Emerging Consumer Trends

Emerging Consumer Trends

It’s a brave new world with shorter attention spans and information overload thanks to social media and the emerging technology. As consumers move ahead, retailers and marketers have started working on new frameworks to understand the consumer’s mindset. Marketing your products in this climate requires a change of focus from who is buying your products to why and how they are buying.

There are various kinds of consumers; there will be some consumers who are interested only in getting the lowest price on what they need. Many of these low-price shoppers will go out of their way to get a lower price, shopping at stores that are not convenient or waiting to buy their favourite brands until they go on sale. There are also a group of people who love their brands do extensive research before buying at the best price they can find. The Internet makes price comparison easier than ever. This group can be attracted by promises of better quality, meaning products last longer and so cost less over the long term, even when the initial outlay is higher. Messages that show brand comparisons and provide clear product data will catch their interest.

IBIS World research forecasts an 8.6% per year increase in online revenues over the next five years. The shift is now to visual vocabulary that relies on photos, vlogs, which is largely replacing the need for text. This the age of impatience, consumers want products that are on-demand and want it quickly, the retailers/marketers need to focus on making the products available and delivered more quickly. Today’s consumers are impulsive shoppers.

You cannot ignore the mobile boom, this industry is moving forward and the retailers need to tap this market as quickly as they can. It’s an age where privacy on the internet is next to impossible, so it has become easier to predict the mood of the consumers and consumer trends. Everybody is ready to embrace quirkiness and creativity, today the consumers are far more independent and don’t need any in store assistance as they are well versed with the current trends.

So all the marketers and retailers out there…keep up with the change, you don’t want to be left behind!!

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Can Customer Experience Be Managed?By Gregory Yankelovich

MottoMost Customer Experience professionals would find this question to be ludicrous, but in the article “Is Customer Experience Manageable? An Industry Pundit Says No” Esteban Kolsky lists 5 arguments to convince them otherwise.

It is critical to start any discussion with definitions of what is being discussed in order to prevent this discussion to become as pointless as debate about the gender of angels – as engaging as it may be, there are very few practical implications.

There are a few definitions for Customer Experience, but this one is sufficiently appropriate for the discussion:

Customer experience (CX) is the sum of all experiences a customer has with a supplier of goods and/or services, over the duration of their relationship with that supplier. This can include awareness, discovery, attraction, interaction, purchase, use, cultivation and advocacy.”

There are many more definitions for “management,” such as

management in business and organizations means to coordinate the efforts of people to accomplish goals and objectives using available resources efficiently and effectively. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization or initiative to accomplish a goal.”

Any definition of organizational management that includes the word “control” supports Esteban’s position – Customer Experience cannot be controlled by a company. However, if we agree that management means coordination, planning, etc., then Customer Experience is absolutely manageable.

A Twitter exchange with @billholland inspired me to think about it a little deeper than usual, where he pointed out that

BillH-tweet

 

The objective of Customer Experience Management is very similar, if not identical, to original objective of Customer Relationship Management efforts – to allow an organization scale fast without losing its focus on customers. CRM has promised a 360-degree visibility of a customer and failed miserably to deliver it, sidetracked by inability to break organizational silos beyond Sales, Customer Service and Marketing. Specialization helps organizations to scale very fast and very efficiently, but the price it pays is a loss of effectiveness as every department is focused on their domain, while the goal of business gets out of focus completely.

Today, Customer Experience Management faces the same challenges and experience of CRM veterans, like Esteban, is very valuable. This is what he has to say (in bold):

  1. Customers are not listening to what you have to say. This is because Social Media gives them more authentic, informative and relevant information about your company and your product.
  2. Customers know more about your business than you do. In this chapter Esteban specifically questions value of “Customer Journey.” I agree with him that too many customer experience professionals focused on customer journey too much – often to the detriment of the overall objective, like many CRM professionals before them, who proudly delivered glorified contact management to celebrate a “mission accomplished” moment. Personally, I think that customer journey charting is a valuable exercise, for some businesses more than others, to get better empathy and understanding. Just remember that customer journey is a relatively small subset (interaction management) of overall effort.
  3. Customers create their own experience. Customers can create their own experience just as successfully as companies can control it – it is not possible. The experience is created mutually by all parties to this relationship. The more flexible and better informed the parties are, the better likelihood of the great experience for all parties involved. Today, customers seem to be better informed than manufacturers and retailers participating in the process of delivery.
  4. Customer interactions are complex and unpredictable.
  5. Customer (and user) communities are where the knowledge is at.

I am not convinced that the last two chapters gave good reasons to throw a towel on attempts to manage efforts for improvement of customer experiences. One thing to remember is – don’t stop trying just because you cannot provide the best experience for your customers. That is not the goal. The goal is to provide better experience to your customers than your competitors provide to theirs, and live to fight another day.

Read more at http://www.business2community.com/customer-experience/can-customer-experience-managed-0798537#r4b5Lp9Qdq032Sel.99

Has India’s consumption story gone bust?

FIRST PUBLISHED: THU, FEB 06 2014. 11 42 PM IST

A slump in growth and rampant retail inflation are forcing middle-class India to cut back on spending, switch to cheaper variants consumer products.

Sapna Agarwal

consumption

The pace of growth in sales of consumer goods has been slowing since December 2012, but it was only in the quarter ended September 2013 that sales by volume actually contracted. Photo: Pradeep Gaur/Mint

Mumbai: For the past five months, Laxmi Shankar Verma has given up using Colgate toothpaste and has switched to chewing a twig of the Neem tree instead. Called a datun, the slender twig is a popular teeth cleanser in rural India and chewing it is supposed to help fight plaque and gum disease.

But the reputed health benefits of the Neem twig have nothing to do with his decision to stop using toothpaste. “Mehngai bad gayi hain (Prices have increased),” said Verma, 42, who works as a security guard at a residential building in the suburbs of Mumbai.

In his village in Uttar Pradesh state, in north India, “everyone uses this”, added Verma, who earns Rs.8,000 a month, including the money he makes by doing odd jobs, out of which he keeps up to Rs.1,000 for his expenses and sends the rest to his family of six—mother, wife and four children.

The trend is called downtrading—whether it’s Verma cutting out a cost item from his budget altogether by switching to the Neem twig he can break off a roadside tree, or middle-class households moving to cheaper brands and smaller pack sizes, or using a product less often.

The trend has accelerated as India’s worst economic downturn in a decade deepens and inflation stays at heightened levels. The Reserve Bank of India (RBI) expects inflation, measured by the Consumer Price Index (CPI), to top 9% in the three months to 31 March, and range between 7.5% and 8.5% a year later.

Consumer prices rose 9.87% in December, the fastest pace in a basket of 17 Asia-Pacific economies tracked by Bloomberg.

The pace of growth in the sales of consumer goods has been slowing since December 2012, but it was only in the quarter ended September 2013 that sales by volume actually contracted.

The sales of packaged consumer goods shrank 0.5% in the third quarter of 2013 from a year ago, according to a December report by market research firm Nielsen and Co. In terms of value, sales improved by 6%, but all of it was driven by price increases, said Nielsen.

Compare this with 2012, when volume growth was around 10%, said the report authored by Sameer Shukla, director of Nielsen’s India unit.

Growth by volume represents the component of sales growth on account of selling more units of a product; value growth is mainly a function of price increases or inflation.

Some analysts are already asking whether the consumption story that paced the Indian economy’s average 9% growth in 2003-07 is as good as over. Growth began to moderate with the financial crisis that struck the world in 2008, and in the fiscal to 31 March 2013, slumped to 5%, the slowest pace in 10 years. In April-September, economic growth averaged 4.6%, and is forecast by RBI to slump below 5% in the full year to next 31 March.

“We must urgently accept the India consumption story has some big problems on the fundamentals that we must try and change or accept and factor into our expectations and our business strategies,” market research consultant Rama Bijapurkar wrote in the 17-23 January edition of MintAsia.

“Consumer India is not anywhere near what we believe it to be—a healthy, young fruit tree, growing in an environment that has all the natural ingredients needed for it to flourish and yield an ever-increasing crop year after year nearly as if on ‘auto pilot’ and almost forever,” she wrote.

“On the contrary, it is like the demographic dividend—it has lots of potential, but miles to go before it gets fulfilled.”

Facts back her up. India’s private final consumption expenditure (PFCE) grew at its slowest rate in 37 quarters in the three months ended 30 September, India Ratings and Research Pvt. Ltd, the local arm of Fitch Ratings Inc., said in a report released on 3 December.

“Low growth in private consumption is becoming a well entrenched trend,” the report said, adding that PFCE for the quarter grew at only 2.2% year-on-year from 1.6% in the previous quarter. “These are the two lowest growth rates in the last 37 quarters.”

PFCE is the money spent on goods or services that are used for individual and household needs or wants.

Changing consumer priorities

A stagnant PFCE means retailers and manufacturers are fighting for a share of the consumer’s wallet that hasn’t increased in size, explainedArvind Singhal, chairman and managing director, Technopak Advisors Pvt. Ltd, a retail consulting firm.

While the consumer has the same amount of money to spend, priorities have changed, with education, mobile phone voice and data plans acquiring priority over products such as body lotions and and skin creams.

The slump in economic growth and the consequent job losses and cutbacks in corporate hiring have shaken consumer confidence. Even until 2012, India had the highest consumer confidence levels among countries included in Nielsen’s quarterly Consumer Confidence Index. In the September quarter of 2013, confidence in India plunged six points, pushing India to the third spot, behind Indonesia and the Philippines.

In the prevailing economic climate, it’s not surprising that sales of consumer packaged goods have slumped, retailers said.

“We have to reconcile to the fact that the overall GDP (gross domestic product) growth has fallen approximately to 4.5%, and this is a reflection of that. So it was a matter of time for it to percolate to the FMCG sector, partly because of the high inflation and partly because of the GDP slowdown,” said Harsh Mariwala, chairman and managing director of Marico Ltd, the maker of Saffola cooking oil and Parachute hair oil.

consumption data

GDP is the value of a country’s output of goods and services. FMCG is short for fast moving consumer goods, which refer to often-purchased goods such as home and personal care products, including food and toiletries.

In December 2013, Mint reported that slowing economic growth and the high cost of finance and fuel had made car ownership more expensive, impacting buyer sentiment. Car sales fell 5% to 1.2 million between April and November, according to the Society of Indian Automobile Manufacturers (Siam), an industry lobby. “India has entered into a slow growth, high cost, high inflation economy. There are various reasons for that and nothing is going to change in the next four-five years,” said Singhal of Technopak Advisors.

Consumer packaged goods firms have come to accept that the new reality means they will now grow below the nominal GDP growth rate, unlike in the past when they exceeded the pace.

“Over the past 12 quarters, domestic FMCG revenues have grown at 1.2x the nominal GDP growth. The third quarter of fiscal 2014 will see the first trend reversal, and FMCG domestic revenues will grow at 0.9x nominal GDP growth,” analysts Anand Mour and Sreekanth P.V.S. of ICICI Securities Ltdwrote in a 3 January report.

Companies are now going slow on the number of launches in India and even consolidating their product portfolios.

Family budgets shrink

For instance, Unilever Plc, the Anglo-Dutch parent of Hindustan Unilever Ltd (HUL), aimed to cut 20% of its stock keeping units (SKU) by end-2013 and another 10-20% in 2014, the Financial Times reported on 5 December, citing Pier Luigi Sigismondi, the firm’s chief supply chain officer.

Unilever’s portfolio has about 50,000 SKUs. A distributor in Mumbai for the maker of Wheel and Rin detergents and Lifebuoy and Lux soaps said the firm had withdrawn new launches like Fair and Lovely night cream andSunsilk Natural shampoo from the market in the past year.

“The growth in 2012 was in double digits and in 2013 it is in single digits. Clearly there is a very significant slowdown in volume and value. From our perspective, at least in the short-term, the market growth for the next few quarters will remain slow and it might be two or it might be three,” said R. Sridhar, chief financial officer of HUL, at a press conference in Mumbai on 27 January.

HUL’s volume growth in the December quarter slowed to 4% from 5% in the preceding three months.

India’s biggest packaged consumer goods maker earned a net profit ofRs.1,060 crore in the quarter ended 31 December, an increase of 22% from a year ago. Sales rose 9.5% to Rs.7,040 crore, led by price increases.

According to Sridhar, the consumers are being far more conscious about their family budgets and tightening discretionary spending—money used to purchase non-essential items. “They are more conscious of their frequency of usage,” he said.

To manage costs, HUL has dropped some promotional offers and increased prices. The firm has also changed its focus from expanding further into the interiors to improve sales from its existing network of stores, Sridhar said.

In an interview to Mint newspaper in November, Sunil Duggal, chief executive officer at Dabur India Ltd, admitted that the mood among consumer goods makers was defensive and Dabur was being conservative in expanding its portfolio.

The rural story

Likewise with rural penetration. On an average, firms increased their rural reach by 50-150% in the past three years, says Vikash Agarwalla, principal at consulting firm Booz and Co.

For instance, Dabur India, the maker of Vatika shampoo and Real juice, has more than doubled its reach in the last 18 months to cover 30,000 villages. Marico has nearly doubled its reach in the last five years to 30,000 towns.

But with the rural consumer joining her urban counterpart in cutting back on spending, companies are rethinking their strategies.

According to data by research firm IMRB International, which tracks sales in 30 core consumer categories such as soaps, shampoos, detergents and packaged staples, growth across rural markets between January and September slowed to 4% from 7% in the year-ago period. Urban growth (across categories) declined from 8% to 2% in the same period, the report said.

“We have slowed down on geographical expansions, and not increasing the number of outlets under our coverage,” said Krishna Mohan, chief executive at Emami Ltd, the maker of Zandu balm and Fair and Handsomeskin cream.

The last three months of 2013 saw a handful of consumer companies effect top-level management changes, putting in place executives better equipped with navigating the slowdown.

On 9 December, beverage maker PepsiCo India Holdings Pvt. Ltd namedD. Shivakumar as the new chairman and chief executive officer (CEO) for the India region. Shivakumar, a former senior executive at Finnish handset maker Nokia Oyj, succeeded Manu Anand, who left the company in June.

Anand joined Mondelez International Inc., the maker of Oreo biscuits andCadbury chocolates, in July as president for India and South Asia and managing director of Cadbury India, replacing Anand Kripalu, who led the business for eight years. Top-management changes were also effected at HUL, Nestle India and L’Oreal India Pvt. Ltd, the maker of Maybelline andGarnier.

In a slowing economy, the room for non-performance is limited as the stakes are high, said Chander Mohan Sethi, senior vice-president, South-East Asia, Reckitt Benckiser Plc. “Making a top-level change may be expensive but companies are not shying away from bringing in the best talent as good people will pay for themselves,” he said.

In the past few years, consumer firms had focused on immediate market gains at the expense of execution quality even as overall consumption was slowing, according to Agarwalla of Booz.

In an interview to Financial Times on 14 January, Nandu Nandkishore, who heads Nestlé’s Asia business, conceded that the maker of Kit Kat chocolate and Maggi noodles had made a mistake by focusing on the mass market and ignoring the emerging affluent segment.

Nestlé’s sales in India had been growing at about 20% a year in the three years to 2011, but this growth decelerated sharply—to 8%—in the third quarter of 2013.

Remapping strategies

Faced with declining sales, a depreciating local currency, slowing economic growth, higher input costs and rising domestic competition, Nestle is redrawing its strategy to cater to more affluent Indians whose household budgets are more immune to the country’s rising inflation and faltering economy, Nandkishore told the Financial Times.

On 1 October, Nestle also saw a change in leadership with Etienne Benetreplacing Antonio Helio Waszyk at the helm in India.

In a bid to maintain prices in spite of the high inflation, manufacturers of consumer packaged goods have started substituting expensive raw materials with cheaper alternatives.

“With the dollar-rupee volatility and prices of crude increasing in the past few months, we have looked at substituting LABSA with vegetable oil-based surfactants in making soaps and detergents,” said G. Ramakrishnan, director (home and personal care business), Galaxy Surfactants Ltd, a supplier to companies like Unilever, Henkel AG and Reckitt Benckiser.

LABSA is short for linear alkyl benzene sulphonic acid, which is used in the formulations of all types of synthetic detergent powders, liquids and cakes.

Similarly, manufacturers of tomato ketchup like Nestle and HUL have also reduced the quantity of tomato paste in the ketchup, The Times of Indiareported on 4 January.

The strategy may boomerang, said Singhal.

“In my opinion, what the consumer companies are doing is something fundamentally dangerous,” he said. “They are changing pack sizes to the smaller size. This is cheating to the consumer. The firm thinks it’s maintaining the price point. The price point is maintained by reducing quantity or then lowering the quality.”

He pointed to the trend of smaller regional firms gaining a foothold by catering to consumers who are comfortable with trying new products because they have felt cheated by the larger brands.

Small enterprises are chasing aggressive growth plans with an eye on the future.

“We want to be a Rs.10,000 crore company by 2020,” said Ullas Kamath, joint managing director, Jyothy Laboratories Ltd, in an interview in December. Kamath expects to close the financial year with close to Rs.1,350 crore of sales.

Long-term picture

In the past two months, the maker of Ujala fabric whitener has raised Rs.650 crore to pay off debt that it had acquired during the acquisition of the Indian unit of Henkel in May 2011 and build a corpus of Rs.250 crore to fuel its growth.

Also with an eye on the long-term growth story, multinationals remain invested in India and have announced ambitious investment plans.

For instance, in mid-July, Unilever increased its stake in its Indian subsidiary from 52.5% to 67.3% by spending nearly Rs.29,220 crore.

In November, PepsiCo India pledged Rs.33,000 crore of investments in the country by 2020.

“A couple of companies are carrying out their pilot projects in Indian markets, which, if successful, would be rolled out to other South-East Asian economies. Thus, from that perspective, there is enough mind share investment,” said Rachna Nath, leader of the retail and consumer practice at PricewaterhouseCoopers Pvt. Ltd.

Still, even when economic growth accelerates and market conditions stabilize, it may be a while before consumers gain enough confidence to spend like they used to in the boom years or start trading up to more expensive products and lifestyles.

“As consumers cut back on spends, trade brands or pack sizes for a smaller or cheaper brand or discontinue to buy a particular brand, they may not revert to consuming it immediately even if the economic growth reverses to becoming better,” Sandeep Kaul, chief executive officer of personal care business unit at ITC Ltd, said in November at a corporate event in Mumbai. “They will stick to the lower priced brand for longer.”

The downturn has inured people to focusing more on necessities and less on aspirational purchases, causing a shift in the consumption pattern, said Kaul.

Source: http://www.livemint.com/Industry/bMsoKICv9F7KZ7ZQ2ywUIO/Has-Indias-consumption-story-gone-bust.html

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Technology making online shopping popular but trust will be the biggest driver: PwC study

, TNN | Feb 6, 2014, 01.14PM IST

KOLKATA: Online shoppers in India are almost at par with their global peers in their shopping habits, despite online shopping being a recent phenomenon in India. This is owing to the growing popularity of technologies such as social media, smart-phones and tablets.

Out of a total of 1,006 respondents surveyed as part of the PwC study from India, 34 per cent opt for making purchases through the internet on a monthly basis, with the global average being 33 per cent. While clothing, footwear, consumer electronics, household appliances, books, DVDs are the top product categories for online shopping, buyers in India are now increasingly opting to purchase product categories such as furniture, homeware, grocery and do-it-yourself or improvement items through the online medium, which traditionally were purchased in-store.

This is different from their global counterparts who still have not opened to buying grocery or sports equipment items through the online medium. These findings are part of a PwC report titled ‘Total retail: A change is underway’ that gives insights into buying behaviour of shoppers in the retail space, the key factors that influence the medium of purchase (online vs. brick-and-mortar).

Rachna Nath, Retail and Consumer leader, PwC India said, “For too long, the customer has been of interest only to Sales and Marketing department.

Today, that is changing. Consumers empowered by technology are now making sure that their shopping experience is not what companies want to give but what the consumer wants. This changing behaviour is driving a change in the business models. It is no longer about having multiple channels but about making them work across seamlessly, where a consumer browses online and buys in-store or vice versa. This again has to be supported by a strong supply chain, the strategy for which needs to be built into the business model.

This concept of ‘Total Retail’ will drive buyer behaviour going forward.” Indian online shoppers believe in choosing from abundance. The number of e-commerce retailers that Indians shopped from within the last one year is more than ten. This figure is way above the developed economies, where people restrict themselves to two to five retailers. The report states that the main reason for buyers to opt for online shopping vis-a-vis traditional brick-and-mortar stores are lower price, full range or more choices, stock availability, better warranty / guarantee and better service.

General election to decide the course of FDI in retail

FIRST PUBLISHED: WED, FEB 05 2014. 05 06 PM IST

Retailers, experts say the next five years are critical for the growth of the retail industry in India

Suneera Tandon

Retailers and experts spoke on the first day of the Retail Leadership Summit 2014 in Mumbai on Wednesday. B.S. Nagesh, chairman of industry lobby Retailer’s Association of India, said irrespective of which political party or grouping comes into power, the retail industry will continue to grow–albeit at the local retailer or modern trade.

Pradeep Gaur/Mint

Photo: Pradeep Gaur/Mint

Mumbai: The next five years will be critical for the growth of the retail industry in India because the result of this year’s general election will decide whether or not global supermarket chains enter Asia’s third largest economy, according to a clutch of retail industry experts.
Retailers and experts spoke on the first day of the Retail Leadership Summit 2014 in Mumbai on Wednesday.
B.S. Nagesh, chairman of industry lobby Retailer’s Association of India, said irrespective of which political party or grouping comes into power, the retail industry will continue to grow—albeit at the local retailer or modern trade level.
“If the Congress comes to power, it will help many modern retailers who have been waiting to enter India, as many states under the new government would allow for foreign investments in retail,” he told the two-day meet. “If FDI (foreign direct investment, in retail) does not happen under the Bharatiya Janata Party (BJP), they will work for non-FDI retailers.”
Two state governments—the BJP government in Rajasthan and the Aam Aadmi Party regime in Delhi—have recently announced decisions not to allow FDI in supermarkets, reversing previous policy.
Barring British retailer Tesco Plc that is in a joint venture with the Tata Group, major supermarket chains such as the Wal-Mart Stores Inc. of the US and French retailer Carrefour SA are yet to make up their minds about entering the multi-brand retail sector in India.
Nagesh described the policy reversals by the two governments as disappointing. “One is going against a national policy. It is a wrong stance taken by the states as it does not present a good precedent for future governments.”
Some experts seemed sceptical about the importance of FDI in multi-brand retail.
“FDI in retail has no meaning any more, specially FDI in multi-brand retail… It is highly misconstrued in India and is a media-created hype,” said Kishore Biyani, founder and group CEO at Future Group.
B.S. Nagesh shares his thoughts on FDI in retail.
Not many retailers were looking at FDI, said Biyani, whose Future Group has in the past held talks with Carrefour. The talks, however, did not end with the two forging an alliance.
Biyani had denied any immediate association with a large foreign retailer in a recent interview.
On consumer goods, Sanjiv Mehta, chief executive officer and managing director at Hindustan Unilever Ltd, said modern trade will continue to penetrate smaller towns and cities with or without foreign investment, but that foreign investments will definitely speed up the process.
Small neighbourhood stores, he said, will continue to be relevant in India, largely driven by the convenience associated with that retail format.
Even if a non-FDI supporting government were to assume power after the general election due by May, Nagesh said, more steps should be taken to support the interests of smaller traders and farmers.
Source: http://www.livemint.com/Industry/BBxeOVRJHQZcuAd5oMmWQN/General-elections-to-decide-the-course-of-FDI-in-retail.html

The Great Indian luxury consumer decoded

20 Jan 2014- Economic Times

In a recent CII-IMRB study on the changing face of luxury in India they have classified the luxury consumers in an interesting manner into Experientialists, Connoisseurs, Flaunters and Aesthetes.

It is not easy to classify the Great Indian luxury consumers. Though several attempts have been made over the years, somewhere we Indian have been able to confuse these classifiers. A classic example was when I saw a gentleman driving a Mercedes E- Class towards the CNG counter of the petrol pump. Although we need to show off or flaunt our status with luxury we cant help save every penny that we possibly can. Another classic example was when I saw a friend strapping a limited edition Omega with a Titan because the Omega strap is very expensive. This gentleman is a high-flying executive with an MNC.

In a recent CII-IMRB study on the changing face of luxury in India they have classified the luxury consumers in an interesting manner into Experientialists, Connoisseurs, Flaunters and Aesthetes.

However, you must remember that no matter how much you try to classify us Indians, we are a heady mix of all the above and much more than any study could possibly gauge.

First, the Experientialists:
This genre typically values new and exciting experiences more than buying products or brands. They spend on the experiences. In their structured lives they seek a getaway and so their spends primarily include five-star hotel stays, fine dining or adventurous/thrilling experiences. Luxury to them brings up images of being suspended in time and space, not having the press of daily life and work responsibilities thrusting into their minds as they enjoy the time away.

(image courtesy: flickr)

An exquisite piece of art or a handcrafted timepiece may also give a similar experience when you are just in a space where you are appreciating the beauty of it. It is a time warp, every time you look at it, you become so mesmerised by the beauty that you forget your meetings and deadlines. The experience is the luxury, the experience is the dazzle or luxe (Read: The Quest for Luxury).

Personalisation of experiences takes luxury to a new level. Personalisation of menus at fine diners is no longer reserved for the elite. Even sometimes the name of the customer is printed on the menu. So yes, this is value for the buck for an experientialist.
For these consumers, going forward the trend will be to stay in specialty boutique hotels or resorts, luxury spas or private apartments and villas when on a holiday.

Now lets meet the Connoisseurs:
This genre is passionate in certain areas of interest and makes it a point to be well informed and knowledgeable about it. These categories could be art, scotch, wine, watches, writing instruments, cigars, horses, and the likes. These connoisseurs get together and appreciate the finer aspects of their passion. They form clubs and get together for a quiet appreciate of luxury of the creation. It may be a horology society or a wine club or a scotch club or a cigar group.

This segment just revels in enjoying what they appreciate the most. Like in Kolkata there is The Calcutta Malt and Spirits Club and in the capital there is Delhi Single Malt Club where members come together, discuss, study, debate and share their appreciation and experience in high spirits (no pun intended). Similarly, there are elitist clubs of connoisseurs for appreciation of Cuban cigars and timepieces across the country.

They will spend their time and money in pursuit of the collection of personal passion points. They make the pursuit of their area of passion a mission and pursue it with zest. When it comes to limited editions, or handcrafted editions or spirit of the bygone era, these connoisseurs will not bat an eyelid for spending a fortune.


(image courtesy: flickr)

They are unlikely to place value on brands unless it stands for exquisite exclusivity. They tend to prize themselves on the knowledge of esoteric brands that are not widely known.
Luxury to them is purely a matter of the level of craftsmanship, the number of man hours spent, and thus the quality of the products or services that they buy. Niche, but specialised brands across categories will make their mark with these consumers. Their willingness to pay is high. Curated services that brings such products to them will be a great getaway to tap into their need for excellence.

The next segment, I believe is the life force that drives luxury in India. Meet the Flaunters:
A socialite friend who used to swear by a clutch that she used to take to every party had secretly told me that she isn’t that fond of it but only carries it for the LV monogram tag. That’s the power of a brand of this genre.

Welcome to the world of flaunters. They tend to value brand name over all other factors. Purchase of a brand is a signal of their status in their society and so visibility of the brand name is important. It is also important for the brand to be aspirational, otherwise, what’s the big deal? Badge seekers at the stage where the brand name itself is the biggest status indicator is seen mostly with the newly rich or new money class, especially among their young members. There is a strong desire to prove to the society that they have entered the elitist luxury brand-wagon.

In a survey more such consumers were seen in cities like Ludhiana, where they justify the ownership of brands by stating that they are now in a status or position which makes it de rigueur. The most interesting thing about this class is that brands are on a continuum. They can show off Zara as a daily wear to Prada on special occasions with elan.

As flaunters move up the societal ladder, the badge value is conferred not only by the brand but also by the level of difficulty in obtaining the product or service. Dinner reservation at hard-to-get restaurants, Birkin or Kelly bags for which the wait list is over four years, monogrammed and hot stamped Louis Vuitton bags with their initials, accessories made from exotic leather like of crocodile or snake the ability to acquire these with relative ease is a reflection of their status.

Well known but exclusive services and products are the way forward for tapping this segment of consumers.

And last but not the least, I present to you the Aesthetes:

To this genre, the brand is much less important than the design. Aesthetes are luxury consumers purely because they have arrived at a state of income due to which they can indulge in their love for design among luxury brands or products.
They will shell out a bomb because the object of desire is hand stitched and not because of the label. They pride themselves for having an eye that picks out the unique and bold in design.

The difference between them and the connoisseur is that the latter has certain passions which they follow with zeal and the quality and craftsmanship are very important. However, for the former category, it is the aesthetic appeal, the look, the intricacies of the design that appeal to their senses. They are also likely to pursue this aesthetic across categories unlike a connoisseur.

It is the creativity and the uniqueness of an item that denotes the value to the aesthetes, and they are willing to shell out if that object catches the eye. It is not about the intrinsic value or brand value, it is about just aesthetics. To tap them, luxury brands need to showcase more distinctive and unique designs.

The most intriguing part is that the experientialist consumer may well be an aesthete when it comes to apparel and accessories, while a connoisseur in art may be a flaunter when it comes to automobiles or his home. Indian luxury consumers are still evolving and many of them are not at a stage where their lives are only dominated by luxury brands.

Built in rationality and conservatism still dominates our minds so one toe may be dipped in luxury, the other may be in a pool of value for money.Yes, it happens only in India.
Let your quest for luxury continue.

About Mahul Brahma

Mahul Brahma is a former senior journalist and luxury editor with a prominent newspaper and currently heads brand and corporate communications for Ambuja Noetia Group.

Referencehttp://retail.economictimes.indiatimes.com/blog/The-Great-Indian-luxury-consumer-decoded/68