RC-1
Don’t look now, but you’re being watched. Don’t flip this page either, for news of this event will be darted across electronically to the issue-planners over at A & M, who might decide to replace such venerable reports on market research (MR) with others more likely to grab your attention.
Okay, that was a lie. What’s true is that in the US, the instant a customer buys anything, the information is transmitted to the marketer’s headquarters. There are computer terminals at every retail transaction point. Some retail chains even have a live picture of what’s moving off the shelves.
In India, retailing has traditionally been . . . well, a low-information field of haphazard activity. Thankfully, it has all begun to change. The past three years have seen a wave of modern retailing ventures, and global chains such as Wal-Mart and Mark & Spencer are expected to enter India in some years.
The need for information is projected to grow at a furious pace, and MR firms are expected to get into retail research in a big way. Research International (RI) India, part of the UK-based MR group, has already done it.
RI (I) is eyeing ‘marketers’ rather than ‘traders’, and is banking on tools crafted from global experience (its client roster includes Sears Roebuck, McDonald’s and Tesco).
With dozens of multi-crore projects sprouting up across the country, the business has suddenly become viable. “It is typical of the big retail outlets that the investments could take up to 10 years to pay off,” says
H. Pradeep, associate vice-president, RI (I) study, for example, reveals that consumers are not deeply affected by the unavailability of their regular soap brand at their regular retail outlet. The feeling varies from indifference to mild irritation, and most brands can easily be substituted by another in the same price-appeal bracket (the alternative being to try another shop). This is not good news for marketers of deep-loyalty brands of premium soap.
The above research was carried out by using a technique called Storemind. The approach is usually tailor-made to fit the specific requirements of the manufacturer (and the category), involving both qualitative and quantitative approaches such as observation and customer tracking.
Another RI (I) survey — this time of a retail chain selling premium fabrics — reveals that ‘purposive shopping’ is high in this market. One of every three purchases made is for a special occasion. Impulse purchases are negligible, and the brand decision is largely taken before the shopper steps out of the house. This has different implications for marketers.
RI (I) offers a broad range of research techniques, covering store location, service measurement and customer response. After all, the increase in the number of Indian working women — and the accompanying pressure on time — is bound to have widespread ramifications.
Since organised retailing is a new thing in India, most of RI (I)’s revenues are likely to come from start-up ventures. So, prelaunch services are expected to do quite well. Of these, site evaluation will probably be the biggest draw. RI (I)’s model claims to make reasonably accurate projections of likely turnover, profile of likely customers and competition. Then, there is a customer profile study, which can provide a retailer with information on visitors to the store. The ‘origin’ of customers can be identified, to plot ‘catchment’ areas. These studies also provide measures of store awareness, usage, image and, so on.
Other prelaunch possibilities include a tool to pre-test a new retailing proposition. The burst of music stores aiming to be teenage ‘hand-outs’ has convinced many prospective retailers that it’s no point unless one has a clear traffic attracting strategy.
The one big stumbling block, however, could simply be the ‘nerd’ problem that afflicts badly conducted MR. Written-down propositions often fail to convey what kind of atmosphere the shop is likely to have, and so respondents respond purely on the basis of attributes such as ‘wares available’, ‘location’ and ‘decor’, which miss out on all the rest of it.
The firm also specializes in ‘tracking’ studies, which are done once the business gets going, and provide performance indicators. Plus, it offers special observational studies, which tend to be qualitative, takes on shopping behaviour. “Observation is the primary research tool,” says Ranjan Banerjee, who heads Renaissance, a Pune-based retail management consultancy, and recommends Why We Buy, a book on the subject by Paco Underhill of Envirosell, a top American retail researcher. Retailers in the US even have data on ideal mannequin postures, let alone the precise placement coordinates. Indian shopping behaviour is likely to prove a more fascinating field of study than in America. This is because the Indian shopper has only just entered a new phase of evolution, and attitudes are shifting rapidly. Here's just one indicator: confident shoppers no longer feel the need to limit their browsing because the days of ‘shopkeeper reproach’ are fading away.
Most of the current general knowledge of Indian shopping behaviour has been obtained from a recent study by KSA Technopak, a Delhi-based retail consultancy, which shows that the experience has started taking precedence over the actual acquisition of products, and old-style retailers risk losing customers if they don’t orient themselves to customer aspirations. According to Banerjee, Renaissance also has a bank of shopping behaviour insights gleaned from local observational studies.
But all that is barely enough. And the learning has only just begun. Indian retailers need a lot more probing done, particularly in areas of specific interest to them. While some generalisations can be made, buyer behaviour differs vastly from category to category. The case of specialized lingerie stores, for example, has been an issue of much debate.
RI (I) intends satisfying retailers’ need for information in a multitude of areas. The firm even has the wherewithal to conduct ‘mystery customer research’, which provides a picture of what happens on a typical shopping trip. Another tool is Purchase Plus, which attempts to evaluate the extent to which the customer’s choice of brand is influenced after he/she enters a store intending to purchase a specific item. This could be of importance to marketers who must make decisions on promotional budget allocations. All in all, RI (I) hopes to provide a basis on which a marketer can monitor a publicity strategy.
Storemind, of course, is what RI (I) expects to be its best seller. And this takes into account all sort of things, answering all sorts of questions. If used in addition to household panel data, it could help marketers get a good fix on their respective markets. This is all the more critical for new retailers who lack the learning acquired over decades by old-timers. Across the world, one of the biggest barriers to entering the retail business is not real estate, but the pool of consumer knowledge that gets built over the years. In fact, it is this experience that has helped local retailers in South America stave off the multinational attack. MR can’t provide a perfect substitute, but it can surely help new entrants. Several other MR firms are expected to launch their own retail intelligence programmes shortly. After all, the changes are going to become faster than ever before. Who would have imagined five years ago that you could have walked into a music store, grabbed a cup of coffee and coolly put on a pair of headphones to sample the hottest new music in town?
1. According to the passage, for products such as premium fabrics
a. consumers are not very affected by lack of availability of their regular brand and most brands can easily be substituted by another in the same price-appeal bracket.
b. consumers would rather try another shop than substitute their regular brand with another.
c. consumers make the brand choice before they step into the shop.
d. consumers are happy as long as they get one of three brands that are uppermost in their minds.
2. Which of the following is unlikely to be a service offered by RI?
a. Evaluation of brand image
b. Projections of likely turnover
c. Demographic profile of consumers
d. Cost-cutting techniques
3. According to the passage, Indian shoppers are
a. lacking in sophistication and confidence.
b. laggards compared to international shoppers.
c. afraid of inviting the displeasure of the shopkeeper if they go on browsing beyond a point.
d. entering a new phase of evolution.
4. According to the passage, buyer behaviour
a. is common to all underdeveloped countries. b. differs from state to state.
c. differs from category to category.
d. is common to all evolved consumers.
5. The extent and the way by which a consumer’s brand choice is affected after he enters a shop can help take decisions on
a. advertising budgets.
b. marketing tactics.
c. promotional budgets.
d. retailing strategy.
6. Market research, according to the author,
a. can help old retailers boost their sales, while new retailers cannot use the information much because of lack of experience.
b. can act as a substitute for experience in the retail business.
c. will help marketers rather than traders
d. All of these
7. The biggest barrier to entering retail business is
a. delayed pay-offs on investments.
b. high real estate cost.
c. lack of customer knowledge.
d. None of these
8. The tone of the passage is
a. descriptive.
b. narrative.
c. sarcastic.
d. indifferent.
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