The fast-moving consumer goods (FMCG) space in India is fast-moving indeed, benefitting from a vibrant local economy. Yet while the growth prospects for the sector are abundant, the path ahead isn’t completely clear. Changes in consumer needs, weak consumer sentiment and inflation could affect the Indian FMCG sector’s ability to attract and retain customers. Companies looking to engage with this country’s eager shoppers need to listen and act on what they have to say about their needs, preferences and attitudes.
When it comes to the factors that drive consumer purchase decisions, word-of-mouth still ranks highest. According to a recent Nielsen study, friends, colleagues and family members are the most important sources of awareness about FMCG products among urban affluent modern-trade shoppers of all ages. Approximately three in five shoppers said they become aware of products by word-of-mouth. And the information doesn’t just drive them toward specific stores. Shoppers are actively seeking guidance on which products to buy as well.
But while connecting with friends and family are top pre-purchase activities, they’re not the only checkpoints on consumers’ to-do lists before heading out to shop. For example, as consumers continue to explore and spend more time on the Internet, they’re steadily increasing their digital usage before they shop. Notably, recent Nielsen research found that one in every three Indian shoppers goes online before they go to a physical store and make an FMCG purchase. The study also found that men are more likely to rely on the Internet for purchase information.
CATCH THEM IN THE ACT
But brands and retailers know shoppers don’t plan out everything. They know consumers can be impulsive at least some of the time, which means they buy more than they plan, purchase things they don’t plan to buy and go over their budgets when something special catches their eyes. In fact, Nielsen’s study revealed that almost 90 percent of shoppers bought more than they had planned. So what’s driving these unplanned purchases?
In many cases, in-store triggers are driving impulse purchases. One in four consumers say that in-store promotions are significant unplanned purchase drivers. They also lead more than 50 percent of shoppers to buy a product they’ve never tried before. Among older consumers, discounts have the biggest impact, whereas promotions are likely to sway men more than women.
Variety is also a big driver of in-store purchase behavior, as is the availability of premium goods. In fact, consumers view “premiumness” and variety as stronger reasons to visit a store than promotions. So the tasks for brands and marketers, based on the recent findings, are to focus on premium, quality products while improving the consumer’s in-store experience.
For additional insight into Indian FMCG shoppers, click here.