It’s boom time for retailers — consumer spending is on the upswing while consumers, in turn, are getting spoilt for choice

The economy, as everyone knows by now, is on the upswing. This rosy hue envelops retailers and brands too with consumer spending following the arrow up, up and further up. Sellers and shoppers are doing an arm-in-arm jig. In brief, it’s boom time!

The Indian retailing scenario has never looked this good and the proof of the pudding is the Consumer Outlook 2003 study by KSA Technopak. It is a strategic annual tracking study on consumer’s shopping and spending behaviour across categories conducted since 1999.

Rosy Outlook
The latest survey of 10,000 Indian households in 20 cities through random sampling, in the 15-58 years age group, for the fifth consecutive year throws up ‘Good news for retailers and brands.’ As a start, consumer spending last year went up by an impressive 9.6 per cent. This growth, in turn, implies a phenomenal rise in the vicinity of Rs 15, 000 crores for retailers, manufacturers and suppliers. It is a two-way street, for the consumers too will be spoilt for choice.

Going by the study, the sluggish growth in 2001-02 has shaken itself out of the lethargy and given way to consumers digging deep into their pockets, indicating a bouncing back of the Indian retail sector. Indian consumer spends are also going the international way — share of groceries have gone down for the first time in five years while more lifestyle related expenses are going up. In other words, it’s plus all the way for apparels, footwear, accessories, personal care items, home textiles, entertainment, books and music etc.

It’s the ‘spending favourable’ budget; Indian consumers are saving less and spending more!
That the Indian urban consumer spend is moving to more evolved grounds is evident from the growth figures for categories like gifts, mobile phones etc. In terms of absolute growth it was +130 per cent for gifts, +108 per cent for mobile phones and +51 per cent for payment to household help. It is not just ‘roti, kapda and makaan’ but has moved much beyond that for Indian consumers. Spending is lifestyle driven.

Interesting Patterns
An aside for the retailers. Next time someone in the 35 plus age group walks in to the store go all out to woo her/him. The study shows that this group is the major contributor to most household expenses while durable purchases peaked in the 20-34 age group. Here the DINK (double income, no kids) couples setting up household were possibly the driving force. When it comes the apparels, footwear, accessories, personal care the majority buyers come from the 35+ age group.

Interestingly, when it came to growth in categories, West India topped the eating out expense category and with regards to movies and theatre growths West India shared the credits with North India.

Almost every locality has a mart or a mall in the vicinity, does that spell convenience for the shoppers? Or how far are the shoppers willing to travel? The deciding factor is whether they are making regular purchases or special purchases. The survey reveals that consumers seek convenience for ‘regular’ purchases but for special purchases like jewellery they are willing to travel that extra mile which means good news for destination markets like shopping malls and exclusive stores. However, in case of apparels, distance travel has gone down primarily due to the significant rise in outlets for apparel brands in localities.

In no Hurry
Everyday more malls and under-one-roof stores are coming up — do consumers have the time to frequent them? Yes, thanks to convenience shopping or regular purchases nearer home. The Indian housewife too has more time than before because of increasing spends (51 per cent) on domestic help.

The simple truth emerges that shopping retains its popularity with Indian consumers, with 77 per cent enjoying shopping. For around 61 per cent of the respondents, shopping was a fun filled activity and far from a boring chore. An interesting psychographic picture emerged — 32 per cent enjoyed shopping, 25 per cent were value conscious, 25 per cent were fashion driven and 19 per cent were time savers. And yes, more women (51 per cent) enjoy shopping more then men (49 per cent)!

Are you one of those who helplessly looks around for a salesperson to guide your shopping? Then you are among the 47% who spend more if they find a helpful salesperson. Overall, however, the reliance on salesmen is declining, which means Indian consumers are maturing to self-service formats.

And that basic guiding principle of retailers — making a ware as attractive as possible to lure buyers— still holds true. 52 per cent of Indian consumers can’t resist buying an item when shown in an in-store display!