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81% shoppers in India look for in-store discounts

Deal seeking behaviour is on the rise amongst consumers due to pandemic and growing inflation, revealed a recent study by NielsenIQ. According to the findings of the study, in 2021, 81 percent of shoppers are looking for discounts and promotions while in-store, up from 74 percent in 2020.

As a result, to complement this shift in consumer trend said the study, manufacturers have increased promotions in non-food categories such as liquid toilet soaps, toilet cleaners, shampoo and washing powders. Within foods – categories that have been given a push through promotion are glucose powders and biscuits, found the study.

“Pricing and promotion analysis by the NielsenIQ Analytics team (2020-21) found that in APAC 37 percent of FMCG sales were products sold on promotions, of this over 51 percent of these sales would have happened even without providing discounts, thus leaving money on the table,” said.

The annual NielsenIQ Shopper Trends 2021 study also found that promotions impacted store and brand loyalty with 29 percent of shoppers indicating they change stores based on best deals they find, and 20 percent regularly buy different brands because of promotions. “This has increased pressure in offering in-store promotions, as well as in specific categories over the last year for manufacturers and retailers,” it said.

The NielsenIQ study indicated that while promotions are critical through the year, there is an emphasis on sales during big days and festive season in India and this accounts for 33 percent of sales in modern trade channels. Optimising the big days and festive season for promo waste reduction and an increase in promotion efficiency becomes important.

Large packs such as those of biscuits and salty snacks, said the study, which are 10-20 percent cheaper than the category average also see an increase in contribution to festive season sales, highlighting the importance of focusing on the pack strategy in planning promotions.

“While there is ‘promo pressure’, manufacturers and retailers should use promotions as a mechanism to drive consumption, uptrade encourage trials, and regularly check wastage or over promotion,” said Vijay Udasi, Sr. Vice President, Analytics, NielsenIQ.

“The promotion mechanism and depth and frequency of promotions should be brand, category and item specific, keeping in view their efficiency and incremental sales. We have seen that at the Asia Pacific level additional 3.3 percent value sales could have been realised with a more efficient promotion strategy – and that shows us the opportunity available in driving growth with the right price & promo strategy,” he added.

As India has seen high inflation across 2020, there has been an increase in prices of food categories over the year owing to macro factors that impacted the imports of oil, price of tea and staples. As of twelve months ending June ’21 the FMCG industry grew at 12.4 percent, however, 5.7 percent of this came from price increases (for the same period), according to NielsenIQ.

About 80 percent of shoppers in India, have indicated that food prices have increased over the last one year, said the survey. “2 in 5 are buying lesser than what they would normally, 29 percent are switching to cheaper brands, and 21 percent are choosing private brands for the price advantage,” it said. MoneyControl

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