highest as compared to counterparts in the other regions
• North Indian guardians spoil their ward with the highest level of pocket money
• North loves its dine-outs, while South is ardent about its Tollywood. More smokers in East, while West likes chilling out with vacations
• More of youth in North zone buy apparel and fashion accessories, though average spend is higher in West
• Youth down South spend more on two-wheelers, while youth in West spend more on mobiles • India is many countries, is not only a “cute saying”
• Ahmedabad accounts for the highest annual spends on furniture – more than twice that of Delhi
• Expenses on mobile handsets is the highest in Ahmedabad
• Expenses on music systems is the highest in Mumbai
• Chennai spends are the highest on durables of daily life

Various researches in the recent past have thrown up some interesting snippets, not all of these agreeing with the conventional theories.

  • Most consumers choose outlets that are conveniently near, around a 5-10 kilometres radius; a greater distance negatively impacts the frequency of visits
  • A group closed certain stores without significantly reducing overall turnover
  • Each “anchor store” within the vicinity of an outlet could increase turnover by as much as 50 per cent
  • Competition around an store actually increased footfalls to that store because the store offerings became more attractive
  • Wallgreens selects locations that enable it to offer drive-through prescription pick-up – a value-added customer service
  • An “effective” front-end staff could impact sales by up to 30 per cent
  • More than 70 per cent consumers attribute their best customer service experience to store employees
  • A drug store is staffed by “nurse practitioners” to help the patient who is in a hurry and does not want to go to a doctor
  • Effectively meeting customer expectations reduced operating budget, fixing issues related to poor customer service by up to 75 per cent
  • Right product knowledge with front-end staff triggered upselling by 30-40 per cent
  • People will bend to pick up regular purchases, but may not make the effort for new/unknown products
  • Near-the-doorway is a lower traction area and, hence, lower noticeability
  • People find it easier to read/notice at eye level and instinctively reach out to the right side to pick up
  • By accommodating the needs of men and children who might not be interested in shopping, the retailer can keep the family in the store longer. IKEA has a ball pit in which children can play while their parents shop; Nordstorm provides sitting areas in its store and pubs where men can have a beer and watch a football game while their wives shop
  • Time spent at shop is an indication of both the volume of shopping and the amenability of the store
  • A store displayed colours light to dark, and found it the most appealing display pattern for their customers
  • Retailers encourage impulse-buying behaviour by using prominent POP to attract attention
  • Sales of grocery items are increased when the item is featured on an end cap or other special display
  • Items are placed at checkout counters so that customers can see them as they wait in line
  • Impulse can be triggered by suggesting complimentary purchases
  • Prime locations should be used for profitable items that customers tend to buy on impulse – such as gourmet food, rather than commodities such as flour/sugar which are usually planned purchases
  • Retailers have specific strategies to tap cross-shoppers (willing to buy premium price on some products and discounted prices on other products…), as most shoppers are price-sensitive only to a select few products
  • Collectivists (eastern cultures) are more price-sensitive than individualistic (western) consumers about private goods and less price-sensitive about public goods
  • Usage of stimulation, social experience, status and power, self-reward… for tapping into the hedonic shopper
  • A leading coffee chain uses a saturation strategy to increase brand awareness when selecting locations (locates several stores in the same area, so customers are exposed more frequently)
  • The seven most frequently used opportunities to develop sustainable competitive advantages are customer loyalty, location, human resources management, distribution and information systems, unique merchandise, vendor relations and customer service
  • Modern retail provides the opportunity to utilise all the senses of visual, auditory, touch, smell and taste, as it allows shoppers to interact with the products pre-purchase
  • Chico's (a speciality store) apparel flatters more mature women with active lifestyles
  • Curve's (a fitness club) targets baby boomers living in small towns
  • The Container store sells products to help “organize their lives”
  • Being present in the outdoor activities during leisure periods of the neighbourhood becomes a strong part of the pull factor
  • Experiences of retailers such as Carrefour and ALDI have shown that customers are willing to forego service for a lower price
  • Up to 85 per cent of mall traffic approaches the store from the side; however, most store window signage is designed for customers approaching the store head-on
  • Up to 50 per cent of women get their ideas for clothes from store displays or window shopping
  • Outlets have an optimum size beyond which sales per square foot begins to fall
  • Window display and free samples can stimulate need recognition and start the buying process… A leading store produces 1,200 different window displays a year, with the 5th avenue windows changing every week
  • Products with highest brand loyalty are beverages, cosmetics, health and beauty aids, and snacks
  • The typical supermarket customer spends 15 seconds and looks at only one brand when buying laundry detergent
  • Seventy-six per cent of consumers say their child's preference is either very or somewhat important in deciding on a restaurant
  • Store layouts need to reflect whether customers shop by brand, size, colour, price point… Customer willingness to substitute one brand for another, is valuable information for assortment planning

Armed with research intelligence, a retailer can assess……
Whether to enter?

  • Is there a retail and consumption potential in a specific “market”?
  • What is the existing retail infrastructure, turnover and strategy?
  • What is the SWOT analysis of this current retailscape?
  • What are the needs, attitudes and usage of the populace towards organised modern retail?
  • Where does the opportunity lie and what could be the most profitable route to entry?

Where to locate?

  • What are the key drivers and variables to judge the viability of a site, and how does it fare on them?
  • Which is the most profitable site in terms of affordability, product range and potential footfalls?
  • What is the appropriate merchandise assortment and depth?
  • What is the best concept and prototype for the given site?

How to attract and retain shoppers?

  • What are the kinds of shoppers and how do they navigate through the store?
  • How conducive is the store layout and merchandise to shopper needs and in triggering purchase?
  • How can idle browsing and window shopping be converted to sales?
  • How conducive is the frontline staff to gently nudge shopping to sales?
  • What is the “just right” mix of below-the-line tactical activities that impact shoppers?


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