Shopper Insights in India
Report description
The Indian grocery retail sector is set to enter a phase of rapid growth and transformation, with the advent of modern retail and changing consumer attitudes towards grocery shopping itself. This report identifies key prevalent trends, provides insight into the potential growth opportunities, and offers strategic action points for the evolving modern grocery retail in the country.
Understand the key consumer trends/insights driving the growth of modern grocery retail in India. Develop stronger brands and a superior competitive positioning by drawing inspiration from the pioneers in the Indian grocery retail industry. Focus on factors that influence consumers' store choice through shopper profiling on the basis of evolving desires, wants, and shopping habits. Avoid costly investments by learning important lessons from companies already operating in India.
Covers the overall grocery retail sector in India with a specific focus on drivers of modern retail formats, including category-specific data and consumer survey data. It provides detailed analysis of consumer attitudes towards and the perceived influence of different retailer schemes and strategies.
In-depth action points offering practical strategies based on the trends and insights uncovered in the report. India is benchmarked against other relevant countries, as and when appropriate.
What are the major trends shaping the future course for the grocery retail sector in India? How effective are store loyalty programs in India and what are the key strategies to improve the store loyalty of Indian shoppers? What is the role of private label offerings and online grocery retail in India's modern retail setup? What are the key trends emerging from the increasing participation of men and children in grocery shopping, and what are its key implications?
Table of contents
OVERVIEW
•Catalyst
•Summary
THE FUTURE DECODED
•Introduction
•Trend: in addition to value, product quality, range, and convenience are emerging as strong influencers of store choice for the Indian shopper
?The value seeker consciously hunts for bargains and tries to stretch each rupee to the maximum
?Quality seekers prioritize buying quality products
?Range seekers prefer more product options and like to compare and contrast between numerous choices
?Convenience seekers want to diminish effort on grocery shopping, which is mostly perceived as a chore
?While convenience and value strongly influence store choice in northern India, product range in the east and quality in the west act as key influencers
?Quality seeking as a behavior tends to be strongly prevalent across all shopper profiles, but becomes significantly more important with rising income
•Trend: the active participation of men and children in grocery purchases is redefining the decision-making process
?Men are increasingly identifying themselves as collectively responsible for grocery shopping; however, factors related to store and product choice influence them differently
?Children are influencing the choice of store for grocery shopping and the specific choice of brand as well
•Trend: Indian shoppers are fast adapting to the idea of bulk purchases, as the frequency of shopping decreases
?The modern shopper's attitude towards grocery shopping at local kirana stores is changing, as the frequency of visits to these stores is on the decline
•Trend: the gradual rise in price consciousness and a changing perception towards private labels is providing a fertile environment for the growing Indian private label sector
?Private label in India is at a very nascent stage, especially in terms of shopper perceptions about quality and value for money
?As private label brands evolve, it is apparent that specific product categories like household cleaning products and food offer better opportunities for growth
•Insight: superior quality and the longevity of products are the strongest contributors to Indian shoppers’ evolving perceptions of value for money
?Retailers are moving towards brand differentiation on the basis of quality product offerings
•Insight: product preservation remains a key concern for Indian shoppers when it comes to packaged consumer goods
?However, Indian shoppers tend to be wary of buying packaged fruits and vegetables
?Retailers are focusing on delivering more product information to Indian shoppers
•Insight: despite increasing retailer initiatives, store loyalty is yet to evolve as a significant influencing factor of store choice
•Insight: though still at a nascent stage, shoppers are exhibiting growing interest in online grocery shopping
ACTION POINTS
•Action: retailers should focus on loyalty programs that differentiate them from competitors while driving long-term loyalty
•Action: retailers should explore opportunities in online grocery retail
•Action: introduce private label offerings in niche categories and create a distinguished brand appeal
•Action: increase sales by addressing the growing participation of children in grocery retail
APPENDIX
•Methodology
•Further reading
•Secondary research
•Ask the analyst
•Datamonitor consulting
•Disclaimer
FIGURES
•Figure: Value is mostly sought by younger, single, and female shoppers
•Figure: Quality is more often sought by females, married couples, and older consumers
•Figure: Range is another attribute that mostly appeals to female, married, or older shoppers
•Figure: Single shoppers in the younger age groups tend to be convenience seekers, a behavioral trend which is also more apparent among female shoppers
•Figure: Northern Indian shoppers show a greater affinity towards value product offerings and convenience, while those in eastern India are more concerned about product range
•Figure: Quality seeking is an attribute that is strongly visible across all consumer profiles
•Figure: Consumers in higher income groups are significantly more swayed by quality product offerings
•Figure: The average household size in India has seen a constant decline over the last two decades
•Figure: The gender divide in the Indian workforce is diminishing, which also means that more men are participating in household responsibilities like grocery shopping
•Figure: Women are increasingly being influenced by their family members, even in the choice of distinctive product categories like household cleaning and laundry products
•Figure: A significant proportion of Indian men now identify themselves as "partly" or "mostly" responsible for the main grocery shopping in the household
•Figure: Factors like proximity to home, loyalty schemes, and product quality have a greater influence on women's store choices
•Figure: Habit, brand image, and product attributes like scent and ingredients have greater influence on female shoppers, as compared to male shoppers
•Figure: Children can prove to be significant influencers of the grocery brands selected by shoppers
•Figure: Child friendliness is a significant factor affecting the store choice of modern shoppers, especially for younger married couples
•Figure: Indian shoppers are tending towards making bulk purchases in fewer trips to supermarkets and hyperstores
•Figure: Retailer schemes, a changing consumer product basket, and the introduction of shopping carts are among the factors that are encouraging bulk purchases by shoppers
•Figure: The frequency of visits to local kirana stores for top-up shopping is on the decline
•Figure: Kirana stores are still the preferred shopping destination for perishable food items
•Figure: Private label offerings have seen a consistent increase over the years, across retail formats
•Figure: Big Bazaar's Tasty Treat range is a prime example of how vending a home brand gives retailers higher negotiation power with established brands, while providing an alternative revenue stream
•Figure: Private label offerings can prove to be a key differentiator between competing retail brands
•Figure: The economic slowdown has changed Indian shoppers' attitudes towards private label offerings
•Figure: Private label products are still perceived to be of inferior quality to branded offerings, and thus rank lower in terms of value for money
•Figure: A higher proportion of respondents perceive private label household cleaning brands to be superior to existing company brands
•Figure: Indian shoppers' value consciousness has significantly augmented after the economic slowdown
•Figure: Superior quality and longer lasting products are greater contributors to the overall perception of value, for the Indian shopper
•Figure: In contrast to Big Bazaar which offers bulk and discount deals, Hypercity focuses on creating a distinguished positioning through quality product offerings
•Figure: Packaging innovation goes far beyond providing convenience, giving brands an opportunity to recreate their brand image
•Figure: Preserving freshness and product protection are the key features that Indian shoppers seek from product packaging
•Figure: Tetra Pak has successfully elevated the perceptions of product preservation, thus creating a market niche through its uniquely positioned advertising campaigns
•Figure: Packaged fruit and vegetables are not likely to be accepted by the "freshness conscious" Indian shopper
•Figure: Indian shoppers, especially the female segment, are looking closely at ingredient information when making product choices
•Figure: There is a visible shift towards more detailed ingredient and product information across categories, in response to the increasing interest from shoppers
•Figure: The Big Bazaar Shakti Credit Card combines the features of a credit card and a store loyalty card
•Figure: Retailers like Reliance and Hypercity are focused on delivering simplicity and convenience through their loyalty programs
•Figure: Store loyalty cards are the least influential factor on shoppers' store choice
•Figure: Both Internet penetration and broadband connectivity is on the rise
•Figure: A significant percentage of respondents, mostly in the 22–34 age group, agree that they have spent more time shopping online in 2011 than in previous years
•Figure: An increasing number of online grocers are offering services across India
•Figure: Tata Teleservices' T24 offering in collaboration with Future Group is an example of how a retailer and a product brand can work together to improve customer loyalty
•Figure: Australian retailer Woolworths offers an integrated loyalty program which appeals to various shopper aspirations
•Figure: Retailers could look at the following solutions to tackle the existing barriers in online grocery retail in India
•Figure: Integration with local stores, strong digital marketing, and online innovation are some of the key factors contributing to the success of retailers like Tesco in online grocery retail
•Figure: A tiered private label strategy can work well for retailers
•Figure: Increasing competition for shelf space means that manufacturers need to specifically brand and position products that trigger children's attention, while fulfilling the nutritional requirements that parents seek for their children
•Figure: While offering confectionery at checkout counters can add substantially to retailers' sales, providing optional confectionery-free checkout counters can help retailers to distinguish themselves from the competition
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