Retail revolution yet to make in-roads in the country

The retail revolution that has ushered in modern retailing is yet to make significant in-roads into almost 15 million kirana outlets (small mom-and-pop shops) throughout the length and breadth of the country. The diversity of population in terms of demographics (income ranges included), shopping patterns of different segments of consumers, the “every day” shopping mindset of a majority of consumers, the dominance of groceries and food purchases of consumers in the total retail purchases and the infeasibility of modern retail outlets in diffusing themselves to completely replace kirana outlets are some of the reasons why retailing in India needs to be probed with insightful consumer behaviour .

While location is an important criteria for retailers, in Indian context, retail formats also count. Reliance Fresh’s discount-oriented and variety-laden format is quite different from the Nilgiri’s format that stocks groceries and bakery products with some branded offerings across categories. The Subiksha format (the failure of the brand is beyond the scope of discussion in this article) was an ideal one in a middle-class locality that wanted limited variety and stock keeping units (variants of sizes and flavours and packages). The availability of vegetables and fruit in such an outlet coupled with “below the MRP” pricing of most items provide an appeal that mattered to the typical middle class neighbourhoods.

Big Bazaar with its vast merchandise and private labels was almost a “one stop shop” for the consumers in the locality. The appeal of such a format may have even enlarged the catchment area associated with consumer segments. Shopper’s Stop and Lifestyle in apparel, Tata’s Croma and Crossword have each created an experiential effect for consumer segments in their respective categories. Despite the presence of such formats, the likes of Vasanth &Co in durables, the bazzar shops in apparels (typically in traditional market places) and old book shops in the centre of towns and cities thrive with their segments of consumers.

Usefulness of tracking the habits of consumers: The complexity and nuances associated with the purchase patterns of consumers pose unique challenges in an emerging market like India. Tracking the retail habits of consumers will provide several insights to marketers. Firstly, the presence of multiple segments of consumers in the market needs to be recognised.

A brand like Britannia (in biscuits and breads) competes both in kirana and modern retail outlets. The price points, variety chosen as well as the pack-size chosen by a consumer depend on several factors like frequency of buying snacks/ biscuits, consumption occasion, affordability levels despite intention to buy and the variety tried out over a period of time.

Wai Wai a brand of noodle has introduced an offering that can be eaten from the pack without any cooking and the offering is sold at a price point of Rs 5. Such an offering may have to decide on several aspects related to retailing and would benefit from tracking a multitude of consumer habits associated with the purchasing patterns of consumers.

A retail outlet (kirana or modern) makes an effort to segment consumers by such criteria, the apparent demographics or trying to rely on the “general traffic” of consumers may not serve much purpose in a competitive environment. The very nature of the merchandise stocked would depend on the segmentation based on unconventional criteria.

Secondly, it is important to track the cycle of shopping. Consumers shop daily, weekly, in stock-out situations, selectively with regard to categories, switch retail outlets, mix their shopping between retail outlets that offer excellent prices, offer cross promotions of products, brands and even have one outlet for buying staples and one for non-staples. How consumers try new categories and brands would be another aspect that is associated with retail cycles.

In consumer durables too, consumers may prefer different outlets for different categories and they also have the choice of exclusive retail outlets. Implications of consumer cycles for exclusive and multi-brand outlets (a widely accepted retail format in the country for a variety of categories), is worth studying.

While there has been a radical progress with regard to consumer behaviour and marketing communications, branding and retailing, analysing the retailing rituals of consumers is critical to sustain brands after they have been created with powerful associations.

The author is professor of marketing, IIM, Bangalore