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Understanding consumer trends is key to success in retail

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Consumer and market sentiment is today more buoyant than it was until two years ago. The improvement in confidence levels has had a positive impact on how we spend. There is no doubt that consumer spending today is more robust than it was earlier thanks to the ameliorating economic conditions along with political stability and clarity and better control on the direction of our economy. Availability of more disposable income in
the hands of consumers due to declining fuel costs is also contributing to better sentiments for spending. In addition, the consumer profile is also changing as the number of young spenders is on the rise and these consumers are increasingly looking for a wider choice of products and better buying options. At the same time, rural consumers are also beginning to try out new concepts and products and demanding due attention from the market.

Understanding consumer trends is key to success in retail
Availability of more disposable income in the hands of consumers due to declining fuel costs is also contributing to better sentiments for spending

What is also at play is that growing health and social image consciousness continue to shape the consumer mindset. Demographic trends are dominated by two key factors: a large young population under the age of 30 and faster growth rates among older age groups.

An understanding of households’ disposable income, consumer expenditure, savings and credit and housing and home ownership, etc., need to be factored in while planning for new business. It is important for retailers and manufacturers to be alert to specific consumer-related issues like eating and drinking habits, shopping habits, preferred types of stores and retail venues, clothing and fashion trends and knowledge of how consumers spend their leisure and recreation time.

All the factors that influence purchasing decisions and the demand for products in different segments need to be kept in mind to have a better control on business. For the success of any retail-related business, a close and continuous monitoring of consumer trends and practices in the following areas is essential, which will also help in maintaining a decisive edge in the marketplace. These are:
• In what types of stores do consumers shop for food and drink
• How do ethnic groups influence consumer preferences and expenditure trends
• How many households own microwave ovens, personal computers, refrigerators
• On the whole, are Indian consumers spenders or savers
• Where do consumers go on holiday and how much do they spend
• How well are consumers served by the India’s healthcare system
• Need to track for comprehensive understanding of consumer trends, attitudes and behaviour in India
• Factors that influence daily decision-making processes of consumers as they shop for and buy products and services

With the advent of online in a big way in our country wherein world leading players like , Flipkart, , and others have started offering great promotions and freebies, consumer buying patterns have taken new dimensions. In many cases, consumers are visiting retail stores for the touch and feel factor before selecting the products, and on finding it suitable they are ordering it online due to better discounts and financing facilities thrown in. It also saves them from the hassle of spending time and wasting money on transportation.

I am sure that if all these factors related to consumer trends are well understood and acted upon, it will help in framing the winning strategies for business. These trends need to be thoroughly analysed while moving ahead so as to ensure positive outcomes for all stakeholders.

The author has over 25 years of experience in FMCG and Modern Retail. He is on the selection panel of ‘Hunar’ skill centre (Retail and Hospitality), a collaboration between Delhi and Singapore governments. He can be reached at rakeshgambhir@imagesgroup.in