A change in customer behaviour away from price sensitivity and towards quality and value
There has long been a popular perception that only price can persuade an Indian consumer to buy. With better discounts and a more extensive customer base, the increasing e-commerce business underlines this thought. However, this mindset has dramatically shifted, with customers now equating the price-value/quality difference. Price and value, though are two separate but connected value propositions. Customers who are price-sensitive enjoy sales, whilst those who are value-driven enjoy investing.
The consumer decision journey has evolved from the early days of brand building. The Indian customer is immensely ‘value sensitive,’ weighing the benefits and quality against its price. Aside from impulse purchases, every other purchase is a well-thought decision. The Indian consumer considers themself to be a “nifty shopper” and takes great delight in it. Given the limited disposable income of most Indian households, the price was the most crucial driver of purchasing until recently. As the pendulum shifts away from discounts, businesses have a chance to increase sales by offering high-quality items across categories. India’s economy has grown, so has the definition of “value for” for Indian consumers.
Today, most consumer durable and computer device purchase journeys begin when customers seek to improve their existing product or acquire an extra unit rather than as a replacement. The buying path is more complicated, with various action points organized into four stages: initial contemplation, functional assessment, final purchasing, and post-purchase experience. The media’s exposure to contemporary living has been a crucial cause for this transition.
Quality is king: Despite the conventional promise of longevity and dependability, consumers are redefining quality as design and aesthetics become more important. Consumers are increasingly prepared to pay a premium for a better, more modern design and better quality that follows global trends. The appeal of Mega discounts & offers is wearing off. This behavior may be seen in various industries, including technology, lifestyle, etc.
Brand matters: A brand is increasingly being viewed as a person’s projection. As a result, it’s become a crucial statistic for assessing a purchase’s value offer. Consumers are prepared to pay more even if a lower-cost alternative may be found in less well-known or unbranded items. In addition to suggesting legitimacy and quality assurance, the brand functions as a mark of success for clients, signifying upward social mobility. However, India is only a second-generation brand-conscious market; newcomers to the brand market.
Functionality is critical: While customers value other aspects of the product, essential product functionality remains at the center of the proposition, which corresponds to the willingness to pay (WTP). Despite having more disposable income, consumers must see a compelling need to pay a higher price for the goods, the added value to the purchase. These are the purpose-driven consumers who seek products that align with their lifestyle irrespective of the price. They consider paying a premium when they are seemingly aware of the discernible difference. Furthermore, the first trigger of requirements and ambitions in the product purchasing cycle is continuously changing. The shopping & payment tool also catalyzes hyperconnected consumers.
Aside from the price-value relationship, deal seeking is an essential aspect for the consumer in any purchase. This phenomenon has always existed, but it is greater with e-commerce discounting, rebates, and promotional deals than ever. This conditioned marketing strategy is now fading off with consumers seeking an experience to every buy. However, the trend in rural India is slightly different where – Rural shoppers are still significantly more price-conscious than city dwellers.
India’s middle class is fuelling the country’s growth. Like their wants, interests, and attitudes, they are rapidly changing. Because of increasing discretionary resources, consumers are prepared to pay more for that extra value, lessening total price sensitivity. Firms must keep in mind that though shopping has changed, but fundamentals still matter; low price isn’t the only requirement for success; consumers increasingly appreciate items‘ long-term worth and quality.