Pointers from “Indian Wallet & Brand Share” report

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“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.

“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
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