A STUDY OF ORGANIZED RETAIL BUSINESS IN...
Transcript of A STUDY OF ORGANIZED RETAIL BUSINESS IN...
A STUDY OF ORGANIZED RETAIL
BUSINESS IN SELECTED
CITIES IN WESTERN
MAHARASHTRA
A Thesis submitted to
Shivaji University, Kolhapur
For the Degree of Doctor
of Philosophy
in
Commerce and Management
Under the Faculty of Commerce
By
Sayali A. Pataskar B.E., M.B.A.
Under the Guidance of
Dr. C. S. Dalvi M.M.S., Ph.D.
Chh. Shahu Central Institute of
Business Education & Research, Kolhapur
2011
DECLARATION
I Hereby declare that the thesis entitled “A STUDY OF ORGANIZED
RETAIL BUSINESS IN SELECTED CITIES IN WESTERN
MAHARASHTRA” completed and written by me has not previously formed the
basis for the award of any Degree or Diploma or other similar title of this or any
other University or examining body.
Place: Kolhapur Research Student
Date: (Mrs. Sayali Pataskar)
Chapter Content Chapter Name and Contents Page No.
III Theoretical Aspects of Retailing
3.1 Introduction 45
3.2 Functions of Retailing 46
3.3 Types of Retail Organizations 48
3.3.1 Retailer Classified on The Basis of Ownership 48
3.3.2 Retailers classified on the Basis of Strategy 52
3.3.2.A General Merchandise Retailers 52
3.3.2.B Food Retailers 54
3.4 Methods of Customer Interaction 57
3.5 Changing Scenario of Retail 61
3.5 .a Role of Internet 61
3.5 .b Branding through Retailers 62
3.6 Retail Mix 63
3.7 Strategic Retail Planning Process 63
3.8 Retail Market Strategy 65
3.9 Competitive Advantage 66
3.9.1 Approaches to Gain Competitive Advantage 67
3.10 Implementing Retail Strategy 70
3.11 Manufactured Brands 74
3.12 Private Labels 74
3.12.1 Advantages of Private Labels 75
3.12.2 Limitations of Private Labels 77
3.13 Unorganized Retailing 78
IV Retail Industry – Worldwide and India
4.1 Worldwide Retail Business 81
4.2 Evolution of Retailing 82
4.3 Evolution of Modern Retail 86
4.4 Evolution of Retail Formats in Various Countries 91
4.5 Emerging Trends in Retail in Various Countries 97
Chapter Content Chapter Name and Contents Page No.
4.6 Factors Attracting Global Retailers to India 100
4.7 Successful Global Retailer ‘Wal-Mart’ 103
4.8 History of Retailing in India 105
4.9 Present Indian Retail Scenario 106
4.10 Structure of the Indian Market 108
4.11 Retailing Formats in India 117
4.12 Emergence of Organized Retail format in India 120
4.13 Region-wise Analysis of Indian Retailing 123
4.13.1 Northern India 124
4.13.2 Southern India 128
4.13.3 Eastern India 132
4.13.4 Western India 134
4.14 Main Drivers of Retailing in India 143
4.15 Impact on Unorganized Sector 151
4.16 Challenges facing the Organized Retail Industry 154
V Data Analysis and Interpretation
Analysis – Consumer Behaviour and Organized Retail 159
Analysis – Unorganized Retailers 287
Hypotheses Testing 308
VI Findings and Suggestions
Findings – Organized Retailing 315
Findings – Unorganized Retailing 324
Suggestions 328
Conclusion 333
Bibliography
Annexure
Chapter Table No. Table Heading Page No.
5.52 Sufficient Cooling of Cold Drinks 256
5.53 Whether Products in Small Quantity Are Available 257
5.54 Whether Products in Large Quantity Are Available 258
5.55 Help from Sales Attendant for Searching Item 259
5.56 Whether Arrangement of Racks and Shelves is
Comfortable
260
5.57 Whether Area Provided For Each Category is Sufficient 261
5.58 Opinion about Space for Movement between Shelves 262
5.59 Feeling of Purchasing Unnecessary Items 263
5.60 Any Complaints Regarding Retailer 264
5.61 Filed Complaint about Some Thing 265
5.62 Complaints Filed by Customers 266
5.63 Provision of Hassle Free Complaint Handling 678
5.64 Efficient Customer Help Desk Handling 268
5.65 Satisfaction about Billing Procedure 269
5.66 Store Timing Convenience for Customers 270
5.67 Feeling about Store Environment 271
5.68 Changing Room Facility at Apparel Section 272
5.69 Satisfaction about Size and Location of Entrance 273
5.70 Vehicle and Baggage Security 274
5.71 Opinion about Congested Area 275
5.72 Whether Signage Provides Required Information 276
5.73 Whether Testing of Electrical/ Electronic Goods before
Selling Done
277
5.74 Attractive Store by Considering It’s Décor 278
5.75 Opinion Regarding Dress of Staff and Manager 279
5.76 Sales Attendant’s Interest in Finding out Items 280
5.77 Sales Attendant’s Interest to Choose Right Item 281
5.78 Liking About Trying New Retail Outlets
282
Chapter Table No. Table Heading Page No.
5.79 Opinion about liking of Big Retailers’ entry 283
5.80 Visit to Modern Retail Formats- Entertainment cum
Shopping
284
5.81 Years in business 286
5.82 Type of Ownership 287
5.83 Type of Shops 288
5.84 Average Number of Customers Visiting Daily 289
5.85 Monthly Sales 290
5.86 Awareness about Modern Retail Shop 291
5.87 Adverse Impact on Business because of entry of Modern
Retailers
292
5.88 Amount of Negative Impact on Profit of Business 292
5.89 Opinion about Impact on Volume of Business 293
5.90 Opinion on ‘Entry of Big Retailers has Made Negative
Impact on Profit’
293
5.91 Reasons behind the Problem 294
5.92 Strengths of Kirana Shop as Compared to Modern
Retails
295
5.93 Weaknesses of Kirana Shop as Compared to Modern
Retails
296
5.94 Rank of the Benefits for Which Customers Prefers Small
Shop
297
5.95 Different Changes Made in Outlook of the Shop to
Match the Competition
298
5.96 Changes in Storage of Products to Suit the Competition 298
5.97 Customers Known Personally by Shop Owner 299
5.98 Credit Period Allowed 300
5.99 Percentage of Providing Home Delivery Service
301
5.100 Opinion - Impact on Employment in Unorganized Retail 301
5.101 Whether Allowing Your Next Generation to Come in this
Business
302
Chapter Graph No. Title of Graph Page No.
5.30 Ranking Given to ‘Status Enhancement’ Factor by
Respondents from Kolhapur
196
5.31 Factor Most Liked About Organized Retail 199
5.32 Ranking for Reliability of Organized Retailer for
‘Availability of the Product’ (Sangli)
202
5.33 Ranking for Reliability of Organized Retailer for
‘Efficient Checkout’ (Sangli)
202
5.34 Ranking for Reliability of Organized Retailer for
‘Quality of Private Label Product’ (Sangli)
203
5.35 Ranking for Reliability of Organized Retailer for
‘Accurate Bills’(Sangli)
203
5.36 Ranking for Reliability of Organized Retailer for
‘Discount and offers’ (Sangli)
204
5.37 Ranking for Reliability of Organized Retailer for
‘Availability of the Product’ (Solapur)
204
5.38 Ranking for Reliability of Organized Retailer for
‘Efficient Checkout’ (Solapur)
205
5.39 Ranking for Reliability of Organized Retailer for
‘Quality of Private Label Product’ (Solapur)
205
5.40 Ranking for Reliability of Organized Retailer for
‘Accurate Bills’(Solapur)
206
5.41 Ranking for Reliability of Organized Retailer for
‘Discount and Offers’ (Solapur)
206
5.42 Ranking for Reliability of Organized Retailer for
‘Availability of the Product’ (Satara)
207
5.43 Ranking for Reliability of Organized Retailer for
‘Efficient Checkout’ (Satara)
207
5.44 Ranking for Reliability of Organized Retailer for
‘Quality of Private Label Product’ (Satara)
208
Chapter Graph No. Title of Graph Page No.
5.45 Ranking for Reliability of Organized Retailer for
‘Accurate Bills’ (Satara)
208
5.46 Ranking for Reliability of Organized Retailer for
‘Discount and offers’ (Satara)
209
5.47 Ranking for Reliability of Organized Retailer for
‘Availability of the Product’ (Kolhapur)
209
5.48 Ranking for Reliability of Organized Retailer for
‘Efficient Checkout’ (Kolhapur)
210
5.49 Ranking for Reliability of Organized Retailer for
‘Quality of Private Label Product’ (Kolhapur)
210
5.50 Ranking for Reliability of Organized Retailer for
‘Accurate Bills’(Kolhapur)
211
5.51 Ranking for Reliability of Organized Retailer for
‘Discount and offers’ (Kolhapur)
211
5.52 Opinion about Parking 214
5.53 Opinion of Respondents for Parking Facility (Sangli) 215
5.54 Opinion of Respondents for Parking Facility (Solapur) 215
5.55 Opinion of Respondents for Parking Facility (Satara) 216
5.56 Opinion of Respondents for Parking Facility (Kolhapur) 216
5.57 Opinion on ‘Outer look of the building attracts
Shoppers.’
217
5.58 Opinion about Effective Check- In and Check-Out
System
218
5.59 Satisfaction with Price Charged 222
5.60 Opinion about Price Level 223
5.61 Awareness among Respondents about Offers 225
5.62 Satisfaction with Schemes and Offers 227
5.63 Preference to Private Brands Introduced by Retail Shop
228
5.64 Opinion about Quality of Private Label
229
Chapter 1
Research Methodology
1. 1 Introduction to subject - The term ‘retailing’ refers to any activity that involves a sale to an individual
customer. Currently, Retailing is the buzzword in Indian Industry. The $ 6.6
trillion retail industry is the largest private industry in the world which
contributes significantly in world’s GDP, employment generation and wealth
creation.1 Because of the saturation of US domestic market and increase of rich
middle class in India, opportunities in retail sector are incredible.
Retailing in India could become a $ 496 billion industry by the 2011 - 12, if it
continues in its current growth of income of the consumers, increasing demand
for products/services, changing lifestyle and buying behaviour and better
products and shopping options. The organized retail industry will grow up to 16
percent by 2011 - 12.2. There will be 600 malls in operation across the country by
2011 - 12. With these levels of growth, there is high scope in this dynamic
business. Large Indian corporate groups like Reliance, Tata, Birla and Mittal are
exploring opportunities in retailing. There will be increase in awareness levels
with respect to products, usage and all leading to higher aspiration level among
the customers.
1.1 (a) Indian Retail Scenario
Retail is the largest industry in the world and is controlled by few powerful
businesses. These are now entering in India, where organized retail trade is only
about 6% and there are huge growth potentials 3. Retailing in India is thoroughly
unorganized. Traditionally, the retail industry in India comprised of large,
medium and small grocery stores and drug stores which could be categorized as
unorganized retailing. Most of the organized retailing in India had recently
started and was mainly concentrated in metropolitan cities. Even though India has
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over 5 million outlets of all sizes and styles, the country lacks in modern sense of
organized retail stores. This presents great opportunity to retailers. As much as
96% of the 5 million outlets are smaller than 500 square feet in area. This means
that India’s per capita retailing space is about 2 square feet which is lowest in the
world.4 Just over 8% of India’s population is engaged in retailing as compared to
20% in U.S.
The retailing industry seems poised for a significant growth in the coming years
owing to the presence of a vast market, growing consumer awareness about
product quality and services, higher disposable income of consumers and the
desire to try out new products. In the past couple of years, the organized, multi-
outlet retailing concept had gained acceptance in India. Leading global retailers
such as Wal-Mart, Tesco and others are keen to enter actively in the Indian
retailing industry.
According to Euro Monitor International, a leading provider of global consumer
market intelligence, sales from large format stores (supermarkets and
hypermarkets) was increased by 30% in 2005. In the year 2002, food-related
items accounted for nearly 71% of retail sales in India 5. However, it was
interesting to note that there had been a decline in the purchase of food-related
items. In recent years, there has been higher spending on non-food items.
Lifestyle in India is changing and the concept of ‘value for money’ is picking up
local companies and local-foreign joint ventures are expected to more
advantageously position than the purely foreign ones. Up and coming modern
retail channels such as hypermarkets, supermarkets, convenience stores and
discounters were unable to make a significant mark in grocery retailers’ value due
to a limited geographical spread in consumer reach. Department stores within
mixed retailers were the forerunner in growth, being boosted by the introduction
of lifestyle concept stores.
In a developing country like India, a major chunk of a consumer’s expenditure is
on retail products. This expenditure is only likely to increase in the near future.
Retailing in India, in spite of industry majors entering is still at its nascent stage.
According to India’s Ministry of Commerce & Industry, only about 6% of the
2
Table 1.2: Space Occupation by Retailers
Retailer Estimated space occupation on
2010
(in million sq. ft.)
Pantaloon 30
Reliance 100
Bharati 15-18
Aditya Birla Group 13-15
Spencers (RPG) 1
Shoppers Stop 5-6
(Source:www.indiaonestop.com)
2) Managing man power
A retail sector is expected to generate employment in access of 20 lakhs by 2010
of which 5 to 6 lakh are directly linked with core retailing. Managing manpower
will be the toughest challenge for organized retail players. Companies are
intending to hire people for critical functions like store design, back end logistic
and merchandising. An organized retail shop needs one employee to cover 275
sq.ft. Thus the challenge is to retain the skilled and talented employees.
3) Supply chain
There will be need to make the sufficient and proper supply chain by making
appropriate provisions. Significant investment in restructuring the supply chain
and logistic management is needed.
4) Partner Selection
The current policy restricts FDI to 51% for multinational retailers and this
translates to joint venture and arrangement of local players. The choice of partner
is very crucial in order to achieve long term success.
5) Cultural Diversity
Because of geographical and socio-economic diversity in India, there is no role
model for Indian suppliers and retailers to adopt and expand in the Indian
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context. Different policies in different province are needed in order to be
successful.
6) Competition from unorganized sector
Traditional retailing has established in India for last some centuries. It is the low
cost structure & operated at negligible real estate and labour. To handle these
challenges, efficient management and virtual merchandising is needed.
1.1 (e) Retailing as an engine for economic growth
In India, the unorganized retailing sector comprises around 94 % while that of
organized sector just 6 % that is mainly in major metropolitan and urban areas.
Indian retailing is traditionally dominated by a small family run “Kirana” store.
Retailing in India is the second largest untapped market after China. Despite the
huge size of the industry, only 8% of the country’s population is engaged in
retailing while that in United States of America; it is 20%. The positive factors
such as increased purchasing power rise in number of double income families and
demanding customers, due change in lifestyle and paucity of time, increasing
consideration of convenience are helping to grow retail sector. Retailers are
providing wide range of products, quality and value for money, apart from
creating a memorable shopping experience. Organized retailing has made a
considerable headway in product like food, groceries, clothing, books and music.
Food & groceries segment has undergone transformation with super market chain
like Food world, Nilgiris, Subhiksha, Apana Bazaar etc. The apparel section has
seen the emergence of store like Pantaloon, Shopper’s Stop, Lifestyle, Westside
etc. and Archies, Music World and Crossword cater the books and music market.
Retailing is estimated to generate about Rs. 13.5 trillion worth of consumers
spending and this activity has as its customers the entire one billion people in the
country. Consumers are increasingly seeking convenience in shopping. The
growing proposition of working women further fuels the desire of convenience.
Consumers also increasingly want the shopping experience to be enjoyable.
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smaller towns and cities, registering a commendable growth 28% growth over the
previous year. Indian retail sector Analysis shows that from 2006 to 2010 the
organized retail sector will grow at 49.53%. Retail sales are predicted to rise
rapidly than consumer expenditure during 2003-08. The forecast growth in retail
sales during 2003-08 is 8.3% per year compared with 7.1% for consumer
expenditure 11. Inevitably modernization of Indian Retail Sector will be reflected
in rapid growth in sales of supermarket, department stores and hypermarkets.
1.3 Statement of the Problem
There is growing preference by affluent and upper middle classes for shopping at
modern organized retail stores, given the convenience they offer such as
shopping ambience, variety and a single point source of purchases. There is no
doubt that traditional retail has been performing a vital function in the economy
and significant source of employment. However, it suffers from huge
inefficiencies as a result of which, it is in trouble. The challenges currently faced
by the Indian organized retail sector are various and these are stopping the Indian
retail industry from reaching its full potential. Retailers have got many
opportunities to make most of the retailing business by adopting some strategies
to eliminate problems as well as to suit the customers’ requirements.
Keeping in mind above factors, organized retailing was selected for the purpose
of study. And hence the present research work “A Study of Organized Retail
Business in selected cities in Western Maharashtra” is an effort to carry out in
depth research in this field.
1.4 Objectives of Study
1. To study current organized retail industry in India.
2. To know various product categories sold in organized retail stores in
selected cities in western Maharashtra.
3. To study various challenges for current retail industry in western
Maharashtra.
11
4. To determine various opportunities for the retail industry in selected cities
in western Maharashtra.
5. To study impact on unorganized retailers due to modern retail formats in
selected cities in western Maharashtra.
6. To know customer buying behaviour when they are engaged in buying
process in selected cities in western Maharashtra.
7. To study change in attitude of people while purchasing and impact due to
strategies like pricing, promotion by modern retailers in selected cities in
western Maharashtra.
8. To know preference for private labels against recognized brands by
customers in organized retailing.
1.5 Scope of the Study
The geographical scope of the study covers four big cities namely Kolhapur,
Solapur, Sangli and Satara in Maharashtra. The topical scope covers strategies
and policies in modern organized retail stores and does not consider non store
retailing or e-tailing. The analytical scope covers fulfillment of objectives set for
the study. The functional scope covers meaningful suggestions for the organized
retail industry.
1.6 Limitations of the study
1. Organized retail has wide scope, but researcher has limited study only to
store retailing. Non-store retail, e-tailing are not the part of this research
work.
2. As it was impossible to consider all kinds of modern retail stores, the
researcher has taken into consideration only multiproduct, multibrand
retailers and not single line or single brand.
3. While colleting data, researcher has selected only four major cities in
Western Maharashtra, where considerable scope of modern retail was
available.
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Primary data were collected from traditional retailers. Considering different types
of retail stores, variety of traditional retail stores covered with judgmental
sampling. Primary Data were collected from modern retailers. All available
modern chain retail formats were considered in 4 different cities.
1.8.4 Sample Size
For collecting data for the research work, 500 numbers of respondents were
considered. The sample is divided into four different groups for four different
cities namely Kolhapur, Solapur, Satara and Sangli.
Table 1.6: Sample Size for Customers
Sr. No. City Number of
Respondents
1 Kolhapur 125
2 Sangli 125
3 Solapur 125
4 Satara 125
Total 500
Primary Data were collected from modern retailers. All available modern chain
retail formats were considered in 4 different cities.
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Table 1.7: Sample Size for Modern Retailers
Sr.
No.
City Number of
Retailers
Names of Modern retailer
1 Kolhapur 3 D- Mart, Big Bazaar,
Vishal Mega Mart,
2 Sangli 3 D- Mart, Big Bazaar,
Godrej Aadhar
3 Solapur 2 D- Mart, Sai Krupa Super
Market
4 Satara 2 Vishal Mega Mart, Godrej
Aadhar
Total 10
There is variety of modern organized retail stores like hypermarkets,
supermarket, discount stores, convenience stores etc. Each type store is different
in terms of facilities, services and variety of products. All available existing
modern retail stores for the purpose of research were considered. Unorganized
retailers who are involved in traditional retailing were selected to find out impact
on unorganized sector because of entry of modern retailers. Traditional shops in
the radius of 1 Km. around modern retail format were selected. In Kolhapur city
there were 12 traditional retailers, in Sangli 3 and in Solapur and in Satara only 5
traditional retailers were found in the area around organized retail format in 1 km.
radius.
Table 1.8: Sample Size for Traditional Retailers
Sr. No. City Number of Retailers
1 Kolhapur 12
2 Sangli 10
3 Solapur 8
4 Satara 5
Total 35
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Chapter –II
Literature Review
2.1 Books
2.2 Journals and Magazines
2.3 Reports
2.4 Dissertation and Thesis
Chapter –II
Literature Review
Number of Thesis, Dissertations, Research articles in journals and magazines
were found while carrying out present research work on “A Study of Organized
Retail Business in selected cities in Western Maharashtra”. This Literature
Review formed a base for completion of this study on organized retailing.
2.1 Books
Parasraman M.G. (2003)1 - In ‘Understanding Shoppers: Building powerful
brands using shopper research’, Tata McGraw-Hill, author has categorized
shoppers in two typologies: Hindi medium type and English medium type, where
the former were more traditional and looked up to the latter for innovating
cultural leads. The study indicated that male shoppers belonged to the following
segments: traditional, pleasure seeker, social chameleon, and intrinsic progressive
man. Women shoppers were contented conservative housewives, the role bound
archetypal provider, the anxious working woman rebel.
Newman Andrew, Peter Cullen (2006)2 – The Book on ‘Retailing: Environment
and Operations’, by Thompson Publication explains retailing as set of activities
that markets products or services to final consumers for their own personal or
household use. It does this by organizing their availability on relatively large
scale and supplying them to consumers on relatively small scale. According to
authors, the responsive retailer recognizes the importance of additional services
for the customer.
Jain J.N., P.P. Singh (2007)3 - Authors in their book on ‘Modern Retail
Management’ by Deep & Deep Publication Pvt. Ltd., have given detail
classification of various retailers as well as competitive analysis. Book also
throws light on Retail locations; Store planning, Design and Layout of retail
stores. Product and Merchandise Management is discussed while giving idea
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G. Laxmi Prabha, Amatul Baseer (2007)14 – ‘Emerging Retail Trends in India’,
here authors have discussed about emerging trends in Indian Retail. Strong
regional and national players are emerging across formats and product categories.
Real estate developers are also moving fast through the learning curve to provide
qualitative environment to the consumers. The shopping mall formats are fast
evolving. Partnering among brands, retailers, franchisees, investors and malls is
taking place. The demanding assertive Indian consumer is now sowing the seeds
for an exciting retail transformation that has already started bringing in larger
interest from international brands. With the advent of these players, the race is on
to please the Indian consumer and its time for the Indian consumer to sit back and
enjoy the hospitality of being treated like a king.
Gupta C.P., Mitali Chaturvedi (2007)15 – ‘Retailing: An Emerging Trend in
India’, authors have commented that, in India Retail Industry has become the
second largest employer after agriculture. It is found that the gap between living
standards of the consumers of metro and non-metro cities are narrowing own day
by day. One of the prime concerns of the retailers is the availability of space for
the retailing in India. The availability of prime space would definitely enable the
retailers to deliver better quality products and services to the consumers, resulting
in increase in operational efficiencies and decline in costs for the supply chain.
This new arena will offer new jobs, high salaries, better living conditions, world
quality products and services, a unique shopping experience and more social
activities and huge business opportunities to the world retail players.
Gupta S.L., Tripat Kaur (2007)16 – ‘Exploring the trends of retail formats in
India – A study of Shopping malls’, this study presents an overview of the
present situation of organized retail formats with a special reference to shopping
malls. It is concluded that understanding of our shopper’s attitude towards
different characteristics of the stores and retailers response towards the shoppers’
mood. The results suggested that if proper window display and other methods of
presentation of merchandising are done, the retailers are able to attract more
shoppers. Study also focuses on product categorization, merchandise co-
ordination and market segmentation.
25
Malliswari M N, (2007)17 – ‘Emerging Trends and Strategies in Indian
Retailing’, here author in her article on ‘Emerging Trends and Strategies in
Indian Retailing’ has given overview on recent strategies in Indian Retailing. The
peculiarity of the Indian Retail scene lies in the co-existence of innumerable
small informal retail stores alongside with modern chain stores and malls. The
poor and middle class constituting a major part of population, patronize the
smaller stores as they are more comfortable with them. Small local stores still
find patronage from substantial number of customers belonging to the middle
class and above because of their convenient location in residential areas.
Md. Ismail El-Adly (2007)18 – In ‘Shopping malls attractiveness’, he undertook
a segmentation approach to shopping malls attractiveness in the UAE revealed
six mall attractiveness factors from the shoppers’ perspective: comfort,
entertainment, diversity, mall essence, convenience, and luxury. It also arrived at
three malls shopper segments, specifically, relaxed shoppers, demanding
shoppers, and pragmatic shoppers. Each segment was profiled in terms of mall
attractiveness attributes, demographics and shopping behaviour.
Palveen Kaur, Raghbir Singh, (2007) 19 – ‘Uncovering retail shopping motives
of Indian Youths’, authors looked at uncovering retail shopping motives of Indian
youth and reveal that Indian youth primarily shops from a hedonic perspective.
Various factors were identified covering shopping motives: hedonic (meeting
friends and getting new ideas), market mavens (to identify new trends), peer
group association, utilitarian motive, status consciousness and impulse shopping
and economic shopping motives.
Panandikar S.C. , Rajiv Gupte,(2007)20 – ‘Models of Consumer Behaviour in
Mall Culture’, here authors state that malls have revolutionized the concept of
retailing and they pose serious competition to their conventional counterparts in
terms of service, ambience, price, access to the brands etc. Furthermore they have
created a niche in the minds of consumer through a perception of innovation style
and status. They observed that most preferred items are food and stationary
followed by toys and beauty care products. Price was observed as influencing
factor followed by product offer, shop display and previous experience.
26
created to lure the Indian consumer away from the traditional Kirana. The Kirana
are not playing salient spectators to this new reality. Although current
demographic indicators and growing consumerism point positively towards the
growth of organized retailers, consumers are still loyal to Kiranas. In spite of the
success stories like Big Bazaar, the Indian Kirana community which forms the
hub of small business and entrepreneurs in India is still holding ground in the
extremely competitive Indian retail market.
Ramesh H.N. (2008)31- ‘Cyber retailing - Indian Profile’, this article highlights
on importance of retailing, scope and types of retailing and retail mix and retail
strategy for successful retailing. Retailing can not be overlooked for its
contribution to the economic development. Lot of professionalism was used for
acquiring, maintaining and retaining the customers. Many industrial houses have
entered into retailing with twin objectives. One of the objectives is to provide
superior service to the customers for building brand loyalty for which
intermediaries may not be so effective. Another objective is to reap the superior
profit in the terminal market. This article notes negative and positive impact of
information technology on retailing.
Ravichanran K., David Sam Jayakumar, Abdus Samad K., (2008)32 –
‘Service Quality: Food Retail’, this paper identifies the critical quality dimension
of food and grocery shoppers based on the Retail Service Quality Scale Proposed
by Dabholkar A. (1996) that takes into account the retail settings. It investigates
the service quality items under five different factors and the results have been
indicated. The quality of service provided by food retailers and be assessed by
pioneering work done by the experts in retail marketing.
Bapat A., Patil P., (2009)33 – ‘Retail Management – A Road Ahead’, it has been
stated that Indian retailing enjoys many unique features, is still in primitive way.
They are not in a position to implement world class practices of supply chain
management. The concepts of quick response are missing. The two bases of
modern retailing the electronic data interface and mutually respectable
partnership among retailers and suppliers are missing to great extent in Indian
context. Also, Indian marketing channel members are performing some
unnecessary tasks, which make channel structure heavy and inefficient.
30
Cherish Mathew, (2009) 34 – ‘Organized Retailing - Opportunity or Threat?’,
this article deals with comparison of the marketing systems of organized and
unorganized retailing to assess the feasibility of ‘Organized Retailing’ as a
strategic choice out of new business opportunities. The phenomenal size of
retailing business in India alongwith high potential has attracted leading Indian
and multinational operations towards ‘retailing’ and expanding their business
portfolio. However the current trend of aggressive expansion strategy b major
organized retailers has created resistance from some socio-political forces thus
raising apprehensions about the future scope of the business.
C V Krishna, (2009) 35 – ‘Next Generation Retailing, An Empirical Study using
Factor Analysis’, this article deals with comparison of marketing system of
organized and unorganized retailers. The phenomenal size of retailing business in
India along with high growth potential has attracted leading Indian and multi
national corporations towards ‘retailing’ or expanding their business portfolio.
The current trend of aggressive expansion strategy by major organized retailers
has created resistance from some socio-political forces, thus raising
apprehensions about the future scope of this business.
Choudhari Himanshu, Vandana Sharma (2009) 36 - ‘Empirical Study on
Operational Efficiency in Retail Stores in Chandigarh Tricity’, in this article,
authors have stated that, it is essential to know-how of all f actors which will help
retailers to sustain in the long run. It was observed that there is significant
influence of format of retail stores and location on the operational efficiency.
Location of the retail store must be central to the customers to encourage higher
footfall and combat competition.
Dutta Nandita (2009) 37 - ‘Friend, Wholesaler an Guide’, here she speaks about
‘How German wholesaler ‘Metro’ is helping customers like ‘Kiranas’ to grow
their business. Metro Cash & Carry India, the Indian arm of German Wholesaler
Metro AG opened its Kolkata Store six months ago. Metro helped small Kirana
shop in a village outside Kolata transform from a hole-in-the-wall outlet to a
central point of the village. For customers like hotels restaurants and caterers,
Metro has a community approach. The idea is to give them a platform to meet
31
J. Prasad, A. R. Aryasri (2010) 49 - Authors in their Research Paper on ‘A study
on Role of Consumerism in Modern Retailing in India’ have stated that
emergence of hypermarkets; shopping malls have become destination centers to
cater ever-changing need of consumers. It is imperative to understand changing
trends of consumerism that led to the growth of organized retailing in India. The
study puts great focus upon overview of selected organized retail formats like
food and grocery, apparel and throws light upon changing trends of retailing and
prospects associated with it.
Sathyanarayanan R.S. (2010)50 – Author has suggested in their research on
‘Measuring Service Quality in the Context of Indian Retail’ that offering service
quality in retail is highly imperative for retailers, as competition is getting stiffer
day-by-day and customers are becoming more demanding and discerning.
Creating unique customer experience is essential for retailers to woo customers
and retain them in long run. Hence Retailers should focus on improving customer
service quality by carefully analyzing perception and expectation of customers
towards the store on various dimensions, and taking appropriate actions to
improve the situation.
Sahoo Swaroop Chandra, Das Prakash Chandra (2010) 51 – ‘Consumer
Decision Making Styles in Shopping Malls’, an attempt has been made by these
authors to know about the decision making styles of buyers in shopping malls.
The purchase of goods and services include a number of factors that could affect
each decision. Increase in numbers of variety of goods and stores, shopping malls
and the availability of multi-component products have broadened the sphere of
consumer choice and have complicated process of decision making.
Saxena Nitu, (2010) 52 – ‘Service Orientation in Retailing’, author has stated
that, service orientation in retailing has come to the fore with the emergence of
organized retailing, and has spread its roots to traditional formats as well. The
changing expectations of consumers have necessitated that services are
effectively planned and executed. Successful retailers know that the demand for
their merchandise is not just price elastic, as economists would like to believe,
but also service elastic. Accordingly service orientation should be integrated into
35
all aspects of retailing. The goal should not be only customer satisfaction, but
also customer delight.
Singh Swati (2010) 53 – ‘The Rise of Non-Metros- New Retail Frontiers’ in this
article researcher discusses the changes taking place in Tier II and III cities and
also the factors that have facilitated transformation. As markets in metros face
saturation, organized retailing is moving to non-metros to make the most of
changing behavioral patterns brought about the increased earnings, western
influences, increased number of working women and desire for luxury items.
Consumers in small cities want to eat shop and get entertained under the same
roof like their counterparts in metros.
Verma Amit,(2010) 54 – ‘Category Management- Merchandise buzz in Retail
Operations’, this article presents a literature survey on the concept of category
management in retail operations based on the exposition on category
management given in research papers. Category management has gained
importance as a result of dynamic changes in consumer outlook coupled with
increasing competition. It helps to ensure better product planning on the retail
shelves so that it can increase profitability and meeting consumer demands.
2.3 Reports
KPMG in Hong Kong, China ‘Retail Outlook for China (2005) 55 - In China,
both hypermarkets and supermarkets are perceived as food specialists and include
fresh food produce to cater to local tastes. Convenience stores have been another
format that have done exceedingly well in larger cities. These convenience stores
have increased their services beyond snack foods, beverages and dairy products
to include financial services and utility bill payment facilities. China’s traditional
urban retail format – the department store – has not been very successful in
competing with modern trade. Mall development in China started in the early
1990s. By 2002, there were over 100 malls in China, most of them concentrated
in the large cities such as Shanghai, Chengdu, Guangzhou and Beijing. At
present, there are more than 400 shopping centers and malls operating in China.
36
entering the fray in a big way. Even at the going rate, organised retail is expected
to touch Rs.2,30,000 crores (at constant prices) by 2010, constituting roughly 13
per cent of the total retail market.
2.4 Dissertation and Thesis
Kulkarni A.A. (2000) 64 - In his Ph.D. Thesis on ‘Analysis of emerging practices
in retailing in Kolhapur City’, the researcher has tried to observe the changes in
the field of retailing. The study deals with retailing in consumer goods only. It
considers textiles, food and personal care products, books, music cards, gift
articles and consumer durables. Information from retailers regarding merchandise
handled organizational structure and product range, was collected and analysed.
Researcher had found scope for modern retailing in future.
Chile Sarjerao (2009) 65 - In M.Phil. Dissertation he has stated in his research on
‘Effects of Organized Retailing on Small Traders in Kolhapur City’ that the
effect on small traders is negligible because of personal relations with customers.
People also prefer to buy things in small quantity and mostly the purchase on
credit. Vendors of grocery and garment have been affected but effect is not
significant.
40
References:
1. Parasraman M.G. (2003) - Understanding Shoppers: Building powerful
brands using shopper research, Tata McGraw-Hill.
2. Newman Andrew, Peter Cullen (2006) - Retailing: Environment and
Operations, Thompson Publication.
3. Jain J.N., P.P. Singh (2007) - Modern Retail Management, Deep & Deep
Publication Pvt. Ltd.
4. Nair Suja (2008) - Retail Management - Himalaya Publishing House.
5. Levy Michel, Weitz Barton A. and Pandit Ajay (2008) - Retailing
Management –Sixth Edition, Tata McGraw-Hills Publishing Company Ltd.
6. Pradhan Swapna (2009) - Retailing Management: Text & Cases, 3rd edition,
Tata McGraw – Hill, New Delhi.
7. Pradhan Swapna (2009) - Retailing Management: Text & Cases, 3rd edition,
Tata McGraw – Hill, New Delhi.
8. Martin, Turley (2004), Malls and consumption motivation: an exploratory
examination of older generation Y consumers, International Journal of
Retail and Distribution Management, Vol.32 No. 10, 464 – 475.
9. Sinha Piyush Kumar, Dwaraka Prasad Uniyal (2005), Using Observational
Research for Behavioural Segmentation of Shoppers, Journal of Retailing
and Consumer Services, Vol.12, No.1.
10. Amatul Baseer, G. Laxmi Prabha (2007) - Prospects and problems of Indian
Retailing, Indian Journal of Marketing – October, 26 – 28.
11. Anbalagan M., V. Gunasekaran( 2007), Retail Consumers Market in India –
The Next Big Leap, Indian Journal of Marketing (Vol.XXXVII, No. 3),
March , 27 – 29.
12. Angshuman Paul, Aditi Prasad, Shashank (2007), Business & Economy, 19
Oct. - Nov., 82 - 87.
13. Dassani Vaishali (2007), Reliance Mart, Images Retail, Sept. 2007, 44- 48.
14. G. Laxmi Prabha, Amatul Baseer (2007) - Emerging Retail Trends in India,
Indian Journal of Marketing – December, 23 – 27.
15. Gupta C.P., Mitali Chaturvedi (2007), Retailing: An Emerging Trend in
India, Indian Journal of Marketing, June, 39 – 44.
41
Chapter –III
Theoretical Aspects of Retailing
3.1 Introduction
3.2 Functions of Retailing
3.3 Types of Retail Organizations
3.3.1 Retailer classified on the basis of Ownership
3.3.2 Retailers classified on the basis of Strategy
3.3.2.A. General Merchandise Retailers
3.3.2.B Food Retailers
3.4 Methods of Customer Interaction
3.5 Changing Scenario of Retail
3.5.a Role of Internet
3.5.b Branding through Retailers
3.6 Retail Mix
3.7 Strategic Retail Planning Process
3.8 Retail Market Strategy
3.9 Competitive Advantage
3.9.1 Approaches to Gain Competitive Advantage
3.10 Implementing Retail Strategy
3.11 Manufactured Brands
3.12 Private Labels
3.12.1 Advantages of Private Labels
3.12.2 Limitations of Private Labels
3.13 Unorganized Retailing
Chapter –III
Theoretical Aspects of Retailing
3.1 Introduction
The word ‘retail’ is derived from the French word retaillier, meaning ‘to cut a
piece-off’ or ‘to break bulk’. In most simple terms, it implies a first hand
transaction with the customer. The term retail refers to the sale of goods or
commodities in small quantities directly to consumers. Thus, a retailer is a
company or an organization that purchases products from individuals or
companies with the intent to resell those goods and services to the ultimate, or
final, consumer. The U.S. federal government considers a retailer a business that
sells more than 50 percent of its products to the ultimate consumer1. Ultimate
consumers, or end users, are families, individuals, or households that plan to
consume the products or services themselves.
3.1.1 Definition
Retailing is a set of activities that markets products or services to final consumers
for their own personal and household use. It does this by organizing their
availability on a relatively large scale and supplying them to consumers on
relatively small scale. Any business that directs its marketing efforts towards satisfying
the final consumer based upon, the organization of selling goods and services as a means of
distribution2.
David Gilbert has defined retail as any business that directs it marketing efforts
towards satisfying the final consumer based upon the organisation of selling goods
and services as a means of distribution3.
As per the above definition the final consumer is a key concept within the distribution
chain, especially since the retailers are at the end of the chain and directly interact
with the customer. Moreover, the final consumer is presumed to be the final user of a
45
(i) Retailer’s vision regarding the size and nature of his business,
(ii) The level of control he wishes to have,
(iii) The level of structure they are willing to deal with,
(iv) The business vulnerability to lawsuits,
(v) Tax implications of the different ownership structures,
(vi) Expected profit (or loss) of the business.
(vii) Whether or not one is required to re-invest earnings in the business,
(viii) Retailer’s need for access to cash from the business for personal use.
Some basic legal forms of ownership for retailers:
3.3.1. i) Sole Proprietorships
The vast majority of small businesses start out as sole proprietorships. These firms are
owned by one person, usually the individual who has the day-to-day responsibility
for running the business. In this case, the retailer owns all the assets of the
business and the profits generated by it. It assumes complete responsibility for any of
its liabilities or debts. Sole proprietors are in complete control and, within the
parameters of the law, may make decisions as they see fit. Sole proprietorship may
be at a disadvantage in raising funds and are often limited to using funds from
personal savings or consumer loans.
3.3.1. ii) Partnerships
A partnership is a common format for carrying out business activities on a small or
medium scale. In a partnership, two or more people share ownership of a single
business. As in case of proprietorships, the law does not distinguish between the
business and its owners in partnership. Partnerships are relatively easy to
establish; however, time should be invested in developing the partnership
agreement. With more than one owner, the ability to raise funds may be
increased. The partnership may have a limited life; it may end upon the
withdrawal or death of a partner.
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3.3.1. iii) Joint Venture
A joint venture is not well defined in the law. Unless incorporated or
established as a firm as evidenced by a deed, joint ventures may be taxed like
association of persons, sometimes at maximum marginal rates. It acts like a
general partnership, but is clearly for a limited period of time or a single project.
If the partners in a joint venture repeat the activity, they will be recognized as an
ongoing partnership, and will have to file as such and distribute accumulated
partnership assets upon dissolution of the entity.
3.3.1. iv) Limited Liability Company (LLC)
The LLC is a relatively new type of hybrid business structure that is now
permissible in most states. It is designed to provide the limited liability features
of a corporation and the tax efficiencies and operational flexibility of a
partnership. The owners are members, and the duration of the LLC is usually
determined when the organization papers are filed. The time limit can be
continued if desired by a vote of the members at the time of expiration.
3.3.1. v) Independents
An Independent retailer operates only one retail establishment. The majority
of these stores are owner or family managed. The case of entry into this type
of retailing makes the independent retail store attractive to those with few
capital resources. Although independent retailers make up 80 percent of all
retailers, their sales represent only 40 percent of retail sales4. Independent
retailers have the advantage of being able to respond quickly to their
customers’ needs and wants.
Due to the smaller size and location, independent retailers have greater
opportunities than other types of retailers to build customer relationships.
One of the most important variables for success as a small, independent
retailer is to develop strategic clarity. Strategic clarity is the commitment to
achieve an in-depth understanding of the retailer’s strengths and weaknesses,
including the strengths and weaknesses of its integrated retail management
and marketing programs.
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3.3.2.A iv)Off-Price Retailers
Off-price retailers resemble discount retailers sell brand-name Merchandise at everyday
low prices (EDLP). Off-price retailers rarely offer many Services to customers. The key
strategy of off-price retailers is to carry the same type of merchandise as traditional
department stores but offer prices that can be 40 to 50 percent lower7. To be able to
offer lower prices, off-price retailers develop special relationships with their suppliers
for large quantities of merchandise. Inventory turnover is the key to a successful off-
price retailing business. In addition to purchasing closeouts and cancelled orders, off-
price retailers negotiate with manufacturers to discount orders for merchandise that
is out of season or to prepay for items to be manufactured, thus reducing the
buying prices of those items. Because off-price retailers do not ask the
manufacturers for additional services such as return privileges, advertising
allowances, or delayed payments, they are often able to get reduced prices for the
merchandise they purchase.
3.3.2. B) Food Retailers
There are many types of food retailers. To make their classifications easier to
understand, this section is broken down into the main types of food retailers. To
remain competitive in the mature food retail business, many retailers are carrying
merchandise outside their traditional lines. As the mass merchandisers industry
begins to mature, this channels vigorous focus on food as a vehicle for growth
results in super centers that are beginning to look similar to conventional grocery
stores. The conventional supermarket channel, in turn, has fought back with an
expanded offering of general merchandise and various other peripheral
departments.
3.3.2. B. i) Conventional Supermarkets
Conventional supermarkets are essentially large department stores that
specialize in food. According to the Food Marketing Institute, a conventional
supermarket is a self-service food store that generates an annual sales volume of
$2 million or more8. These stores generally carry grocery, meat, and produce
products. One benefit that accompanied the development of supermarkets was
increased Impulse buying. Impulse purchases are those that haven’t been planned.
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Shoppers at conventional supermarkets generally prepare a list of items needed for
their households. While in the supermarket, however, they may find some
tempting items that weren't on the list and may purchase them on the spot, or by
impulse. The key to successful supermarket sales is high inventory turnover.
Because supermarkets have a great deal of competition from convenience
stores, warehouse stores, and superstores, they must develop an effective strategy
to keep their customers coming back.
3.3.2.B. ii) Superstores
One of the biggest trends over the past twenty years in food retailing has been the
development of superstores. Superstores are food-based retailers that are larger
than the traditional supermarket and carry expanded service, bakery, seafood, and
nonfood sections. Superstores vary in size but can be as large as 150,000 square
feet. Generally they are no smaller than 20,000 square feet. Typical stores run
80,000 to 130,000 square feet and carry more than 60,000 products, compared to
an average of 40,000 products for supermarkets9. Typically included are bakeries,
ready-to-cook meat and seafood entree sections, international foods, photo labs,
floral shops, and a fun centre for kids to play in while their parents shop.
3.3.2.B. iii) Combination Stores
Because shoppers have been demanding more convenience in their shopping
experiences, a new type of food retailer has been emerging, called a combination
store, this type of retailer combines food items with nonfood items to create a one-
stop shopping experience for the customer. In general, customers can find general
merchandise along with food products and can take all these products to a common
checkout area. Combination stores can be as large as 100,000 or more square feet.
3.3.2.B. iv) Super Centers and Hypermarkets
A super centre is a combination of a superstore and a discount store. Super centers
developed based on the European hypermarket, an extremely large retailing
facility that offers many types of products in addition to foods. In super centers,
more than 40 percent of sales come from nonfood items. Super centers are the
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every 5 minutes, a mobile handset every 8 minutes and a car every 9 hours11. The
number of Internet users in India is estimated at four million. These users are young,
well-educated males with a monthly income of over Rs 15,000 and are concentrated
in the top 10-20 class ‘A’ cities. Internet retailing had a positive impact on the
economy of the nation in particular and the world at large. In India, it will be a
mixture of e-tailing and retailing that will work. With time, companies are
working hard on reaching out to their consumers with the help of Internet. It helps
prospective customers to acquire information about the offers or retailers at minimal
cost in terms of traveling time and cost involved. The capital and labour devoted
to stores, salespersons, inventories, etc. are freed up for other productive
applications in the economy.
Internet retailing appeals to marketers and retailers on account of the following
factors:
(i) Internet retailers can avoid expensive capital investment on stores and in store
fittings, sales persons, and inventory holding costs,
(ii) Internet retailers depend on IT integration from their store-front to order
3.4. 4) Catalogue and Direct Mail Retailing
It is a form of non-store retailing in which retail units communicate about their
merchandise or service through a catalogue. This retail format is new to Indian
retail industry and is at a very nascent stage of its development. In the West,
catalogue retailing became popular among marketers and retailers to tap rural
markets, which lacked access to the retail centre/stores. Later with the
emergence of the double-income families with limited time at their disposal,
catalogue retailing proved quite successful. Direct mail retailing is a non-store
retail format in which retailers communicate with their customers using
mails/letters or brochures. Retailers directly mail advertising material to their
existing or potential customers with the objective of selling goods or services.
Catalogue retailing is classified into two, namely general merchandise-
catalogue and Speciality-catalogue retailing. General merchandise catalogue
offers a wide variety of merchandise that is periodically mailed to the customers
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3.4. 5) Direct Selling
It is a retail format which involves personal contact between salesperson/ retailer
and customers at any convenient place, be it his home, office, or club. It also
includes the phone interactions between retailers and customers.
3.4. 6) Television Shopping
It is a retail format in which existing and prospective customers watch a TV program
demonstrating products and then placing order for the same by telephone, e-mail
Internet. There are three types of television shopping, namely cable channels meant
for shopping, infomercials, and direct-response advertising shown on TV.
Infomercials are TV program that mix entertainment with product demonstrations
and then interested customers place orders by telephone or e-mail. However, direct-
response advertising includes, advertisements on TV that provide details about
merchandise and an opportunity to order. The Indian TV retailing is estimated at
Rs 50 crores, with an annual growth rate of 20%. The key players in the Indian
market are Asian Sky Shop (ASK), TSN, TVC, TSNM, Telebrands (India), and
Star Wamaco, the last one being an international player. ASK and TSN are Rs 20
crores companies each, with the balance Rs 10 crores being shared by other players
in the market12.
3.4. 7) Vending Machine Retailing
It is a form of non-store retailing in which products or services are placed in a
machine and dispensed to customers when they deposit cash or use plastic
money (credit or debit card). Vending machines are found everywhere; compared to
store retailing, vending machines offer consumers greater convenience 24 hours a day,
and have replaced many services formally requiring a human interface. Vending
machines offer everything including; cigars, postcards, stamps, etc. The
expensive equipment and labour required to stock and service vending machines
makes this a costly channel of distribution, and prices of vended goods are often 15-
20 % higher than those in retail stores.
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buying pattern include - market size and growth, sales cyclically and seasonality.
Market size (large, growing, mature markets etc.) will be an indicator of whether the
retailer will be able to generate revenues to cover his investments. The competitive
factors affecting retail markets include barriers to entry (due to scale economies,
customer loyalty and availability of locations), bargaining power of vendors and
level of competitive rivalry. The environmental factors affecting the retail market
includes the technological, economic, regulatory and social changes which can affect
the market’s attractiveness.
While performing the situation audit, the retailer will have to do a self analysis in
terms of - management capability, financial resources, operative strengths,
merchandise capabilities, store management capabilities, location strength, loyal
customers etc. in order to determine the potential areas for developing competitive
advantage.
Step 3: Identify Strategic Opportunities
After doing the situation audit, the retailer will have to identify strategic
opportunities for increasing retail sales. These could include growth strategies for
the retailer such as, market penetration, market expansion, diversification strategy
etc.
Step 4: Evaluate Strategic Opportunities
Once the situation audit is done, the next step involves making an evaluation of the
opportunities in order to determine the retailers’ potential to build up a sustainable
competitive advantage and reap long term benefits. Typically, evaluating strategic
opportunities call for looking into market attractiveness and the strengths and
weaknesses of the retailer. Such an evaluation will enable the retailer to make proper
investments looking to the market opportunities and then build up a strong
competitive position.
Step 5: Establish Specific Objectives and Allocate Resources
The retailer’s overall objective is included in the mission statement. The specific
objectives are goals against which progress towards achieving the overall objective
can be measured. The specific objectives include three components:
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• The performance sought in terms of a numerical index against which
progress can be measured.
• The time period within which goal is to be achieved.
• The level of investment required to achieve the objective.
The performance will be measured by looking into the return on investment, sales or
profits.
Step 6: Develop a Retail Mix to Implement Strategy
The sixth step in the strategic retail process involves developing a retail mix for the
strategic opportunity in which investment will be made and to control and evaluate
the performance. The retail mix will include planning merchandise assortments,
buying systems and merchandise, planning the retail communication mix and
customer service, store management, visual design and merchandising etc.
Step 7: Evaluate Performance and Make Adjustments
The final step in the planning process relates to evaluating the results of the
strategy and implementation program. Evaluating the strategy and
implementation program will reveal whether the retailer is meeting or not the
objectives set. If the objectives are being met, changes are not required. But if the
retailer fails to meet the objectives, a reanalysis is done to review the
implementation programs and if necessary a new situation audit is worked out.
3.8 Retail Market Strategy
Today, the emergence of new retailing formats, advancements in the field of
technology and increase in consumer awareness and needs is making retail
competition more intense and also forcing retailers to devote more attention towards
working out the long-term retail market strategy. The retail market strategy will
provide an insight to retailers on how to deal with the market environment,
customers and competition. The retail structure is a mix of both organised and
informal retailing. It becomes more challenging for the organised sector to stand out
and woo customers through unique product offerings. Through a strategic approach,
the retailer works at positioning his product/service offerings in the market with its
unique image, price and quality features.
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competitively priced. Further, the store's image builds a certain level of confidence
and trust within the customer which can lead to an increase in customer base.
3.9.1.7 Vendor Management
When retailers have good relations with vendors it helps:
• To procure merchandise to be sold in a particular region.
• To enter into some special terms of purchase with vendors due to strong
relations with them.
• To receive fast moving merchandise even with short notice or receive those
merchandise, which are in short supply.
Good relations with vendors are built over a period of time and are always beneficial
for the retailer. Today while operating in a competitive environment, timely
deliveries and-quality of merchandise are major concerns. They need to go for
backward integration i.e., manage and plan production so as to work out a
sustainable model with higher quality compliance and lower mind-to-market time.
Now, retailers are making use of Retail Managed Production Planning (RMPP)
system, which offers a sustainable solution for partnering with the vendors in order
to achieve the long-term objectives of better quality and lower lead times.
3.9.1.8 Customer Service
On the one hand, retailing in India is still in its nascent stage and they are trying to
offer merchandise to satisfy the rising aspirations of the lifestyles of the Indian
households. On the other hand there also exists the local and unorganized retailing
format in India, who is finding it difficult to match the growing demand of the same
higher middle class with high disposable income. Nevertheless, all types of retailers
have realised that good customers can be attracted only be offering good customer
service. The customer services offered by some well-known retailers like Reliance
Infocomm, Bharat Sanchar Nigam Ltd (BSNL), Food World etc. include drop boxes
for cheques and credit cards, proximity, good ambience, new and certified products
and so on. There are retailers like Food Bazaar, Food World, Kemp (Bangalore) etc.
offering candy or popcorn vending machines, food courts, good seating arrangement
where customers can relax and shop at leisure. The layout of the stores and mall are
made consumer friendly to ensure that consumers are able to shop with comfort and
purchase fresh and quality products.
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3.9.1.9 Build Multiple Sources of Advantage
Retailers make use of a combination of approaches or parameters to build up
sustainable advantage. Generally a mix of various factors such as good products and
services, attentive sales personnel, physical store appeal, good vendor management,
suitable locations and so on can result in a successful retail venture. For, a satisfied
customer is likely to visit the store more often and also recommend it to others. The
net result will be a healthy bottom-line in which both customers and the retailer
benefit mutually.
Organised retailer, Shoppers Stop when it opened shop in Mumbai apart from
focusing on variety of (fashion) designer wear, at affordable prices, good vendor
management (prefers outright purchase leveraging on the designers’ confidence) and
ideal location also has a First Citizen’s club for frequent shoppers (loyal customers).
Every time a First Citizen’s club member makes a purchase, he notches up a number
of redeemable points. The first citizen also enjoys other benefits such as free parking;
a member only queue for at the cash counter and a few hours of exclusive shopping
for club members at festival time. Such programs are mutually beneficial for both -
customers and retailers. This is because profitable customer service provides added
value, tangibly and intangibly to the customers and also enables the company to
make profit at the same time
3.10 Implementing the retail strategy
3.10.1 Organizing structure and Training
The first decision by retailer is to clearly define the structure of the organisation
that would facilitate implementation of all the tasks. This will involve exactly
pinpointing who is responsible for each job and to whom each individual would
report to. The structure of small independent retailers is simple, even though they
perform almost the same functions as the large chain store retailers. Since a small
store has few employees, there is little scope for specialization and most staff
needs to be multi-skilled in which each employee may have to perform several
functions. However as the store expands, there is more opportunity for
specialization and departmentalization.
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only gives the store an appealing look but also imparts and attractive fragrance that
could go a long way in motivating customers to spend a longer time in the store
which would hopefully materialize into some concrete purchases.
3.10.7 Communication Strategy
The final part of the retail strategy involves implementation of the communication
strategy of the company. The company must be able to communicate to its target
clientele very clearly its prime USPs over its competitors and what it wishes to
offer. If a retailer wishes to operate a discount store format, he must effectively
communicate his lower prices to his target clientele, while if a department store
operator has larger variety and greater choice.The pricing policy of the company as
well as the depth and the breadth of the product mix must be decided prior to this.
3.11 Manufactured Brands
Manufactured brands are products that are designed and marketed by the
manufacturer himself or through his authorized distributors. The manufacturer’s
prime responsibility is to develop the product and establish an image for the
brand. In some cases, the manufacturers use their own brand name for the name
of the product, while others prefer to treat a product as a separate brand
altogether. For example, Kellogg’s corn flakes use its own name for its products,
whereas Procter and Gamble does not use its name for any of its products.
3.12 Private Labels
Private label is the term used to signify the brands which are developed by the
retailer himself. The process of developing such products is known as ‘backward
integration’. In other words, when a retailer expands his operations into
backward integration for some products, wherein he also develops the products
that he sells from his stores, the end-products are called private label items. Such
items may or lay not be developed within a unit or subsidiary of the same retail
company. For example, a retailer may also decide to outsource the production,
development and/or packaging for his private label items to extremely reliable
74
third parties. Many retailers around the world prefer this option. Typically,
retailers develop specifications for the merchandise and then contract the
production of the same to vendors with prior experience of manufacturing the
same products.
Private label items are usually sold exclusively at the retailer’s outlets only.
Deciding which products must be developed under the private label is a crucial
decision for every retailer though it is important to generate large volumes of the
product to be able to justify the private label. Even the strategies adopted for
allotting the brand name to private label items are quite diverse throughout the
world. While some retailers prefer to retain the same name as that of their stores,
others prefer to use a separate name altogether. Such decisions involve intense
thought on the part of the retailer as each strategy has its own advantages and
limitations.
It is rather intriguing that while some retailers aggressively adopt private labels,
others running operations of a similar magnitude prefer to remain rather passive
in this regard. Although even independent retailers have managed to create a few
fast moving private label items, it is a fact that unless large volumes are assured
from a chain of stores, a retailer may not be able to develop many private label
products. Offering private labels provides a number of benefits to the retailers.
Given below are some of the advantages and limitations of developing private
label brands.
3.12.1 Advantages of Private Labels
3.12.1.1 Greater Profits
Since private label items are the retail company’s own products, selling them
helps save almost entirely the profits of most of the intermediaries, i.e. the
manufacturer as well as the distributors, which are usually quite substantial.
Apart from this, the retailer is also free to decide his own pricing policy and
hence enjoys much greater flexibility in marketing the products.
75
is a major comparative advantage of unorganized outlets. Unorganized retailers
have significant competitive strengths that include consumer goodwill, credit
sales and amenability to bargaining, ability to sell loose items, convenient
timings, and home delivery.
It is feared that organized retailing will eliminate the traditional retailers. But they
would continue to exist and will not be seriously affected because organized
retailing is developing its own distinctive market. New market equilibrium will
be achieved where both organized and unorganized retailers will be able to thrive.
The market size is too expanding giving enough scope for all. Besides giving
long term relationships, small stores give additionally goods on credit and home
delivery. They are reaching to their price sensitive customers with attractive
deals. Corner store has become smart and giving value added services. There is
competitive response from traditional retailers who are gearing up to meet the
threat from organized retailers.
The size of opportunity is very large and neither the foreign nor the domestic are
the threat to unorganized stores. They have their own USP in terms of
convenience due to their proximity, personalized service and deep understanding
of their customer’s behaviour and lifestyle. Those who adapt and improve will
survive and grow. Small retailers can also form co-operatives or associations to
avail advantage of bulk purchase which facilitates fewer prices. They can directly
procure from suppliers or farmers. With some changes in policies and practices,
traditional retailing can overcome adverse impact on modern retailing.
79
References:
1. Nicolas Alexander (2005)- International Retailing, Oxford University
Press
2. Newman Andrew, Peter Cullen (2006) - Retailing: Environment and
Operations, Thompson Publication.
3. Gilbert David ( 2005) - International Retailing, Prentice Hall
4. Barry Barman, Evans Joel R. - Retail Management ( 2007) – A strategic
Approach, Prentice Hall, 10th edition.
5. Lamba A.J. (2008) - The art of Retailing, Tata McGraw-Hill Publication.
6. Jain J.N., P.P. Singh (2007) - Modern Retail Management, Deep & Deep
Publication Pvt. Ltd.
7. Nair Suja (2008) - Retail Management - Himalaya Publishing House.
8. Gupta S.L. (2007) – Retail Management: An Indian Perspective, Wisdom
Publication
9. A. Shivkumar (2007) - Retail Marketing, Excel Books.
10. Lucas, Bush, Gresham (1994) - Retail Management, Macmillan
Publishing Company.
11. Pradhan Swapna (2009) - Retailing Management: Text & Cases, 3rd
edition, Tata McGraw – Hill, Nesw Delhi.
12. Sinha Raj (2008) - Retail and Trade Management, Mohit Publications.
13. Impact of Organized Retailing on Unorganized Sector, ICRIER Working
Paper No. 222 (2008)
14. Valsamma Anthony (2009) - Small Retail Stores thrive on Customer
relations – An Empirical Study, Marketing Mastermind, Feb,68-70
80
but disappeared almost throughout the world. And in its place we find the more
refined self-service ‘cash-and-carry’ organised retail stores in the form of
supermarkets, department stores, shopping malls and the like. These stores
signified the beginning of ‘organised retailing’ and its evolution across the
world. This new breed of organised retailers have their shelves neatly stacked
with a huge variety of products which include anything from cans, packed food,
bread, dairy products, fresh meat and fish, apparel, shoes, furniture or any
conceivable item one can think of. This phenomenon of new found modern
supermarkets, department stores is in sharp contrast to the old and orthodox
grocery stores that had hitherto existed.
Thus, this is the story of a revolution - a revolution in the shopping habits of the
people across the entire world, which has virtually brought the supermarket to
the main street. This revolution is unparalleled in human history as it has
engendered the development of a distribution system that delivers food and
other products to the consumer in unprecedented abundance, variety and quality.
Retailing was never as it is seen today. It has gone through its natural process of
evolution in all areas from the initial concept of the supermarket and
department store to the shopping mall as it exists today.
It is believed that the first true department store in the world was founded in
Paris in 1852 by Aristide Boucicaut and was named Bori Marche. At that point
of t ime, the department store business was a bare-bones operation. It was
only after World War II that retailers in the West began to upgrade their
services, facilities and merchandise selection to offer a fascinating array of
additional benefits to consumers through organised retailing.
In the early part of the twentieth century, the American housewife, while shop-
ping for her family’s dinner, bought meat at one store, groceries at another, and
fruits and vegetables at still another. It was back then that chain stores which
existed such as the Great Atlantic and Pacific Tea Company (now known as the
‘A&P’ chain of stores) started introducing new methods of food selling. Because
83
they did large volumes of business, these chain stores could stock larger
quantities of a greater variety of products and afford to sell them at lower
prices. Soon these chain stores too began to sell meat, fruits, vegetables and
dairy products all under one roof and housewives liked this idea of one-stop
shopping.
In order to reduce business expenses and compete with chain store prices, some
of the smaller merchants too were compelled to open self-service stores of their
own. Initially the emphasis in these stores was only on price competitiveness
and little attention was given to making the stores attractive. Even empty garages
or ware houses were often used for the purpose. The supermarket revolution was
first sparked off in the 1920s, and by the 1950s it had won acclaim almost
throughout America.
In the 1920s, one could not even dream of retailing as it exists today. One could
never have imagined that from their humble beginnings, supermarkets in the
West would evolve into their present form. Initially, many items used to come in
bulk and were sold as it is at the retail outlets. Potatoes were sold from barrels
and later from 100 pound sacks, while sugar was sold from 100-pound sacks and
butter in tubs. The average grocery store was originally very small and expanded
only with the passage of time. The retailers were keen to acquire the know-how
to upgrade their quality and service for the consumers and to develop the best
stores possible. They all learnt a little from each other - many retailers thus
became business friends and some even became family friends. By the late
1950s, about 40 per cent of the American population was buying its groceries
from these organised retail stores4.
In America, the owners of these stores finally got together to form an association
which ultimately contributed a great deal in the development of modern retailing.
There were, among them, men with vision and determination who spoke
aggressively in seminars and conventions which were attended not only by
retailers but also by wholesalers, suppliers and even manufacturers. They soon
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Straus. Similar developments were under way in London (with Whiteleys), in
Paris (with La Samaritaine) and in Chicago, where department stores sprang up
along State Street, notably Marshall Field and Company, which remains the
second-largest store in the world (after Macy’s). In 1877, Wanamaker’s opened
in Philadelphia. Philadelphia’s John Wanamaker performed a 19th century
redevelopment to the former Pennsylvania Railroad terminal in that city and
eventually opened a modern day department store in the building.
On March 1, 1869 Zion’s Cooperative Mercantile Institution was opened in Salt
Lake City as a new community store that became the first incorporated
department store in America in 1870. A new 3-storey brick and iron store was
built in 1876, noted for its unique architecture and striped awnings. This store
was replaced by an enclosed shopping centre in 1973, and the new Zion
department store preserved the gilt-edged ornate facade of the old store. In 1999
the May Department Stores bought a 14-store ZCMI chain and changed its name
to “Meier and Frank”, a May property with eight stores in Oregon and
Washington. Subsequently May Department Stores completed a merger with
Federated Department Stores and the Meier and Frank brand ZCMI stores have
become Mac/s stores, effective late 2006.
In 1881, Joseph Lowthian Hudson opened a small men’s clothing store in
Detroit. After 10 years he had 8 stores in the midwest and was the most profitable
clothing retailer in the country. In 1893 he began construction of the immense
department store at Gratiot and Fanner streets in Detroit. The 25-storey tower
was added in 1928, and a 12-storey addition in 1946, giving the entire complex
49 acres of floor space.
In 1954 the company became a suburban shopping centre pioneer when it built
Northland 13 miles northwest of Detroit. In 1969 it merged with the Dayton
Corporation to create Dayton-Hudson headquartered in Minneapolis. George
Dayton had founded his Dayton’s Daylight store in Minneapolis in 1902 and the
AMC cooperative in 1912, built the Southdale Shopping Centre in 1956, and
started the Target discount store chain in 1962. The new corporation closed the
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flagship Hudson department store in downtown Detroit in 1983, but expanded
its other retail operations. It acquired Mervyn’s in 1978, Marshall Field’s in
1990, and renamed itself the Target Corporation in 2000.
By 1890 a new world of retailing had been created as department stores had a
clear market position as universal providers. General stores eventually became
department stores as small towns became cities. The most prominent department
stores emerged from small shops. The department store created several of North
America's first large businesses. The department store is also largely responsible
for the standard store design seen today; because of its size it required new
building materials, glass technology and new heating, amongst other architectural
.innovations. The store layouts made shopping easier for consumers regardless of
their social or economic background. The department store also offered new
customer services never before seen such as restaurants, restrooms, reading
rooms, home delivery, wrapping services, store hours, bridal registries, and new
types of merchandise displays.
Some department stores leased space to individual merchants, similar to the
changes in late 17th-century London, but by 1900 the smaller merchants were
purchased or eventually replaced by the larger companies. In this way they were
very similar to our modern malls, where the property owner has no direct interest
in the actual department store itself, other than to collect rent and provide
utilities. Today only the most specialised departments are leased out, such as
photography, photo finishing, automotive services or financial services.
However, today this is rare, as most departments - even a store’s restaurant - are
usually run by the store itself.
Before the 1950s, the department store held an eminent place in both Canada and
Australia, during both the Great Depression and World War II. Since then, they
have suffered from strong competition from specialist stores. Most recently the
competition has intensified with the advent of larger-scale superstores. Following
World War II, a number of retail establishments in the United States began to
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branded the former Switzer stores in Cork (formerly Cash’s), Limerick (formerly
Todd’s) and Galway (formerly Moon’s). There are also many self-owned
department stores around the country, especially in rural towns. The British
department store, Debenhams, has a Dublin city centre site within the Jervis
Centre. The opening of the Dundrum Shopping Centre in Dublin's suburbs saw the
arrival of two more British stores: House of Fraser and Harvey Nichols.
4.4.8 Japan: Some of the largest department stores in Japan include Daimaru,
Hankyu, Hanshin, Isetan, Marui, Matsuzakaya, Matsuya, Mitsukoshi, Printemps
Ginza, Seibu, Sogo, Takashimaya, Tobu and Tokyu. Many are owned and
operated in conjunction with private railway companies.
4.4.9 Germany: In Germany there are a number of department stores. There
are two big department store companies, Karstadt Quelle (Karstadt and Hertie)
and Kaufhof (part of the Metro AG). There are also some smaller independent
department stores. Some department stores only sell clothing. The biggest clothing
department store chain is C&A. Larger department stores in Germany usually
contain a self-service restaurant, clothing departments, a toy department, a
department for computer and electronics, a small book department (for bestsellers),
a department for newspapers and magazines and a food department (like a
supermarket).One of the most famous department stores in Germany is the
Kaufhaus des Westens (German for department store of the west) which is located
in Berlin.
4.4.10 Malaysia: Since the 1980s, Malaysia has opened its doors to many foreign
chains, such as Tesco, Carrefour, Aeon (Jusco), Makro Sogo, Parkson, etc. All of these
foreign stores must join venture; with local partners. Many of home grown
department store chains include Giant, Metrojaya, Cold Storage, Sunshine
(SuiWah), The Store, Kamdar, Mydin, etc.
4.4.11 Mexico: Mexico has a number of department stores, many coming
from other countries, such as the United States. However, some Mexican
department stores exist and serve different income levels. Examples include
Sears Mexico, Liverpool and El Palacio de Hierro.
4.4.12 Panama: Panama's first department stores such as Bazaar Frances, La
Dalia and La Villa de Paris started as textile retailers at the turn of the
nineteenth century. Later on in the twentieth century these eventually gave
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way to stores such as Felix B. Maduro, Sarah Panama, Figali, Dante, Sears,
Gran Morrison and smaller ones such as Bon Bini, Cocos, El Lider, Piccolo
and Clubman among others. Of these only Felix B. Maduro (usually referred
to as Felix by locals) and Dante remain strong. All the others have either
folded or declined although Cocos have managed to secure a good position in
the market. Today major department stores aside from these two include
Steven's and Collin’s. There are also many discount department stores such as
Conway, La Onda, Dorian’s, Saks, Madison Store and El Titan among others.
4.4.13 Netherlands: The most well-known department stores in The
Netherlands are Metz & Co, De Bijenkorf, Vroom and Dreesmann and
HEMA.
4.4.14 Thailand: The most popular department stores in Thailand are Central
Department Store which managed by Central Group. These are the list of
department stores in Thailand
• Central Department Store - has 20 branches (2007)
• The Mall - has 6 branches (2007)
• Robinson Department Store has 19 branches (2007)
• Zen Department Store has 1 branches (2007)
4.4.15 Russia: Arguably the most famous Department store in Russia is the
GUM in Moscow or the Petrovsky Passage. In Saint Petersburg there is The
Passage extremely popular.
4.4.16 Singapore: Most department stores are clustered around Orchard Road
in Singapore. The most well-known department stores in Singapore are
BHG- Formally known as Seiyu, Isetan, John Little, Marks and Spencer,
Metro, OG, Robinson and Co., Takashimaya, Tangs, etc. They can also be
found in some sub-urbs shopping malls.
4.4.17 South Korea: Most famous department stores are Shinsegae, Hyundai,
and Lotte. Shinsegae, which opened in 1930 as Mitsukoshi Gyeongseong store,
is oldest department store chain. Shinsegae, Lotte Department Store, and GS
Group has discount stores. Carrefour and Wal-Mart sells its all stores to E-
Land and Shinsegae.
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with just three stores opened by 1997. This probably had a role in Wal-Mart
experimenting with a smaller format called ‘Todo Dia’, which stocked just
12,000 items. It was an attempt to cater to a completely different income
segment. This is a strategy similar to the strategy it followed in Mexico, where it
is the market leader and operates in six retail formats.
4.5.2 China:
China has gradually opened up retailing to 100 percent FDI in the last 10 years.
Bailian is China’s biggest retailer and its largest domestic retail player. Created in
April 2003 by merging the parent companies of Hualian Supermarket, Lianhua
Supermarket, Hualian Department Store, and Shanghai No 1 Department Store,
Bailian is now a veritable giant in China’s retailing landscape. Acquisitions have
been Bailian’s strategy to gain a significant share of China’s chronically
fragmented retail market. Even after the consolidation activities, Bailian’s 2004
sales of US$ 8.16 million represented just over one percent of national retail
sales. Bailian has a major consolidation task on its hands – in store format,
branding and management – in its plans to leverage its size effectively.
Hong Kong listed Gome Electrical Appliances Holdings Ltd is China’s largest
retailer of consumer electronics, and was on the top ten listed private companies
in China in 2005. Yet even Gome, the market leader has just a 5 percent market
share in this segment. Aggressive expansion plans: In March 2005, the company
announced plans to double its retail presence in China.
Tesco, the UK’s largest food retailer finally moved into China’s grocery market
in 2004. Having evaluated the market for over three years, it finally entered
China through the acquisition of a 50 percent stake in Hymall, owned by a
Taiwanese food processor and retail, which owns 25 hypermarkets on the
mainland in a US$ 260 million transaction. Tesco is entering the arena against
global rivals such as Wal-Mart, Carrefour and Metro in addition to Bailian. Yet,
for all the competition, Tesco’s timing may be just about right. For a start, the
company can take advantage of the growing popularity among Chinese
consumers for modern trading practices – particularly hypermarkets. More
importantly, with China just having opened its retail market in December 2004 in
line with its obligation as a member of the WTO, Tesco is now free to decide on
its expansion unencumbered by restrictive regulations.
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4.5.3 UK and Europe A number of structural changes in the retail environment have become evident
during the post-war era. These developments have occurred throughout Europe,
although they are apparent to differing extents in different markets. Three
fundamental related transitions have occurred in the European retail
environment: first, the balance of power has shifted along the distribution channel
from the manufacturers to the retailers; secondly, traditional independent retailers
and co-operatives have lost market share to multiple chain organizations and
thirdly, markets have become increasingly consolidated and concentrated. The
second point above is reinforced by Hollinger (1998), who identified that the
Co-op had fifty mutual retail societies, of which the fifteen largest accounted for
more than 90 per cent of the movement’s trade. In fact in 1985 the Co- operative
movement as a whole could boast that it was the UK’s leading grocery retailer,
as well as a banker, insurance provider, funeral services group and agricultural
operator. The Co-op business allowed its competitors such as Tesco, J. Sainsbury,
ASDA and Safeway to invest heavily in store development, delivering a consistent
product range to customers while the Co-op’s individual societies were left to
languish.
It is believed that globally, retail management (in the initial period) followed a
passive supply led approach, i.e., markets were assumed to exist and the retailer
was only required to provide an acceptable outlet to enable the consumer to
make purchases. In the initial stages of retailing, there was minimal branding
and competitive advantage was obtained by creating efficiencies in operational
costs. The changes occurring in the economic scenario helped in the inception of
the Disneyland Theme park concept. Similarly, McDonald management was
able to open their first fast food outlet in the USA in 1955. Subsequently, there
were some important factors which prompted retailers and manufacturers to
work closely in order to satisfy the needs of the consumers. These factors are:
(a) An increase in demand (or oversupply of retail outlets) to serve similar
markets, coupled with the risks associated with the market place, has prompted
retailers to make better use of marketing to survive at the market place.
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4.7 Successful Global Retailer ‘Wal-Mart’
Wal-Mart, a name we are all familiar with even in India, is not just a retailer but
truly an institution of its own. The hitherto American retail giant is undoubtedly
the largest and the most successful retail company the world has ever witnessed.
In 2002 for the first time in its history it has been declared the largest
organisation in the world according to Fortune with a turnover of US$ 220 billion
beating Exxon Mobil and all other conglomerates globally. The company
currently has over 1900 Wal-Mart stores and 565 Wal-Mart super centers apart
from the over 450 Sam's Club Warehouse Stores and even this number has been
rapidly increasing at the rate of almost one new store every day in some location
of the world. Sam Walton, the founder of Wal-Mart was declared the richest man
in America in 1985 and even to this day, long after his death, the rest of the
Walton family are stated to be among the 10 wealthiest families in the world. It is
believed that they have created over US$ 20 billion of family wealth within the
last 40 years only since the inception of the company. In fact, according to some
studies they are considered second only to Bill Gates, and their total accumulated
wealth is believed to be much more than even what the Rockefellers and the
Fords had during their times.
However, the real wealth that Sam Walton truly created was the wealth of his
highly motivated workforce whom he termed as his associates. His commitment
to providing his customers greater value for money and his philosophy of
partnership still remain the cornerstones of the success of Wal-Mart even after
his death. What is most intriguing is the fact that while there were many chain
store retailers operating for much longer periods of time, Wal-Mart which started
with only one store about 40 years ago, has now become the world’s largest
retailer with over 3000 stores, and an annual sales of over US$ 137 billion and
900,000 employees who are treated as partners of the company9.
Although the young Sam Walton did a brief stint as an army officer, his retailing
career commenced only as a management trainee at J C Penny in 1940 where he
started at a salary of US$ 45 per month. It was only in 1945 that Sam actually
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ventured out on his own for the first time in his life by buying a ‘Ben Franklin’
variety store franchise in Newport, Arkansas. When his landlord refused to
renew his lease in 1950, Walton re-located to Bentonville, Arkansas and opened
a ‘Walton 5 & 10’. The location still remains the corporate headquarters of Wal-
Mart Inc, in spite of the company becoming the largest retailer in the world
today. By 1962, Walton’s business had grown to five stores, by which time Wal-
Mart had created a firm corporate strategy to offer branded merchandise at
discounted prices to small communities. Walton truly believed that the key to
success was people: his customers and his employees (called ‘associates,’ a term
adopted from his initial job at Penny).
Sam Walton died in 1992, but his spirit and ideas remain a driving force at Wal-
Mart even today. With annual sales of over US$ 200 billion, Wal-Mart is today
the largest retail merchant on the planet. The Company has always believed in
providing quality merchandise at the lowest possible retail prices and this
philosophy has till this day been the secret of its unprecedented success. In fact
Wal-Mart’s competitors have always been baffled by how the company is able to
maintain its high standards of service and facilities, and still be able to offer the
most competitive prices. The tremendous effect that this policy of Wal-Mart had
on the retail industry at large is evident from the now very famous lawsuit, which
was initiated against the retail giant. The suit was related to charges against Wal-
Mart for deliberately engaging in price-cutting to drive the smaller competitors
out of business. However, after a very long and tiring round of litigation which
lasted a couple of years, the Arkansas Supreme Court finally ruled in favour of
Wal-Mart. It held that the cost benefit to the public at large on account of
superior technology was in no way an indication of unfair trade practices.
However, despite its aggressiveness and phenomenal success in the domestic
market, Wal-Mart as a company had never been as aggressive as some of its
competitors in terms of overseas expansion. However, the company’s policy in
this regard has lately seen a drastic change and a far more aggressive approach in
this area in the more recent past. In fact so aggressive has been its entry into
some of the overseas markets that it has often given the impression of being a
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With these huge attractive infrastructures, organized retailers create environment
which boosts shopping activity. Modern retail Business focuses on ‘One stop
shopping model’ by expanding product assortment and enhancing store
ambience. Share of organized retail to total market is given in following table.
Table 4.5 : Share of Organized Retail to Total Market
Retail Segment 2004 2005 2006 2007
Clothing, Textiles & Fashion
Accessories
13.6% 15.8% 18.9% 22.7%
Jewellery 2.0% 2.3% 2.8% 3.3%
Watches 39.6% 43.5% 45.6% 48.9%
Footwear 25.0% 30.3% 37.8% 48.4%
Health & Beauty Care Services 6.0% 7.6% 10.6% 14.3%
Pharmaceuticals 1.8% 2.2% 2.6% 3.2%
Consumer Durables, Home Appliances 7.8% 8.8% 10.4% 12.3%
Mobile handsets. Accessories &
Services
6.5% 7.0% 8.0% 9.9%
Furnishings – Home & Office 6.7% 7.6% 9.1% 11.0%
Food & Grocery 0.5% 0.6% 0.8% 1.1%
Out-of-Home Food (Catering) Services 5.7% 5.8% 6.9% 8.0%
Books, Music & Gifts 9.8% 11.7% 12.6% 13.4%
Entertainment 2.6% 3.3% 4.1% 5.3%
(Source: Images F & R Research (2006))
4.10 Structure of the Indian Market
India's population of more than 1 billion may at first glance seem like a
tremendous opportunity for retailers, but in reality, it has become their biggest
nightmare. Not only does the uncontrollable population pose innumerable
problems, its disproportionate density also aggravates the situation. The
population of China, at approximately 1.2 billion, is only about 20 per cent
higher than that of India while its size approximately 300 per cent more than that
of India. Apart from its uncontrollable population, it is the high density of
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population and the unplanned expansion of its important towns and cities that
pose numerous problems in India today.
Table 4.6 Population and Proportion of Total Retail Market
City Type Population in
crores
Population of total retail market
( % )
2001 2025 2004 2010 2015 2025
Metroes, Mini Metros and
Cities
6.7 13 15 18 20 28
Top Cities, Population > 1
million ( 27 cities )
3.7 7.2 6 6 7 10
Large Cities Population 0.5
to 1 million ( 32 cities )
2.4 4.5 2 3 3 4
Rest of India 5500 towns +
6 lakh Villages
87.4 115.3 77 73 69 57
( Source : NCAER, CSSO TSMG Analysis (2006))
The social infrastructure in the country too is deficient and has not been
developed in an organised manner either. Since retailing is an integral part of the
social infrastructure of any country, the haphazard growth of the social
infrastructure in India has caused the Indian retail market to grow in a highly
fragmented manner over the last five decades. There are presently over four
million retail outlets in India's approximately 5500 urban markets and over
5,00,000 villages. While there has been virtually no development of organised
retailing, the retailing scenario in the villages has been even more depressing
due to various factors. The lack of proper roads, poor basic infrastructure and
transport system have all contributed to this situation and very little effort is
being made to improve matters in this area.
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city will reduce the catchments population of an outlet, thus increasing the
density of occurrence. Delhi and Bangalore fall in the latter category.
Towns with lower income and higher unemployment trends would give rise to
fragmentation of the retail universe resulting in a large number of small outlets.
Calcutta, Howrah, Patna and Guwahati are some apt examples of such
fragmentation. The composition of the retail universe in India is also quite
diverse. As is evident from the tables given above, grocers account for the largest
block of 32 per cent of the total retail outlets while the tiny paan stores have
emerged as the second largest block accounting for about 15 %.
Table 4.12: Structure of the Indian Market
Year 1994 - 95 2000 – 01 2005 – 06
Destitutes 35 % 24 % 17 %
Aspirants 48 % 32 % 33 %
Climbers 48 % 66 % 78 %
Consuming Class 29 % 55% 75 %
Very Rich 1 % 3 % 6 %
(Source: Business India Projections Based on NCAER Research Published in Nov. 1997)
Table 4 13: Segregation of Income Groups
Monthly Household Income (‘000)
Number of individuals in Urban Area ( millions )
Number of individuals in Rural Area ( millions )
10 to 15 14 19
15 to 30 16.3 6.2
30 to 50 3.9 1.4
50 to 125 3.4 0.9
Above 125 1.7 0.2
(Source: Business India Projections Based on NCAER Research Published in Nov. 1997)
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The future of the retail industry in India thus rests entirely in the hands of the
retail community itself which should have no expectations from the government.
While most retailers, especially supermarkets, around the world are considered to
be a crucial part of the social infrastructure, India has still not woken up to this
reality nor given the retail sector the importance and impetus it deserves.
Retailing in India remains just the same as it has been for several generations,
with small, independent, owner-managed shops constituting a chunk of the total
of 4 million retail outlets that are estimated to dot the country’s landscape.
According to surveys conducted by AIMS (Asian Information Marketing and
Social Research) in 1996-97, it is estimated that there are over 2.1 million retail
outlets stocking FMCG items in urban India alone. This implies that there is one
outlet for every 125 urban residents. From the tables given above, we have
observed that the north and east zones have a significantly higher density of retail
outlets as compared to the south and west zones.
The very concept of retailing, however, is still under developed in India, with
emphasis only being laid on distribution. The Indian retail market is quite large
but highly fragmented, comprising very few large retailers. It is estimated that
there are approximately 1.8 million urban retail outlets in this unorganised sector,
out of which only 7 per cent achieve sales of over Rs 8 lakh per annum. These
traditional corner stores, at best, constitute nothing more than a cost and
distribution overhead. At worst, they destroy the very concept of making
shopping a pleasant experience. In fact, it is estimated that till date less than 2 per
cent of the retailing business in India comes from organised retailing.
There are approximately only 100 odd credible organised retailers comprising
supermarkets and department stores in the entire country, the majority of which
too have only come up during the last five years or so. Most of these stores are
owner-managed and are independent outlets, while only a handful of companies
have actually got down to serious chain store retailing yet. While almost 85 per
cent of the shopping in the US is done in organised stores, it is a very different
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merchandise, offer limited services and at low prices. For instance, Subiksha and
Margin Free Super Market.
4.11.4) Department Stores: Large stores ranging from 20000-50000 sq. ft., catering to a
variety of consumer needs. Further classified into localised departments such as
clothing, toys, home, groceries, etc. Departmental Stores are expected to take
over the apparel business from exclusive brand showrooms. Among these, the
biggest success is K Raheja’s Shoppers Stop, which started in Mumbai and now has
more than seven large stores (over 30.000 sq. ft.) across India and even has its
own in store brand for clothes called Stop. A store having several departments
such as clothing, personal care and cosmetics, books and stationeries, house ware
goods, electronics etc. all under a single roof, although individually functioning
as a Strategic Business Unit (SBU). These stores are large in size (or area) more
often owned by large or national chains. For instance, Life Style, Shoppers’ Stop,
Pantaloon, Westside, Ebony.
4.11.5) Hypermarkets/Supermarkets: Large self service outlets, catering to varied
shopper needs are termed as Supermarkets. These are located in or near residential
high streets. These stores today contribute to 30 per cent of all food and grocery
organised retail sales.14 Super Markets can further be classified in to mini
supermarkets typically 1,000 sq. ft. to 2,000 sq. ft. and large supermarkets ranging
from of 3,500 sq. ft. to 5,000 sq. ft. having a strong focus on food and grocery and
personal sales. Hyper markets are very large in size, carry grocery, hardware,
appliance and other general merchandise, with self service facilities, usually
located in warehouse type structures with large parking facilities. For instance,
Trent's (a Tata Enterprise) Star India Bazaar, Giant (RPG Group) and Big
Bazaar( Pantaloon Retail India).Hyper markets are very large in size, carry
grocery, hardware, appliance and other general merchandise, with self service
facilities, usually located in warehouse type structures with large parking
facilities. For instance, Trent's (a Tata Enterprise) Star India Bazaar, Giant (RPG
Group) and Big Bazaar (Pantaloon Retail India).
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4.11.6) Convenience Stores: Ideally located close to residential areas to enable
target customers have easy accessibility and select convenient merchandise such
as beverages, ready-to-eat snacks, grocery etc. For instance the friendly
neighbourhood grocery stores. These are relatively small stores 400-2,000 sq. feet
located near residential areas. They stock a limited range of high-turnover
convenience products and are usually open for extended periods during the day,
seven days a week. Prices are slightly higher due to the convenience premium.
4.11.7) MBO’s: Multi Brand outlets, also known as Category Killers, offer several
brands across a single product category. These usually do well in busy market
places and Metros.
4.11.8) Shopping Plaza: The shopping plaza will be a configuration of many
tenants using space of 1,000 sq ft. or so for putting up stores within a single
building. For instance, Fountain Plass (Chennai), Modi Arcade Plaza (Bangalore)
etc.
4.11.9) Kiosk: Kiosk as a store often is a concession format store placed within a
mall/shopping centre, a bus station, airport etc. It is a free standing pavilion open
on one or more sides. For instance, in a bookstore kiosk, customers are provided
with online catalogue service to help them to identify titles and read reviews
before making a purchase decision.
4.11.10) Standalone Stores —the Oldest Retail Format
Standalone stores can be defined as single self service stores and are an
important supermarket store type within the modern Indian retail environment.
India has been witnessing a rise in various formats in the past few years.
Although traditional retail formats such as ‘Kirana stores’, grocery stores and so
on still exist in the market, modern retail formats are growing in importance for
the FMCG marketer. This is because of the availability of a wide range of
products and services and increase in awareness among the customers. In fact
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It can be observed that Pantaloon has the highest estimated sales. The second
largest retailer was RPG, followed by Shopper’s stop. In terms of floor space,
Pantaloon was again at the top having 30 lakh sq.ft. in 2004-05. A recent 2008
report on India’s organized retail sector predicts that the existing players in this
sector such as Bharati, RPG, Pantaloons, Reliance, Birla's and so on are going to
witness a multifold growth in the coming 5-10 years. This dynamic sector will also
witness the debut of other major Indian business players such as Mahindra,
Parsavnath, DLF, Hero Honda and India bulls. These players are making it happen
big in a short span because they are keeping the important factors such as
operational efficiency as their prime concern. This is also supported by extremely
high concern for customer satisfaction and extravagant experience for the
customers while consuming products and services at organized retail stores. India
has a highly competitive retail industry; therefore, it is very essential to have know-
how of all those factors which will help retailers to sustain in the long run.
4.13 Region-wise Analysis of Indian Retailing
The existence of major hindrances in the development of organised retailing in
India, does not, however, imply that supermarkets and department stores are
entirely non-viable in India. All problems notwithstanding, the first signs of a
retail revolution are already visible in the country and this is so in spite of the
immense diversity between regions within the country. It is usually felt that
extending retail operations from one region to another within India is like
travelling from one country to another. The tastes, habits, consumption and
buying patterns are vastly different between various regions making it imperative
for a retailer to possess a very sound knowledge of each region that he operates
in. Diversity of the country in relation to the growth of retail operations and the
present Indian retail scenario can be examined. It must also be mentioned here
that some extremely interesting and very large retail chains are also expected to
come up in the near future in the country.
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4.13.1 Northern India
The northern part of India comprises some of the largest states in India but has
seen very little development in terms of organised retailing, except in places like
Delhi , Faridabad, Jaipur, Lucknow and Allahabad among other cities. Some of
the important cities and towns in the various states of northern India which may
be termed as attractive retail destinations are:
• Delhi - New Delhi
• Haryana - Faridabad, Gurgaon, Rohtak
• Himachal Pradesh - Shimla
• Jammu & Kashmir - Srinagar, Jammu, Gulmarg
• Punjab - Chandigarh, Amritsar, Ludhiana, Jalandhar,
Patiala
• Rajasthan - Jaipur, Jodhpur
• Uttar Pradesh - Dehra Dun, Noida, Nainital, Meerut, Agra,
Lucknow, Kanpur, Allahabad, Moradabad
It has been observed that whatever little growth has taken place in the organised
retail sector of late, has taken place primarily in the apparel and fast food sectors.
Many international readymade garment brands have discovered that franchising
is the most successful method of branching out into India and many of them have
opened their exclusive outlets by giving franchisees throughout various parts of
the country. Companies like Benetton, Arrow, La Coste, Van Heusen,
Weekender, Raymonds, Lee, Adidas and Reebok have taken the lead in this
regard and have opened many such stores all over the country, especially in
northern India, with a fair degree of success. However, apart from these
relatively small franchised stores, there is also the emergence of larger stores and
multi-storeyed department stores especially in the major cities of northern India
like Delhi, Chandigarh and Jaipur.
Large multi-storeyed department stores like Ebony, Snowhite, Big Jo’s, Jainsons,
Landmark and the latest edition of Shoppers Stop have also become quite popular
within their respective regions. These relatively large department stores usually
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4.13.2 Southern India
The southern part of India is undoubtedly the most literate part of the entire
country. It has the highest percentage of literacy and also has the highest
number of organised retail stores compared to any other region. In fact even the
global recognition that our country has received in the IT industry, has largely
been possible on account of the vast pool of wealth that exists in the southern
part of the country. It is in many states of South India that most of the biggest
global names in the Infotech industry have their offices and an extremely large
pool of manpower talent, which has also brought more prosperity to these
states.
It is also said that organised retailing in India actually originated from the South
and it is from here that it has been gradually spreading to other parts of the entire
country. The level of retailing in some southern cities is also far higher than in
most other parts of India. Some of the important cities and towns in the states of
southern India are as follows:
• Andhra Pradesh - Hyderabad, Secunderabad, Vishakapatnam
• Karnataka - Bangalore, Belgaum, Mangalore, Mysore
• Keral - Trivandrum, Kochi, Calicut, Kottayam, Kannur
• Tamilnadu - Chennai, Erode, Salem, Vellore, Coimbatore, Trichy,
Kanyakumari
• Andaman & Nicobar Islands - Port Blair
• Pondicherry
Almost all major national and international brands have their stores across south-
ern India. While some of these outlets are company-owned, others are franchised.
Apart from the outlets of some of the major companies, many small Indian
companies have also been promoted by dynamic entrepreneurs who operate some
very popular retail stores over a large spectrum of store formats in the region. In
fact though the density of population in the South is much lesser in comparison
to the north, there are a very large number of organised retail stores here
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including fast food stores, supermarkets, apparel stores and consumer electronic
stores among others.
Some of the major retailers of south India are as follows:
Nilgiris
It is said that the supermarket way of shopping was introduced in India by this
then fairly small South Indian family. This company known to have been called
the ‘Nilgiris’ chain of supermarkets has been operating very successfully in
Bangalore, Chennai, Coimbatore, Erode and some other South Indian towns and
cities since more than the four decades. In fact the advent of Nilgiris has been a
tremendous boon for consumers in these towns who have been able to do their
one-stop grocery shopping here. The tremendous customer traffic at these
Nilgiris stores in turn has fascinated many entrepreneurs in South India so much
that a large number of retail stores of various store formats have since opened all
over South India. The Nilgiris chain of stores too has grown, though rather
slowly over the last four decades and presently has about 20 supermarkets, some
company-owned and others franchised. They also have ambitious plans of
opening a large hypermarket (over 100,000 square feet) on the outskirts of
Bangalore in the near future which could become the largest single store in the
entire country.
FoodWorld
In May, 1996 the 100-year old Chennai-based Spencers and Company, which
was taken over by RPG Enterprises in 1989, started a supermarket chain from
Chennai with the brand name 'FoodWorld'. This company was set up under a tie-
up with the retail wing of the US-based $40 billion Jardine Matheson group,
Dairy Farm International, Hong Kong who currently operate over 2400 stores in
a variety of formats all over the world. The stores of Dairy Farm are extremely
popular in many countries in south-east Asia, Australia, New Zealand, Spain and
the United Kingdom. It is said that in India, the company tasted blood right from
its inception, which is apparent from the fact that it did not waste any time in
implementing its expansion plans unlike the Nilgiris.
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not more, but real progress has been extremely low. This is so because the
population in India is generally not very mobile like in the US or Europe and
prefers to remain in the same areas as they have been for many generations even
if the economy of the region is in shatters.
Retailing in eastern India has, by and large, been extremely fragmented with a
majority of many small outlets and hence very few major retailers have set foot
in this region yet. Although the population in the region is quite large, the buying
power of the consumer is still very limited. It is primarily because of this that
most large retailers including garment as well as fast food stores prefer not to
include the region in their expansion plans, at least in the near future. Companies
even prefer to open stores in cities such as Indore and Hyderabad but avoid the
relatively more populated cities and towns like Kolkata or even Jamshedpur.
Some of the important states and towns in the region, which may be termed as
attractive retail destinations, are as follows:
• West Bengal - Kolkata, Darjeeling, Siliguri, Haldia, Kalyani,
Durgapur
• Assam - Gauhati, Dibrugarh, Silchar, Jorhat
• Bihar - Dhanbad, Jamshedpur, Ranchi, Patna
• Orissa - Bhubaneswar, Cuttack, Puri, Balasore, Rourkela
• Nagaland - Kohima, Dimapur
• Meghalaya - Shillong
• Sikkim - Gangtok
• Arunachal Pradesh - Itanagar
• Manipur - Imphal
• Tripura - Agartala
Some of the major retailers of the region are:
Vishal Garments
It is believed that after all major store formats failed in eastern India, it was only
the discount format of Vishal Garments that was successful. The company’s first
store is located on prime Chowringhee Road very close to the historical New
133
Market of Kolkata. The company believes in round-the-year sales in which it
heavily discounts its products on the lines of international discount stores. The
primary focus of the company is on garments for all ages. The company has also
recently opened its second store, a large 3000 square feet store located in the
prime Gariahat area of South Kolkata, where it also follows the same policies of
‘everyday low prices’.
Pantaloon
Pantaloon was undoubtedly the first true international retailer to be successful
in the city of Kolkata. The company has its head office in Mumbai and as a
matter of prime policy only believes in having its own stores and does not
believe in the concept of franchising. The company has an extremely successful
department store format and its policy of low-cost high-volume products has
been paying off extremely well especially in Kolkata. Apart from its store in
Kolkata, the company has seven more branches including one each in Chennai,
Hyderabad, Mumbai, Nagpur, Pune, Secunderabad and Thane.
It has been observed especially in the eastern region that retailers dealing in
essential household items are far more successful than those dealing in
upmarket or luxury products. The one type of retail format that would definitely
be a grand success in the region would be that of a ‘no-frill, low price
supermarket/convenience store’ format focusing primarily on essential items of
daily necessity.
4.13.4 Western India
Western India is perhaps the most advanced and progressive region of the
country. This region is also economically the most advanced as a result of
which the major part of the population here also has greater buying power as
compared with most other parts of the country. Some of the important cities
and towns in the various states of Western India, which are attractive retail
destinations, are:
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stores across 13 states at the end of FY 2007-08. RRL launched its first
‘Reliance Digital’ store in April 2007 and its first and India’s largest hypermarket
‘Reliance Mart’ in Ahmedabad in August 2007. RRL has also launched its first
few specialty stores for apparel (Reliance Trends), footwear (Reliance
Footprints), jewellery (Reliance Jewels), books, music and other lifestyle
products (Reliance Timeout), auto accessories and service format (Reliance
Autozone) and also an initiative in the health and wellness business through
‘Reliance Wellness’. In each of these store formats, RRL is offering a unique set
of products and services at a value price point that has not been available so far to
the Indian consumer. Overall, RRL is well positioned to rapidly expand its
existing network of 590 stores which operate in 57 cities.
During the year, RRL also focused on building strong relationships in the agri-
business value chain and has commenced marketing fruits, vegetables and staples
that the company sources directly to wholesalers and institutional customers.
RRL provides its customers with high quality produce that has better shelf life
and more consistent quality than was available earlier. RRL has made significant
progress in establishing state-of-the-art staples processing centers and expects to
make them operational by May 2008. RRL also expanded its supply chain
infrastructure. The Company is fully geared to meet the requirements of its
rapidly growing store network in an efficient manner.
Recognizing that strategic alliances are going to be a key driver to its retail
business, in FY 2007-08, RRL established key joint ventures with international
partners in apparel, optical and office products businesses. Further, RRL will
continue to seek synergistic opportunities with other international players as well.
This year, RRL will continue its focus on rapid expansion of the existing and
other new formats across India.
Shoppers Stop
The K Raheja group of companies, considered to be one of the largest real estate
developers in the country, also owns a few cinema halls. When the cinema hall
business was no longer viable, the company began exploring many possibilities
138
and were finally convinced that if real estate developers in other parts of the
world could succeed in retailing so could they. In October 1991, Shopper’s Stop
made its first serious attempt to create a world class department store in
Maharashtra. The cinema hall in Andheri, in Mumbai's western suburbs was
gradually but extensively renovated over a couple of years to ultimately make the
property appropriate for a 32,000 square feet department store. The store is
primarily an apparel store offering garment and garment accessories for both men
and women of all ages including a very attractive special section for children.
The store was a great success right from its inception and was visited by over
3000 customers on week-days and about 6000 on weekends. As mentioned
before the large population of Mumbai, which had the resources to spend, had
been quite desperate for such a store for a very long time. However, never before
did they ever get the opportunity to witness such a large variety of products under
one roof and at reasonable prices. The sheer convenience and service was hitherto
unheard of in this part of the country and the positive response encouraged the
group to think bigger. The company now has some very successful stores with
almost identical store formats in cities like Bangalore, Chennai, Hyderabad and
even one in Jaipur. The company has a current turnover in excess of 160 crores
per annum and is believed to have a sales growth of over 40 per cent per annum.
Westside
As mentioned before Westside, the retailing outfit of the Tata’s, has also created
a department store format with emphasis on garment and garment accessories.
They began their commercial operations in Mumbai only a couple of years ago
and much later than Shopper's Stop but with much fanfare. Within a very short
span of time, apart from Mumbai, they too have already expanded their
operations into Chennai, Bangalore and Hyderabad and have some very
ambitious plans for the near future as well. In fact their seriousness and financial
power to back their entry into the exciting retail arena in India, were
demonstrated during one of their interesting promotion campaigns when they
139
Star India
Bazaar
Hypermarket 2 Chota
Budget,
Lambi
Shopping
Food and Non
Food
Discount
Piramyd Department
Stores
7 ----- Apparel,
accessories,
cosmetics,
home
Regular
Spencer’s
Express
Convenience
Stores
93 ---- Food and
Grocery and
Basic home
needs
Regular
Spencer’s
Daily
Supermarket 143 --- Food and
Grocery and
Basic home
needs
Marginal
Discount
Spencer’s
Super
Supermarket 8 ---- Food and
Grocery and
Basic home
needs
Marginal
Discount
Spencer’s
Hyper
Hypermarket 12 ---- Food and Non
Food
Discount
( Source ; Retailing Management By Swapna Pradhan, 3rd Edition, pg. 95 – 96 )
4.14 Main Drivers of Retailing in India
4.14.1) Rising incomes
Over the past decade, India's middle- and high-income population has grown pace of
over 10% per annum. Though this growth is most evident in urban areas it has also
taken place in rural markets. Further, the number of households earning above
Rs.1,50,000 per annum is about 30 million and expected to grow to 80 million 19. This
143
growing high-income population triggering the demand for consumer goods, leading
to the proliferation of quality of higher priced products.
4.14.2) Consumerism Cycle
Consumer cycle starts with the industry dictating the market. Eventually time the
distributor gains control over the market; at this stage the distributor is an important
link between manufacturer and customer. When the market starts developing and
expanding its horizons, retailers turn into the vital in this supply chain. India is
entering this third stage where retailers control market. Being the closest link to the
consumer in the supply chain, retailers profit accordingly. Manufacturers spend a lot
of money promoting a product; profit it's not on the shop-shelf, consumers won't be
able to buy it. Manufacturers have also realised that retailer recommendations matter,
particularly in smaller towns where retailers are figures of authority or opinion
leaders. With shopping attitudes changing, the Indian market today desires value-
added products and services with good ambience and brands which only a retailer can
provide. Hence good retailer relations are a must. Manufacturers are ready fees to get
retailers to stock a product, or display charges to place it prominently.
4.14.3) Establishment of the Supply Chain
Over the past few years, the consumer goods sector has been transformed
by increased liberalization, continuous reduction in customs duty, a shift from
quota to tariff-based systems for imports and sophistication in manufacturing.
Entry restrictions for multinationals have been removed in nearly all sectors. All
this has enabled chain retailers to enjoy better range depth and, sourcing options
as well as improved average margins. There has been a proliferation in, the range
across all categories, with a simultaneous increase in the supply of f products and
quality retail space. According to a study, there are over 18,000 stock-keeping
units (SKUs are products and their variants, of type and size, counted
individually), while most retailers have the space for at most 5,000-2,000 units.
This has tempted a number of real estate companies and other corporate into
investing in malls and other retail formats.
144
4.14.7) New Entrepreneurs
The growing attractiveness of the retail trade has begun to attract new
entrepreneurs with ideas, and venture capitalists with funds. Venture capitalists like
ICICI and IL&FS are also increasingly willing west in retail businesses.
4.14.8) Explosion of Media
There has been an explosion in media as well during the past decade; Kick-started by
the cable explosion during the Gulf War, television has accelerated to a point where
there are more cable connections than telephones in Indian, homes (225 million vs. 23
million), and about 90 channels are being aired at all times. This media
bombardment has exposed the Indian consumer to the lifestyles of more affluent
countries and raised their aspirations and expectations from the shopping
experience; they want more choice, value, service, experience and convenience.
4.14.9) Foreign Retailers Looking for Entry Options
The increasing attractiveness of the sector has drawn the interest of a number of global
retailers. With the opening up of the economy, more and more MNCs have entered
the Indian business arena through joint ventures, franchisees or even self-owned
stores. The very first MNC to get into the business was Spencer’s, a tie-up between the
RPG Group and Dairy Farm International, $ l0 billion Hong Kong-based Company,
and a part of the Jardine Matheson, group. While foreign retailers cannot start
operations on their own mainly because of FDI restrictions on the sector, a number
of companies, Kingfisher, Metro, Carrefour and Ahold, are exploring entry options.
In appe1rel, Benetton, Lifestyle and Zegna are already in business, and Dairy Farm
has a number of retailing joint ventures in India.
4.14.10) Technological Impact
Technology is probably the most dynamic change agent in the retailing industry.
The computerization of the various operations in a retail store including inventory
management, billing and payments as well database (customers) management -
widespread use of bar coding, point of sale terminals and Management Information
Systems (MIS) has changed the face of Retailing drastically. Apart from providing the
retailers with better and timely about their operations, the technology also performs
such tasks as preventing theft store's goods and creating a better shopping
148
atmosphere. This is help of closed-circuit televisions, video walls and in-store video
network forms of interactive applications ranging from CD-ROMs to let customers
select and buy products.
4.14.11) Building Chains Around Brands
Apparel, footwear and consumer durable brands have driven the growth of specially
chains and upgraded existing multi-brand outlets. Some like Reebok claim to have
entered retailing because of the paucity of suitable multi-brand retailing options.
4.14.12) Expansion of Family-Owned Businesses
The most successful of these are the Rs.150 crores Viveks, the 40-year-old
Chennai consumer durables chain, the Rs.50-crore Pantaloon apparel retail
business, and Bangalore’s food retailer Nilgiris. With the new-age demanding
consumer preferring to shop in these big retail chains, traditional ‘bania’ shops
will face a difficult time trying to meet consumer expectations. This will make
retailing an unattractive proposition for them. The process is likely to be kick-
started by grocery stores transforming into supermarkets since the margins in
the grocery trade are the lowest in the business. Further, the ‘bania’ is no longer
considered a trusted friend. Managing inventory is a challenge in the small
spaces that they operate from and it is a tough balancing act between stocks-
out and keeping low-turnover SKUS. The younger generation, however, is far
more aware of the cost of real estate or indeed of higher-margin retailing
opportunities. Moving up to newer business opportunities and creating the
space for a new model will take top priority.
4.14.13) Awareness in Rural Market
The rural market is beginning to emerge as an important consumption area,
accounting for over one-third of the demand for most key consumer durables
and non-durable products. In response, manufacturers of consumer goods-both
FMCGs and durables have begun developing new products (LG television,
shampoo sachets, Ruf’n Tuf jeans) and marketing strategies (using a village
‘haat’ for brand promotions) with the rural consumer in mind.
149
The recent years have witnessed rapid transformation and vigorous profits in
Indian retail stores across various categories. This can be contemplated as a result
of the changing attitude of Indian consumers and their overwhelming acceptance
to modern retail formats. Asian markets witness a shift in trend from traditional
retailing to organized retailing driven by the liberalizations on Foreign Direct
Investments. For example, in China there was a drastic structural development
after FDI was permitted in retailing. India has entered a stage of positive
economic development which requires liberalization of the retail market to gain a
significant enhancement.
Domestic consumption market in India is estimated to grow approximately 7 to
8% with retail accounting for 60% of the overall segment. Of this 60%, organized
retail is just 5% which is comparatively lesser than other countries with emerging
economies. In developed countries organized retailing is the established way of
selling consumer products. Despite the low percentage, Indian textile industry has
grown noticeably in organized retailing of textile products. The negative phase in
exports may have compelled the Indian textile retailers to explore the
opportunities in the domestic market substantially causing the outstanding growth
in the concerned segment. These indications give a positive notion that organized
retailing has arrived in the Indian market and is here to stay. It is expected to
grow 25-30 per cent annually and would triple in size from Rs35,000 crores in
2004-05 to Rs109,000 crores ($24 billion) by 201021.
India is on the radar screen in the retail world and global retailers and at their
wings seeking entry into the Indian retail market. The market is growing at a
steady rate of 11-12 percent. The inherent attractiveness of this segment lures
retail giants and investments are likely to sky rocket with an estimate over Rs 200
billion by end of 201022. Indian retail market is considered to be the second
largest in the world in terms of growth potential.
A vast majority of India's young population favors branded garments. With the
influence of visual media, urban consumer trends have spread across the rural
areas also. The shopping spree of the young Indians for clothing, favorable
income demographics, increasing population of young people joining the
153
workforce with considerably higher disposable income, has unleashed new
possibilities for retail growth even in the rural areas. Thus, 85 % of the retail
boom which was focused only in the metros has started to infiltrate towards
smaller cities and towns. Tier-II cities are already receiving focused attention of
retailers and the other smaller towns and even villages are likely to join in the
coming years. This is a positive trend, and the contribution of these tier-II cities
to total organized retailing sales is expected to grow to 20-25 %.
4.16 Challenges facing the Organized Retail Industry:
Despite the rosy hopes, some facts have to be considered to positively initiate the
retail momentum and ensure its sustained growth. The major constraint of the
organized retail market in India is the competition from the un-organized sector.
Traditional retailing has been deep rooted in India for the past few centuries and
enjoys the benefits of low cost structure, mostly owner-operated, therein resulting
in less labor costs and little or no taxes to pay. Consumer familiarity with the
traditional formats for generations is the greatest advantage to the un-organized
sector. On the contrary, organized sector have big expenses like higher labor
costs, social security to employees, bigger premises, and taxes to meet.
The challenges facing the Indian organized retail sector are various and these are
stopping the Indian retail industry from reaching its full potential. The behavior
pattern of the Indian consumer has undergone a major change. This has happened
for the Indian consumer is earning more now, western influences, women
working force is increasing, desire for luxury items and better quality. Indian
consumer now wants to eat, shop, and get entertained under the same roof. All
these have lead the Indian organized retail sector to give more in order to satisfy
the Indian customer.
The biggest challenge facing the Indian organized retail sector is the lack of retail
space. With real estate prices escalating due to increase in demand from the
Indian organized retail sector, it is posing a challenge to its growth. With Indian
retailers having to shell out more for retail space it is effecting there overall
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References:
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2. Nair Suja (2008) - Retail Management - Himalaya Publishing House.
3. Planet Retail Database (2006).
4. Shewan M. (2006) – Retail Management – Sonali Publiation.
5. Diamond Jay, Pintel (2007) - Retail Buying - Prantice Hall.
6. Morgetein, Strongin (2010) - Modern Retailing – Prantice Hall.
7. www.walmartstores.com
8. Michel Levy, Weitz Barton A. and Pandit Ajay (2008) - Retailing
Management –Sixth Edition, Tata McGraw-Hills Publishing Company
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9. Sheeja S. (2009) - India’s Subhiksha – Aping Wal- Mart’s EDLP
Strategy? Icfai University Journal of Entrepreneurship
Development,Vol.VI, No.1, 62- 69.
10. Lamba A.J. (2008) - The art of Retailing, Tata McGraw-Hill Publication.
11. Srivastava Shuchi (2007) - Not quite Corner Shops , Outlook, Dec.,38 -44
12. www.indiaretailbiz.wordpress.com
13. India Retail Report (2005) an Images KSA Technopak Study.
14. Ganguli Shrishendu, B. Vinoth Kumar (2008) - Drivers of Customer
Satisfaction and loyalty in Indian Retail Supermarkets: An exploratory
study,Icfaian Journal of Management Research, Vol. VII, No. 12, 60 – 73.
15. www.tradingmarkets.com (2008)
16. Images Retail, Vol.5, No. 9. Sept. (2006), pg.75
17. www.indianrealtynews.com
18. www.indiaretailing.com Revolutionary retail initiative: Reliance Retail
19. The Great Indian Middle Class, NCAER, MGI Analysis (2007)
20. Global brands slash prices to woo small owners (2007) – The Economic
Times, page 4, Nov. 20.
21. Indian Retail Sector Analysis (2008- 2009)
22. KSA Technopack Retail report (2006)
23. Gupta S.L., Kaur Tripat (2007) - Exploring the trends of retail formats in
India – A study of Shopping malls, Indian Journal of Marketing, July, 30
– 36.
24. India Retail Report (2009)
158
Chapter –V
Data Analysis and Interpretation
• Analysis – Consumer Behaviour; Organized Retail
• Analysis – Unorganized Retailers
• Hypotheses Testing
Graph 5.1: Classification of Respondents by Considering Age
8.0%
42.6%
27.6%
21.8%
Up to 20 yrs.
21 to 30 yrs.
31 to 40 yrs.
Above 41 yrs.
The purpose was to find out the age group to which maximum numbers of
customers belong. This helps to focus on target group of potential customers of
organized retail format. Consumer behaviour highly depends on age of the
respondent. Young shoppers are generally prone to accept new products and new
concepts, trends easily. Modern retailer has to concentrate all marketing efforts
on young shoppers.
From the above table it is observed that, the majority of the visitors in Sangli i.e.
52 percent are from young age group i.e. 21 to 30 yrs. age group followed by
middle age group 24.8 percent and elder age group 18.4 percent. Majority of the
customers from Solapur city belong to age group of 21 to 30 yrs. i.e. 36 %
followed by 29.6 % from 41 yrs. and above age group and then 28.8 % from 31
to 40 yrs. In Satara and Kolhapur cities, majority are from age 21 to 30 yrs. ( 46.4
% and 36 % ) then from age group of 31 to 40 yrs. ( 26.4 % and 30.4 ) and then
from age group of above 41 yrs. ( 8 % and 31.2 %) . Overall very less proportion
is from customers up to 20 yrs. age group i.e. teenagers.
It can be seen that youngsters are the potential group of customers in modern
retail shops. They like modern facilities, sophisticated way of shopping at
organized retails. Youngsters prefer to shop at modern retail outlets because they
162
generally like to spend leisure time in enjoying shopping activity with friends.
For young couples this can be evening recreational activity. Therefore retailers
also have to think of attracting and retaining more and more young shoppers.
Table No.5.4: Categorization of Customers by Considering Occupation.
Occupation Service Business Housewife Any other Total
City Frequ
ency
% Frequ
ency
% Frequ
ency
% Frequ
ency
% Frequ
ency
%
Sangli 71 56.8 25 20.0 12 9.6 17 13.6 125 25
Solapur 46 36.8 40 32.0 19 15.2 20 16.0 125 25
Satara 55 44.0 28 22.4 18 14.4 24 19.2 125 25
Kolhapur 52 41.6 39 31.2 18 14.4 16 12.8 125 25
Total 224 44.8 132 26.4 67 13.4 77 15.4 500 100
The above information was collected to know occupation of respondents and
study its relation with buying behaviour. Occupation of a person can determine
his/her lifestyle and ultimately their habits and requirements. Most of the time
businessmen do not get time for shopping and employed people get leisure time
especially reserved for shopping. Housewives also like to shop for their family.
It is clear from the table that in Sangli, Solapur, Satara and Solapur cities
respectively, nearly 56.8 %, 36.8 %, 44% and 41.6 % shoppers are employed in a
service, 20 %, 32 %, 22.4%, and 31.2 % are having their own business and
only 9.6 %, 15.2 %, 14.4 % and 14.4 % are housewives.
This also makes clear that majority of the shoppers are earners as well as decision
makers. Most of the shoppers are employed and shopping in modern retail shops
might be convenient for them. Employed people reserve time for leisure activities
after returning from workplace as well as on holidays. Retailer can consider this
factor for developing strategies for rush hours, peak time etc. Purchasing pattern
also changes with occupation of the person. Needs and demands are derived on
the basis of occupation of the respondent.
163
family. In Solapur also majority i.e. 37.6 % and in Kolhapur 36.8 % are the
maximum values for 4 family members. In Satara majority is 40.8 % for 5 family
members. Average size of family for Sangli, Solapur, Satara and Kolhapur is 9,
12, 5 and 5 respectively.
On an average the family size is 5 members in all cities as well as in total. As
nuclear families are more than joint families number of family members can limit
to 4 or 5 people. As percentage of working women is increasing their role as
decision maker is also increasing. Role of children as influencer in buying
process also becoming important.. Thus retailer has to take into consideration
important features of current family structure.
Table No.5.8: Monthly Income of the Respondents
Monthly
Income
Up to Rs.
10000
Rs. 10001 to
Rs. 20000
Rs. 20001 to
Rs. 30000
Above Rs.
30000
Total
City Frequ
ency
% Frequ
ency
% Frequ
ency
% Frequ
ency
% Frequ
ency
%
Sangli 27 21.6 47 37.6 30 24.0 21 16.8 125 25
Solapur 22 17.6 54 43.2 38 30.4 11 8.8 125 25
Satara 61 48.8 50 40.0 7 5.6 7 5.6 125 25
Kolhapur 20 16.0 36 28.8 51 40.8 18 14.4 125 25
Total 130 26.0 187 37.4 126 25.2 57 11.4 500 100
167
Graph 5.2: Monthly Income of Respondents
05
101520253035404550
Per
cent
age
Up toRs.10000
Rs. 10001 to20000
Rs. 20001 to30000
Above Rs.30000
Sangli
Solapur
Satara
Kolhapur
As income is the crucial determinant of consumption, it was studied to know
purchasing pattern. Economic background of the person largely decides his/her
lifestyle. This also influences the kind of store in which he/she may be
comfortable shopping in.
The above table overall shows that majority 37.4 percent customers are having
family income from Rs. 10001 to Rs. 20000 and 25.2 percent belongs to
Rs.20001-Rs. 30000 income group.26 percent customers belong to income group
of up to Rs. 10000 and 11.4 percent customers have their income above Rs.
30000. In Sangli and Solapur city majority is from income group Rs. 10001 to
20000 but data of Satara city shows majority for income group up to Rs. 10000.
For Kolhapur city, majority of the customers belong to income group of Rs
20001 to 30000.
This implies that most of the customers who shop in modern retail outlets are
from middle class and upper middle class. Socio-economic factors are
influencing consumer buying behaviour. It also determines the retailer from
which these customers may shop. Purchases from lower income group may not
be suitable for modern retail format and high class customers prefer to shop in
other formats while considering status criteria.
168
Table No.5.11: Type of Product Purchased From Retail Outlets
City Sangli Solapur Satara Kolhapur Total
Product Freq % Freq % Freq % Freq % Freq %
Food and
Grocery 94 75.2 92 73.6 92 73.6 94 75.2 352 74.4
Personal
Care 76 60.8 109 87.2 83 66.4 112 89.6 380 76.0
Home Care 75 60 87 69.6 68 54.4 97 77.6 327 65.4
Home
Décor 62 49.6 87 69.6 32 25.6 68 54.4 249 49.8
Clothing 48 38.4 77 61.6 104 83.2 81 64.8 310 62.0
Jewellary 37 29.6 70 56.0 1 0.8 9 7.2 117 23.4
Music and
Books 32 25.6 48 38.4 5 4.0 19 15.2 104 20.8
Electronic
Appliances 22 17.6 32 25.6 30 24 32 25.6 116 23.2
Toys 14 11.2 26 20.8 10 8.0 29 23.2 79 15.8
Cooking
and Dining 11 8.8 14 11.2 22 17.6 50 40 97 19.4
Health and
Beauty 10 8.0 13 10.4 31 24.8 59 47.2 113 22.6
Any other 7 5.6 10 8 8 6.4 19 15.2 44 8.8
172
Graph 5.4: Type of Product Purchased by Respondents
0 10 20 30 40 50 60 70 80
Food & Grocery
Personal care
Home Care
Home Décor
Clothing
Jwelery
Music & Books
Electronic Appliances
Toys
Cooking & Dining
Health & Beauty
Other
%
The above table shows the intensity of various items purchased by customers in
organized retail outlets. It is the trend for shoppers that food and grocery and
personal care are the categories mostly shopped in modern retail outlets. The
reason is on such products modern retailers offer discount on M.R.P. which
Kirana shop does not. For categories like electronic appliances etc. customers
generally prefer to purchase from reliable source which will offer after sales
service and maintenance.
Overall 74.4 percent visitors purchasing food and grocery, 76 percent of the
visitors are purchasing personal care items and 65 percent of the visitors are
purchasing home care items. 49.8 percent visitors are purchasing items of home
decor and 62 percent purchase clothing. 23.4 percent customers prefer to
purchase jewelry items, 20.8 percent buy music and books and 23.2 purchase
electronic appliances from modern retail formats. 15.8 percent customers shop
toys, 19.4 percent shoppers like to buy cooking and dining items and 22.6 percent
173
Table No. 5.14: Items Purchased From Traditional Kirana Shop
Items Food Items Non Food Items Total
City Frequency % Frequency % Frequency %
Sangli 95 84.8 17 15.2 112 100
Solapur 76 82.6 16 17.4 92 100
Satara 83 87.4 12 12.6 95 100
Kolhapur 70 86.4 11 13.6 81 100
Total 324 85.3 56 14.7 380 100
The above information was gathered to know different category of items that
generally people purchase from traditional Kirana shops. Food is one of the
purchases which have some safety, quality and reliability considerations. This
makes people to buy it from reliable source on which they can depend on for
cleanliness and good quality of food and grocery.
It is observed from the analysis that 84.8 % from Sangli, 82.6 % from 82.6, 87.6
% from Satara, 86.4 % from Kolhapur city, respondents purchasing food items,
where as 15.2 % from Sangli, 17.4 % from Solapur, 12.6 % from Satara and 13.6
5 from Kolhapur, respondents are purchasing non food items from Kirana shops.
The overall response is majority i.e. 85.3 % of the total respondents purchase
food items and only 14.7 % of the respondents purchase non food items.
There is more preference for purchasing food items than non-food items by
respondents. This may be because of the reliability on Kirana Shop and heavy
discounts on non-food items in Modern Retails. But modern retailers have to
work hard for attracting this chunk of customers and making them feel reliable
while purchasing food products.
177
Table No. 5.15: Reason behind Purchase from Kirana Shop
There are many reasons behind the purchase from traditional Kirana shop. The
intension of this question is to find out most preferred reason.
The most important reasons are good and reliable quality (20.2 percent), near by
home (7.4 percent), Time saving and convenience (6.6 percent), urgently required
178
City Sangli Solapur Satara Kolhapur Total
Reason Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
No
Response 45 36.0 39 31.2 53 42.4 44 35.2 181 36.2
Urgently
Required 17 13.6 6 4.8 4 3.2 4 3.2 31 6.2
Good and
Reliable
Quality
17 13.6 19 15.2 27 21.6 38 30.4 101 20.2
Home
Delivery 12 9.6 7 5.6 4 3.2 5 4.0 28 5.6
Near by
Home 7 5.6 18 14.4 5 4.0 7 5.6 37 7.4
Time
Saving 9 7.2 8 6.4 6 4.8 10 8.0 33 6.6
Money
Saving 9 7.2 13 10.4 4 3.2 5 4.0 31 6.2
Convenient 5 4.0 14 11.2 6 4.8 8 6.4 33 6.6
Bulk
Purchase 2 1.6 0 0.0 0 0.0 2 1.6 4 0.8
Good
Relations 2 1.6 1 0.8 16 12.8 2 1.6 21 4.2
Total 125 100 125 100 125 100 125 100 500 100
Table No.5.18: Category of Shopping
Category of
Shopping
Regular
Shopping
Special
Shopping
Infrequent
Shopping
Total
City Frequ
ency
% Frequ
ency
% Frequ
ency
% Frequ
ency
%
Sangli 59 47.2 39 31.2 27 21.6 125 100
Solapur 76 60.8 31 24.8 18 14.4 125 100
Satara 54 43.2 63 50.4 8 6.4 125 100
Kolhapur 72 57.6 41 32.8 12 9.6 125 100
Total 261 52.2 174 34.8 65 13.0 500 100
Above information was collected to know category of shopping mostly preferred
by shoppers.
The above table shows that in Sangli about 47.2 percent respondents are visiting
for regular shopping, 31.2 percent are for special shopping and the remaining are
for shopping infrequently. In Solapur, 60.8 percent visit for regular shopping,
24.8 % visit for special shopping and 14.4 % visit infrequently. In Satara,
maximum i.e. 50.4 % visit for special shopping, 43.2 % come for regular
shopping and 6.4 % visit for infrequent shopping. In Kolhapur, majority 57.6 5
visit for regular shopping, 32.8 % visit for special shopping and 9.6 % come for
infrequent shopping. Overall, it is observed that majority, 52.2 % are regular
shoppers followed by 32.8 % of the respondents visit for special shopping and 13
% visit for infrequent shopping.
Shoppers regularly purchase from Organized Retail Stores.
182
Table No.5.19 Rank of Benefits While Shopping in Modern Retail Format
City Rank Saves
time %
Saves
money %
Different
experience %
Variety
of
products
% Window
shopping %
Status
enhance %
1 33 26.4 46 36.8 3 2.4 34 27.2 11 8.8 1 0.8
2 37 29.6 34 27.2 11 8.8 30 24.0 13 10.4 1 0.8
3 28 22.4 20 16.0 17 13.6 44 35.2 10 8.0 5 4.0
4 17 13.6 16 12.8 24 19.2 10 8.0 47 37.6 11 8.8
5 7 5.6 6 4.8 46 36.8 4 3.2 23 18.4 38 30.4
Sangli
6 3 2.4 3 2.4 24 19.2 3 2.4 21 16.8 69 55.2
1s 55 44.0 45 36.0 6 4.8 15 12.0 5 4.0 1 0.8
2 28 22.4 34 27.2 20 16.0 37 29.6 3 2.4 5 4.0
3 11 8.8 19 15.2 41 32.8 40 32.0 10 8.0 4 3.2
4 16 12.8 20 16.0 25 20.0 23 18.4 25 20.0 15 12.0
5 9 7.2 6 4.8 23 18.4 6 4.8 52 41.6 29 23.2
Solapur
6 6 4.8 1 0.8 10 8.0 4 3.2 30 24.0 71 56.8
(Continued …..on next page)
183
Graph 5.11: Ranking Given to ‘Window Shopping’ Factor by Respondents from
Sangli.
The above graph explains that 37.6 percent of the customers from Sangli have opined
that modern retail markets are not for window shopping; only around 9 percent of the
customers have stated that the modern outlets are useful for window shopping.
Graph 5.12: Ranking Given to ‘Status Enhancement’ Factor by Respondents from
Sangli.
From the above given data and graphs it can be observed that, 55.2 percent customers
of Sangli city don’t think that visit to modern retail shops will enhance their status in
the society.
187
Graph 5.13: Ranking given to ‘Time saving’ Factor by Respondents from Solapur.
From the above given graph it is clear that majority customers from Solapur (44
percent) opined that the modern shopping outlets are helping in save the time while
shopping because all items are available at one place.
Graph 5.14: Ranking Given to ‘Saves Money’ Factor by Respondents from
Solapur.
From the above graph it can be said that 36 percent of the customers from Solapur feel
that the modern shopping outlets are useful in saving the money in their purchasing
because of different schemes introduced by the retailers.
188
Graph 5.21: Ranking given to ‘Different Experience’ Factor by Respondents
From Satara.
Respondents from Satara do not think that shopping in modern retail formats give
different experience. Majority is 32.8 % with fourth rank.
Graph 5.22: Ranking Given to ‘Variety of Products’ Factor by Respondents from
Satara.
It can be seen that maximum respondents ( 39.2 % ) have ranked ‘Variety of products’
factor as third. This means that no much importance given by respondents to this factor.
192
Graph 5.23: Ranking Given to ‘Window Shopping’ Factor by Respondents from
Satara.
The above graph shows that, customers from Satara do not feel that modern retail
outlets are for window shopping. Fifth rank is given with value as 48 percent.
Graph 5.24: Ranking Given to ‘Status Enhancement’ Factor by Respondents from
Satara.
193
It can be seen that majority of the respondents from Kolhapur i.e. 51.2 % have given
sixth rank to the factor of status enhancement due to shopping in modern retail outlets.
In every city ranking preferences by respondents are in different pattern but mostly
money saving and time saving are the priorities.
Table No. 5.20: Monthly Expenditure on Modern Retail
Expenditure Upto Rs.
1000
Rs. 1001 to
Rs. 2000
Rs. 2001 to
Rs. 3000
Above Rs.
3000
Total
City Frequ
ency
% Frequ
ency
% Frequ
ency
% Frequ
ency
% Frequ
ency
%
Sangli 68 54.4 34 27.2 10 8.0 13 10.4 125 25
Solapur 30 24.0 60 48.0 31 24.8 4 3.2 125 25
Satara 62 49.6 49 39.2 7 5.6 7 5.6 125 25
Kolhapur 40 32.0 39 31.2 34 27.2 12 9.6 125 25
Total 200 40.0 182 36.4 82 16.4 36 7.2 500 100
The intension of knowing monthly expenditure on shopping from Modern retail shops
is to understand its relation between monthly income of the respondent.
The above table shows the monthly expenditure on purchases from modern retail
stores. It is observed from the table that, 54.4 percent respondents from Sangli are
spending up to Rs. 1000 and 27.2percent are spending amount between Rs. 1001 to
Rs.2000. There are 10.4 percent of the respondents spending more than Rs. 3000.
However there are only 8 percent of the respondents who are spending between Rs.
2001 to Rs. 3000. In Solapur, 48 percent respondents are spending amount between Rs.
1001 to Rs.2000, 24.8 percent spend between Rs. 2001 to Rs. 3000, 24 percent are
spending up to Rs. 1000 and only 3.2 percent spend above Rs. 3000. In Satara
maximum percentages of respondents, (49.6 percent) spend upto Rs. 1000, 39.2 percent
spend between Rs. 1001 to Rs.2000 and 5.6 percent respondents each from group of Rs.
2001 to 3000 and from group above Rs. 3000. The data from Kolhapur city shows that
32 percent respondents spend upto Rs. 1000, 31.2 percent respondents spend Rs.1001
to 2000, 27.2 percent respondents spend Rs. 2001 to 3000 and only 9.6 percent
197
customers respondents spend above Rs. 3000 on purchases from modern retail shops.
Overall it can be predicted that, majority (40 percent) spend up to Rs. 1000 per month
and only 7.2 % customers spend above Rs. 3000 per month on purchases from
organized retail outlets.
This shows that people are ready to spend upto Rs.3000 monthly, on shopping activity
at organized Retail outlet.
Table No.5.21: Factor Most Liked About Organized Retail
City Sangli Solapur Satara Kolhapur Total
Factor Frequ
ency %
Frequ
ency %
Frequ
ency %
Freque
ncy %
Frequ
ency %
Convenient
location 32 25.6 23 18.4 58 46.4 17 13.6 130 26.0
Modern
physical
facilities
16 12.8 22 17.6 19 15.2 17 13.6 74 14.8
Trained
staff 1 0.8 5 4.0 18 14.4 7 5.6 31 6.2
Attractive
display 13 10.4 20 16.0 16 12.8 25 20.0 74 14.8
We get
what we
require
63 50.4 55 44.0 14 11.2 59 47.2 191 38.2
Total 125 100 125 100 125 100 125 100 500 100
198
The above data deals with the reliability of the store in above given factors. Factor
wise presentation is as follows:
Graph 5.32: Ranking for Reliability of Organized Retailer for ‘Availability of the
Product’ (Sangli)
During the study period it has been observed that majority 32 percent of the customers
have said that availability of the products in retail outlet is highly reliable and other 32
percent of the respondents reveled that reliability is average.
Graph 5.33: Ranking for Reliability of Organized Retailer for ‘Efficient
Checkout’ (Sangli)
From the given data it can be said that the retail store is not having efficient checkout
system. This factor is ranked five by the majority customers i.e. 38.4 percent.
202
Graph 5.34: Ranking for Reliability of Organized Retailer for ‘Quality of Private
Label Product’ (Sangli)
From the above given graph it is clear that quality of the private labeled products is ok.
This factor had been given rank two by majority of the customers i.e.32 percent.
Graph 5.35: Ranking for Reliability of Organized Retailer for ‘Accurate Bills’
(Sangli)
The customers are not happy with the billing in the retail stores. They believe that the
billing procedure is not proper. This factor ranked four which is low reliability in the
customers mind by considering the store. This is expressed by 36 percent of the
customers.
203
Graph 5.42: Ranking for Reliability of Organized Retailer for ‘Availability of the
Product’ (Satara)
Regarding consistency in availability of products majority 44.8 % has given 2nd rank,
about 30 % given 1st rank.
Graph 5.43: Ranking for Reliability of Organized Retailer for ‘Efficient
Checkout’ (Satara)
The 2nd parameter is efficient checkout system. In this case 4th tank has given by 51.2
% respondents, 5th rank by 30.4 % no one has given 1st rank.
207
Graph 5.44: Ranking for Reliability of Organized Retailer for ‘Quality of Private
Label Product’ (Satara)
Regarding quality of private label products, majority 35.2 % given 3rd rank, 22.4 %
given 2nd rank.
Graph 5.45: Ranking for Reliability of Organized Retailer for ‘Accurate Bills’
(Satara)
The 4th parameter is accurate bills. It is interesting that majority 40.8 % have given 5th
rank indicating that people are less reliable on bills.
208
Table No. 5.23: Mode of Transport Used by Respondents while Visiting Retail
Outlet.
City Sangli Solapur Satara Kolhapur Total
Mode of
Transport
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
By two
wheeler 66 52.8 75 60.0 49 39.2 63 50.4 253 50.6
By car 26 20.8 20 16.0 18 14.4 21 16.8 85 17.0
By auto
rickshaw 18 14.4 16 12.8 16 12.8 16 12.8 66 13.2
By bus 8 6.4 6 4.8 24 19.2 9 7.2 47 9.4
By walk 7 5.6 8 6.4 18 14.4 16 12.8 49 9.8
Total 125 100 125 100 125 100 125 100 500 100
In order to reach the modern retail stores respondents follow different transport
facilities. This information was collected to understand need for parking facility at
Modern retail shop.
The above table shows the different modes of transport used by the respondents. 52.8 %
in Sangli, 60% in Solapur, 39.2 % in Satara and 50.4 % in Kolhapur city, respondents
are using two wheeler. About 20.8 % in Sangli, 16 % in Solapur, 14.4 % in Satara, 16.8
% in Kolhapur, respondents are coming by car. Overall it can be observed that majority
i.e. 50.6 % use two wheeler while coming for shopping. 17 % respondents come by car.
13.2 % of the respondents reaching retail outlets by auto rickshaw. Around 9.4 % are
coming by bus and 9.8 % come walking for shopping.
Mostly people use their own vehicles while shopping because it makes convenient to
carry goods purchased.
212
Table No. 5.24: Time Required Traveling to Retail Outlet.
Time Lees than
10min. 10 to 20 min. 20 to 30 min.
More than 30
min. Total
City Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Sangli 35 28.0 69 55.2 11 8.8 10 8.0 125 25
Solapur 44 35.2 51 40.8 25 20.0 5 4.0 125 25
Satara 30 24.0 58 46.4 20 16.0 17 13.6 125 25
Kolhapur 29 23.2 68 54.4 21 16.8 7 5.6 125 25
Total 138 27.6 246 49.2 77 15.4 39 7.8 500 100
The purpose for asking this question was to know whether people are willing to travel
for shopping or people from only neighborhood area shop at organized retail stores.
The table shows the time required for respondents to reach modern stores. It is
observed from the table that, 55.2 % in Sangli, 40.8 % in Solapur, 46.4 % in Satara and
54.4 % in Kolhapur, respondents are reaching the stores within 10 to 20 minutes. 28 %
in Sangli, 35.2 % in Solapur, 24 % in Satara, 29 % in Kolhapur, respondents are taking
less than 10 minutes to travel. 8.8 %, 20%, 16 % and 16.8 % respondents require 20 to
30 minutes whereas 8 %, 4 %, 13.6 % and 5.6 % respondents take more than 30 min.
respectively from Sangli, Solapur, Satara and Kolhapur while traveling to shopping.
Overall majority 49.2 % customers require 10 to 20 minutes, followed by 27.6 %
require less than 10 minutes, 15.4 % take 20 to 30 minutes and very few (7.8 %) come
from long distance because they take more than 30 minutes to travel.
It is good for retailer that people are ready to travel for more than 30 minutes also to
visit modern retail store.
213
Most of the respondents who enjoy parking space when they visit organized retail
outlet are happy with the service.
Table No.5.26: Opinion about ‘Outer Look of Retail Store Attracts Shoppers’
City Sangli Solapur Satara Kolhapur Total
Opinion Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Strongly
agree 44 35.2 43 34.4 49 39.2 30 24.0 166 33.2
Agree 52 41.6 62 49.6 66 52.8 78 62.4 258 51.6
Undecided 15 12.0 7 5.6 3 2.4 11 8.8 36 7.2
Disagree 12 9.6 9 7.2 4 3.2 5 4.0 30 6.0
Strongly
disagree 2 1.6 4 3.2 3 2.4 1 0.8 10 2.0
Total 125 100 125 100 125 100 125 100 500 100
Graph 5.57: Opinion on ‘Outer look of the building attracts Shoppers.’
0
10
20
30
40
50
60
70
StronglyAgree
Agree Undecided Disagree StronglyDisagree
Per
cent
age
Sangli Solapur Satara Kolhapur
Objective of knowing this opinion is to find out importance of outer look of the
building while selecting retail store for shopping.
217
The above table says that 41.6 % of the respondents from Sangli, 49.6 % from Solapur,
52.8 % from Satara and 62.4 % from Kolhapur have agreed that the outer look attracts
shoppers. 35.2 %, 34.4 %, 39.2 % and 24 % respectively from Sangli, Solapur, Satara
and Kolhapur agreed the same strongly. Overall it can be observed that, 51.6 % agree
and 33.02 % strongly agree that outer look of the building attracts shoppers. 7.32 % are
undecided and very few i.e. 8% disagree with that.
It can be revealed that ‘outer look of building’ is one of the important factors to be
considered by Organized Retailers.
Table No5.27: Effective Check- In and Check-Out System
Opinion Definitely
Yes Yes Can’t say No Total
City Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Sangli 88 70.4 33 26.4 3 2.4 1 0.8 125 25
Solapur 36 28.8 44 35.2 28 22.4 17 13.6 125 25
Satara 52 41.6 67 53.6 4 3.2 2 1.6 125 25
Kolhapur 34 27.2 74 59.2 8 6.4 9 7.2 125 25
Total 210 42.0 218 43.6 43 8.6 29 5.8 500 100
Graph 5.58: Opinion about Effective Check- In and Check-Out System
42.0%
43.6%
8.6%5.8%
Definitely Yes
Yes
Can't Say
No
218
Graph 5.59: Satisfaction with Price Charged
05
101520253035404550
DefinitelyYes
Yes Can't Say No DefinitelyNo
It is general feeling that price of good at modern retail formats is generally on higher
side. This question was asked to know satisfaction towards price.
Above table and graph shows that about 49.4 % i.e. majority of the respondents are
satisfied with the price charged on the items by the modern stores. 29.6 % are definitely
saying that they are satisfied with the price. However, about 5.6 % percent respondents
say no and only 2% fell that definitely they are not satisfied about the price.
For all four cities majority of the respondents are satisfied by the price factor of
organized retail shops.
Table No.5.31: Opinion about Price Level
Opinion Higher Satisfactory Less Total
City Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Sangli 12 9.6 92 73.6 21 16.8 125 25
Solapur 11 8.8 81 64.8 33 26.4 125 25
Satara 3 2.4 95 76.0 27 21.6 125 25
Kolhapur 6 4.8 76 60.8 43 34.4 125 25
Total 32 6.4 344 68.8 124 24.8 500 100
222
Graph 5.60: Opinion about Price Level
0
10
20
30
40
50
60
70
80P
erce
ntag
e
Higher Satisfactory Less
Sangli
Solapur
Satara
Kolhapur
Total
The intension was to know the feelings about price level at organized retail as
compared to others.
The above table and graph explains whether customers are satisfied with the price level
or not. 73.6 % of the respondents from Sangli, 64.8 % from Solapur, 76 % from Satara
and 608 % from Kolhapur and in total 68.8 % respondents are satisfied with the prices
charged by the retail shops. About 16.8 %, 26.4 %, 21.6 % and 34.4 % respondents
respectively from Sangli, Solapur, Satara and Kolhapur feel that price in organized
retail shops is less than others. Only 6.4 % of the customers feel that price charged by
retailers is on higher side.
There is satisfaction among customers regarding price level at modern retail shop.
223
Graph 5.62: Satisfaction with Schemes and Offers
0%
20%
40%
60%
80%
100%
Sangli Solapur Satara Kolhapur
Definitely No
No
Can't Say
Yes
DefinitelyYes
The purpose of asking this was to know whether customers are satisfied with the
schemes and offers given by Retailers.
In Sangli, about 34.4 % customers are definitely satisfied and 49.6 % are satisfied with
schemes offered by the stores. Only 3.2 % customers are not satisfied with the offers.
Respondents from Solapur also say that 52 % of them are satisfied and 28 % are
definitely satisfied, only 9.6 % are not satisfied with the offers. In Satara 58.4 % are
satisfied and 28.8 % are definitely satisfied. Only 8.8 % are not satisfied by the offers
and schemes. In Kolhapur city, 68.8 % are satisfied and 13.6 % are definitely satisfied
with the schemes offered.
The overall effect is respondents are satisfied with the schemes offered by Organized
Retailers.
227
Table No.5.35: Preference to Private Brands Introduced by Retail Shop
City Sangli Solapur Satara Kolhapur Total
Opinion Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Definitely
Yes 52 41.6 17 13.6 36 28.8 15 12.0 120 24.0
Yes 40 32.0 56 44.8 47 37.6 57 45.6 200 40.0
Can't say 8 6.4 17 13.6 2 1.6 9 7.2 36 7.2
No 19 15.2 29 23.2 27 21.6 40 32.0 115 23.0
Definitely
No 6 4.8 6 4.8 13 10.4 4 3.2 29 5.8
Total 125 100 125 100 125 100 125 100 500 100
Graph 5.63: Preference to Private Brands Introduced by Retail Shop
24.0%
40.0%
7.2%
23.0%
5.8%
Definitely YesYesCan't SayNoDefinitely No
The objective for collecting this information was to know that private brands are
accepted by customers or not.
228
definitely not purchased, 9.6 % have purchased and 2.8 % have definitely purchased
unknowingly outdated product. 12 % of the respondents could not say anything.
Overall no major findings about outdated products on shelf but still small proportion
also may spoil retailer’s performance.
Table No. 5.39: Whether Unlimited Assortment Creates Confusion
City Sangli Solapur Satara Kolhapur Total
Opinion Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Strongly
Agree 11 8.8 22 17.6 30 24.0 19 15.2 82 16.4
Agree 24 19.2 44 35.2 9 7.2 54 43.2 131 26.2
Undecided 44 35.2 16 12.8 21 16.8 23 18.4 104 20.8
Disagree 24 19.2 16 12.8 48 38.4 17 13.6 105 21.0
Strongly
Disagree 22 17.6 27 21.6 17 13.6 12 9.6 78 15.6
Total 125 100 125 100 125 100 125 100 500 100
Graph 5.65: Whether Unlimited Assortment Creates Confusion
16.4
26.2
20.8 21
15.6
0
5
10
15
20
25
30
StronglyAgree
Agree Undecided Disagree StronglyDisagree
Per
cent
age
232
There is variety of products available in modern retail stores. This unlimited assortment
whether confuses shoppers, was tried to find out this as advantage or disadvantage of
organized retail.
The above table and graph shows that overall 16.4 % customers strongly agree and 26.2
% respondents agree that unlimited assortment creates confusion while shopping. 20.8
% of the total respondents could not decide about it. 21 % respondents disagree and
15.6 % strongly disagree and they feel unlimited assortment does not create confusion.
Table No. 5.40: Opinion on ‘If Required Brand is not available’
City Sangli Solapur Satara Kolhapur Total
Opinion Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
No
response 1 0.8 3 2.4 0 0.0 0 0.0 4 0.8
Postpone
purchase 13 10.4 11 8.8 8 6.4 16 12.8 48 9.6
Select
substitute
brand
23 18.4 49 39.2 65 52.0 59 47.2 196 39.2
Go to
another
retailer
25 20.0 39 31.2 15 12.0 28 22.4 107 21.4
Depends
on type of
product
63 50.4 23 18.4 37 29.6 22 17.6 145 29.0
Total 125 100 125 100 125 100 125 100 500 100
233
Table No.5.42: Opinion about ‘Better Social Image because of Shopping at
Modern Retail Shop’
City Sangli Solapur Satara Kolhapur Total
Opinion Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Strongly
Agree 23 18.4 19 15.2 37 29.6 23 18.4 102 20.4
Agree 43 34.4 61 48.8 64 51.2 68 54.4 236 47.2
Undecided 28 22.4 27 21.6 12 9.6 13 10.4 80 16.0
Disagree 14 11.2 16 12.8 8 6.4 11 8.8 49 9.8
Strongly
Disagree 17 13.6 2 1.6 4 3.2 10 8.0 33 6.6
Total 125 100 125 100 125 100 125 100 500 100
Graph 5.67: Opinion about ‘Better Social Image because of Shopping at Modern
Retail Shop’ (Sangli)
From the above table and graph it is observed that, 34.4 percent of the customers
agreed that shopping at modern stores gives social image, 18.4 percent customers
strongly agreed the same.11.2 percent disagreed and 13.6 percent of the customers
strongly disagreed with this view.
237
Graph 5.68: Opinion about ‘Better Social Image because of Shopping at Modern
Retail Shop’ (Solapur)
From the above table and graph it is observed that, around 48.4 percent of the
customers agreed that shopping at modern stores gives social image, 15.2 percent
customers strongly agreed the same.12.8 percent disagreed and 1.6 percent of the
customers strongly disagreed with this view.
Graph 5.69: Opinion about ‘Better Social Image because of Shopping at Modern
Retail Shop’ (Satara)
From the above table and graph it is observed that 51.2% customers agreed that
shopping at modern stores gives social image, 29.6% customers strongly agreed the
same. Only 6.4% disagreed and 3.2% strongly disagreed.
238
(continued……from previous page)
Monthly
income/Amount
of Purchase
City More than Rs.5000 Rs.3001 to 5000 Rs.1001- 3000 Less than Rs.1000 Total
Frequency % Frequency % Frequency % Frequency % Frequency %
UptoRs.10000 1 100.00 1 33.33 25 41.67 34 55.74 61 48.8
Rs.10001-20000 0 0.00 0 0.00 28 46.67 22 36.07 50 40.0
Rs.20001-30000 0 0.00 1 33.33 5 8.33 1 1.64 7 4.6
Above Rs.30000 0 0.00 1 33.33 2 3.33 4 6.56 7 4.6
Total
Satara
1 100 3 100 60 100 61 100 125 100
UptoRs.10000 1
9.10 5 25.00 8 10.80 6 30.00 20 16.0
Rs.10001-20000 2 18.2 3 15.00 23 31.10 8 40.00 36 28.8
Rs.20001-30000 4 36.4 8 40.00 35 47.30 4 20.00 51 40.8
Above Rs.30000 4 36.4 4 20.00 8 10.80 2 10.00 18 14.4
Total
Kolhapur
11 100 20 100 74 100 20 100 125 100
Total 36 100 49 100 272 100 143 100
242
Ho: Monthly income and average amount of purchase are independent.
H1: Monthly income and average amount of purchase are not independent.
Analysis for Sangli
Critical value = 16.919
Chi-square value = 34.271 and d.f. = 9
At 5% level of significance at 9 d.f. the null hypothesis has been rejected because, the
calculated chi-square value is greater than the critical value. It is indicating that average
amount of purchase is dependent on monthly income.
From the table it is also observed that 50 percent of the customers belonging to above
Rs. 30,000 income group and 38.9 percentage customers having monthly income
Rs. 20001-Rs. 30,000 are spending more than Rs. 5000 on an average.
Analysis for Solapur
Critical value = 16.919
Chi-square value = 10.490 and d.f. = 9
At 5% level of significance at 9 d.f. the null hypothesis has been accepted because, the
calculated chi-square value is less than the critical value. It is indicating that average
amount of purchase is independent of monthly income.
From the above cross table it is also observed that, the respondents’ whose amount of
purchase is less than Rs.1000 , 47.83 percent of the customers are belonging to income
group of Rs.10001 to 20000 , where as the respondents who are spending Rs.1000 to
3000, 44.83 percentage of the customers having same monthly income. Significantly,
the respondents who are spending more than Rs. 5000, 66.66 percent of the customers
are belong to monthly income of up to Rs. 10000 and Rs.10001 to 20000. When the
average amount of purchase is more than Rs.5000 there is only 16.67 percent of the
respondents is belonging to the income group of above Rs.30000. Thus, in Solapur, the
average amount of purchase and the monthly income of the respondents are
independent in nature.
Analysis for Satara
Critical value = 16.919
Chi-square value = 15.927 and d.f. = 9
At 5% level of significance at 9 d.f, the null hypothesis has been accepted. It is
indicating that average amount of purchase is independent on monthly income.
243
Graph 5.74: Satisfaction about Lighting Arrangement (Satara)
From the above table and graph, it is observed that about 61% customers agreed that
they are satisfied about lighting arrangement, and 34.4% are saying “definitely yes”
indicating satisfaction about lighting. Only about 3% are not satisfied.
Graph 5.75: Satisfaction about Lighting Arrangement (Kolhapur)
From the above table and graph, it is observed that about 70% customers agreed that
they are satisfied about lighting arrangement, and 21% are saying “definitely yes”
indicating satisfaction about lighting.
247
Table No.5.47 Whether Signage Provided Sufficient and Informative
City Sangli Solapur Satara Kolhapur Total
Opinion Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Definitely
Yes 66 52.8 30 24.0 32 25.6 21 16.8 149 29.8
Yes 47 37.6 65 52.0 70 56.0 83 66.4 265 53.0
Can't say 5 4.0 7 5.6 6 4.8 3 2.4 21 4.2
No 3 2.4 20 16.0 10 8.0 13 10.4 46 9.2
Definitely
No 4 3.2 3 2.4 7 5.6 5 4.0 19 3.8
Total 125 100 125 100 125 100 125 100 500 100
The word ‘Signage’ means sign of identification, warning, or direction. About 52.8
percent customers from Sangli have agreed strongly and 37.6 percent also feel that
signage provided are sufficient and informative where as only about 5.6 percent
customers are not agreed with the same. In Solapur about 52 percent customers have
agreed and 24 percent have definitely agreed that signage provided are sufficient and
informative where as only about 2.4 percent customers have not agreed with the same
strongly. From Satara city, 81.6 %customers agreed that signage provided is sufficient
and informative where as only about 13.6 % customers are not agreed with the same.
From Kolhapur, 83.2 % agree and 14.4 % do not agree that light is sufficient. Overall it
can be seen that, 53 % say ‘Yes’, 29.8 % say ‘Definitely Yes’, whereas 13 % say ‘No’
for satisfaction towards sufficient lighting arrangement.
248
Table No.5.49: Style of Shopping
City Sangli Solapur Satara Kolhapur Total
Opinion Freque
ncy %
Freque
ncy %
Freque
ncy %
Freque
ncy %
Freque
ncy %
Purchase the things in list 21 16.8 16 12.8 7 5.6 13 10.4 57 11.4
In addition to things listed
purchase many things 27 21.6 29 23.2 36 28.8 51 40.8 143 28.6
Decide products to purchase
with the help of displays 25 20.0 38 30.4 41 32.8 27 21.6 131 26.2
Like to save time while
purchasing 17 13.6 25 20.0 20 16.0 20 16.0 82 16.4
Like to enjoy shopping while
going through all shelves with
ample time
35 28.0 17 13.6 21 16.8 14 11.2 87 17.4
Total 125 100 125 100 125 100 125 100 500 100
252
Graph 5.80: Style of Shopping
11.4%
28.6%
26.2%
16.4%
17.4%
Purchase things in list
In addition to thing listedpurchase many things
Decide product topurchase with the help ofdisplay
Like to save time whilepurchasing
Like to enjoy Shoppingwith ample time
From the table and graph, it is observed that about 11.4 % percent purchase the things
in list, majority i.e. 28.6 percent customers purchasing more items than the list they
prepared, about 26.2 percent customers decides what to purchase with the help of
display, 16.4 percent customers are visiting to save time while purchasing and 17.4
percent of the customers enjoy shopping while going through all shelves. Majority of
the respondents from Sangli (28%) like to enjoy shopping while going through all
shelves with ample time. In Solapur majority of the respondents from Solapur (30.4 %)
and Satara (32.8 %) decide products to be purchased with the help of displays. In case
of Kolhapur, majority (40.8 %) purchase many things in addition to the things listed.
This makes clear that most of the people enjoy shopping activity.
253
Table No. 5.53: Whether Products in Small Quantity Are Available
City Sangli Solapur Satara Kolhapur Total
Opinion Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Definitely
Yes 38 30.4 24 19.2 15 12.0 15 12.0 92 18.4
Yes 57 45.6 55 44.0 56 44.8 67 53.6 235 47.0
Can't say 16 12.8 16 12.8 22 17.6 18 14.4 72 14.4
No 8 6.4 15 12.0 7 5.6 10 8.0 40 8.0
Definitely
No 6 4.8 15 12.0 25 20.0 15 12.0 61 12.2
Total 125 100 125 100 125 100 125 100 500 100
From the above table, it is observed that about 76 percent of the customers in Sangli,
63.2 % in Solapur, 66.8 % in Satara and 65.6 % in Kolhapur have agreed that they are
getting adequate small size and volume of items as per the requirement. However, 10.2
percent customers from Sangli, 24 % from Solapur, 25.6 % from Satara and 20 % from
Kolhapur have not agreed with the same. Overall it can be observed that 18.4 %
definitely say ‘yes’ and 47 % also feel that they get adequate small size and volume of
items as per the requirement. 8 % feel they do not and 12.2 % say that definitely they
do not get adequate small size and volume of items as per the requirement. Only 14.4 %
customers have failed to give any opinion.
257
Table No. 5.54: Whether Products in Large Quantity Are Available
City Sangli Solapur Satara Kolhapur Total
Opinion Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Definitely
Yes 48 38.4 19 15.2 13 10.4 21 16.8 101 20.2
Yes 48 38.4 53 42.4 52 41.6 57 45.6 210 42.0
Can't say 16 12.8 19 15.2 23 18.4 20 16.0 78 15.6
No 6 4.8 16 12.8 11 8.8 14 11.2 47 9.4
Definitely
No 7 5.6 18 14.4 26 20.8 13 10.4 64 12.8
Total 125 100 125 100 125 100 125 100 500 100
From the above table, it is observed that about 76.8 % of the customers from Sangli,
67.6 % from Solapur, 52 % from Satara and 62.4 % from Kolhapur have agreed that,
whenever they want items in large quantity, they are getting in adequate size and
volume of items. 10.4 % respondents from Sangli, 27.2 % respondents from Solapur,
29.6 % from Satara and 21.6 % from Kolhapur feel that they do not get items in large
quantity whenever they require it. Out of total respondents 20.2 % say ‘Definitely yes’
that they get items in large quantity, 42 % also agreed that whenever they require they
get items in large quantity. 9.4 % do not and 12.8 5 definitely do not get items in large
quantity whenever required.
258
Table No. 5.58: Opinion about Space for Movement between Shelves
City Sangli Solapur Satara Kolhapur Total
Opinion Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Completely
satisfied 72 57.6 62 49.6 37 29.6 31 24.8 202 40.4
Satisfied 43 34.4 38 30.4 50 40.0 70 56.0 201 40.2
Can't say 1 0.8 5 4.0 7 5.6 2 1.6 15 3.0
Dissatisfied 8 6.4 17 13.6 23 18.4 21 16.8 49 9.8
Completely
dissatisfied 1 0.8 3 2.4 8 6.4 1 0.8 13 2.6
Total 125 100 125 100 125 100 125 100 500 100
The above statistics clearly states that, 57.6 %, 49.6 %, 29.6 %, and 24.8 % of the
respondents from Sangli. Solapur, Satara and Kolhapur are completely satisfied with
the space provided for the movement between the shelves in the retail outlets. It can be
also seen that 34.4 %, 30.4 %, 40 % and 56 % are satisfied. Only 7.2 %, 16 %, 24.8 %
and 17.6 % of the respondents respectively are not satisfied with same. In all 40.4 are
completely satisfied, 40.2 % are satisfied and 12.4 % are dissatisfied with the space
provided for movement in retail outlets. Only 3 % respondents could not say anything.
262
Table No. 5.59: Feeling of Purchasing Unnecessary Items
City Sangli Solapur Satara Kolhapur Total
Opinion Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Very
frequently 16 12.8 27 21.6 14 11.2 16 12.8 73 14.6
Frequently 12 9.6 20 16.0 6 4.8 18 14.4 56 11.2
Sometimes 34 27.2 25 20.0 41 32.8 28 22.4 128 25.6
No 17 13.6 24 19.2 28 22.4 20 16.0 89 17.8
Never 46 36.8 29 23.2 36 28.8 43 34.4 154 30.8
Total 125 100 125 100 125 100 125 100 500 100
Graph 5.82: Feeling of Purchasing Unnecessary Items
14.6%
11.2%
25.6%17.8%
30.8% Very Frequently
Frequently
Sometimes
No
Never
Sometimes there can be unnecessary purchase of items while shopping in the modern
outlets. So this question is asked to the respondents to know in this regard. Majority
respondents have opined that they never felt about purchasing of unnecessary items in
the retail outlets (48.6 percent). 25.6 percent of the respondents felt that they sometimes
purchased unnecessary items in the retail outlets and 25.8 percent of the respondents
felt that they frequently purchases unnecessary items while shopping in retail outlets.
263
From the table it is clear that, majority customers filed complaint but they were not able
to give information on the same. But there is significant part of the respondents who
have filed complaints on poor customer service, poor quality of the cloths and
electronic items. Remaining respondents have filed complaints on billing procedures,
quality of the fruits and vegetables and unavailability of the required products in the
outlet. It can be observed that majority of the complaints are regarding delay and
mistakes in billing. Some customers have complained regarding poor quality of fruits,
vegetables and food items. Some have also complained regarding no complaint box as
well as no free gifts.
Table No. 5.63: Provision of Hassle Free Complaint Handling
City Sangli Solapur Satara Kolhapur Total
Opinion Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Definitely
Yes 8 6.4 21 16.8 33 26.4 20 16.0 82 16.4
Yes 38 30.4 52 41.6 26 20.8 65 52.0 181 36.2
Can't say 69 55.2 43 34.4 61 48.8 34 27.2 207 41.4
No 10 8.0 5 4.0 3 2.4 5 4.0 23 4.6
Definitely
No 0 0.0 4 3.2 2 1.6 1 0.8 7 1.4
Total 125 100 125 100 125 100 125 100 500 100
From the analysis it has been observed that, 36.8 % of the respondents from Sangli,
58.4 % from Solapur, 47.2 % from Satara and 68 % from Kolhapur have opined that
the retail outlets have hassle free complaint handling arrangement. Only 8 %, 7.2 %, 4
% and 4.8 % respectively from Sangli, Solapur, Satara and Kolhapur have opined the
outlets don’t have hassle free complaint handling arrangement in the outlets. Overall
41.4 % could not comment anything, 52.6 % feel that complaint handling by retail
outlets is hassle free whereas only 6 % said it is not hassle free.
267
Table No. 5.64: Efficient Customer Help Desk Handling
City Sangli Solapur Satara Kolhapur Total
Opinion Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Strongly
agree 25 20.0 46 36.8 50 40.0 27 21.6 148 29.6
Agree 52 41.6 53 42.4 44 35.2 77 61.6 226 45.2
Undecided 44 35.2 19 15.2 28 22.4 18 14.4 109 21.8
Disagree 4 3.2 7 5.6 3 2.4 3 2.4 17 3.4
Total 125 100 125 100 125 100 125 100 500 100
Customer Help Desk is provision made by retailer to help customer to solve their
problems and help them while buying. It also handles enquiries. The analysis made by
the researcher reveals that, majority respondents 41.6 % from Sangli, 42.4 % from
Solapur, 35.2 % from Satara and 61.6 % from Kolhapur have agreed that customer
help desk handling is efficient in these outlets and 20 %, 36.8 %, 10 % and 21.6 %
respectively have strongly agreed the same. Only 3.2 %, 5.6 %, 2.4 % and 20.4 % of
the respondents have disagreed with the efficiency of the outlet regarding customers
help desk. Overall 45.2 % have agreed that customer help desk handling is
efficient.29.6 % strongly agree with efficient handling of customer help desk. Only 3.4
% disagree with the above statement and 21.8 % remain undecided.
268
Table No. 5.68: Changing Room Facility at Apparel Section
City Sangli Solapur Satara Kolhapur Total
Opinion Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Definitely
Yes 39 31.2 59 47.2 68 54.4 41 32.8 207 41.4
Yes 56 44.8 50 40 51 40.8 69 55.2 226 45.2
Can't say 21 16.8 11 8.8 0 0.0 14 11.2 46 9.2
No 8 6.4 4 3.2 6 4.8 1 0.8 19 3.8
Definitely
No 1 0.8 1 0.8 0 0.0 0 0.0 1 0.2
Total 125 100 125 100 125 100 125 100 500 100
This question is to know about the changing room facility provided by the retailers. In
Sangli 76 % of the customers revealed that the retailers have provided the changing
room facility at apparel section, 7 % of the customers revealed that there is no changing
room facility in the apparel section of the retail outlets. In Solapur, 87.2 % customers
say yes and only 4 % say no for the changing room facility provided in Apparel section.
The data from Satara shows that 95.2 % customers agree that changing room facility is
provided and only 0.8 % disagree about it. In Kolhapur city, 88 % are saying that
changing room is provided and only 0.8 % said it is not. Overall 86.6 % of the
respondents agree that changing room facility is provided at apparel section at modern
retail outlet.
272
Table No. 5.69: Satisfaction about Size and Location of Entrance
City Sangli Solapur Satara Kolhapur Total
Opinion Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Completely
Satisfied 89 71.2 68 54.4 38 30.4 46 36.8 241 48.2
Satisfied 30 24 39 31.2 59 47.2 66 52.8 194 38.8
Can't say 2 1.6 1 0.8 1 0.8 2 1.6 6 1.2
Dissatisfied 3 2.4 14 11.2 16 12.8 11 8.8 44 8.8
Completely
Dissatisfied 1 0.8 3 2.4 11 8.8 0 0.0 15 3.0
Total 125 100 125 100 125 100 125 100 500 100
In order to make customer more convenient while shopping and for free movement of
the customers the entrance gate size and location is important. Results reveals that 71.2
% of the customers from Sangli, 54.4 % from Solapur, 30.4 % from Satara and 36.8 %
from Kolhapur are completely satisfied with the size and location of the entrance gate
at different retail outlets.24 %, 31.2 % 47.2 % and 52.8 % respectively from Sangli,
Solapur, Satara and Kolhapur, respondents are satisfied with location and size of
entrance. Only 3 %, 13.6 %, 21.6 % and 8.8 % of the respondents are dissatisfied with
the same. Overall 87 % are satisfied and 11.8 % of the respondents are dissatisfied with
size and location of entrance.
273
Table No. 5.73: Whether Testing Of Electrical/ Electronic Goods before Selling
Done
City Sangli Solapur Satara Kolhapur Total
Opinion Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Definitely
Yes 47 37.6 32 25.6 44 35.2 23 18.4 146 29.2
Yes 46 36.8 53 42.4 51 40.8 74 59.2 224 44.8
Can't say 30 24 36 28.8 30 24.0 28 22.4 124 24.8
No 2 1.6 3 2.4 0 0.0 0 0.0 5 1.0
Definitely
No 0 0.0 1 0.8 0 0.0 0 0.0 1 0.2
Total 125 100 125 100 125 100 125 100 500 100
This question is intended to know whether electronic, electrical products are being
tested at Modern Retail Shop before selling. In Sangli majority customers 37.6 percent
said definitely yes in this regard, 36.8 percent of them said yes and only 1.6 percent of
them said no to the same. In Solapur, majority customers 42.4 percent said yes in this
regard, 25.6 percent of them said definitely yes and only 0.8 percent of them said
definitely no to the same. A significant part of the customers are indeterminate in this
regard (around 29 percent). In Satara about 35% strongly agreed, and 41% agreed that
the stores testing the functioning of electrical and electronic items before selling. In
Kolhapur, about 18.4% strongly agreed, and 59.2% agreed that the stores testing the
functioning of electrical and electronic items before selling.
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Table No. 5.74: Attractive Store by Considering It’s Decor
City Sangli Solapur Satara Kolhapur Total
Opinion Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Definitely
Yes 22 17.6 35 28 49 39.2 33 26.4 139 27.8
Yes 86 68.8 60 48 55 44.0 78 62.4 279 55.8
Can't say 9 7.2 11 8.8 5 4.0 2 1.6 27 5.4
No 5 4 14 11.2 13 10.4 12 9.6 44 8.8
Definitely
No 3 2.4 5 4 3 2.4 0 0.0 11 2.5
Total 125 100 125 100 125 100 125 100 500 100
Attractiveness of the store is determined by outer look as well as inside arrangement
and decoration. By considering the décor, from Sangli, 69 percent of the customers
opined that this retail outlet is attractive only 2.4 percent of the customers said
definitely no to the same. In Solapur 76 percent of the customers opined that this retail
outlet is attractive only 15.6 percent of the customers said no. Regarding store
decoration in Satara, 39.2% strongly agreed, and 44% agreed that the store decoration
is attractive, whereas about 13% not agreed. From Kolhapur, 26.4% strongly agreed,
and 62.4% agreed that the store decoration is attractive, whereas about 10% not agreed.
In all majority is shown by 55.8 % saying yes and then 27.8 % saying definitely yes for
attractiveness by considering décor. Only 11.3 % does not agree with the above.
278
Table No.5.78: Liking About Trying New Retail Outlets
City Sangli Solapur Satara Kolhapur Total
Opinion Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Definitely
Yes 67 53.6 64 51.2 65 52.0 68 54.4 265 52.8
Yes 33 26.4 43 34.4 53 42.4 46 36.8 175 35.0
Can't say 9 7.2 12 9.6 4 3.2 4 3.2 29 5.8
No 14 11.2 4 3.2 3 2.4 7 5.6 28 5.6
Definitely
No 2 1.6 2 1.6 0 0.0 0 0.0 4 0.8
Total 125 100 125 100 125 100 125 100 500 100
Graph 5.84: Liking About Trying New Retail Outlets
52.8%
35.0%
5.8%5.6%0.8%
Definitely Yes
Yes
Can't sayNo
Definitely No
The present question emphasizes on the customers’ attitude about trying new retail
outlets. Form the analysis it has been observed that majority customers 53.6 % from
Sangli, 51.2 % from Solapur, 52 % from Satara and 54.4 % from Kolhapur said
definitely yes and 26.4 %, 34.4 %, 42.4 % and 36.8 % from respective cities said they
are interested in trying new retail outlets. Only 12.8 %, 4.8 %, 2.4 % and 5.6 %
282
respectively are not interested in trying new retail outlets. The overall analysis about
this factor shows that majority of the respondents i.e. 52.8 % are very much interested
followed by 35 % who will like to try new retail outlet. 5.6 % are not interested, only
0.8 % will not like to try new retail outlet. 5.8 % respondents did not give any opinion.
Table No. 5.79: Opinion about liking of Big Retailers’ entry
City Sangli Solapur Satara Kolhapur Total
Opinion Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Frequ
ency %
Definitely
Yes 96 76.8 72 57.6 75 60.0 76 60.8 319 63.8
Yes 26 20.8 44 35.2 42 33.6 42 33.6 154 30.8
Can't say 3 2.4 6 4.8 8 6.4 7 5.6 24 4.8
No 0 0.0 3 2.4 0 0.0 0 0.0 3 0.6
Total 125 100 125 100 125 100 125 100 500 100
Graph 5.85: Opinion about liking of Big Retailers’ entry
76.8
20.8
2.4
57.6
35.2
4.82.4
60
33.6
6.4
60.8
33.6
5.6
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Sangli Solapur Satara Kolhapur
NoCan't SayYesDefinitely Yes
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Table No.5.82: Type of Ownership
Type of ownership Frequency Percent
Sole proprietorship 22 62.9
Partnership 2 5.7
Family owned 10 28.6
Any other 1 2.9
Total 35 100
Graph 5.88: Type of Ownership
The above graphical and statistical presentations reveling that, the type of ownership by
majority of the small retailers is sole proprietorship. There are 63 percent of the
retailers are sole proprietors and very less are having partnership i.e. 6 percent.
287
Table No. 5.83: Type of Shops
Type of Shop Frequency Percent
Grocery shop 10 28.6
Stationary shop 2 5.7
Cloth shop 7 20
Electronics shop 3 8.6
Gift articles shop 2 5.7
General stores 4 11.4
Any other 7 20
Total 35 100
Graph 5.89: Type of Shops
From the above graph it can be said that, 28.6percent of the retailers are running
grocery shops, 20 percent are having cloth business, and 8.6percent are having
electronic shops.
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Table No. 5.87: Any Adverse Impact on Business because of Modern Retailers
Opinion Frequency Percent
Yes 13 37.1
No 22 62.9
Total 35 100
When this question is asked to traditional retailers, around 63 percent of the retailers
have opined that there is no adverse impact on their business because of the modern
retail outlets. Only 37.1 percent of the retailers agreed that they are seeing adverse
impact on their business due to entry of modern retailers.
Table No. 5.88: Amount of Negative Impact on Profit of Business
Negative Impact Frequency Percent
Up to 5 percent 8 61.54
Up 5 to 10 percent 4 30.77
More than 15 percent 1 7.69
Total 13 100
As it is clear from earlier table about opinion about impact of modern retails on
traditional retails, 13 respondents have agreed this. Out of this, 61.54 percent of the
retailers have opined that there is impact up to 5 percent on their business, 30.77
percent said 5 to 10 percent and only 7.69 percent said that there impact of more than
15 percent.
292
Table No.5.89: Opinion about Impact on Volume of Business
Opinion Frequency Percent
Definitely yes 9 25.7
Yes 5 14.3
Can't say 2 5.7
No 12 34.3
Definitely no 7 20
Total 35 100
As we are clear from earlier table about impact on business, this question deals with
impact of modern retails in terms of volume on traditional retails. From the above table
it is clear that, 34.3 percent of the respondents have said that there is no impact of
modern retails on volume of business. A significant part of the respondent said that
there is impact on their volume of business by modern retails (25.7 percent).
Table No.5.90: Opinion on ‘Entry of Big Retailers has Made Negative Impact on
Profit’
Opinion Frequency Percent
Strongly agree 7 20
Agree 6 17.1
Undecided 5 14.3
Disagree 10 28.6
Strongly disagree 7 20
Total 35 100
From the above given table it is clear that, 28.6 percent of the respondents have
disagreed with this question that entry of big retailers has made negative impact on
profit. 20 percent of the respondents have strongly disagreed with the same and another
20 percent of the respondents have strongly agreed that there is negative impact on their
profits because of entry of big retailers in the market.
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Table No.5.94: Rank of the Benefits for Which Customers Prefers Small Shop.
Credit Home
delivery
Convenient
Timing
Loose
items available Reliability
Rank Freq. % Freq. % Freq. % Freq. % Freq. %
1 2 5.71 2 5.71 0 0.00 7 20.00 24 68.57
2 13 37.14 4 11.43 10 28.57 3 8.57 5 14.29
3 10 28.57 4 11.43 5 14.29 12 34.29 4 11.43
4 4 11.43 15 42.86 8 22.86 6 17.14 2 5.71
5 6 17.14 10 28.57 12 34.29 7 20.00 0 0.00
The present question is asked to the traditional retailers to rank the given benefits in
order to know why the customers come to traditional retails. Regarding credit
allowance, majority retailers given 2nd rank and very few 5.7 percent of the respondents
have give rank 1 to the same. Regarding home delivery majority respondents 48.26
percent have given rank 6. The timings of the store gained fifth rank with
34.29percenet, availability of loose items in the traditional stores given rank 3 (34.29
percent) and reliability of the traditional stores given first rank by 68.57 percent of the
respondents.
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Table No.5.95: Different Changes Made in Outlook of the Shop to Match the
Competition
Change Frequency Percent
No change 12 33.4
Display, models 8 22.8
Attractive shelves, packaging 6 17.1
Modern look 5 14.3
Furniture 2 5.7
Interior decoration, showcase 1 2.9
Telephonic order, home delivery 1 2.9
Total 35 100
The present question intends to know about the changes made by the traditional
retailers to match with organized modern retailers. 33.4 percent of the traditional
retailers have not made any changes in the outlook of the store. Remaining made
changes like providing attractive shelves, display and models (22.8 percent), attractive
shelves and packaging (17.1 percent), giving modern look to shop (14.3 percent) new
furniture ( 5.7 percent), interior decoration ( 2.9 percent) , telephonic orders and home
delivery(2.9 percent) etc. to compete with the competition .
Table No. 5.96: Changes in Storage of Products to Suit the Competition
Change Frequency Percent
No changes 25 71.5
Maximum display 3 8.6
Neat and proper storage 2 5.7
Glass shelves 1 2.9
More products 1 2.9
More variety 1 2.9
Packing and storage 1 2.9
Showcase 1 2.9
Total 35 100
298
Table No.5.101: Whether Allowing Your Next Generation to Come in this
Business
Opinion Frequency Percent
Yes 23 65.7
No 10 28.6
Can't say 2 5.7
Total 35 100
Majority of the traditional retailers said that they allow next generation to come in this
business with 65.7 percent and 28.6 percent are not interested to allow their next
generation to this business.
Table No. 5.102: Opinion on Making Changes in Business to Keep With Recent
Times
Opinion Frequency Percent
Yes 25 71.4
No 5 14.3
Can't say 5 14.3
Total 35 100
The above given table clears that 71.4 percent of the traditional retailers are making
changes in their business to keep with the recent times and there are only 14.3 percent
who are not in the pace.
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Table No.103: Strengths of Modern Retailing
Strength Frequency Percent
One stop shop 6 17.2
Attractive offers 4 11.4
Discounted rates 4 11.4
Many products, offers, variety 4 11.4
More space, attractive display 4 11.4
No response 2 5.7
Modern facilities, shelve, trolleys 2 5.7
Big size, promotion options 2 5.7
Bulk purchase 2 5.7
Shopping enjoyment 2 5.7
Huge Display, heavy discounts 2 5.7
Huge Infrastructure 1 2.9
Total 35 100
The present question is asked to the traditional retailers to check the strengths of
Organized Retailing according to them. It is observed form the analysis that the main
strengths of the modern retailers is, many things are available at one place, i.e. ‘One
stop Shop’. 17.2 % of the small retailers have given choice about that. 11.4 % retailers
have given preference for factors like attractive offers, discount, variety and display.
303
Chapter –VI
Findings and Suggestions
Section – I: Consumer Behaviour - Organized Retail
1. Demographic Profile of Shoppers –
1) It has been found that there is majority of Male Shoppers (71.8%) than Female
shoppers (28.2%) visiting to modern retail stores in all four cities of Western
Maharashtra namely - Sangli, Solapur, Satara and Kolhapur.
2) Educational level of the shoppers is satisfactory from point of view of
communication and understanding during shopping activity. Most of the
customers are graduates (50.2%) and 21.4 % are post-graduates.
3) Majority of the customers (42.6%) belongs to young group from 21 to 30 years.
This is an opportunity because young customers can be convinced easily and
they like shopping activity.
4) Most of the respondents (44.8 %) are employed and 26.4 % are having their
own businesses. Most of the customers are married (58.6%) which means there
are chances that they might be purchasing items in food and non-food category.
5) It is found that major chunk of customers belong to nuclear family where needs
of family members are different. They purchase frequently but in small
quantity.
6) It can be seen from data analysis that from Sangli (37.6 %), Solapur (43.2 %)
majority of the respondents has monthly income between Rs. 10001 to 20000
and in Kolhapur (40.8 %) majority respondents show monthly income between
Rs. 20001 to 30000. In case of Satara (48.8 %) majority customers’ monthly
income is below Rs. 10000.
2. Purchasing Prior to Organized Retail Stores –
1) It is found that prior to modern retail outlets, majority of the respondents (56.8
%) were purchasing from particular shop only.
2) Significant percentage of buyers i.e. 76 % still go to Kirana shops for
purchasing items. They purchase from Organized Retail Shop as well as small
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Kirana shop. When things are needed in urgency, people may not go to
hypermarket or Shopping mall for some tiny purchases. They prefer nearby
shop for such purchases. Thus it can be said that traditional retailing is an
integral part of Indian retail.
3) 85.3 % of the customers usually purchase food items from Kirana Shops. Most
of the customers (20.2%) prefer to buy from Kirana shop because of ‘Good and
Reliable Quality’. 7.4 % customers go to Kirana shop because it is nearby
home, sometimes because Shopkeeper provides home delivery and they have
good relation with customers.
4) It has been found that, 42.4 % of the respondents still spend Rs. 500 to 1000 on
purchases from Kirana Shop and 37.9 % spend less than Rs. 500 monthly. 31.4
% customers visit Modern Retail outlet to get discount on purchases, 29.2 %
have shifted to modern retail shop because of ‘One stop shop’ Model. This may
benefit by saving time in traveling while going from shop to shop for various
categories.
3. Shopping at Organized Retail Format –
1) In Sangli ‘Big Bazaar’ is most preferred and then ‘D-Mart’. In Solapur ‘D-
Mart’ and in Satara preference is given to ‘Vishal Mega Mart’. In Kolhapur,
customers have given same preference to ‘Big Bazaar’ as well as ‘D-Mart’.
2) It is found that most of the shoppers (39.8%) shop once in a month and 27.4 %
shop 2 to 3 times in a month.
3) It is clear that there is more demand for personal care products then food and
grocery, then home care and clothing.
4) Majority of the respondents (52.2%) shop regularly in Modern Retail Shops and
34.8 % visit for special shopping. This brings out the fact that customers like to
shop regularly in Organized Retail formats.
5) Respondents from all three cities – Sangli, Satara and Kolhapur have allotted
first rank to ‘Saves Money’ as benefit while shopping in Modern Retail format.
In Solapur 44.5 % of the respondents have preferred ‘Time saving’ factor as
first rank on benefits of Organized Retail.
6) Monthly expenditure on Purchase from Modern Retail is up to Rs. 1000 by
maximum (40 %) customers and 36.4 % spend between Rs. 1001 to 2000
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monthly on shopping from Organized Retails. Majority of the Organized Retail
Formats which are existing in selected four cities belong to Discount Stores and
shoppers prefer to shop with discounted rates.
7) It is clear that customers choose to shop in Modern Retail outlet because it is
‘One Stop Shop’ model because they have opined that ‘We get what we
require’.
8) Respondents have given first preference to ‘Discounts and offers’ while they
rank reliability of the Organized Retailer. Second preference has been allotted to
‘Availability of Product’.
4. Buying Behaviour
1) It has been found that maximum number of customers (50.6 %) come by two
wheelers followed by 17 % coming by cars. Majority of the customers visit on
their own vehicles. This trend is also regarded as ‘Shopping basket on wheels’.
2) Major chunk of respondents (49.2 %) travel for 10 to 20 minutes while visiting
Modern Retail Shop for Shopping. 27.6 % of the customers take 10 minutes or
less for coming to Shop from their place to Organized Retail Store.
3) 84.8 % of the respondents agree that ‘Outer look of the building attracts’.
Therefore for retailers outlook of the retail format is very important from point
of view of attracting customers. Outer display helps to remind customers
regarding shopping.
4) It is observed that 86.6 % of the customers feel that billing counters are
sufficient. Insufficient billing counters may lead to unnecessary queue and
wastage of time. 91 % of the respondents feel that price is clearly mentioned on
the products. In case of EDLP (Every Day Low Price) format price must be
updated frequently.
5) It is seen that major portion of the response (67.4 %) agrees that, shopping in
modern retail outlets adds to get better social image. It can be prestige point for
customers to shop in modern retail outlets than purchasing from Kirana shop.
6) If ‘Brand Loyalty’ of the buyers is checked then it is clear that 53.2 % of the
customers go on shifting brand to avail promotional offer and discount. 24 % of
the customers always like to try new products and 22.6 % are sticking to one
brand while purchasing products.
316
7) Average amount of purchase in modern retails and monthly income are
dependent at Sangli and Kolhapur. This means as income increases
automatically expenditure on purchases at modern retails increases. Other two
cities Satara and Solapur bring out the fact that average amount of purchase and
monthly income are independent.
8) It is found that majority of the respondents (54.4 %) make monthly purchases
from Modern Shops worth between Rs. 1001 to 3000. This can be the average
amount of expenditure on food and non food items by generally middle class
customers especially with nuclear type of families.
5. Customer Satisfaction -
1) It is found that around 30 % of the respondents are totally satisfied with the
price charged by retailers and around 50 % of the respondents are happy with
the prices of products at organized retail store. 68.8 % of the customers are
satisfied with the level of price charged by modern retailers.
2) Approximately 10 % of the respondents have paid more frequently and around
20 % of the respondents sometimes have paid more than others for particular
item. This may be harmful for performance of Organized Retailer.
3) Approximately 70 % of the respondents are aware about offers by Retailers. It is
seen that 83.4 % of the respondents are satisfied with the promotional offers and
remaining; those who are not satisfied, the reasons shall be traced out.
4) Regarding experience about inferior quality of products, 26.9 % customers have
agreed that they frequently experience it. These types of experiences will make
customers to think of shifting to another retailer.
5) Very few (12.4%) customers said that they purchased outdated products
unknowingly. This means that proper inventory management and shelf
supervision is lacking in some cases.
6) It is found that 89 % of the customers are satisfied with the billing procedure.
Billing procedure is computerized and with use of bar coding system.
6. Private Labels
1) It is found that 24 % of the respondents surely prefer ‘Private Label’ by retailers
and 40 % prefer to buy. Private Labels are the brands introduced by Retailer as
317
one of the part in ‘Backward Integration’. This helps retailer to enjoy more margin
by competing with manufacturer’s brands.
2) Only 18.4 % of the customers feel that quality of ‘Private Label’ is ‘Very Good’
and majority (45.3 %) say it is ‘Good’. There is tough competition from Popular
Brands, therefore retailers need to be very keen regarding quality of these
products, because they need to divert customers from the brands that customers
is familiar with, towards a new brand.
7. Merchandise Management –
1) ‘Unlimited assortment’ term refers to too many products and brands availability
in particular range of product. It can be difficult for a buyer to decide one
product which is most suitable for him/her out of large variety of the products.
16.4 % customers strongly agree and 26.2 % agree that ‘unlimited assortment
creates confusion while purchasing.
2) It is found that if required brand is not available with retailer then most of the
customers (39.2 %) prefer to purchase substitute brand. 29.4 % customers have
said that they decide depending on type of the product they purchase. For
products like cosmetics, apparels etc. people may change brands easily. But
electronic appliances or food products etc. customers may not go for substitute
brand. This might be the reason for 21.4 % customers who go to another retailer
for same brand.
3) It is found that 88 % of the respondents agree that ‘Product display reminds of
purchasing it’. It is the general trend while shopping in modern retail formats
that buyer while going through all sections purchase as they remind of their
need. This is the most important part of ‘Merchandise management’.
4) It is found that majority (28.6 %) said that they always purchase many things in
addition to the listed requirements. 26.2 % of the respondents decide products to
purchase with the help of displays. 17.4 % respondents like to enjoy shopping
while going through all the shelves with ample time. This means for these
differentiating styles of shopping than traditional retailing, people visit and get
such benefits of modern retails.
318
8. Shopping Environment –
1) Store environment is the total combined effect of lighting, ventilation, noise,
cleanliness, housekeeping etc. 89.4 % of the respondents are satisfied with the
store environment provided by retailer.
2) It has been found that 93.4 % of the customers are satisfied with the lighting
arrangement inside modern retail store. Generally modern retailers take care of
this factor of lighting and illumination because they need to create perfect
shopping environment for their customers which results in attracting customers
towards various categories of products.
3) 82.8 % of the respondents agree that signage provided by the retailers is
sufficient and informative. Various types of information have to be given by
retailers – directions, facilities like parking, washrooms, enquiry, customer
support etc. In addition to this product categories and sections are important for
new customers.
4) It is observed that 92.6% customers are happy with comfort while shopping
because of arrangement of shelves and racks. In modern retail outlets
customers self help to handle and select products. This is the reason that
comfortable arrangement of shelves and racks is necessary.
5) Opinion about space for movement is also one of the crucial factors while
considering shopping environment. Congested arrangement results in problems
and uncomfortable feeling while moving between shelves. Around 80 % of the
respondents are satisfied with the arrangement of racks and shelves.
6) It is found that, 30.4 percent of the customers have strongly agreed and 32
percent agreed that congested areas can harass, frustrate and injure the
customers while moving in the retail outlets.
7) Signages give information to shoppers regarding directions, various sections,
offers and schemes etc. 41.8 % of the customers felt that organizational,
location; category and promotional signage provide them required information.
28.8 % definitely say that signage provide needed information.
8) Attractiveness of the store makes customers feel good while shopping. It is
found that 83.6 % of the customers are satisfied with attractiveness of the store
while considering store décor.
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9. Category Management -
1) Regarding availability of fresh vegetables in organized retail formats, 46.6 %
respondents are happy with it. This is also important consideration from the
point of view of category management by organized retailers. Customers
generally become happy on getting all categories available at one place.
2) In case of food items, those are to be preserved properly. 68 % customers feel
that retailers preserve those properly. If food products like fruits and vegetables,
milk and milk products, ready to eat products, not preserved properly then those
get spoiled. This may result in disappointment of customers as well as loss for
retailers.
3) It is observed that most of the customers (73.4%) are happy with sufficient
cooling of cold-drinks. This means that retailers have made proper arrangement
of cooling.
4) In Organized Retail stores generally products like grocery items are available in
packing only. But sometimes customers need small quantity and that size
packing may not be available. But 65.4 % customers are happy with that aspect
and say that they get small packs as per their requirement.
5) Similarly some customers with large family size or occasionally may require to
purchase in large quantity and retailer may have limited sizes of packs. Buyers
also expect discount on purchase of large quantity. But 62.2 % of the
respondents are happy with the availability of the products in large quantity.
6) In Organized Retail Chain Stores there are many product categories made
available and all those should be properly displayed. Area provided for each
category should be sufficient to avoid mess in arrangement. 85.4 % of the
respondents are happy with the allotted area for each product category.
10. Customer Service -
1) In Organized retail chain stores, mostly sales attendants are available for
assisting buyers while searching and choosing correct products. This is also a
unique feature of organized retail so that buyers save their time and energy
while searching for the products. It is seen that 12 % of the respondents very
frequently get help from sales attendants. 34.2 % frequently and 27.4 %
respondents sometimes get help from sales attendants.
320
2) It is found that, 47.4 percent customers felt that the sales attendants show
interest to find out the required item 23.4 percent opined definitely yes. But 19.2
percent of the respondents said that the sales attendants are not interested to find
out the items which customer require. 65.4 % of the customers are satisfied with
participation of sales attendants to choose right product.
3) Uniform of the staff and manager of retail outlet gives pleasant look to the retail
outlet as well as it gives professional look and good feeling. Around 61 % of the
customers in Sangli, 50 % customers from Solapur and Satara and 58 %
customers from Kolhapur felt that the staff and managers appropriately and
smartly dressed.
4) Most of the customers (54 %) did not respond regarding complaint about
retailer. 16.4 % complained that products are not available. There are few
complaints regarding poor customer service as well as billing errors.
5) Total 16 customers from Sangli, 23 from Solapur, 8 from Satara and 31 from
Kolhapur city only have filed complaint because of many reasons like- poor
response, staff behavior, quality, non availability of products etc.
6) In all 74.8 % of the respondents said that customer help desk handling is
efficient. This means that there is proper provision made by researcher to handle
customer enquiries and problems. This is an additional service made available
by retailer to make customers delighted.
7) At Organized Retail Outlets, when customers visit for shopping, that time they
need to park their vehicles and deposit baggage at counters. 64.6 % of the
customers are satisfied with the arrangement of parking and baggage counter by
retailers.
8) Approximately 70 % of the respondents are satisfied with the parking facility
provided by retailer. Parking facility is one of the important peripheral services.
It has been observed that D-Mart especially provides ample parking and
recreation facilities but some retailers like Vishal Mega Mart, Big Bazaar etc.
do not have sufficient parking space.
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11. Future Scope for Organized Retailing -
1) In western Maharashtra this is the growth stage of life cycle of Organized
Retailing and many more big retailers are keen to enter in this market. Response
from customers regarding new retail outlets was studied. 52.8 % of the
customers definitely said that they will like to try new retail outlet.
2) Acceptability of the new retail outlets by the customers is studied by researcher
and it was found that majority customers opined that they will be definitely
happy if big retailers like Wal-Mart enter their city. 63.8 percent said they will
be definitely happy. 30.8 % will be happy with this. This shows that the
customers are willing to have more retail outlets to enjoy shopping.
3) As modern retail outlet provides facility of ‘One Stop Shop’ as well as
entertainment and recreation, 51.2 % of the customers feel that visit to modern
retail outlet provides entertainment cum shopping facilities because of which
customer get attracted towards it to spend leisure time.
322
Section – II: Unorganized Retailers
1. General Profile of Traditional Retailers –
1) Unorganized Retailers’ response was considered to know impact on their
business because of Modern Retailers. It has been found that some businesses
are established since 70 years. Majority of the retailers (57.1 %) are running
their business since last 10 years.
2) Out of 35 small shops selected from four major cities in western Maharashtra,
22 businesses are run under ‘Sole Proprietorship’ and 10 shops are ‘Family
Owned’. Most of the businesses are owned by individually and few are family
businesses.
3) It has been observed that majority (10) shops selected in the vicinity of
Organized Retails are grocery shops. Seven shops are cloth shops and shops
under category of any other are also seven. In addition to these there are other
businesses like stationary, gift articles, electronics etc.
4) It is found that in 51.4 % of the shops, daily less than 50 customers visit
whereas in 28.6 % of shops approximately 100 customers visit. This makes it
clear that most of these small businesses have very limited scope of operation as
compared to Organized Retailers.
5) Monthly sales of these selected shops is reviewed and it is clear that majority of
shops (31.4 %) have their monthly sales up to Rs. 1,00,000 and 28.6 % of the
unorganized retailers have shown their monthly sales between Rs. 1,00,001 to
Rs. 2,00,000.
2. Organized Retail and it’s Impact on Business –
1) Awareness of these small retailers about Modern Retails in their cities is
checked and it is found that very few know about big retailers operating in
chains. 77 %of them know only about local level modern retailer formats like
supermarkets.
2) It is found that 62.9 % of the retail shop owners said that there is no adverse
impact on their business and only 37.1 % of the unorganized retailers agreed
that they are seeing adverse impact on their businesses because of entry of
organized retailers.
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3) It is found that out of 13 businesses, 8 are facing 5 % negative impact on and 4
shopkeepers said they are facing negative impact on their businesses up to 10
%. Only one traditional retailer is suffering from more than 15 % of their sales.
4) Opinion of the customers regarding impact on volume on businesses shows,
retailers have agreed that their volume of business has been reduced because of
entry of organized retailers.
5) There is balanced response on opinion about ‘Entry of big retailers has made
negative impact on profit’. 20% have strongly agreed and 20 % have strongly
disagreed with this statement. Majority 28.6 % did not agree with this opinion.
6) It is seen that unorganized retailers have brought out various reasons for the
problem of shifting their customers to organized retail. Majority, 22.9 % feel
that ‘discount on MRP’ is the main reason behind this problem.
3. Opinion about Traditional Retailing –
1) Small retailers were asked about strengths of businesses. It was found that
majority of them (20 %) said that they provide qualitative service and after sales
service to the customers. 20 % also said that they sell qualitative and durable
products.
2) Traditional Retailers stated their weaknesses, and then 25 % retailers said that
there is no weakness with their business. 17 % said that they can give limited
discount and limited stock. Few said there is small space and limited
investment.
3) Benefits for which customers prefer to purchase from small shop were asked to
rank then maximum retailers (68.57 %) have given first rank to reliability
factor. This means according to retailers, customers come to them as reliable
source.
4) Opinion about impact on employment on unorganized retailing was asked.
There is no unemployment observed in the unorganized retailing sector by the
most of the retailers (54.3 percent). Only 20 percent of the retailers agreed that
there is unemployment in unorganized retailing.
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4. Special Features of Traditional Retailing –
1) It is found that traditional retailers know their customers personally and
therefore they know their likes, dislikes and preferences. This adds personal
touch when they buy from small shop. Majority of the retailers (42.9 %) know
their 25 percent of the customers personally.
2) Traditional retailers generally sell products on credit and there is a trend that
customers pay the bills for whole month when month gets over. This can be the
reason that majority of the retailers (31.4 %) offer 31 to 45 days credit period.
3) Provision of ‘Home Delivery’ of products is one of the important criterions for
purchasing from Kirana Shop. It is found that 55.3 % of the retailers provide
home delivery.
5. Strategies to cope up with Competition –
1) Efforts were taken to know about the changes made by the traditional retailers
to match with organized modern retailers then it was found that 33.4 % of the
retailers did not make any changes in their shop.22.8 % said that they are
working more on display of items to attract customers. Others said
modernization, new furniture, shelves etc. changes are made by them.
2) It is found that most of the small retailers (71.5 %) did not make any change in
the storage of products. Other retailers made changes like packaging and then
storage, display on shelves etc.
3) It was asked traditional retailers regarding allowing their next generation to
enter in the same business, then majority (65.7 %) of the retailers are ready to
bring their next generation in the business. They are positive about future of
their business.
4) It is found that 71.4 percent of the traditional retailers are making changes in
their business to keep with the recent times and to overcome competition from
Organized Retails. This makes clear that they are ready to compete with modern
retailing.
5) Traditional retailers have their future plans to compete with retailers.
Approximately 25 % of them have not decided details yet. Others have decided
to modernize shop, expansion, adding new variety of products etc.
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6. Opinion about Organized Retailing –
1) Traditional retailers have stated few strengths of modern retailing, out of those
maximum i.e. 17.2 % feel that it is ‘One stop shop’. Other strengths are –
attractive display, more space, discounts, modern facilities etc.
2) Weaknesses of modern retails are highlighted like customer relations
maintained by the modern retailers (25.7 %), no service and poor customer
service (22.8 %) and cheap and low quality items (14.3 %). Few other
weaknesses of Modern Retailing are also pointed out by small shop owners – no
credit, no home delivery, no after sales service etc.
3) Opinion about ‘Customers get attracted because of infrastructure, technology
and variety’ was asked then 48.6 % of the retailers have strongly agreed with
that and 25.7 % have agreed with the statement.
4) It is found that 45.7 % of the traditional retailers are not happy with the entry of
organized retailers in their market. Because of Modern retailers customers are
changing their style of shopping and shopping has become leisure time
entertaining activity for them.
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Suggestions
1. ‘One Stop Shop’ model
It is observed that customers are looking for Convenience in shopping,
enjoyment and time saving. As the competition increases and customer becomes
knowledgeable and demanding, the retailer needs to build competitive
advantage. The element of convenience is fast gaining prominence in the world
of organized retail. Therefore Organized retailers shall try to make available all
categories of products under one roof by providing ‘One stop shop’ model. It
helps customers by saving time in travelling from one shop to other and
utilizing same time for entertainment. Most of the retailers considered for study,
were not running all the sections like ‘fruits and vegetables’ etc.
Many retail companies today are rethinking their retail strategies. While the
existence of customer is integral to the existence of the retailer, the ability to
understand consumer is the key to develop successful retail strategy. To be able
to satisfy customer, is to understand them their needs, and how they respond to
various marketing efforts done by organized retailers.
2. Focus on ‘Customer Experience’
One of the main objectives of retailer is to deliver qualitative service to the
shoppers. Customer service is largely a function of perception, customer
expectation and actual service provided. In the age of intense competition, a
retail organization is concerned with the image that stores carries in the minds
of customers. Many a times reputation of the stores and the service offered
become impotent criteria for the customer while selecting store for purchases.
One of the leading problems faced by many retailers is lack of differentiation
among competitors. They can tackle this problem by focusing on improvement
in the experience of customers in the store. This encompasses far more than
customer service and shall include all elements influencing customers such as
store layout, signage, lighting, service and the ease and speed of transactions.
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3. ‘Shopping Basket on wheels’
There is a trend of using vehicle – car or two wheelers while coming for
shopping. It is conveniently called as ‘Shopping Basket on wheels’. This is
because of the central location of the retail formats which are not located in the
proximity of shopper. One of the most important decision retailer has to make is
on the location of retail outlet. Accessibility is most important factor considered
by customers while deciding retail format for shopping. Now a days because of
improved roads and ample availability of automobiles, people mostly travel on
their vehicles for shopping.
Most important part for retailer is making sufficient and proper arrangement of
parking vehicles. It is seen that in selected cities many retailers are not having
sufficient parking space. This can become deciding factor while choosing
Organized Retail Store. Therefore Organized Retail store must have ample, safe
and secure parking space.
4. Private Labels
It is observed that there is no much popularity for ‘Private Labels’.
Manufacturer’s brands are already established and popular because of heavy
promotion. Most significant advantage that a private label allows a retailer is
that of earning a level of margin which may be higher than what is offered on
other brands that are chosen to retail. Throughout the world private label are
gaining acceptability and loyalty of customers. Retailer has a task to attract
customers by using promotional offers towards ‘Private Brands’. In order to
compete with national brands, private label need to focus on quality. In addition
to this quality of private brand must be comparable to popular brands then only
customers can be retained in future. Power of private labels must be understood
by retailers so they need not be at the mercy of popular brands. Private labels
are no more price- fighter but value added marketing differentiator.
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5. Merchandise Management
Merchandising in retail is the orderly, systematic, logical and intelligent way of
displaying all products in store. The biggest challenge in competitive world of
retail is stay relevant to the customers. In order to stay relevant to the customer,
retailer would understand his needs and then make available products according
to requirement. Awareness of general economic conditions is also required to
which will enable anticipation of buying patterns. Anticipating consumer
preferences and ensuring that goods are in stock when they are needed requires
resourcefulness on the part of retailer. The success of any retail operation is to a
great extent depends on retailer’s ability to provide right goods, at right time, at
right place and in right price.
Many customers always purchase many things in addition to the listed
requirements, some decide products to purchase with the help of display and
others like to enjoy shopping while going through all the shelves with ample
time. This is an opportunity for retailer and can be grabbed by making attractive
display of all possible products. This will attract attention and then remind
customer about purchasing it. Various storage and display methods can be used.
In addition to shelf and racks, hangers, gondolas, baskets, beans can also be
used. Arrangement should not also give congested look to the store.
6. Shelf Management
Quality of products and proper shelf management are also the important factors
while considering customer satisfaction and retaining them. Many customers
have responded that they experienced inferior quality of products and
sometimes outdated products unknowingly. This will make for them unhappy
experience and retailer may loose customers. Therefore, Organized Retailers
shall not compromise with quality of products while offering products in less
price as well as they must monitor shelves regularly so as to remove outdated
products strictly from shelves. Experience of outdated food products as well as
cosmetics and heath products category by consumer is most harmful to retailer.
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Non availability of products may also disappoint customers and they may shift
to another retailer. Therefore organized retailer must manage to always make
available presence of products on shelf.
7. Customer Service
Retail today is a part of service sector and customer service can become
powerful strategy. Today’s customer is savvy shopper with an eye for service.
Entire function of customer service needs to be understood by retailer because it
directly deals with the interaction with the customers. In the age of intense
competition a retail store has to create its image which is concerned with service
provided and experience while shopping. Retailers lose customers due to
attitude of rude employees.
Sales attendants, staff sand managers must behave properly with customers.
They must try to help customers in case of doubts, non availability of the
products etc. Behaviour of staff can be deciding factor when customers think
about delighting service. Customer expects that a sales person will have a fair
amount of information and will be able to advise them. Therefore, retailer must
train their sales persons so as to handle customers effectively while resulting in
delightful shopping. While customer service has become immensely necessary
part of the retail trade, it is equally necessary to provide service quality.
8. ‘Competitive Response’ by Traditional Retailers
It was feared that organized retailing will eliminate the traditional retailers. But
they would continue to coexist and will not be seriously affected because
organized retailing is developing its own distinctive market. Small stores should
also give additionally goods on credit and home delivery and attractive deals.
There should be competitive response from traditional retailers who are gearing
up to meet the threat from organized retailers. There has to be competitive
response from unorganized retailers through improved business practices and
technology upgradation.
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Unorganized retailers must adopt steps like- adding new product lines and
brands, better display, renovation of the store, introduction of self service,
enhanced home delivery, more credit sales, and acceptance of credit cards etc.
9. Formation of co-operatives and associations
Unorganized stores have their own USP in terms of convenience due to their
proximity, personalized service and deep understanding of their customer’s
behaviour and lifestyle. Those who will adapt and improve will survive and
grow. Small retailers can also form co-operatives or associations to avail
advantage of bulk purchase which facilitates fewer prices. They can directly
procure from suppliers or farmers. With some changes in policies and practices,
traditional retailing can overcome adverse impact on modern retailing.
10. Rural Retail Development
India is dominating in agriculture business and around 70 % of the GDP comes
from it. It is observed that there is vast development of organized retailing in
urban area but rural retail is an different concept in itself. Rural retail
development has been initiated by ITC Choupal Sagar, Hariyali Kisan Bazar
etc. especially in North India. It can be initiated in Maharashtra by these
retailers. Organized retailers can go for contract farming. This will assure
farmers continuous and more returns to farmers. There is also scope for dairy
business for supplying to moern retail outlets. There is much more scope for
increasing consumption of dairy products especially in cities. This will provide
employment and business opportunities in rural area, ultimately helping to
develop.
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Conclusion
In current scenario retail has emerged as a separate function by itself. Indian Market
has just entered the stage of growth and this can last for 15 to 25 years. Many retailers
will move from local to national presence. The environment in a large organized retail
store is significantly different from that in a traditional or mom and pop store. With the
emergence of large supermarkets hypermarkets and other formats retailers have come
in more contact with customers. Unorganized Retailers in the vicinity of organized
retailers experienced a decline in their volume of business and profit in the initial years
after the entry of large organized retailers. Adverse impact on sales and profit weakens
over time. There is competitive response from traditional retailers through improved
business practices and technology upgradation.
The concept of retailer’s private label has emerged. A strong trend in favour of
organized retail format is being witnessed in food and non food sector as people are
showing preference for one stop shops. Customers are also looking for convenience in
shopping. This would continue more strongly in future. With more dual income
families, the consumer’s ability to spend will increase, but at the same time, it is
predicted that the time available for shopping will go down. In such a scenario, the
retailers will have to take steps to develop shopping as an experience, though the more
successful retailers will be those that will provide faster services.
Growth of organized retail industry will have positive multiplier effect on Indian
economy. Retail industry is attracting a domestic and global investment which also
supports several industries like IT, cold chain, logistics, and warehouse distribution.
The surge of private labels have generated demand and sourcing tie-ups with
manufacturers. In case of fruits and vegetables, direct procurement is bringing
quantitative benefit from higher price realization and qualitative benefit by improving
agro-processing services. It will result in complete revamp of the agricultural supply
chain. Organized retailing will remove various inefficiencies of present Indian
distribution system which in turn will provide better price for farmer and supplier and
lower price for consumers.
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Organized retail has created many employment and business opportunities of higher
quality. It is going to enhance employment potential of Indian economy. Organized
retailing provides direct employment in retail and indirectly in many other dependent
industries like food processing, packing, IT, transport, cold chain logistics and
infrastructure.
This research work contributes to academics by making available detail analysis of
worldwide and Indian retail industry. Students are going to benefit from this research
work because of deep insight of retailing as one of the important business activity in
current scenario as well as in future.
The present research work contributes to knowledge of society by making them aware
about current developments and future scope of this business. This may also guide
other researchers to study it further.
Future scope of study:
By considering vast scope of retailing, researcher could study only selected four cities
in western Maharashtra. This scope can be widened while considering different cities,
towns etc.
The research does not consider non-store retailing and e-tailing. This can be further
studied because developments in communication facilities have great impact on these
upcoming methods of retailing.
Organized Retail chains in multi-brand and multi-product category only are taken into
consideration in this study. But there is vast scope in single brand or single product
retailers like McDonalds, Pizza Hut, Café Coffee Day, Titan, Gold Plus, Cotton King
and many more.
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