Functional Literacy and the New Consumer

Socialization, for humans, begins as early as when the brain begins to recognize faces. Consumer socialization soon follows suit; taking cornflakes out of a particular box every morning for breakfast, putting on shoes with three stripes on your toddler’s feet every morning, etc are some of the simple, and often considered trivial, aspects that go a long way in shaping how an individual behaves as a consumer.

Every step that we observe and interpret, serves to make our lives easier. This is mostly done through Heuristics, mental shortcuts based on previous experiences that aid us when presented with a situation. When we look at a chair, we know what it is, we know of its uses, how it’s made, etc only because we have seen and heard of it earlier. This is how the human brain is wired to work and is also the reason why an individual who is blind from birth, will not be able to interpret visuals he receives from new found sight.

Heuristics is what makes the concept of ‘functional literacy’ worth taking a look at. Functional literacy in a typical consumer environment would mean the basic skills required to be able to read product labels that differentiate offerings, the ease with which an individual navigates around in a shop, being able to calculate value of units rather than the pack size, totaling costs of purchased items etc. Having had an education, if effective, would resolve any conflict mental heuristics has with cognitive rational processes. This means that an individual would then be able to create more complex but better decision processes. ( Pic courtesy – psychcentral.com)

How important can this term be for us?

We have more than 12% of the world’s consumers and approximately 70% of those in India reside in rural areas. In rural India, income levels have doubled from what they were in 2004-05 growing at a CAGR of 12%. Urbanization is rising rapidly. FDI norms on multi brand retail, albeit with some riders, are on the verge of being opened up. The bottom-line is that soon, a large number of people will have access to large format retail outlets, which they have never visited before. It would be safe to assume that a large number of customers who visit these stores, may be low on functional literacy; this is not to say that such customers are not present today, but the importance of this segment will rise manifold.

The Big Deal

Research has shown that people low on ‘functional literacy’ tend to behave differently from individuals not low on this aspect. The behavior displayed by such individuals can be broken down and analyzed, and steps taken to equip them with suitable understanding, to help them navigate through modern retail with ease. This kind of research will benefit such consumers by bringing them into the mainstream and help organizations tap effectively into them when competition skyrockets. The sad part is that almost all such studies have been conducted outside India. It would be naïve to assume that the same outcomes would hold true here as well.

There is a huge opportunity for research organizations to understand how we can tap into ‘low functional literacy’ consumers. From Cognitive Predilections to Trade-Off models, from Decision Heuristics to Coping Strategies for certain situations, all of these present immense opportunities. Eventually, the outcome of such consumer research would lead to the crafting of better products and service environments, and to the creation of seamless thought and physical processes, that would empower all entities involved.

The question is, are there such visionary research entities that are willing to invest in new methodologies and new research horizons, with essentially long term benefits? We are waiting with bated breath for a response!

This blog post has been written by Vivek A. Nair, Associate Consultant, Data Mining, Brandscapes Worldwide.

Email – a.vivek@brand-scapes.com

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About Brandscapes Worldwide

Brandscapes specializes in marketing analytics and insight consulting for consumer goods, services and the retail sectors. We leverage the power of advanced data mining tools and the practical marketing and communication planning expertise to distil actionable marketing insights.
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One Response to Functional Literacy and the New Consumer

  1. Would it make sense for Market research companies to have an R&D division? … wonder how many have one. It would be a cost center but it could be worth the time and money as they would have an array of products in the pipeline to cater to the needs of their clients in future. What percentage of their bottom line should they set aside for such ‘solutions for the future’ is another question that needs to be answered.

    I found this post difficult to grasp but it was worth a read.

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