The retail environment today is characterised by constant and intense competition. Every retailer wants a higher share of the customer’s wallet. An AT Kearney report calls India the numero uno retail destination in 2017 but it also says that the competition is set to intensify in the foreseeable future. Most retailers will be confronted with the challenge of attracting more customers to their store, converting them to buyers, and getting a fair share of their basket.
Market consultancy and research firm Neilsen, with a wealth of experience in understanding consumer behaviour and retail, has come out with a study titled the Three Pivots of Retailing, which details interesting facts that a retail business in India needs to look at in order to be successful. The study also provides valuable insights into the mind of the consumer.
Three pivots of retailing
Increasing the number of footfalls
Increasing the frequency of people coming to the store
Increasing the basket size of customers
Increasing the number of footfalls is about being in the right location. For identifying the location, the parameters to be keep in mind are to look at areas where you have the high income or the affluent or the mid income consumers. High affluence areas mean high potential for the retail store to meet its objectives. So the first step is to identify the consumer affluence level out there and identify the consumer potential. The next is to account for retail potential, which is a combination of retail density out there and retail sales happening there. The important thing to keep in mind when considering income is the change in consumption baskets.
“Identifying the consumers and the location where you can find the intended footfalls starts with defining who and what your consumer is. This description is arrived at by looking at their income. At Neilsen, we use a lot of methodologies to estimate income. We don’t ask about the income, we estimate it. We ask about expenditure, we look at the savings rate and then estimate the income,” says Peeyush Bajpai, Director, Micro marketing & Economics, Nielsen India.
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