Saturday, June 25, 2005

Well written and research article that is fundamentally flawed

Every wondered about the state of the retail clothes business in India? Well here is the article you have been waiting to read - generational analysis: Insight into consumer behaviours
At a macro level this is a fascinating article about a vast and hugely important country. It seems that consumers are falling out of love with apparel shopping.

A major reason for this is the distraction of competing purchase options. For example, spending is up on cell phones (from 0.2% of expenditures in 1995 to 0.7% in 2004) and medical services (from 20% in 1995 to 23% in 2004). Clothing was left with only a 4.0 per cent share of consumers' total expenditures in 2004, down from 4.9 per cent in 1995. In dollars, this decline in share equates to a $324 billion loss. That is a massive slug of demand to disappear.

One explanation for this decline, that is glossed over, is that consumers have enjoyed a decade of deflating product prices, increased purchasing power has enabled them to get more apparel for less.

Where I think the article enters world of dreams is when it analyses the shopping behaviour of three age groups (Xers, Boomers and “The Silent Generation” (59- to 70-year-olds). What a ghastly name.

I have no idea how many people are covered by these three generation groups but I suspect it is a big number with a lot of zeros. To believe that you can make sensible marketing decisions based on such blunt analysis is lunacy.
Dick Stroud www.20plus30.com

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