Apply Now

Thankyou

Knowledge At MET

Knowledge At MET

An Analytical Study of Changes in Consumer Shopping Behavior Strategies with Special Reference to Organized Retail Sector in Nashik City

Retailing plays a vital role in the world economy. Indian retailing industry has seen outstanding changes. The retail sector in India, which is dominated by small and unorganized entrepreneurs consisting of standalone stores, boutiques and kirana stores are drastically changing its face. In Nashik city, great changes have taken place in organized retail sector between 2001-2010. Today, retailing is a fun-filled experience for the whole family. Where once Nashik city was under the dominance of unorganized retailing conventional kirana stores (grocery stores), roadside mini departmental stores at the panwala shop and the roadside self-service restaurant; the organized retailing sector has now emerged in a crucial way. This study is undertaken with a view to analyze the changes in consumer shopping behaviour with special reference to organized retail sector. It also studies the changes in organized retail sector. It attempts to know different motivating factors affecting the buying decision in organized retail shops. The study tries to find out limitations in organized retail outlet.

Keywords:

Changes in consumer shopping behaviour, Changes in organized retail sector

Introduction

There has been significant expansion in organized retailing business in recent years. Many big industrial houses have entered the organized retail sector with very strong future growth plans. There has been a huge development of new retail formats such as malls, hypermarkets, supermarkets and lifestyle stores. Change is the only constant in the retail world and survival in organized retail will depend on the ability to adapt this change. While these new retail formats are rising at a rapid speed in India; there remains a need among Indian businesses to understand the changing behaviour of consumers towards shopping in these organized retail outlets. Where once Nashik city was under the dominance of unorganized retailing conventional kirana stores (grocery stores) roadside mini departmental stores at the panwala shop and the roadside selfservice restaurant; the organized retailing sector has now emerged in a crucial way. The Nashik market space is being engaged by shopping malls, chain stores, departmental stores, shopping centers, food courts, fast food outlets. The shopping behaviour, lifestyle of Nashik customers, in particular, has been changing noticeably, which can be viewed as a paradigm shift. The significant change has taken place in consumer shopping behaviour in Nashik city.
The exact understanding of consumer need will help the retailer make a product that will be successful in the market. Consumer understanding or an understanding of changing consumer shopping behaviour is initial point of strategy formation. It is not only important to understand what a consumer knows about a product, but also what they do not know? Therefore all main players in retailing are focusing on understanding changing consumer shopping behaviour and developing strategies for tapping consumers. The firm needs to study consumers to see how its product is perceived. Therefore all main players in retailing are focusing on understanding changing consumer shopping behaviour and develop strategies for tapping consumers.

Rationale of the study:

“An Analytical Study of changes in Consumer Shopping Behaviour with special reference to Organized Retail Sector in Nashik City” is important because of the following reasons:-

  1. To understand retail business and practices followed in India.
  2. To understand the changing trends in retail industry.
  3. To study the changes taking place in consumer shopping behaviour such as:
    • The psychology of consumers, how do they feel, and how do they select between different alternatives;
    • The behaviour of consumers while shopping and impact on purchase decisions;
    • How consumers' motivation and decision strategies differ at various modern retail formats?
    • How and when marketers can adapt and improve their marketing campaigns and marketing strategies more effectively to reach the consumer?
  4. To know the impact of changing trends in consumer shopping behaviour and marketing strategies.
  5. This study would help to provide guidelines and some groundwork for new ventures entering Nashik; as many new major players are interested in setting up retail business in Nashik city.
  6. This study is also helpful to find lacunae in organized retail sector and also to provide remedial measures to overcome the lacunae in organized retail sector.

Objectives of the Study:

Following are the objectives of the study:
a) To identify the consumer shopping behaviour with respect to organized retail sector and to know the changes in consumer shopping behaviour.
b) To know the different motivating factors affecting the buying decision in organized retail sector.
c) To study the changes in organized retail sector.
d) To find out the limitations of organized retail sector.
e) To suggest remedial measures to overcome the limitations of organized retail sector.

Hypotheses of the Study

Following hypotheses are constructed for the study:
a) Purchasing pattern of consumer and Impulse buying behaviour are interrelated to each other in organized retail sector.
b) Motivating factors for actual buying and various discount schemes are interdependent in organized retail sector.
c) Emergence of organized retail sector and changes in consumer shopping behaviour are interdependent on each other.
d) Different schemes offered by the organized retail outlets influence consumer shopping behaviour.

Research Methodology:
5.1. Data Collection:

The data has been collected through following sources –

Primary Data

The primary data has been collected with the application of simple random sampling method. In addition to the above techniques of data collection, field visits were done to know the actual changes in consumer shopping behaviour and changes in organized retail sector and their problems etc. To collect the required primay data the following tools/ techniques of data collection have been used.
• Sampling
• Questionnaires
• Interviews and Field visits

• Sampling :

For the study samples are selected from Nashik city. Following are the samples for the study:
Consumers who are buying from organized retail format (Shopping Mall, Hypermarket, Departmental Stores, Specialty Stores, Franchisee, Company showroom, Multi-brand showroom, Supermarket, Mom and Pop Store) in Nashik city. Employees working at organized retailing format.
Sampling Technique: The samples were selected with the Random sampling method.

Sample Size:

Research first carried out pilot survey and observed average footfall of organized retail shop on weekends and considered 1% of that average footfall as consumer sample size. For the employees, same method has been carried out, considering 1% organized retail sector employee as employee sample
Total Consumer Sample Size = 856
Total Employee Sample Size = 150

• Questionnaires:

Primary data has been collected by using two different structured questionnaires. The first questionnaire consists of the data from consumer who were buying from organized retail format that emphasized exploring consumers shopping behaviour. Changes in consumer shopping behaviour, individual factors affecting on consumer shopping behaviour like cognitive thinking processes which include perception, attitudes, motives and consumer personal characteristics like demographics, lifestyles, personality traits are also considered in the first questionnaire.
The second questionnaire has been applied to collect data from employees working in organized retail format to find changes in organized retail sector.

5.2 Secondary Data

Secondary data are essential for most organizational research. The secondary data refers to the information gathered by someone other than the researcher. Such data can be internal or external and accessed through the internet, books, and annual reports.
Secondary Source:
The secondary data has been collected from:

  1. Publications of the Govt. periodicals, publications of federal bodies/ associations, institutions, reports of various committees, Bureau of statistics etc.
  2. Published data are also collected from Govt. offices, Research institutions and Financial institutions.
  3. Research papers published and unpublished on the subject were studied.
  4. . Journals, Magazines and Newspapers were used.

5.3 Data Processing

The data thus collected is systematically coded, processed, tabulated, classified and analyzed by using electronic processing methods. The data collected was initially coded. After data collection, tabulation was made; thereafter analysis and interpretation were attempted. For the purpose of analysis and interpretation the methods and techniques like percentage, chi-square test, graphical presentation and charts were used.

5.4 Scope of the Study

The scope of this research is restricted to the organized retail sector in Nashik City. The Study was made by the researcher for the period 2001-2010. Therefore scope of the study is restricted to this period and organized retail sector in the Nashik city only. Thus results and conclusions are related and suitable for Nashik City only. They may or may not be applicable to other areas of India or any part of the world.

5.5 Limitations of the Study

The research has been done for the period from 2001-2010; therefore whatever data was available in this period was utilized for the study. If there is some variation in the data, then the result and conclusions may not be the same.
All the conclusions are drawn on the basis of the data and information given by the respondents of the organized retail sectors in Nashik city, due to the secrecy comprehensive correct data was not given by them therefore the data is inadequate and incomplete. There is a possibility of deficiencies in the conclusions. However, the researcher has tried at his level best to extract correct and reliable data from the respondents.

6. Review of Literature

  1. Dholakia (1999) in article on “Going shopping: key determinants of shopping behaviour and motivations” published in International journal of retail and distribution management mentioned, the . rationale for shopping is making physical visits to a shopping site. It is considered as a household task as well as a form of recreation, relaxation and entertainment along with buying goods.
  2. Howard (2007) in his article on “New shopping centres is leisure the answer?” published in “International journal of retail and distribution management” believes shopping to be a leisure pursuit and with the rapid development of shopping centres, both retailers and developers are trying to make it more of a pleasure activity of the many studies done in an attempt to identify motives of shopping, the one by Tauber (1972) is a prime one. Tauber (1972) in his study on “Why do people shop?” published in “Journal of marketing” identified motives of shopping in a market based economy apart from the acquirement of products and services and classified them as role playing and social experience outside home (Howard, 2007).
  3. Social reasons are important, as Lunt and Livingstone (1992) describe in ‘Mass Consumption and Personal Identity’, Open University Press, Buckingham that shopping is a spectacle in which the person who is shopping is both a spectator and a performer. However, most of these motives that have been mentioned in the table can be described as pleasure or leisure related.
  4. Many studies that have followed Tauber's (1972) study have made an attempt to generate some evidence from reality to confirm these motives. A lot of consumer behaviour researcher have investigated and found insights into the personal and situational experiences of shopping and its emotional and behavioural effects (Howard, 2007).

7. Conclusions and Recommendations

These Conclusions and Recommendations are as below:

7.1. Conclusions:

I. The first hypothesis for this study is “Purchasing pattern of consumer and Impulse buying behaviour are interrelated to each other in organized retail sector.” For the testing of this hypothesis, the researcher has collected data from the consumers' buying from organized retail sector and the employees' working at organized retail sector:

  1. The Researcher has tested the data at 5% significant level. Chi-square computed value for above data 11.11 is greater than table value of 3.84 on 01 degree of freedom. Thus there is an association between purchasing pattern of consumer and impulse buying behaviour. Hypothesis is accepted.
  2. Majority (42.06%) of the consumers purchasing is linked with 25% plan and 75% impulse buying. Many consumers' (20.56%) purchasing pattern is linked purely with impulse buying. Only 8.18% consumers buying patterns linked with plan buying. Hence, it has been concluded that maximum consumers (62.62%) have impulse buying behaviour
  3. Majority of the employees 20.67% and 36% (i.e. 56.67% in total) “strongly agree” and “agree” respectively on the view that purchasing pattern of consumer in organized retail is more on impulse buying. Only 28.66% respondents “disagree” with it. Therefore it is concluded that “Purchasing pattern of consumer and Impulse buying behaviour are interrelated to each other in organized retail sector”. Hence Hypothesis is accepted.

II.. The second hypothesis for this study is “Motivating factor for actual buying and various discount schemes are interdependent in organized retail sector”. For the testing of this second hypothesis, the researcher has collected data from the consumers' buying from organized retail sector and the employees' working at organized retail sector:

  1. The researcher has tested the data at 5% significant level. Chi-square computed value for above data 30.48 is greater than table value of 3.84 on 01 degree of freedom. Thus there is association between motivating factor for actual buying and various discount schemes. Hypothesis is accepted.
  2. Majority of the consumers i.e. 34.70% and 23.13% “strongly agree” and “agree” on the view of discount schemes as a main motivation factor in organized retail. Very few consumers (i.e. 22.90%) “disagree” and “strongly disagree” to discount schemes as a main motivation factor at organized retail.
  3. Majority of the employees 26% and 41.33% (i.e. 67.33% in total) “strongly agree” and “agree” on the view that various discount schemes in organized retail is main motivating factor for actual buying. Very few employees (i.e. 16%) “disagree” and “strongly disagree” with the statement that various discount schemes at organize retail are main motivating factor for actual buying. Therefore, it has been concluded that, “Motivating factor for actual buying and various discount schemes are interdependent in organized retail sector”. Hence the Hypothesis is accepted.

III.Third hypothesis for this study is “Emergence of organized retail sector and Changes in consumer shopping behaviour are interdependent”
For testing of this third hypothesis, the researcher has collected the data from the consumers' buying from organized retail sector and the employees' working at organized retail sector.

  1. The Researcher has tested the above data at 5% significant level. Chi-square computed value for above data 13.29 is greater than table value of 3.84 on 01 degree of freedom. Thus there is association between emergence of organized retail sector and changes in consumer shopping behaviour. Hypothesis is accepted.
  2. Majority of the employees 20.67% and 40.67% (total 61.34% respectively) “strongly agree” and “agree” on the view that consumer shopping behaviour in Nashik has changed. Very few employees' (i.e. 21.32%) “disagree” and “strongly disagree” with the statement consumer shopping behaviour in Nashik has changed significantly.
  3. Majority of the employees 42.67% and 24.67% (total 67.34% respectively) “strongly agree” and “agree” with the view that with emergence of organized retail sector there is change in the shopping behaviour of consumers. Very few respondents (i.e 18.68%) “disagree” and “strongly disagree” that the emergence of organized retail sector has no effect on the change in the shopping behaviour of consumers. Therefore it has been concluded that, “Emergence of organized retail sector and changes in consumer shopping behaviour are interdependent”. Hence the, Hypothesis is accepted.
  4. Changes in Consumer Shopping Behavior After analysing the employees' feedback, the researcher has identified that significant changes have taken place in consumers' lifestyle in Nashik city. Those changes
    i. Traditional Outlook to Modern Outlook,
    ii. Shopping as a necessity to Shopping for pleasure,
    iii. Itemised Purchase to Bulk Purchase,
    iv. Prepared food to readymade food,
    v. Conservative spending to Liberal spending,
    vi. Increasing buying during Holidays and festival seasons.
  5. Consumers agree with the view that “there are significant changes in post purchase action at organized retail shop” Majority of the consumers agree with the statements (statements are related to changes in consumer shopping behaviour): “I have started shopping with my family” “I often check price between stores” “I buy more than what I Plan at Retail” “I have stopped visiting the old shop” “My purchasing pattern is more on Impulse buying” “I feel significant changes have taken Place in my lifestyle and shopping behaviour” It is found that maximum consumers realized changes in their shopping behaviour:
    a. Many consumers have stopped visiting old shops.
    b. Many consumers have started shopping with their families.
    c. Many consumers are interested shopping along with the entertainment in organized retail sector. Many consumers have perceived shopping a fun experience.
    d. Maximum respondents agree that nowadays major part of our shopping is based on impulse buying. It was based on planned buying previously.
    On the basis of foregoing study, it is concluded that “Significant changes have taken place in consumer lifestyle in Nashik city”.

IV.The Fourth hypothesis for this study is “Different schemes offered by the organized retail shops influence consumer shopping behaviour”.
For the testing of this fourth hypothesis the researcher has collected the data from the consumers' buying from organized retail sector and the employees' working at organized retail sector:

  1. The researcher has tested the above data at 5% significant level. Chi-square computed value for above data 7.95 is greater than table value of 3.84 on 01 degree of freedom. Hypothesis is accepted.
  2. It has been analyzed that, majority of consumers i.e. 34.70% and 24.42% “strongly agree” and “agree” with the statement that different schemes offered by organized retail format influence more shopping. Very few consumers “disagree” and “strongly disagree” (i.e. 20.80%) with the statement that different schemes offered by organized retail format influence more shopping.
  3. Majority of employees 14% and 37.33% respectively (in total 51.33%) “strongly agree” and “agree” to different Schemes offered by the organized retail shop influence consumer shopping behaviour. Very few employees (i.e. 34.66%) “disagree” and “strongly disagree” with it. Therefore it has been concluded that the “Different schemes offered by the organized retail shops influence consumer shopping behaviour”. Hence the Hypothesis is accepted.

V. Consumer Shopping Behaviour

  1. It has been observed that 38.20% respondents agree with the view that “Main purpose to visit organized retail shop is lifestyle”. Majorly youth consumer group and working age group included in it. 30.02% respondents agree that the purchase of cloth is an important purpose for visiting organized retail shop. It has been concluded that new lifestyle, clothing and purchase grocery are main purposes to visit organized retail shop. It is verified that there is an association between gender, age group, monthly income level and purpose of consumer to visit organized retail shop. Hence, it is concluded that purpose of consumer to visit organized retail shop is related with gender, age group, monthly income.
  2. 33.76% respondents prefer organized retail shop due to good offers. 27.80% respondents prefer organized retail shop due to large variety; 10.51% respondents preferred organized retail shop because of pleasure shopping. It is concluded that good offers, large variety, pleasure of shopping are main motives/ reasons of consumers to visit organized retail shop. It has been analyzed that there is an association between gender, age group, educational qualification, monthly income level and different motives/ reasons of consumers to visit organized retail shop. It is concluded that “motives/ reasons of consumers to visit organized retail shop is associated with gender, age group, education qualification, monthly income”
  3. It is found that majority of (30.14%) respondents appreciate family as main source of information, while 29.44% respondents consider friends as source of information. It has been concluded that friends and families are the most important sources of information for consumers. It has been analyzed that there is an association among gender, age group, educational qualification, monthly income level and source of information. It has been concluded that the “Source of information is associated with gender, age group, educational qualification, monthly income”.
  4. It has been observed that 31.31% respondents appreciate “retail shop location and side” for the selection of organized retail sector; 28.97% respondents appreciate “retail shop image” for the selection of organized retail sector; and 29.91% respondents prefer “retail shop atmosphere” for the selection of organized retail sector. It has concluded that “retail shop location and side” is the most important factor for selection of organized retail shop. “Retail shop image and retail shop atmosphere” play very important role for the selection of retail shop.
  5. The analysis shows that 32.01% respondents agree that elders are major decision influencers in shopping at organized retail shop. 29.90% respondents consider friends as major decision influencers in shopping at organized retail shop. Therefore it has been concluded that elders and friends are major decision influencers on shopping at organized retail shop.
  6. It has been concluded that consumers are satisfied and gaining good shopping experience in organized retail shop. There is no gap present between the expectation before shopping and actual shopping experience.
  7. It has been analyzed that majority (26.87%) respondents spend ` 2000 and above in a month at organized retail shop. 25.35% respondents spend 1001-1500 in a month at organized retail shop. It has been concluded that maximum consumers spend more than ` 2000/- in a month. Maximum consumers have liberal spending nature with high buying capacity. Very few consumers (i.e. 11.21%) have conservative spending (` 0-500 in a month).
    It has been analyzed that there is an association among age group, monthly income level with spending at organized retail shop. It has been concluded that “Spending at organized retail shop is associated with gender, age group, educational qualification and monthly income”.
  8. It has been observed that majority (30.22% and 22.66%) of respondents preferred debit card and credit card as modes of bill payment at organized retail shop.
    It has been concluded that Debit cards and Credit cards (Plastic money) are the most famous modes of bill payment in mall culture. Coupons are least preferred options for bill payment at organized retail shop.
    It has been analyzed that there is an association among age group, educational qualification, monthly income level and mode of bill payment at organized retail sector. Hence it is concluded that “mode of bill payment at organized retail shop is associated with gender, age group, educational qualification and monthly income”.
  9. The result shows 53.50% respondents have membership card of organized retail shop and 46.50% respondents don't have membership card of organized retail shop. It is reflected that maximum consumers are loyal and regular buyers of organized retail shop. It has been analyzed that there is an association among gender, age group, educational qualification, membership card. It has been concluded that “membership cards are associated with gender, age group, educational qualification and monthly income”.

VI.Changes in Organized Retail Sector

  1. 16% and 44% (i.e. 60%) employees “strongly agree” and “agree” that there are significant changes in organized retail sector in Nashik city. Very few respondents (24%) “disagree” and “strongly disagree” that there are significant changes in organized retail sector in Nashik city. It is concluded that there are significant changes in organized retail sector in Nashik city. 3.
  2. 62% respondents appreciated creating private label as new changing trend in organized retail sector in Nashik city. 62.66% respondents appreciate various offers and discounts are changing trends in organized retail sector in Nashik city. It has been concluded that creating private label, promoting various offers and discounts are major new trends in organized retail in Nashik city
  3. 90% employees at organized retail shop agree that there is a significant change in sale volume due to different scheme offered by organized retail shop. Only 10% responses are negative about it. But the respondents are not ready to tell exact amount of change observed in sale volume due to different schemes. It has been concluded that there is a significant change in sale volume due to different schemes offered by organized retail shop.
  4. 92% employees at organized retail shop agree that there is a significant change in footfall due to different schemes offered by organized retail shop. Only 8% are negative about it. It has been concluded that there is a significant change in footfall due to different schemes offered by organized retail shop.
  5. Majority of employees' 22% and 36.67% (i.e. 58.67%) “strongly agree” and “agree” on the view that “overall image of organized retail shop in Nashik city has changed”. Very few employees (i.e. in total 26.66%) “disagree” and “strongly disagree” that the overall image of organized retail shop in Nashik city is changed. It is concluded that “overall image of organized retail shop in Nashik city has changed.”
  6. Majority of employees' 28.68% and 31.33% (i.e. in total 59.99%) “strongly agree” and “agree” that “interior and exterior atmospheric factor of organized retail shop in Nashik has changed”. Very few employees' (26.66%) “disagree” and “strongly disagree” with “interior and exterior atmospheric factor of organized retail shop in Nashik has changed”.
  7. Major changes in organized retail sector:
    • Change in Market Size: Retailing in India is emerging as one of the largest industry with total market size of US $ 320 billion in 2006 and extended US $ 421 billion in 2010 growing at a healthy CAGR of 5% till date.
    • Change in organized retail market share from 4% to 7.44% and projected to be 9 per cent of total retail market by 2015 and 20 per cent by 2020. In a span of last 10 years, organized retail has expanded in urban cities and makes an entry in semi-urban and rural areas. In 2007 organized retail market was 4% of the total retail that is around ` 67,310 crore and expanded to a compounded rate of 27% per annum, aggregating to ` 1,75,103 crore (7.44% of the total retail) in 2010-11. Organized retail projected to be 9 per cent of total retail market by 2015 and 20 per cent by 2020.
    • Significant changes in retail format from Conventional Formats to Modern retail formats.
    • Foreign Investment and Employment opportunity has increased in organized retail sector.
    • Change in reforms (2001-2012): UPA government has hung an 'Open' sign for foreign retailers. The cabinet has approved 51% FDI in multi-brand retail sector and 100% FDI in single brand. The policy will allow global retailers to set up shops in the country's $ 450 billion (Rs. 2,500 crore) retail sector, and is aimed at drawing more overseas investment and taming inflation. Till 2011, Indian central government were unused to FDI in multi brand retail, unfriendly foreign groups from any ownership in supermarkets, convenience stores or any retail outlets. Even single brand retail was restricted to 51% ownership and process. In Nov. 2011, India's central government declared retail reforms for multi brand store and single brand stores. These market reforms paved the way for retail modernization and competition with multi brand retailers such as Walmart, Carrefour and Tesco, as well single brand majors such as IKEA, Nike and Apple. The announcement sparked activism, both in opposition and in support of the reforms.

VII. Limitations In Organized Retail Sector

Maximum respondents don't like to pay for parking. Many respondents want help from the sale persons during buying process. Maximum respondents said premium prices for many products are not affordable to them. Respondents want more discounts, offer which are affordable to middle class families.
It has been concluded that pay parking, less involvement of sale person during buying process, premium price, credit facility and lack of relationships are limitations of organized retail shop.
In unorganized retail sector, customer enjoyed personal relationship touch of retailer but in organized retail sector customers do not enjoy this personal relationship touch.

7.2 Recommendations:

I. “Purchasing pattern of consumer and Impulse buying behaviour are interrelated to each other in organized retail sector”. Thus retailer should develop special theme to encourage impulse buying behaviour.

  1. For encouraging unplanned buying pattern means to encourage impulse buying pattern. Retailers should use special occasions like festivals and develop themes. Theme should be based on visual merchandising. Retailers should develop theme on the basis of seasons or occasions like. New Year, Christmas, Summer, Holi, Diwali etc. Events and festivals like World Cup/Ganpati Utsav etc. can also be used as a theme. For instance, A Holi theme with colourful accessories, bowls/packets containing colours, pichkari etc. should be displayed. This can be used to encourage the unplanned buying pattern of consumers.
  2. Maximum consumers have impulse buying behaviour. It means a lot of scope for retailer to tap consumers pocket space. Retailers have to excite consumers for more purchases through various discount scheme, offers and display.

II.“Motivating factor for actual buying and various discount schemes are interdependent in organized retail sector”. The retailers should develop various discount schemes to motivate consumers during actual buying.
a. The Researcher has observed that maximum respondents appreciate “Sabse Sasta Din” and “Maha Bachat” as most tempting schemes. These schemes are motivating factors for actual buying. Thus organized retailer should develop schemes based on Each Day Low Prize which is followed by many big retailers like
b. Good offers, large variety, pleasure of shopping, fun filled experience are main motives/reasons for consumers to visit organized retail shops. Organized retailers should always provide new offers with large variety of goods and services to make consumer satisfied. They should provide a fun filled shopping experience.
III.“Emergence of organized retail sector and changes in consumer shopping behaviour are interdependent”. The retailers should adopt many emerging trends in organized retail sector to retain consumers.
a. The researcher has analyzed that significant changes have taken place in organized retail sector. Creating private label, quick home or phone delivery, diversifying into sale of SIM and mobile, Etailing, various offers and discount are major new emerging trends in organized retail sector. Thus retailers should adopt these emerging trends in organized retail sector.
b. Consumers are attracted towards modern retail format and it is the sign of changing consumer shopping behaviour. Shopping mall and CIRO are preferred shops by the consumers. Retailers should point out this change and try to retain consumers.
IV. “Different schemes offered by the organized retail outlets influence consumer shopping behaviour”. The retailers should influence consumers by developing various schemes like special offer on festivals, discount schemes, weekend offers and seasonal offers.

V. Consumer Shopping Behaviour

  1. Majority of consumers (between 26-40) visit the shopping malls with their families. The retailer should make special provision for this age group. Mostly these groups want everything under one roof which results in the saving in costs as well as in time. At the same time,15-25 age group is the most neglected age group. For this untapped segment, the retailer should make special arrangement in themes of entertainment, game zone, and restaurant. This age group has definitely got the purchasing power (in terms of pocket money). They are visiting the malls more for having fun and passing their time rather than making the purchases. For the elder age group, retailers should develop new format which will increase interest and buying habit of elder age group or which will concentrate on health care, fun, or elder clubs.
  2. The Retailers should follow six ways to attract youth:
    • College/School fashion show: College/School fashion shows in malls. Each youngster who participates brings along an average of six families and friends to the mall to watch the fashion show.
    • Campus Promotion: If the Mall is situated near a college, arrange a table at colleges to introduce new students to the Mall. Give store coupons and lucky draw prizes. The shopping habits begin due to this activity. Many schools and colleges will be pleased to offer the counter at orientation or during the first week of college and school to offer discounts and prizes to students.
    • Day Contest: Day contests at shopping malls mainly included special events on Labour Day, Independence Day and Mothers’ Day. Arrange contests for youngsters who have birth date around Independence Day or Labour Day. Have the youngsters register at any of the participating stores. The winner is the youngster whose birth date is closest to 12:01 a.m. on Independence Day! The lucky youngster wins clothing from one of the stores. Convey the details to radio stations and newspapers about the Day contest. It's a grand public relations chance. Retailers can get a newspaper or radio station to sponsor the programme.
    • Back-to-college Make a back-to-college shopping list or register/catalogue that lists where students can find a range of back to college supplies. Distribute this list by mail or drop it at colleges
    • Welcome Students: Arrange a welcome event for students. Give them a chance to use coupons, and leaflets for shopping.
    • Tie up with colleges as a sponsor for some event or youth festival.
  3. Maximum educated consumers buy from organized retail shop. Educated consumers and the elite class prefer to visit organized retail shops. Retailers should consciously focus on this class while marketing communication and service
  4. Maximum consumers are from high buying capacity and therefore retailers should focus on expanding their basket size by tempting them
  5. Shop preference or shop choice decision is based on consumers' gender, age group, educational qualification and monthly income. Thus retailers should analyse demographic profile of target segment and develop retail format by considering gender, age group, educational qualification and monthly income of target segment.
  6. Maximum consumers prefer weekend shopping and the first week of a month (after salary date) shopping. Footfalls in organized retail shop are high in weekends and in the first week of a month. Retailers should make required arrangement for these weekends in terms of manpower planning, availability of goods and services, special offers, discounts scheme for weekends. Housewives and young consumer groups frequently visit organized retail shop for shopping.
  7. Purchase frequency of consumers is related to gender, age group, educational qualification and monthly income. Retailers shall make arrangement of goods and services for consumers who have maximum purchase frequency. For example, for housewives and young consumer group who frequently visit organized retail shops for shopping; the retailers can make necessary provision to satisfy this consumer segment
  8. Lifestyle, clothing and purchasing grocery are main purposes to visit organized retail shop. The retailer should give priority to this segment and provide variety of offers on it for attracting and retaining consumers. Purpose of the consumer's to visit organized retail shop changes as change in demographic profile of consumer. Retailers should identify different purposes with respect to changes in demographic profile for serving different segments.
  9. Friends and families are most important sources of information for consumers. Organized retailers use these two as main sources for attracting consumers. Publicity, road shows, advertising in local media are important tools for influencing family and friend.
  10. “Retail shop location and side” is the most important factor for the selection of organized retail shop. “Retail shop image and retail shop atmosphere” play very important roles on selection of retail shop. For providing good shopping experience to consumers, retailers should properly arrange location, image and atmosphere of the shop.
  11. .Elders and friends have major influence on shopping at organized retail shop. In this case if the elders and friends are coming for shopping to assist the consumer in the buying process, retailers should provide atmosphere, experience, display and offers to this third party to influence consumers for shopping.
  12. Maximum consumers have liberal spending nature with high buying capacity. Maximum consumers are spending more than Rs 2000/- in a month. Very few consumers have conservative spending (` 0- 500 in month). This change has moved shopping behaviour from conservative spending to liberal Back-to-college: Make a back-to-college shopping list or register/catalogue that lists where spending. Retailers should excite consumers to buy more than what they plan. Try to expand the basket size of liberal consumers.
  13. Debit cards and credit cards (plastic money) are the most famous mode of bill payment in mall culture. Coupons are least preferred options for bill payment at organized retail shops. Retailers can tie up with many banks, debit card - credit cards by co-branding and providing bonus points to consumers on the basis of their shopping. Retailers should make necessary arrangements like swapping machines.
  14. Membership card of organized retail shop is an indication of customers' loyalty. For gaining shopping points, membership card holder do repetitive purchases. Retailers should penetrate maximum membership card to the consumers.
  15. Shop selection is majorly dependent upon promotions and offers, convenient parking, better services, and one stop shopping and retailers should focus on it. For example, consumers always complain about parking space. For this issue, retailers should refund parking fee on specific amount of buying.
  16. Maximum customers are satisfied after shopping at organized retail shops. It is good for retailers that many consumers are satisfied. Customers complain about offers, discount, price level and paid parking can be solved by analysing consumer feedback form.
  17. There are significant changes in post purchase action after purchasing at organized retail shop. Retailers should be happy that maximum changes are positive for organized retail shop. Retailers should maintain consistency in this performance.
  18. In Nashik majority of consumers are using offline shopping to enjoy pleasure of shopping and fun filled entertainment at shopping mall. Retailers need to wait some time for virtual store and virtual shopping in Nashik City.
  19. There is a need to provide seating arrangements in the shopping area because constant walking makes consumers feel exhausted, their children start crying for some seating place and because of this the consumer thinks to leave the shopping mall and go back. This will certainly have an effect on losing the possible sales. It is a verified fact that more the time a consumer spends in the organized retail format, more is the chance that they will buy.
  20. Consumers wish to buy grocery once in a month, cosmetic items monthly, vegetable and fruits daily, beverages and snacks on weekly and ready to eat food once in month. People prefer to buy products whenever they are required, so organized retail shop must put all the item on shelves every time.
  21. Some people visit the organized retail format as free time activity. So retail store should use strategy to make income from such people and retail store should charge for vehicle parking. Place some items to boost impulse buying.
  22. Due to rise of women in buying at organized retail format, retailer should keep items which can gain the attention of the women.

VI.Changes in Organized Retail Sector

Organized retailers situated at shopping malls have realized that they have to make a whole shopping destination for the consumers which has a mix of retail stores, entertainment and places and eating joints which offers consumers the whole shopping experience. The promoters should take the consultancy from experts to make a fair tenant mix so that the consumers are able to get everything they want under one roof. It should satisfy consumers intention of coming to the shopping mall. The retailers should make a unique image of the shopping malls by the process of segmentation and formation of specific shopping environment. For example, the brands for price sensitive consumers and the high end luxurious brands should not be put under one roof. This will assist them retain viewers belonging to different customer segments. Apart from this, the organized retailers can also encourage shopping malls as specific shopping destinations. For example, there would be special malls like mall for bags, mall for furniture, and mall for jewellery etc.
After analyzing changes in consumer shopping behaviour and changes in organized retail sector, research suggested some innovative ways to attract consumers:

  1. A Balloon can be fixed with the organized modern retail shop and the logo should be a part at the entrance of the mall. The balloon can be of any dark colour showing the logo of the brand. It will be noticeable from far away as well as emphasize the logo.
  2. Discos and clubs: Modern retail stores may have tie ups with discos and clubs for the consumers or provide some space for disco and clubs. Here consumers can stand to win gift vouchers and prizes from retailers.
  3. Fashion shows: Modern organized retail can organise fashion shows in their store every year. Mr. and Ms. Nashik and give away attractive prizes.
  4. Tourist Point: A tourist point should be developed in shopping malls, especially for tourists who want to visit famous places in Nashik City. They can plan their trips with the help of shopping corners. Shopping malls may provide them vehicle. They can enjoy their holidays along with shopping.
  5. Health Centre/Gym Facility in shopping mall: This would help to attract people every day to the shopping mall.
  6. Mom Corner: Where a mother can keep her child for safety and protection and can do shopping freely.
  7. Beauty Corner: Provide special tips and counselling about beauty. Retailer can sell some beauty products along with beauty counselling.
  8. Game Zone and Personal Care.
  9. Set up Customer Advisory Boards to get suggestions from customers and give them a chance to voice their opinion about modern retail format.
  10. • Strategy to offer discount on Taxi Services to its customers, on the basis of loyalty programmes.
    • Use some space as payment centre for telecom services, medical stores and health clinic banks, insurance.
  11. Turn mall parking into a profit generator: Retail organizations can make parking lots into revenue generators with an exclusive advertising system. Even parking space can be used for vehicle servicing and earn profit on it.
  12. Promotional ways and new offer Organized retail format can accept a variety of promotional ways like, • Widespread advertisement in newspapers frequently.
    • Advertisements should be prepared in famous English and different state languages.
    • Leaflets/advertising material can be circulated near colleges and schools. It can be done during off season sales.
    • T.V. and Radio used for advertising purpose.
    • Emails and SMS can be sent to the consumers for intimating various schemes, offers.
    • Banners, Posters and Hoardings can be placed in important areas so that it covers the population of the city

VII. Remedial Measures to Overcome the Limitations of Organized Retail Sector

a. Less involvement of sales person during buying process, pay parking, premium price, credit facility and lack of relationship are limitations of organized retail shop.

  1. It is recommended that retailers should give refund parking charges on specific amount of buying. For getting this refund amount, consumers will buy something from shopping malls and that footfall will actually convert into sale.
  2. Retailer should increase service staff for assisting customers during buying process. There should be sufficient help desk for helping customers.
  3. In Nashik, for middle class families, premium prices are not affordable. Retailer should develop a value format.
  4. For credit facility, retailer should tie up with banks by co-branding. Retailer should provide credit card facility to customer. Retailer can focus on private label which will be affordable to consumers.
  5. In unorganized retail sector, customers enjoy personal relationship touch of retailer. In organized retail sector customers not have enjoyed personal relationship touch.

For this personal relationship, organized retailers may use relationship management. Organized retailers can maintain all possible database of consumers and will use this database for greeting customers on special occasions. Example SMS greeting cards on birthday, to build relationships with consumers and give them personal touch.
b. Friendly behaviour of staff is necessary to satisfy consumers and this is one of the key factors on which these shopping malls are scoring very high. When consumers enter into the shopping mall and even the security guard standing at the door wishes consumers good afternoon/evening which makes the consumers feel special.

08. Bibliography

  1. 1. Pancholi R. (2007) - “Growth off the Shelf”, Hindustan Times, New Delhi, July 22, 2007.
  2. Sinha P. K. & Banerjee: A. (2004) - “Store Choice Behavior in an Evolving Market”, International Journal of Retail and Distribution Management, Vol.32 No. 10, pp 482-494
  3. Millan E. S. & Howard: E. (2007) - Shopping for Pleasure? Shopping Experiences for Hungarian Consumers, International Journal of Retail and Distribution Management, Vol. 35 No. 6, pp 474-487.
  4. Swapna Pradhan (2007) - “Retailing Management”, Tata McGraw-Hill Publication Company Ltd, New Delhi, 2nd Edition.
  5. ICRIER (2007) - “ICRIER Begins Survey of Indian Retail Sector." 19 March 2007.
  6. Sathyaraj (2006) - “Definition of Unorganized Retailing”, April, 2006-04-01 in http://retailindustry.blogspot.com.
  7. McKinsey Quarterly(2005) - “Winning the Indian Consumer”, Special Edition.
  8. Tata S. (2007) - “Spurring Super – Shopping” http://www.tata.com/trent/articles/20030305_spurring_super_shopping.htm
  9. Sheejih A (2008) - “Organized Retail Market Boom & The Indian Society”, International Conference on Marketing & Society,IIM-K.
  10. A. J. Lumba (2007) - “The Art of Retailing”, Tata McGraw-Hill Publishing Company Limited, New Delhi.
  11. Suja Nair (2008) - “Retailing Management”, Himalaya Publishing House, New Delhi, 3rd Edition.
  12. White Book (2006) - Marketing White book, 2006, Business World, pp. 114-15.
  13. NCAER (2005) - NCAER Research on Indian Consumers, The Great Indian Consumer, 2005.
  14. AT Kearney (2006) - The Global Retail Development Index,( 2006) , AT Kearney.
  15. Del I Hawkins (2007) - “Consumer Behavior”, Tata McGraw-Hill Publishing Company Ltd, New Delhi, 9th Edition.
  16. Chetan Bajaj (2005) - “Retailing Management”, Oxford University Press, New Delhi, 1st Edition.
  17. Beri G. C. (2004) - “Marketing Research”, TATA McGraw-Hill Published Company, New Delhi, 3 Edition.
  18. Nargundkar Rajendra (2008) - “Marketing Research”, TATA McGraw-Hill Published Company, New rd Delhi, 3 Edition.

Website:
http://www.indianretailforum.com
http://www.indianretailsector.com
http://www.nashikcitycentre.com/about_mall.php
http://www.technopak.com
http://www.ibef.org

Authors by

Dr. Yogesh Gaikwad
MET, Nashik
Dr. Nilesh Berad
MET, Nashik

Tags: MET Institute of Management