As global inflation continues to rise, consumers are looking to spend their money where they can get the most value, as new Mintel research reveals that Indians now associate online platforms with better deals.
Cashback offers are driving 50 percent of Indians to shop online while 46 percent say the same of product discounts. The appeal of cashback offers is more evident in Metro areas (55 percent) where the cost of living is increasing and digital penetration is higher.
50 percent of Gen X consumers (aged 41-56) are motivated by product discounts to shop online more frequently compared to 46 percent of the general population, according to a report by Mintel.
Saptarshi Banerjee, Senior Research Analyst - Lifestyle, Mintel India said, “Price sensitivity is likely to dominate consumer purchase decisions as they want to remain in control of their finances for the next few years. Products and platforms will be evaluated under the lens of discounting and value more than ever. In the short term, a focus on everyday products that emphasize low or discounted prices will see greater sales through e-commerce.”
This generation is used to bargain shopping in offline stores since their early years, therefore, the search for better bargains will continue to drive their online purchase behaviors.
Also, 52 percent of Indian Gen Xers2 strongly claim that they have a budget that they try to stick to, the Mintel report further stated.
Meanwhile, nearly half (46 percent) of married/living as married Indians are likely to look for better offers on bulk buying and volume purchasing compared to 43 percent of single consumers. One-time purchasing can also serve as an attractive cost-saving option for couples who are looking to maximize value from their combined household budget while being able to set aside enough for their desires of aspirational and recreational living.
“Brands targeting double-income households can offer bulk discounts, especially between the end-of-month and start-of-month periods, where most working consumers receive their remuneration and make monthly household purchases. Furthermore, our research shows that consumers who are more likely to enjoy collecting coupons and/or discount codes from online retailer platforms are parents with children in the household, who expect fun activities to keep them engaged with the shopping site and a simplified user interface from online sellers/stores,” Banerjee continued.
Discounted Shipping Charges Appeal to Millennials
With cost being a key purchase consideration, 40 percent of Younger Millennial consumers (aged 25-31) and 38 percent of Older Millennials (aged 32-40) prefer to shop from brands that offer competitive shipping rates. This group also exhibits a high preference for cashback offers (53 percent vs 49 percent).
“It is clear that the ongoing pandemic and inflation are amplifying frugal mindsets as half (51 percent) of Indians3 indicate they prefer to save/invest any surplus funds even when they can afford to spend it instead. The need for brands to demonstrate value, and help consumers derive maximum value from their wallets, is critical.
“Platforms like Zepto are offering consumers the convenience of doorstep delivery and speedy execution, with no minimum order value or delivery fee. They also claim to deliver in a record time of under 10 minutes. Newer options, like subscription models for frequent shoppers, have been introduced to Indian consumers on Amazon.
“At the same time, as the growth of online channels continues to influence consumer priorities, superior user experiences and smart use of technology will be two key differentiators for brands to leverage when forging better customer relationships,” Banerjee concluded.