Revenge Done, Value Prevails: A New Chapter in Consumer Behaviour!

As the final quarter of FY23-24 unfolds, companies are assessing their overall performance, especially in the wake of post-festive season sales on e-commerce giants like Amazon, Flipkart, and Mantra. Surprisingly, the data suggests a significant shift in consumer behaviour. No longer driven by anger or vengeance, today's consumers are embracing a more conscious approach to spending, giving precedence to value over impulsive purchases. Two recent reports shed light on the evolving dynamics of Indian consumer behaviour during 2023 and the anticipated changes in 2024.

The Retailers Association of India (RAI) has divulged a noteworthy transformation in the spending patterns of the Indian middle class. When it comes to apparel and footwear, two categories that witnessed a substantial decline in growth over the past 12 months, consumers are becoming increasingly budget-conscious. Has the era of Revenge Shopping, a phenomenon that gained prominence in the post-2022 pandemic world, come to an end?

The data reported in the media seems to suggest so. Apparel, footwear, beauty, and quick-service restaurants (QSRs) have collectively lost almost half of their allure, growing only at a modest rate of 9 percent in the last year.

From Anger to Awareness: The End of Revenge Shopping Era

Is it a case of Revenge Done, or can we turn to the Men’s Underwear Index for answers? This informal economic indicator, which gauges consumer sentiment through the sales of men's underwear, suggests that during economic downturns, men might delay purchasing new underwear, impacting sales. However, a deeper analysis reveals that consumers are still willing to spend on high-priced products in the electronics and automobile segments. It appears that Revenge Shopping was not a sustainable trend. With an increasing number of people opting for financing options to acquire higher-priced items, there was an inevitable reduction in spending on items like apparel and accessories.

Job Loss & Inflation: Consumer Priorities Shift Amid Challenges

The underlying reason for this shift in consumer behaviour can be attributed to low sentiment arising from job losses, inflation, supply chain disruptions, and global uncertainties. These factors have forced consumers to reevaluate their priorities, especially in terms of spending on apparel and footwear. The festive period spanning October to December witnessed a slowdown in sales, indicating that the phenomenon of Revenge Shopping has indeed tapered off.

While the industry does not foresee a swift recovery, experts believe that a turnaround might occur in the next two to three quarters, contingent upon factors such as lowered interest rates, salary hikes, and minimal layoffs.

Emergence of Sustainable and Considerate Consumer

A new wave is emerging – one of mindful spending, where consumers prioritise value and experiences over spontaneous purchases. Finding the balance between conscious choices and occasional indulgences is becoming the norm. Responsible spending habits, waiting for salary hikes and lower interest rates, and focusing on premium experiences over fleeting trends are now the guiding principles. It seems that the current landscape encourages finding joy in quality over quantity and creating lasting memories over impulsive buys. As the Revenge era concludes, a more sustainable and considerate consumer emerges, shaping the future of the retail landscape.