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Beverage major Coca-Cola, which is committed to India’s growth, says its sales have been rising despite the slowdown. In an interview with Business Line, Carlos Olmos, Group Director (Eurasia and Africa), talks about the firm’s 20-20 vision and Indian consumer behaviour. Olmos also gives insights into a study: ‘Understanding shopper loyalty within different retail formats’
How important is the Indian market for Coca-Cola? Have you chalked out any specific strategy to achieve the 20-20 vision?
India is definitely a key market, which means doubling sales and transactions in this decade. India stands in the Top Ten in our global business. Given the global environment, the rankings will change.
As far as Coca-Cola is concerned, every single channel in India is going to grow from now till 2020, from kirana to big retail. In traditional channels, sales would increase three times, while we expect a five-fold growth through modern retail.
What are the key findings of your study on shopper loyalty?
We conducted a study in 92 countries across Eurasia and Africa. Shopper loyalty changes at a particular time of the year and throughout the week. It also varies with occasion.
Some of the key findings are that premeditated items account for about 20 per cent of the average basket in the Eurasia and Africa region, and are the foundation of shopper loyalty for any retailer.
About 73 per cent of shoppers in India are aware that they spend more on groceries at present, than during the same period last year. Whilst more than 80 per cent of respondents said this was due to rising prices, more than 25 per cent of shoppers indicated it was also a result of purchasing more items each week.
How different is the Indian market from the western in shopper loyalty?
In India shoppers prefer walking to a neighbourhood store. However, when it comes to larger stores or weekly shopping trips, they use personal transport. Personal transportation changes the loyalty paradigm vis-à-vis the western market.
Compared to South Africa or Turkey, there are fewer people with access to personal means of transportation in India. As choices in catchment areas increase, by definition, the average loyalty to a particular store in that catchment will go down. We found that shoppers were less loyal within cities in India, which have seen hundreds of stores opening in the past few years. Between 75 and 80 per cent of the shoppers we surveyed at different channels across India could not imagine shopping in a different location for groceries at the same time next year.
What are the key elements that drive shopper loyalty?
Needs are the foundation of a shopping trip and ultimately the loyalty of shoppers. Shopper loyalty is often measured by market share or share of total expenditure. There are three types of categories that determine this — trip drivers, in-store drivers and basket-fill.
Trip driver means specific items or stock keeping units (SKU) that cause shoppers to make a trip to a particular store or channel on that day. These vary by trip and are critical for the store as they drive a whole basket.
In-store drivers help drive the trip to a particular store on a particular day of the month, without a specific term or SKU being on the shopper’s mind.
Basket-fill is the term for staple and impulse items. While trip drivers and in-store drivers account for 20 to 25 per cent of the total basket, the rest is the basket fill-ins.
What are the trip-drivers in India?
For neighbourhood grocers in India the majority of items — more than 80 per cent — that trigger a shopping trip are for non-perishable categories. Health and beauty, and household cleaning account for more than 25 per cent, which is the highest. Grains, pulses, oils and fats follow. In Africa, the same holds true for flowers and flip-flops.
Any changes in the consumption pattern or trip-drivers?
During the week, trip drivers make up a relatively smaller part of the trip, whilst on weekends, shoppers tend to buy more based on a shopping list. Our survey found that for 75 per cent of the shoppers in India, price was important as was small pack sizes
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