Ashwini Gangal

"India is ready for consumer-centric retailing": Vijay Bobba

i-mint and Payback organised a day-long event to discuss shopper insights and in-store consumer behavior patterns.

The theme of the Shoppers and Consumer Insights conference focussed upon integrating consumer insights with the marketing plans of brands.

Vijay Bobba, founding chief executive officer and managing director, i-mint and Somjit Amrit, vice-president and global head, CPG-Wipro Technologies, delivered the keynote.

"India is ready for consumer-centric retailing": Vijay Bobba
Bobba spoke about the 80-20 rule -- for any business, 80 per cent of all profits come from 20 per cent of the customers. The challenge lies in identifying these customers. He cited the example of Shoppers Stop. Seventy three per cent of its sales are from its loyal (high frequency) customers. He went on to assert that India is now ready for customer-centric retailing because markets are now maturing and there exists the necessary infrastructure, technology and POS (point of sale) innovation. Additionally, there exists loyalty data to help retailers identify customer lifestyles and life-stage behaviour patterns.

Bobba reiterated that understanding category-specific purchase decisions can help redesign the retail layout, depending on what drives the customer (for instance, price, quality). Taking into consideration the shopping patterns of customers can help optimise store layout, thus increasing sales.

This introduction was then followed by the first session of the day. Presentations were made by Ramesh Vishwanathan, executive director, CavinKare, Charu Harish, planning director, Asia-Pacific, Grey Group, K V Sridhar (Pops), national creative director, Leo Burnett, and Praveen Kumar, vice-president, strategic planning and analytics, Omnicom MediaGroup.

Deodorants Decoded

Vishwanathan began with some facts about the Indian FMCG market. It makes up 2.15 per cent of India's GDP, has a market size of Rs 125 billion, and is set to grow by 10 to 12 per cent, annually. Given these facts, media spends in this sector have apparently increased multifold in the last decade. "Brands are the lifeline of the FMCG market and the higher the marketing investment, greater is the brand equity. Brand equity determines pricing power, which in turn, determines profit margins. Profits, again, get ploughed into marketing and the cycle repeats itself," said Vishwanathan.

"India is ready for consumer-centric retailing": Vijay Bobba
"India is ready for consumer-centric retailing": Vijay Bobba
"India is ready for consumer-centric retailing": Vijay Bobba
"India is ready for consumer-centric retailing": Vijay Bobba
With specific reference to deodorants, Vishwanathan said that the category has a 40 per cent YOY (year-on-year) growth, and that marketing spends form 30 per cent of the sales. His own brand, CavinKare has a five-to-eight per cent market share, and maintains a five per cent share of voice.

According to Vishwanathan, in order to maximize output, brand managers ought to understand which variables influence businesses to what extent and in what combinations. "Identifying critical drivers is important. For instance, in-store promotion (in the form of standees and posters) helps and BOGO (buy-one-get-one-free) offers don't. Also, the launch of new variants needs to be timed appropriately in order to avoid cannibalisation," he said, adding that spends should be area-specific.

Wipro has developed a tool to help CavinKare manage its marketing spends better and based on this research, the role of the deodorant as a product in the retail space was altered. The study showed that contrary to popular belief, the product belongs to an impulse category. In fact, over 35 per cent of the categories from which shoppers purchase products are planned only after entering the store.

"Supermarkets are entertain-markets"

Grey's Charu Harish spoke about Indian retail and shopper trends. Reiterating that brand differentiation is necessary at the retail level in India, Charu said, "Supermarkets are no longer a 'grab-and-go' space; they've evolved into 'entertain-markets' that shoppers visit to de-stress. They look for fun, happiness and adventure in supermarkets and hypermarkets these days." She shared instances of retail level innovations, including the Forest 225 Store by Nike, Red Bull's 'Room of Red Bull' in Amsterdam and The American Girl doll store in Los Angeles.

Charu shared a second insight by saying that shopping lists are a myth. "Shoppers take up to 36 minutes to browse and compare products in-store," she said. The crux of POS material and shopper activation is that shoppers want a good deal in terms of price and value. More importantly, they want to feel smart with their purchase decisions.

She cited the example of how Iams pet food, which enjoys a great brand equity as a nutritious product, is also marketed as something that 'costs less than an apple' in order to position it as an inexpensive product in the retail space in the UK. Similarly, Nestle's Nido Milk tapped into the insight that shoppers are hungry for product information while in the retail space, and launched a campaign to encourage buyers to 'Check the Label' (the campaign tagline) before buying.

Charu went on to share that Indian shoppers tend to heed recommendations from friends and family, and consequently, try out new brands. "This is the Shared Wisdom 2.0 Concept. WOM (word-of-mouth is a great tool these days as the social media (Facebook, Twitter) allows consumers to share their shopping experiences in real time," she said.

Charu added that active advice seeking is highest in India (as compared to other Asian countries). In the retail space, shoppers seek information from shop assistants whose inputs work to help customers switch their brand loyalty if they are dressed professionally (in a white coat, for instance), and are well-trained and well-informed. Citing the example of the Don Pepe infomercial initiative that P&G adopted, Charu said that shop assistants can be converted into brand ambassadors.

She concluded by stating that sales are no longer determined by the price of a product. Price as a barrier is passé. The barrier is no longer the price of a product, but about the overall budget of a shopping trip.

"Consumers are human beings, first"

Pops urged the audience not to get lost in the finer details of consumerism. Brands, according to him, are lifeless entities and brand managers need to understand consumers at a human level. "Whether traditional or organised, retailers should use common sense and human insights instead of complicating things with research," said he. One such insight, in his opinion, is that decisions of consumers regarding purchases are emotional ones, which are later rationalised. He gave the example of a beer company that used a real human insight. On Sundays, husbands hit the stores to pick up diapers, so the beer brand increased its sales by placing the beer cans right next to the diaper shelf! Best Buy, Pops shared, used Twitter to show customers that its staff was well-equipped with the right knowledge. All the salespersons started Tweeting as gadget gurus (and answered product-related queries by customers) while on the job.

Kumar concluded the session by throwing some light on the 'Nine Second Deadline'. "At the POS level, the purchase decision is made within 11 seconds flat, of which the first nine seconds are most crucial," said he. Specifically, the stages are noticing the brand (two seconds), approaching it (two seconds), engaging with it (five seconds), and finally, deciding to buy it (two seconds). He disagreed with Charu, saying that shopping lists exist, but get extended in the modern retail setting.