Experiential Insight: on Consumer Behavior

In 2019, Indian retail industry is worth $790 billion; it is expected to hit $1,400 billion by 2024. Retail industry is contributing significantly to Indian economy. When consumers enter into a physical retail store, they exhibit different patterns of behavior. Several Factors impact consumer’s product purchase behavior.  This experiential insight presents the behavior exhibited by consumers while purchasing specific products in a physical retail store based on my own experience and observation of other consumers on the floor of a retail store over a period of time.

Different Types of Consumers: The simple categorization of consumers is:

1. High Income Consumers
2. Middle Income Consumers
3. Low Income Consumers
4. Retired Consumers
5. Unemployed Consumers
6. Guest Consumers

Another classification of retail consumers is:   i) Married Consumer, and ii) Unmarried Consumer or Bachelor Consumer.

Following is the behavior exhibited by different types of consumers in a physical retail store:

Behavior Exhibited by High Income Consumers: Following is the behavior exhibited by higher income consumers:

• Usually this category of consumer is having very less time to do shopping. Or occasionally, if he promises to his family that he will take them to store, he ends up in the store with his family and kids. If he is having less time to do shopping, he grabs the products near the entrance of store at higher price, i.e newly launched products.
• If he is with his family and children, he may agree to his children to purchase bit expensive goods. It depends even if he is wealthy and if he is running the show with credit cards, then may end up in purchasing low priced products.
• Some high income consumers even send their domestic helpers to purchase the goods from store. That store bill is neither has significance to them nor they have time to inspect/verify it. However this category of consumers’ percentage is very less.
• Sometimes, they may send their spouses or kids for shopping. And handover their debit/credit card to them for spending. In this case, their family members make the product purchase decisions.

Behavior Exhibited by Middle Income Consumers: These consumers can also be called as middle class consumers; Indian middle class is almost half of the Indian population. When a middle class consumer enters into a retail store, he exhibits following behavior:

• If the middle class consumer is running a family of 4 to 6 people and if it is single income family, as he is entering into the store, he looks for product advertisements on wall at store entrance having discount sale deals. As he enters into the store, first he looks for on the floor center table on display, which products are on sale, bulk deals, or combo packs. Usually on center table of store, the products which were not sold for long time, or the products which are nearing expiry date, or the products purchased in bulk by the retailer at low cost or very high cost from supplier; and mainly the retailer wants to get rid of those specific products; otherwise it leads to loss for him or he may get less return than what he paid for it if he returns those specific products to supplier. If something matches the consumer monthly needs of the family, first he picks that combo product and keeps in his trolley. Further, walking down in store he observes the products on display;
• After walking some distance in physical store, the products on display would be the bit high priced new arrival products to the store. Usually the middle class family man won’t stop there; particularly, if he is with his children and family in the store. He observes the products on display in that area and moves further. Occasionally, he may observe product prices there. Usually in this display area brand new confectioneries, expensive chocolates, dry fruits, expensive detergents, bit high end soft drink bottles may be there. Sometimes expensive toiletries may also be there in that specific area of the store.
• The middle class consumer walks quickly further into the store where the each category of product with different brands and price ranges are on display. Usually this is the area where he spends maximum time in the store. Here also on the racks, he sees for Buy 1-Get 1, Buy 2-Get 1, or 30% extra goods in the product, or 20% to 50% discounts on each separate product on display. First, he looks for these kinds of deals. Does his shopping; Before entering into this store area, he also visits the corner area in store, where discounted products are kept. If something fits his needs and still expiry date has some more time then, he picks up that specific good. Later on he moves to the area where regular products are displayed category wise.
• One more behavior exhibited in regular product categories displayed area, the middle class consumer won’t pick the product which is just near to his reach of the hand or the product on top of the rack. Because top rack products or near to reach products are priced at bit higher prices. He looks for the lower and last rack products where low cost or unbranded, Buy 1-Get 1 kind of product packs are displayed.
• One more behavior exhibited is, if he is purchasing cooking oil; he takes the low cost 5 liters oil can in bulk; in that also if there is any complementary product /free gift coming with that oil can he observes and purchases that specific brand. For example, if he is purchasing Sun Flower oil along with it if he is getting Glucon-D packet, if goes for it. Similarly, if he is purchasing a surf packet and if he is getting a detergent bar along with it, he goes for it. Similarly if he is purchasing a prickly heat power and he is getting a small talcum powder along with it, then also he goes for it. Like this the middle class consumer exhibits the behavior.
• One more thing is, if the customer is looking for cost cutting, if the pulses are packed as 1 kg or 2 kg packs; he may not pick the packs; he goes to the loose quantity area and pack each quantity of pulses from the loose quantities areas. They come at less price than the packaged or branded products. It depends, if the consumer came alone to the store, or walked in along with the family, or he has sufficient time to do shopping, etc. If he has sufficient time to do shopping and he came alone to the store and also it is month end, then definitely he goes and packs the loose quantities of the pulses. If he is with family or kids, he won’t be having time to pack the loose items, he immediately goes and picks the packaged pulses. Here also, another algorithm can be applied. That is, in this case, he picks the pulses pack in small quantity. That is because he wants to visit the store again alone and pack the loose pulses in large quantity sufficient for the month at low cost.
• Mainly he looks for combo packs, discount deals on the display because there are many people at home. The purchases decisions are mostly based on number of dependents at home.
• Checkout Counter Drama: Lets, see last minute, near checkout counter behavior:
  • Usually, near checkout counter quick bite chocolates, or products going to expire in that month are kept at discount price. This is the middle class person even if he won’t require it, if it is coming at low price and based on how long he can use that product, he purchases it. If the product is priced at high rate or dry fruit kind of product. This is optional, he won’t purchase it.
  • Also, near checkout counter drama will be like this. If this poor fellow is with his kids near the checkout counter, and kids are asking for bit high priced chocolates or confectioneries on display there; and somebody else is watching this drama, he reluctantly agrees to purchase the product. He ends up in taking what he initially not thought of purchasing. This fellow won’t leave the store immediately after billing is done. He verifies the bill; here also one more algorithm is applied. For example, if the customer belongs to bit higher middle class, he verifies only some prices of the products on list; i.e. products costed more than Rs 100 (for example). Some other customer, may be lower middle class, he verifies each product price on bill and recalls and matches with the price on display. If any mismatch is there, he asks for it.
• Sometimes, if the product category is customer favorite, then the customer is ready to spend even higher price for the better quality product. For example, some middle class customers, while purchasing goods related to healthcare, products which are applied to body, consumables, wearable, or which can impact the health, then the customer is ready to spend more price for the better quality of the product. For example, in case of medicines, these specific customers may prefer branded medicines than generic medicines.
• There is one more category in middle class itself. This guy is in his late 20s or early 30s; and is newly married, or came to store with friend probably working class classmate or previous colleague, while purchasing he may go for bit high-end branded product to show his purchasing power. It depends how much trust he built with this partner with whom he came to store. If he is comfortable with his partner in store, he may spend more time and evaluate alternatives.

Behavior Exhibited by Low Income Consumers: The consumer behavior exhibited by this category of consumers is as follows:

• This kind of consumer, has price limit for any product. He may end up taking the product quantity coming to that price. Brand is not a concern for him.
• He also prefers to take loose products in case of pulses.
• He observes the price of the product, enquires for it, if price is not on display.
• He may not use debit/credit cards. He prefers to do cash transactions.
• Sometimes, if he gets money from somewhere, he also goes for higher priced product.
• He may not go for branded products.
• Before bill is generated, he asks how much is the total bill amount;

Retired Consumer: This category of consumers can further be categorized as those dependent on their children, sufficient pension earners, and those having settled children / children staying abroad. Specifically, retired consumer, if he has to give certain product as gift to someone, he may spend more money than what he usually wants to pay while he purchases for himself. Sometimes, in store, the spouse behavior also impacts this specific consumer purchase decisions. Sometimes, they leave the entire shopping to their dominating spouse and sit a side in store. In most of the scenarios, they go for age old product brands. For example, they may go for Mysore Sandal; Britannia Biscuits, etc. These are the potential customers for Deepam Oil and spiritual goods in the store such as Agarbatti, scent sticks, etc. One more thing is they may not purchase heavy weight products. This is because they cannot carry the heavy bags with them. Hence, they limit their shopping to limited quantities.

Unemployed Consumer: this category of consumer may be in between jobs. Even if he has bank balance, he is not having confidence to spend. His insecurity feeling impacts the product purchase decisions. He may not purchase luxury goods; he prefers to end the shopping taking the minimum required necessities. He may question discrepancies on displayed product price, and price came on bill. He has sufficient time to do shopping. It also depends on his mood and the situation at home. He may purchase limited number of products. He may not take surplus quantities. He prefer to just-in-time inventory for his home.

Guest Consumer: is the foreigner who came to India on a long term or short visit. He may try to purchase the brand known to him. He may not go for unbranded products. He prefers card transactions. He may not spend more time in store. He may not scan all the brands, of the product he is looking for, on the rack. He may purchase the brand catchy to him and known to him. He seeks for help in finding the specific location of the product in physical store. Sometimes the helper /sales executive in store may influence their purchase decision. Sometimes, some Indian counterpart may come along with him to store; and this specific Indian counterpart influences foreigner purchase decisions. He rarely questions about the bill; unless something is weird.

This is how; typical consumer behavior is exhibited in physical stores. If you enjoyed the story, please write back.

Best wishes,

Dr.Goparaju Purna Sudhakar