Four insights that could lift the fortunes of retailers in India

What makes a consumer? I think to be a consumer, you need four things: a desire to consume; a propensity to spend; an ability to spend; and an opportunity to spend. Retailers need to understand these four aspects thoroughly, if they desire to be successful. Let’s test the hypothesis.

Can there be a consumer without desires?
Philosophy says that desires are the root cause of all dukha or sorrow. So seers, saints and sages try to get rid of desires. They are unlikely to shop at Food Hall, the food shopping destination of Mumbai.

Can there be a consumer without a propensity to spend?
This is like the comic character Uncle Scrooge. If the consumer has pots of money, but loves to keep it rather than spend it, she would fit this description. These kinds of people are the challenges and opportunity for marketers. Such ‘consumers’ don’t spend not because they are miserly but because their passion is not triggered by aspiration or need to buy. What can change it? Well, a consumer did not find the opportunity to buy a sugar level testing meter till she joined a weight-reduction programme.

Can there be a consumer without the ability to buy?
Again, my economics study told me in the first line of the chapter on demand that desire backed by an ability to buy is demand. Without money, your name would be desire but not demand. Desire is everyone’s birthright, but the ability to buy is to be earned or acquired.

Can there be a consumer without an opportunity to spend?
When the desire exists with a corresponding ability, but the product or service is not available, then it is choking a demand and creating an opportunity for the retailer and frustration for the consumer. A consumer, on her return from England, is prepared to make blue mould cheese a regular part of her diet. But, sadly, no one sells it in India. She has to make do with alternatives.

Every retailer and FMCG company may want to subject their products and services to this test of four conditions, to be able to assess whether they actually are in the area of demand or just desire or neither.

One of the best examples where all these are played out is Gillette. Starting from Presto the disposable razor to Fusion the battery-operated shaving systems, all become desire or demand for different people. The user of disposable razors would wish he could afford a Fusion system for a ‘smooth gliding shave’. He remains in the area of desire.

There was a time when the desire for drinking tasty, healthy juices saw the mother ration out ‘Tropicana 100%’ in wine-size cups to kids. But with rising per capita incomes and realisation that these are good for health, such juices have moved from desire to demand.

Imported apples in the early ‘90s were luxury to have in summer, when Indian apples were not available. Then, after years of promotion, the Washington Apples Commission had made tasty, crunchy apples available to the Indian consumer throughout the year. The endorsement of taste, availability and the ability to buy… all have made apples a round-the-year fruit. In the next two years, the Indian consumer can hope to enjoy strawberries and other ‘foreign’ fruits throughout the year.

Clearly, marketers must understand that demand will emerge sooner or later if they create sufficient desire long enough. This, in turn, will ensure sustained profitability.

The writer is a veteran retail professional and a sector expert. He can be reached at radha.krishnan@alignedbp.com