How to get the Indian Shopper to Buy More

in the Supermarket
chillibreeze writer — Nuthan Manohar
I am unaware of the authenticity of this anecdote, but it is said that once Aristotle stood in the
marketplace for days. When asked the reason, he replied that he was looking at all the things
he didn’t need in life. I seem to belong to the same genre; I can spend ample time strolling
supermarket aisles and return empty-handed.
This quirk coupled with the nature of my work has helped me observe and postulate on shopper
behavior in the Indian supermarket.
For instance, when a woman saunters into the supermarket and forgets to pick her basket, and
is browsing through, you can know for sure that she is potentially a good customer. She doesn’t
have a list of items to buy and with gentle coaxing, can be made to buy much more than what
she intends to.
Owing to the traffic rules we follow in the country, Indian shoppers prefer to stick to the left hand
side of the store. They prefer to walk straight aisles and tend to turn right more than towards the
left. While shopping with trolleys, they push the cart with the left hand and pick the merchandise
with the right hand. Baskets are, however, carried in the right hand.
It is almost hilarious when popular brands try to get the rack closest to eye level, because unlike
popular belief, shoppers prefer the rack that is just below their eye level. People read books
holding it below eye level and the same principle holds true when they browse through products.
So, the ideal rack is the one at shoulder level.
The next choice is the rack nearest to the elbow level followed by the level of the wrist. It is only
after this that they look up. You will hardly ever come across shoppers bending down while
browsing.
Shoppers are lured by premium/advanced personal care products, new product launches,
imported products, promotional schemes, and snacks. However, it is necessary to keep in mind
that shoppers walk in almost blind, which means they do not spend time in reading promotion
posters placed at the entrance, or pick up trolleys.
Bakery products, fruits, and vegetables impart a sense of freshness and completeness to the
store but since these are products that are bought weekly, there is a tendency to grab and go,
which the retailer needs to curb. This means that the most essential products that are bought
weekly and the anchor products of the store need to be away from the billing counter so that the
shopper moves through various aisles and may indulge in some impulse buying.
Processed food, basic personal care products, and fabric care products rank second in keeping
the interest of Indian shoppers. Provisions and oils, and household cleaning products, although
essential to their purchase, are seen to be “unimaginative” and “boring”. Hence, there is ample
possibility of cross-selling high margin imported products in these stores.
In supermarkets that have dairy and frozen products kept in refrigeration units with sliding
doors, shoppers have to jostle other shoppers or wait for their turn to pick products. To induce
more sales, stores have to provide more aisle space or switch to refrigeration units that do not
have doors.
Shoppers seem to have an affinity for the billing counter, especially when they spy one that
doesn’t have a queue. It is ideal if you can create layout plans where the shopper is nudged to
go through all the aisles and finally encounter the billing counter. The area demarcated for
billing may be used not only for selling products that are bought on impulse, but also
merchandise with promotions that the shopper may have missed out on.
A host of differences in shopping behavior can be spotted once you consider the demographics
of shoppers. For instance, women think of shopping as fun, exploration, and novelty; men think
of their wallet and sticking to the “list”. Women love to spend time browsing, which positively
correlates to billing amounts, whereas men seek quiet efficiency. Women tend to shop more
when they are with other women and are more willing to try out new products. This is greatly
hampered when men “chauffer” them. Ideally there should be a sitting area where men can sip
coffee, while women shop in peace.
When it comes to children as shoppers, it has been noticed that pester power works when the
product is “known” or “endorsed” and is around Rs 15. A good place to sell to children is near
the billing counter, but the racks should not be too high for the children to reach. Men, more
than women, are willing to indulge their children in a supermarket.
As final food for thought, now seems to be an apt time to test organic and health foods as a
separate merchandise category altogether, since young shoppers today are more health-
conscious and willing to spend more for all the things they may not really need in life.
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Indian shoppers increase spending

19-09-08 12:57
Age: 1 yrs
BY: GEOFF HISCOCK, THE AUSTRALIAN BUSINESS

Category: No FDI in the news

INDIAN shoppers will spend close to $500 billion on consumer goods and services in
2010, up from $360 billion last year, according to a bullish outlook released on Thursday
by India's fast-growing retail industry.
Despite the global market turmoil, retailers expect 300 million aspirational middle-class Indians
will lead the cash-register assault, their confidence buoyed by likely wage rises of 15 percent a
year over the next few years and an economy growing at around 8 per cent. Total annual retail
spending in India should hit 18.1 trillion rupees ($490 billion) by 2010, according to the India
Retail Report 2009, which was released in Mumbai for the industry's peak event, the India Retail
Forum. The report produced by New Delhi-based research group Images F&R Research,
envisages that modern organised retailing is likely to have a 13 percent share ($62 billion) of the
total spend, as Indian middle class shoppers increasingly turn to air conditioned malls, mini-
marts, supermarkets and "big-box" outlets. The shopping needs of India’s 1.2 billion people
traditionally have been served by a combination of 12 million "mom-and-pop" corner stores, wet
markets, bazaars and weekly or monthly rural fairs, plus a relative handful of department stores.
It is only in the last decade that modern organised retail has begun to make an impact, with the
opening of supermarket chains and shopping malls in India’s key cities such as Mumbai, Delhi,
Kolkata, Chennai, Bangalore and Hyderabad. As recently as two years ago, modern retail’s
share of the total consumer spending pie was only 3 to 4 per cent. According to the new report,
modern retail grew at more than 40 per cent in 2007 and now has a share of 5.9 per cent.But
with the rapid growth has come a storm of protest from small traders’ associations, market
middlemen and political groups opposed to large Indian business groups such as Reliance, Birla
and Bharti entering the retail sector. The protesters argue that the big modern retailers will
destroy the livelihoods of millions of street vendors, small traders and corner-store (or "kirana")
operators. In some states, Reliance Industries – which is controlled by India’s richest man,
Mukesh Ambani -- has closed or scaled back its retail stores in the face of sometimes violent
protests. A government-initiated report released by the ICRIER think tank in May found that
while there would be some initial loss of revenue for the kirana stores from competing modern
retailers, the small corner stores would survive for many years to come and would often fo rm
mutually beneficial relationships with organised retailers.Activist groups such as India FDI
Watch also oppose investments by overseas retailers, arguing that allowing in US giant Wal-
Mart -- which has set up a wholesale cash-and-carry venture with the Bharti Group -- will spark
a "race to the bottom" in terms of workers’ rights and conditions. For now, foreign entrants to
India’s retail sector are limited to franchises, wholesaling and certain single-brand
outlets.According to the India Retail Report 2009, fears of job losses in the sector are
groundless. "Modernising retail will see some 15 million people engaged in retail and retail
support activities by 2010 – including front-end retail operations, supply chain management,
logistics, process and infrastructure development and supplies," it says.A much more pressing
problem than fear of foreign investment is fixing India’s abysmal supply chain, particularly for
refrigerated foodstuffs. As much as 40 per cent of the dairy, fruit and vegetables produced in
India is lost or spoilt because of poor storage, handling, distribution and transport. Commerce
Minister Kamal Nath told the India Retail Forum this week that that the supply chain problem
was India’s greatest agricultural challenge. Better handling techniques and infrastructure to
reduce this wastage would deliver a substantial benefit to the retail industry, to farmers, and to
the rural sector in general, he said. Reflecting the needs of the hundreds of millions of Indians
who survive on less than $2 a day, the 2009 report found spending on food and groceries is the
dominant category, accounting for almost 60 per cent of the total retail outlay of $360 billion.
Clothing and accessories ranks second with a 10 per cent share share, followed by out-of-home
food services with a 5.4 per cent market share. The report says this last category "largely
reflects the massive employment opportunities to youngsters in the services sector and
accompanying changes in consumer lifestyles."The organised retail sector offers a different
picture, with spending on clothing and fashion accessories the largest category at 38.1 per cent.
This is followed by food and groceries 11.5 per cent, footwear 9.9 per cent and consumer
durables 9.1 per cent. Shoes and timepieces are the most organised of all retail categories, with
more than 48 per cent of the money spent on these items going to the modern retail sector.
They are followed by clothing and fashion accessories, where the modern retail sector controls
22.7 per cent of the market. With incomes rising, the modern sector can expect even higher
figures over the next few years. According to the 2009 report, 70 million Indians already earn
more than $24,500 a year, and that number will likely rise to 140 million by 2011. At the same
time as incomes are rising, tastes and spending habits are changing in line with an Indian
demographic profile that becomes ever younger. Already, 55 per cent of the population is under
25; by 2015, more than half the population will be 22 or younger, and will only have ever known
an economically liberalised India. This is why industry experts such as Arvind Singhal, chairman
of Indian retail consulting firm Technopak, believe modern retail is well on its way to being the
key driver of the Indian economy over the next decade. In their view, despite high real estate
prices, hyper-competition, a difficult political environment and shortcomings in supply chain
logistics and management skills, India’s consumer demand is simply unstoppable. Geoff
Hiscock writes on Indian business and is the author of "India’s Store Wars: Retail Revolution
and the Battle for the Next 500 million Shoppers," published by John Wiley & Sons.