Retailers face uphill task in wooing customers

Indian retailers face uphill task in wooing consumers as, apart from growing competition from rivals, they also continue to face problems in winning away customers from traditional grocery stores.

Reflecting the slowdown trend customers’ adoption of modern trade format slowed in 2008 compared to 2007, according to the latest Nielsen Shopper Trends India report.

The slowdown was despite the fact that the customers frequenting supermarkets and hypermarkets had grown by 11 per cent in India’s eight key metros compared to the last round of conducted in November 2007.

The study found that traditional grocery stores continued to dominate the Indian retail scene. While 39 per cent of grocery buyers visited a supermarket or hypermarket at least once in four weeks, 97 per cent of them visited a traditional store over the same period.

“The exponential growth in the modern trade format’s customer base that we have observed in recent years now appears to be stabilising. Given this scenario, awareness and presence will continue to drive the equity a retail banner enjoys in shoppers’ minds,” said Asitava Sen, Director, Retail Consulting, The Nielsen Company, India.

The choice of multiple retailers within the vicinity is also allowing shoppers to hop around for bargains.

The Indian customers now have more options to shop from and one fifth of the customers visit four or more stores in a month, the report said.

As the modern retailers try to capture the higher proportion of Indian customer’s wallet, neighbourhood store formats are more popular as more than half the shoppers visit a store because of its sheer proximity, says the report.

The retailers are trying to stock up all the basic need products under one roof to increase the footfalls. “Keeping regular customers happy by stocking categories and brands that are important to them is a key mantra to avoid banner switching.

Food and grocery is a low involvement category, so convenient and easy access to product categories is particularly important to today’s grocery buyer,” Sen added.

While both value for money and low price are rated as important drivers of store choice, value for money had a slight edge over low prices according to Nielsen ShopperTrends  report.

Explaining the behaviour of the Indian customers the ShopperTrends survey says “it is observed that attractive and interesting promotions play a vital role in store selection. Shoppers claiming to have checked the newspaper or flyers for coupons and then having gone to the store with attractive deals increased three-fold compared to last year.

Retailers like Pantaloon, Vishal Retail and Spencer’s have been offering large discounts from time to time to boost their sales.