Consumer spending up 9.6 per cent, says KSA study

NEW DELHI: The pessimistic outlook on the retail and fashion segment seems to have turned into a positive one. The Consumer Outlook study conducted by KSA Technopak, India's leading management consulting firm specialising in the fashion and retail industries, shows that consumer spending in the year 2002 has gone up by an impressive 9.6 per cent compared to the previous year which showed a decline in spending.


The findings of the study was shared during the ongoing fifth KSA retail Summit, organised by KSA-Technopak, in Mumbai on 10-12 February 2003. KSA-Technopak is India's leading management consulting firm specialising in the fashion and retail industries.

Consumer Outlook is a strategic annual tracking study on consumer's shopping and spending behaviour across categories conducted by KSA Technopak.

KSA Technopak officials also announced that the growth implies a phenomenal rise in market opportunity for retailers, estimated to be in the region of Rs 150 billion among the SEC A and B categories in urban India alone. The five main key drivers for today's consumers, according to the study, are enjoyable shopping experience; value for money; product quality; fashion attributes and saving time.

A large percentage of consumers said they enjoyed shopping to the extent they were willing to drive further for a pleasant and better shopping experience. Consumers also showed preference for shops offering special schemes or sales and were keen on products that are trendy and in with the times. A large number of consumers said shopping was a need-driven exercise which they preferred to do at outlets where they could save time.

Announcing the results, KSA-Technopak principal and associate director Harminder Sahni says: "These insights can be transformed to opportunities for retailers. Clearly, retail outlets that would succeed are those that, in

addition to offering quality products, also build enjoyment into every part of the consumer's shopping experience; create an ambience by effective use of merchandise display techniques; offer quick and efficient service; reward

the customer for loyalty; and use a combination of promotional schemes and offers to attract the customer."

According to the study, after a sluggish growth in 2001-02 when difficult market conditions forced people to tighten belts, almost all the categories in the Indian retail sector have bounced back. Among these are footwear, apparels, apparel accessories, home textiles, entertainment, books and music, among others.

This is not to say that consumers are spending more than they are saving, for the study reveals that savings and investments have also gone up by a substantial percentage. Brown goods and personal care items purchased for self showed a decline in growth.

However, various categories continue to vie for the share of consumer's wallet, with food reigning over other categories. Consumers spent more on groceries and eating out than on other categories and this trend has been consistent over the last five years that KSA Technopak has undertaken the Consumer Outlook study.

Announcing the outlook for 2003, Harminder Sahni says: "This year, 41 per cent of consumers have declared they will spend more in 2003 than the last, while 48 per cent expect they will spend at least as much as in 2002. This

spells good news not just for retailers, manufacturers and suppliers but also for consumers who continue to benefit from the many choices on offer and the increased competition for a share in his spending rupee."

The Consumer Outlook 2003 study was conducted by random sampling of 10,000 respondents in the 15 to 58 year age group in the SEC A and B categories in 20 cities across India. The Consumer Outlook study is a consumer-behaviour based tool used for devising consumer-centric strategies and is based on research across categories such as apparel, accessories, consumer durables,

books and music and personal care items.

KSA Technopak (KSA T) is a joint venture company with Kurt Salmon Associates (KSA) in India. KSA is the world's largest management consultancy, specialising in consumer goods and retail sectors. Based in New Delhi, with an industry experience of over 10 years and a strength of 50 consultants, KSA T has an in-depth understanding of the Indian consumer products industry and a unique vision of its future.

Comprehending the needs of the fast changing retailing milieu, it formulates company strategies, augments business processes and develops systems to effectively manage change. KSA T has successfully aided India's leading retailers & suppliers in the areas of business planning and strategy, retail operations and supply chain management.

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