When the new takes over
Millennials are known to wield their influence across generations—the older and younger people around them. Their way of life then is not the new, it’s the new normal
Life, as we know it, has changed. The way we eat, travel, shop and spend has changed. It’s not just about technology and millennials influencing our decisions. Yes, that’s happening. Yet, it’s a little more nuanced than that.
For one, the availability and accessibility of everything that was once considered niche has now increased. In the last five years, close to 50 new start-ups have emerged even in categories like tea and chocolate, according to start-up tracker Tracxn. The number of craft breweries increased from two in 2008 to over 45 across the country by March 2015, according to market research firm Euromonitor.
Globally, the number of products available on retail shelves has increased by over 10% in the first three quarters of 2016 as compared to 2012, according to an Accenture Strategy report.
Some start-ups are creating new market segments and business models. Others have appealed to the finer taste, quality sensibilities or even Indian-ness of the discerning consumer. So, in a short span of two years, Bira 91 craft beer has become the country’s favourite beer brand. Others like Blue Tokai have changed the way we think about coffee. Meanwhile, chocolate is no longer synonymous with Cadbury; or shaving with Gillette. In fact, Cadbury’s manufacturer Mondelez International Inc. has lost over 15 percentage points in market share in the last three years, according to Euromonitor. Whereas for Gillette India Ltd, men’s grooming has undergone a sea change. Start-ups like Beardo and Bombay Shaving Co. have created new segments in existing markets and even business models catering to male vanity and incumbents like Gillette are facing the brunt with slowing growth and also market share loss.
What we have is a changed and fragmented marketplace. A telling sign is that most large packaged consumer goods companies from Unilever Plc. to Coca-Cola Co. and closer home Godrej Consumer Products Ltd and Marico Ltd are investing in start-ups.
What’s also changed is the way we consume brands. Brand loyalty is dead. Consumers are “flirting with multiple brands in supermarket stores and even in their homes”, says Damodar Mall, in his 2014 bookSupermarketwala: Secrets To Winning Consumer India.Mall attributes some of these changes to the growing affluence of the Indian consumer and also the advent of modern retail in the last decade.
Also, shopping is no longer just about visiting a store, purchasing and walking out. It’s about experience. It’s about creating a memory that can be tweeted, Instagrammed or Facebooked. In an experience-based economy, consumers are spending less on materialistic pleasures or acquiring cars, televisions and handbags, and more on chasing experiences like attending a music festival or even just trying out a new cuisine, café or bar.
The change has created multi-billion-dollar start-ups like Uber, Ola and Airbnb. In fact, young adults today don’t even really care about getting their learner’s driving licence when they turn 16 or their driver’s licence when they turn 18. They are indifferent towards brands and their ownership.
To be sure, some of these behaviour traits can be attributed to the hipsters—which include the stereotypes—of the millennials in big cities and the bearded, pierced and tattooed Gen X-ers who outspend all other shoppers. If we take into consideration only the millennials, there are over 320 million millennials in India, a substantially large demographic. However, it’s not just about them. Millennials are known to wield their influence across generations—the older and younger people around them. Their way of life then is not the new, it’s the new normal.
Shop Talk will take a weekly look at consumer trends, behaviour and insights.