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CHAPTER – I
INTRODUCTION
1.1 MEANING, DEFINITION OF RETAILING
Introduction
Retailing is the activity of selling goods and services to final consumers for their
own personal use. It is concerned with getting views in their finished state into the hands
of customers, who are prepared to pay for the pleasure of eating, wearing or experiencing
particular product item.
Retailing forms an integral part of the marketing mix. Customers are first
introduced to the product at the retail store. Retail stores serve as communication hubs
for customers. The role of retailing in the marketing mix is very significant. Retailing
can be divided into two major classifications, viz., organized and unorganized.
Organized retailing is one in which there is a proper organized ownership, permanent
employees, fixed place involving standardized business practices.
Unorganized retailing is one which is not organized. Often, the family members
take care of the business. The size of the business is very small and sometimes its form
part of the residence of the owner. There is no fixed place for shop and the business
practices are not at all organized. In India, majority of the retail outlets come under the
unorganized category. The organized sector is slowly entering the Indian market.
Retailing consists of all business activities associated with the sale of all goods
and services in small quantities directly to the consumers for their personal, family or
2
household use. It involves the sale of merchandize from a fixed location, such as a store,
for direct consumption by the customer. It can be defined as an activity that ensures
maximum satisfaction for the customers from the buying process.
Retailing as an activity can be traced back to the times when human beings
stopped producing all their requirements by them self and trading came in to being.
Retailing involves a retailer, traditionally a store or service establishment that deals with
consumers who are acquiring goods and services for their own use rather than for resale.
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. Retailers provide the accessibility of location and convenience of timing, size,
information and life style support. When retailers perform these activities, they create
value for their customers, who pay for the services. These values are created continuously
through a combination of service, price, accessibility and convenience.
Viewed in the context of the channel of distribution, retailers are the important
final link in the process that brings goods or services from producers to consumers.
Retailing is the business of buying goods in large quantity from a manufacturer or a
wholesaler and then selling these products to consumers.
Retailing services consist of the sale of goods or merchandise for personal or
household consumption and related subordinated services. Retailing is the interface
between the producer and the individual consumer buying for personal consumption.
3
A retailer buys goods or products in large quantities from manufacturers or
importers, either directly or through a wholesaler, and then sells individual items or small
quantities to the general public or end-user customers at a margin of profit. Thus retailers
are at the end of the supply chain and retailing is the last link that connects the individual
consumer with the manufacturing and distribution chain.
The retail trade sector comprises establishments engaged in retailing,
merchandise, generally without transformation, and rendering services incidental to the
sale of merchandise. The retailing process is the final step in the distribution of
merchandise. Retailers are, therefore, organized to sell merchandise in small quantities to
the consumers and not for resale.
The word „retail‟ is derived from the French word „retailer‟, meaning „to cut piece
off‟ or „to break bulk‟. In simple terms, it implies a first-hand transaction with the
customer. Retailing involves direct interface with the customer and the coordination of
business activities from end to end – right from the concept or design stage of a product
or offering, to its delivery and post delivery service to the customer.
Retailing is activity concerned with getting goods in the finished state into the
hands of the customers who are prepared to pay for the pleasure of eating, wearing or
experiencing particular product items. Retailing is all about the distribution of goods and
services because retailers play a key role in the journey that products make from a
manufacturer, a grower or service-provider to the person who consumes. Retailers
provide a collection of service benefits to their customers such as being located in
convenient places, editing product ranges according to shopping tasks and selling goods
4
in quantities that match personal consumption level. Retailing is therefore a deceptively
simple management process–yet fascinating complex in its detail.
1.2. BACKGROUND OF THE STUDY
Manusmriti and Kautilya‟s Arthastra, provided guidelines for dealing with
customers, after-sales service, quality and price guarantees. Such scholarly works
provided the equivalence of for exchange in case of barter. They also defined the tax
structure for retail and wholesale transactions. Kautilya commented on the location of
stores dealing in specific products in the city. Memoirs of traders who came from Europe
indicate that Indian merchants carried out business with low margins in order to enhance
sales.
Indian history and archaeology record the existences of markets during the
Harappan civilization also. Elaborate descriptions of local and periodic hats have also
been found. These were the places were commodity exchange was carried out and people
congregated and derived several non-economic values. Retailing as an occupation came
into existence when farmers started producing surplus food than they require.
Early signs of organized retail were visible in the 1970‟s when Nilgiri‟s (food),
Vivek‟s (consumer durables) and Nalli‟s (silksarees) started diversifying their operations.
While these retailers gave the necessary ambience to the customer, little effort was made
to introduce world-class customer care practices and improve operating efficiencies.
Moreover most of these modern developments were restricted to South India, particularly
Chennai which is still regarded as one of the important land mark of Indian Retail”.
5
On account of the liberalization drive in the 1990‟s, several structural and
demographic changes helped the industry to grow. The GDP grew by 6.6 percent in the
last decade resulting in increased income levels and higher purchasing power of the
population. Increasing literacy levels, increasing number of working women, increasing
media penetration has raised aspiration levels of the population, resulting in demand for
better shopping experience and larger variety of goods.
India has close to 54 per cent of population below the age of 25, which translates
into higher prospects of increased consumption levels in the future. Finally interest rates
have also declined in the past few years further propelling the consumption demand.
These factors were the key drivers for the retail wave in the industry. Notably among the
early entrants were players like Shoppers Stop, Pantaloon, Ebony, and Food world etc.
Initially, the growth in organized retail was very slow and concentrated mainly in
the metros with South India holding its ground as the pioneer in organized retail growth,
on account of the low cost of real estate. Due to the high investments required in the
early stages and the fact that the real estate was the key-deciding factor for success of
stores, real estate developers have been the major players in the industry.
6
Table 1.1
Sponsors
Group Retail Businesses
Rajan Raheja – Real Estate Developer Globus – chain of departmental stores
K Raheja – Real Estate Developer
Shoppers Stop – chain of departmental
stores
Hiranandani – Real Estate Developer Haiko supermarket, Loft shoe store and
Hakone mall
TATA - Diversified Business House
Westside – chain of departmental stores
DS Group – Rea Estate Developer Ebony - chain of departmental stores
RPG – Diversified Business House
Food World, supermarkets, Giant
hypermarkets, Health & Glow beauty and
health stores
DLF – Real Estate Developer DLF malls
ITC – Diversified Business House Wills Sport – chain of apparel stores.
Source: KSA – Techno Park Research
In the early 90‟s as the players were lower down on the learning curve many
faltered in their models, and growth of the industry remained slow. The second half of
the 1990‟s saw many players making losses and exiting from the business.
The concept of retailing in India dates back to ancient times when it was mainly
in the form of weekly markets and the village fairs (Melas). Changing socio-economic
patterns and consumption levels shifted the focus of retailing to mainly convenience
stores (mom and pop stores) for daily needs with few prominent retailers on the high
street in each city. While talking of Indian Retail, a special mention must be made of the
role played by the PDS outlets, Co-operatives and Khadi stores. The Indian
Government‟s Public Distribution System (PDS) Outlet chain is amongst the largest retail
chains in the world.
7
Retailing has always been here in our country – we have centuries old tradition of
retailing. Indian retail industry is perhaps the oldest in the universe. Our focus in retail
could be traced way back in the history when Veda assigned „Vaisya‟ community to do
trading and business. The common bath (paid baths) at Mohenjodaro is perhaps one of
the earlier examples of service retailing. Melas could be examples of temporary malls
complete with shopping, food and entertainment options. Today, every town has its
„retail stars‟ – these can be found in Karolbagh in Delhi, or Pondy Bazaar in Chennai, or
in Chickpet in Bangalore.
The retail industry in India can be broadly classified as organized and
unorganized. Unorganized retail refers to traditional retail formats which are owner-
managed while organized retail refers to professionally managed retail stores. Indian
retail industry has been largely dominated by unorganized retail which accounts for 96%
of the total retail industry.
Most international brands which have entered India in the past few years have set
up franchises to provide high visibility and retain identity, rather than succumb to the
clutter of a 75 sq m multi-brand independent retailer. Many such as Arrow, Lacoste and
Lee, are not retailers elsewhere in the world, but their Indian licensees have judged sales
through exclusive shops to be essential to establishing the brand successfully.
8
Diagram 1.1
Comparative Penetration of Organized Retail
15%
19%
45%
60%
70%
80%
96%
U S Taiwan Malaysia Thailand Indonesia China India
Source: KPMG Report
Unorganized industry can be further classified as those occupying fixed locations
like kirana stores, drug stores and pan shops and mobile retail like street vendors and
hawkers who sell at village mandis and on push carts.
9
1.3 SIGNIFICANCE OF THE STUDY:
Retailing is one of the fast emerging sectors in a developing country like ours. Its
future and prosperity is dependent on other related sectors like agriculture and industry.
Therefore, the development of retail automatically leads to the development of other
related sectors, which ultimately leads to the development of the country‟s economy as a
whole.
The following points highlight the importance of retailing and its implications on the
various related sectors of the economy:-
Development of Real estate: The retail industry‟s real-estate requirement will be
in millions of square feet in the years to come. This will release for productive use
large tracts of land lying with various government agencies. 100% FDI is allowed
in real estate development and this will make a large chunk of quality
infrastructure available for modern retailing.
Improvement of Tourism: One of the best features of any city that attracts a
large number of tourists every year – London, Singapore, Dubai, New York and
so on–is a well–developed shopping environment. Organized retailing will help
significantly in developing our cities as tourist destinations. And, if well-marketed
and managed, it can significantly enhance government revenues, apart from
spreading the word about ethnic Indian brands across the world.
Higher GDP: The value that retailing can add to the economy should not be
underestimated. Organized retailing has huge potential, which could lead to
10
higher GDP growth and result in increased consumption. Organized retailing
could also bring about the transformation of the agricultural supply chain, remove
inefficiencies in the distribution of consumer goods and improve productivity
while providing consumers with a better range of products at better prices in a
better ambience at the same time.
Economic Growth: India‟s economy in the past has primarily been agrarian in
nature, but the services sector has been growing exponentially and now forms 47
per cent of the GDP. Software services, in particular are booming and fuelling the
GDP growth. Consumer price inflation is lower than the double-digit inflation of
the early 1990s, leading to higher disposable incomes.
Outsourcing opportunities: Organized retailing is a billion dollar industry.
Outsourcing will be undertaken on everything from supply chain management to
pilferage control and loyalty management.
Expenses on advertising and promotions have also gone up many times, which
will result in considerable increase in revenue for retailers. In countries where
retailing and modernization has progressed, it has favorably affected the value-
capturing capacity and modernization of the farming industry. It has also
restructured the supply chain for all FMCG products, brought down customer
prices on a sustained basis, created significant employment opportunities. The
revenues of the various State Governments and the Central Governments has
increased through taxes collected, ultimately leading to increase in national
11
wealth. For instance, the success of the VAT proposal depends on it being
implemented at the retailer level.
The country‟s dynamic retail landscape presents a great opportunity to investors
from across the globe, to use India as a strategic business hub.
One of the major advantages of a developed and advanced retailing setup is the
generation of competition. This leads to reduction of prices, better products and
innovations and enhanced customer experience.
Retailing is the last mile infrastructure to access and deliver goods to consumers.
Retail forms the backbone of the nation’s delivery system and its importance can
be exemplified by the network of KVIC (Khadi & Village Industries Corporation)
outlets which support small and medium handicraft manufacturers.
The Indian retail sector is no more nascent today. The Indian retail sector is only now
beginning to evolve in line with the transformation that has swept other large economies.
There has been a significant change in retail trading over the years, from small
kiranawalas in the vicinity to big super markets; a transition is happening from the
traditional retail sector to organized retailing. The unorganized sector still holds a
dominant position in this industry. The organized segment holds just about 1.2% of the
current US$ 245 billion retail market, which is expected to reach about US$ 385 billion
by the middle of this decade.
With consumers looking at convenience with multiplicity of choice under one roof
and expectations evolving over time, consumer demand is truly the driving force for
12
organized retailing in the country. As India goes through this transformation, a new
business with sales of $ 1 billion - $ 2 billion will be created in grocery and $250 million
- $500 million in apparel as per KSA estimate. Smaller, but interesting opportunities will
be created in other sectors like books, electronics and music.
A growing presence is increasing consumer awareness, accessibility and
loyalty to brands. This provides the opportunity of large and better-organized retailers to
grow and develop.
The Indian retail sector is going through a period of consolidation and fast
changes. A number of new players – both domestic and foreign – are entering the
industry. Driven by rising incomes, favourable demographics and changing lifestyles, the
Indian retail industry is witnessing increased activity in terms of expansion: entry of
international brands: and increasing focus on technology and operations.
1.4. STATEMENT OF THE PROBLEM
Retailing is one of the biggest sectors of Indian economy with a turnover of
around $245 billion. Yet it remains an underdeveloped, fragmented and inefficient sector
in the country. With around 13% contribution to the GDP and 7% employment of the
national workforce, retailing no doubt is a strong pillar of the Indian economy. What it
requires is more corporate backed retail operations that have started to emerge over the
couple of years.
13
The unorganized sector is highly fragmented and consists of family owned
businesses. India has the highest shop density in the world with 11 shops for every 1000
persons. 95% of these outlets have shop area of less than 500 square feet.
A majority of retail outlets are basically kirana stores with basic offerings, fixed
prices and little ambience, and result in little more than subsistence for their owners.
Organized retail overall stands at 2% of the total industry, and this figure varies across
categories.
India has the highest number of retail outlets per capita in the world but has the
lowest retail space per capita in the world (2 ft / person). Out of these 5 million outlets
96% are smaller than 500 sq.ft. in area 3. About 350 million people live, within one-
minute walk of these retail shops. According to retail census, Rs.4,79,568 crore worth of
products were sold through these 5 million retail outlets.
14
Diagram 1.2
Traditional Stores – Continuing to Expand
7.8
-
7.6
-
7.4
-
7.2
-
7.0
-
6.8
-
6.6
- 6.5
6.4
-
6.2
-
2003 2004 2005 2006 2007
Source: AC Nielson
15
Unorganized retail in India is growing at an annual rate of 3% in contrast to
organized retail which is growing at 32%.
Euromonitor International report on Indian retail industry
In 1950 India had a population of around 350 million and had 2,50,000 retail
outlets. By the year 1999 the population of India had grown to 970 million and
simultaneously the number of retail outlets has also grown to 53,70,000 outlets. This
makes India one of the countries wit the highest number of retail outlets per capita in the
world.
However 96% of the retail sales come from small unorganized retailing with shop
space less than 500 sq.ft. The shop space per capita in India is around 2 sq.ft. which is
significantly smaller than developed markets? For example, USA has shop space per
capita of around 19 sq.ft. The number of persons being catered to by each store in India
is approximately 180, the corresponding figure for US is approximately 2100. The retail
outlets in India include large and medium sized chains, chemist‟s shops and others
(mainly paan bidi kiosks)
Retail industry in India is estimated to be US $330 billion industry and is
expected to reach $430 billion by 2010. India has been ranked number one in
A.T.Kearney‟s Global Retail Development Index in both 2005 and 2006 on the basis of
market attractiveness, risk and saturation. Organized retail accounts for only 4% of this
industry and thus presents a huge opportunity for new players to enter this market and
exploit the opportunity.
16
This is clearly indicative of small-shop ownership crowding the unorganized
segment of retailing. While this fragmented market structure does pose significant
challenges for organized retailing, potential does exist if modern information and supply
chain management systems are deployed to support the development of convenience
shops that match customer expectations.
Retailing is not yet a structurally organized industry, probably as a result of the
sheer size of the country, its regional diversity and until now, fairly limited infrastructural
support. This has precluded the possibility of infusion of better systems and the
technology for improving retail performance, while retail management skills have been
concentrated in the store‟s owner-manager.
Most small-scale retail formats in India operate on low cost, minimum tax and
cheap labour models to offer customers low prices despite fragmented and long supply
chains. Organized retail in India is a recent phenomenon and is still evolving. Organized
retail is a fast growing industry and is estimated to grow at a CAGR of 50% and set to
become $90 billion industry by 2010. It is estimated that it will increase its share from
current 4% to over 20% by 2010.
Manufacturer retailers, mostly in the form of exclusive stores, had driven modern
formats retailing in pre-liberalization period. And we had a host of independent
multibrand store, kiranas and so on. In the post liberalization era, we have seen a few
pioneering efforts to showcase modern format retailing.
17
Table 1.2
Organized retail sector having a $90 billion share. 2006 r
ank
Countr
y
Reg
ion
Countr
y r
isk
Mar
ket
att
ract
iven
ess
Mar
ket
sat
ura
tio
n
Tim
e pre
ssure
GR
DI
score
Weight 25% 25% 30% 20%
1 India Asia 55 34 89 76 100
2 Russia
Eastern
Europe
43 59 53 90 85
3 Vietnam Asia 55 43 24 87 81 84
4 Ukraine
Eastern
Europe
42 37 76 81 83
5 China Asia 55 58 40 57 86 82
6 Chile America 67 57 47 48 71
7 Latvia
Eastern
Europe
58 50 31 88 69
8 Slovenia
Eastern
Europe
78 52 25 70 68
9 Croatia
Eastern
Europe
57 51 28 91 67
10 Turkey
Mediterran
ean
46 59 64 40 66
Source: AT Kearney report: “Building the optimal global footprint”
18
The sales through organized retailing in India are still lower compared to the total
sales of unorganized sector. The investments made in this sector are also minimal
compared to other sectors.
There are many reasons why organized retailing has not been undertaken to any
major extent in India in the past. Some of them are:
The Indian market was closed and protected till 1990. The absence of foreign
brands had led to a sense of complacency in the Indian players. Thus brand
creation and management was more of an exception than a rule.
The major competition was from unorganized players. These were family run
units. They had very low overhead costs. Moreover, their practice of giving
credit also made them popular in the locality where they operated.
The Indian middle class mindset that big well decorated shop will be expensive
also led to non-development of organized retailing.
The organized penetration being so low, it presents immense opportunities for
growth. Several new players are entering the industry with the existing players making
huge expansion plans. With Government policies becoming more favourable and
emerging technologies facilitating operations, the organized retail industry is growing at a
rapid pace.
Thus the problem of study is to highlight the importance of organized retailing, its
prospects of yielding higher revenue by way of increase in GDP and the Government by
way of taxes and also to suggest measures for solving the problems faced in retailing by
the retailers.
19
1.5. RETAIL SCENARIO – GLOBAL
Retailing is big business in developed countries and it is better organized than our
country. According to recent reports, the US$ 9 trillion retail industry is one of the
world‟s largest industries and the sector is still growing. 47 of the Global Fortune 500
companies and 25 of Asia‟s top 200 companies are retailers. Organized retailing,
however, has gained a great deal of momentum in China in the last few years especially
after the opening up of the sector to 100% FDI in 2004,and it accounts for 20% of the
total retail sales currently. According to the US Department of Labour, about 22 million
Americans are employed in the retailing industry in more than 2 million retail stores –
that is, one out of every five workers employed. Traditionally, local players tend to
dominate in their home markets. Wal-Mart, the world‟s leading retailer, has about 8% of
the market in the USA. Similarly, Tesco has a market share of about 13% in the UK
market.
20
Table 1.3
The percentage of organized and unorganized/ Traditional retailing in selected
countries
Country Organized Traditional Retailing
USA 80% 20%
West Europe 70% 30%
Malaysia 50% 50%
Thailand 50% 50%
Brazil 40% 60%
Argentina 40% 60%
Philippines 35% 65%
Indonesia 25% 75%
China 20% 80%
South Korea 15% 85%
India 6% 94%
Source: Mc Kinsey Study
According to the UK based research firm Euro monitor International, in the
global scenario, the emerging retail markets of India and China are witnessing strong
growth and India especially is among the biggest and the fastest growing retail markets
globally.
1.6. RETAIL SCENARIO – INDIA
The Indian retail industry is no more nascent today. The Indian retail industry is
only now beginning to evolve in line with the transformation that has swept other large
economies. There has been a significant change in retail trading over the years, from
21
small kiranawalas in the vicinity to big super markets; a transition is happening from the
traditional retail sector to organized retailing. The unorganized sector still holds a
dominant position in this industry. The organized segment holds just about 1.2% of the
current US$ 245 billion retail market, which is expected to reach about US$ 385 billion
by the middle of this decade.
Retail is the country‟s largest source of employment after agriculture, has the
deepest penetration into rural India, and generates more than 10% of India‟s GDP. With
close to 12 million retail outlets, India has the highest retail outlet density on the world.
In spite of this, retail is also India‟s least evolved industries. In fact, it hasn‟t even been
accorded the status of an industry.
1.7. REASONS FOR GROWTH OF RETAIL
Based upon the observations made on the various sectors of the retail segment we
can say that the conditions are becoming favourable for the growth of retail sector. The
factors can be listed as follows:-
Consumer Pull: In the pre-liberalization market the power rested clearly with the
manufacturers. In today‟s demand-led market, it is the consumer who calls the shots.
Over the last decade, there has been a significant evolution in the Indian consumer,
mainly due to the liberalization of the consumer goods industry
Rising Incomes: Over the past decade, India‟s middle-and high-income population has
grown at a rapid pace of over 10% per annum. Further, the number of households earning
22
above Rs.1, 50,000 per annum is about 80 million today and is expected to grow to 200
million by 2015.
Explosion of Media: There has been an explosion in media as well during the past
decade. 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.
Change in Consumer Behaviour: The urban woman today is literate and, in many
cases, employed. There is greater work pressure and increased commuting time. And
with a shift in the family structure, nuclear families have become a significant component
of urban markets.
Consumerism Cycle: The consumer cycle starts with the retail sector dictating the
market. The distributor gains control over the market and becomes an important link
between manufacturer and customer. When the market starts developing and expanding
its horizons, retailers turn into the vital link in this supply chain. Manufacturers have also
realized that retailer recommendations matter, particularly in smaller towns where
retailers are figures of authority or opinion leaders.
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 wider range and sourcing options as
well as improved average margins.
23
Favourable demographics: India has one of the youngest populations in the world. The
median age in India is 24 years and about 60% of the population is below the age of 30
years. This segment has emerged as the fastest growing consumer group.
Table – 1.4
Consumer Growing Group
Ageing Population 1996 2001 2006
0 - 14n Years 37.8% 35.3% 30.6%
15 – 59 Years 55.6% 58.7% 61.9%
60 & above 6.7% 7.0% 7.5%
Source: Statistical Outline of India, 2001-02.
As stated above, a huge population potential with an increasingly number of
economically active people is bound to increase the demand exponentially for retail
industry in India.
Table – 1.5
Structure of the Indian Market
Households Million ( % of population
Classification
Annual Household
Income
1995 – 96 2001 – 02 2006 – 07
Very Rich
(>INR 3,60,001)
1.2 0.8% 2.6 1.5% 5.2 2.7%
Consuming Class
(INR 80001 – 360000)
32.5 20.1% 46.4 25.9% 75.5 39.5%
Climbers
(INR 40001 – 80000)
54.1 33.7% 74.4 41.9% 81.7 43.1%
Aspirants
(INR 28001 – 40000)
44 27.4% 33.1 18.8% 20.2 10.7%
Destitute
(<INR 28,000)
33 20.5% 24.1 13.7% 16.5 8.7%
Source: NCAER Projections on Structure of Indian Market released in 2001.
24
The above factors are increasing the number of people with higher disposable
incomes and thus have fueled the demand for retail industry in India.
Easy availability of credit: Credit mechanisms including credit cards, personal loans
and EMI schemes have boosted retail spending. For large purchases, consumers have the
option of paying through Equated Monthly Installments, thus reducing the impact on
consumer wallets. Consumer credit has been on the rise mainly due to low interest rates
and higher ownership of credit cards. The average income group today is not averse to
taking loans.
Development of real estate: FDI is allowed 100% in real estate and as a result the
demand for retail space also increased leading to the emergence of malls.
Increase in availability of products and brands: Present day consumers are
increasingly being exposed to international brands and styles due to the impact of
globalization. Increasing number of manufacturers are now trying to satisfy this demand,
leading to an increase in the number of products and brands available to the consumer.
Retailers are increasingly focusing on the supply chain thus resulting in better product
availability for the consumer.
Increased supply of organized retail: The arrival of the international retail chain brands
in India which have brought along with them the state-of-the-art technology and
processes management for the organized retail chains. Large corporate houses are
evincing interest in organized retail.
25
Favourable Legislation: Changes in land reforms are making it more conducive for the
large retail chains to get real estate at economical bargains. Introduction of uniform taxes
and VAT will make the retail chains more comfortable to handle the logistic issues with
better location for their warehouses.
Increased demand for the better shopping experience: The income level of the class A
customers is increasing which also implies that the whole base has moved upwards thus
making more disposable income available for consumption.
Increased sourcing options: The suppliers and manufacturers have improved their
quality with improved supply chain solutions thus making their offering more
competitive and comparable to the global standards.
Changing Psychographics: With liberalization came the western media, which gave the
Indian an idea about the culture and customs out there. This did change the dynamics of
the psychographics in India. With changing psychographics, there was a greater need
felt for an organized and a professionally run retail formats to cater to the ever increasing
consumer expectations.
Penetration of Global trends: With the advent of western media and the internet, the
information across the globe has been made easy to access. As a result of this,
organizations operating in many nations have to adopt uniform practices across countries
in terms of the quality of products, service and the value proposition. This to a great
extent has fueled the demand for organized and professionally run retail formats.
26
Table – 1.6
Estimated Share of Organized Retail and Per capita Retail Sales
Country Estimated Share of
Organized Retail (%)
Estimated Per Capita
Retail Sales (US $)
USA 85 9,973
Japan 66 9,249
United Kingdom 80 7,851
France 80 7,7124
Germany 80 5,109
South Korea 15 4,144
Czech Republic 30 3,301
Russia 33 1,940
Brazil 36 1,520
Argentina 40 1,359
Malaysia 55 1,264
Thailand 40 1,043
Indonesia 30 665
China 20 599
Philippines 35 591
Pakistan 1 404
Vietnam 22 309
India 4 287
Source: Various, Including ICRIER and Third Eyesight Analysis.
27
1.8 OBJECTIVES OF STUDY
To understand the importance of retailing
To focus on the current status of retailing in Chennai.
To list out and elaborate the key drivers of growth of retailing
To provide a clear understanding of the emerging physical store/Non store
formats.
To identify the modern practices adopted by the present day retailers.
To analyze the policies of the government towards retail sector and to provide
feedback for the development of the sector.
To describe the projected retail trends and the growth path as studied by research
agencies.
To study the problems and challenges facing the retail sector and offer suitable
suggestions for the same.
1.9 HYPOTHESES
The starting point of any research is the formulation of Hypotheses. To verify the
validity from the analysis of data, the following hypotheses were formulated for this
study.
There is significant between male and female with respect to making repeated
purchases.
There is significant difference between married and unmarried with respect to
getting ranges of products under one roof.
There is significant difference between age group with respect to sufficiency of
infrastructure facilities.
28
There is significant difference between age group with respect to employee
service satisfaction leading to repeated purchases.
There is significant difference between age group with respect to getting ranges of
products under one roof.
There is significant difference between age group with respect to opinion about
taking good care of the customers and goods.
There is significant difference between educational qualification with respect to
opinion about taking good care of the customers and goods
There is significant difference between occupations with respect to sufficiency of
infrastructure facilities.
There is significant difference between occupations with respect to retail
employee service satisfaction leading to repeated purchases.
There is significant difference between occupations with respect to getting ranges
of products under one roof.
There is significant difference between income with respect to opinion about good
care of the customers and goods.
There is significant difference between retail outlets generally prefer for shopping
with respect to sufficiency of infrastructure facilities.
There is significant difference between purchase decision-makers with respect to
retail outlets employee service satisfaction leading to repeated purchases.
There is significant difference between purchase decision-makers with respect to
getting different ranges of products under one roof.
29
There is significant difference between purchase decision –makers with respect to
opinion about taking good care of customers and goods.
There is association between type of goods purchased from retail outlets and
educational qualification of consumers
There is association between retail outlets prefer for shopping and age group of
consumers.
There is association between credit cards used for payment and age group of
consumers.
There is association between purchase decision-makers in the family and marital
status.
There is association between having witnessed the presence of cold-storage
facilities in retail outlets and family monthly income.
There is association between inconveniences encountered while shopping and age
group of consumers.
There is association between welcoming MRP on the products and marital status.
There is association between suggestion to improve store security and occupation.
There is association between opinion about FDI into retail business and family
monthly income.
There is association between modern practices of shopping and age group of
consumers
There is association between VAT system impact on purchases and family
monthly income.
30
There is association between safety measures necessary for a retail unit and
family monthly income.
1.10 METHODOLOGY
This study has adopted descriptive and analytical methodology according to the
situation. Descriptive methodology has been considered vital for the review of
theoretical background of the concept of retailing and customer satisfaction and the issues
relating to the research problem. The adoption of analytical methodology has become a
compelling factor as it concentrates on the views expressed by the customer and their
satisfactory levels across the different retail format. The research design used in this
study is explained in brief below
Sources of data
This study is mostly based on a primary data collected from the sample clients
chosen for this study. As the primary data is the information collected for the first time, a
printed list of questions arranged in sequence was given to elicit the response from the
respondents. A printed and well drafted questionnaire was prepared and distributed
among the respondents. They were assured that the information furnished would be kept
confidential. Mainly structured questionnaire was used as it would help the respondents
to answer the questions quickly by taking minimum time. Further, it becomes easier for
the researcher to make necessary arrangements in advance for classification and
tabulation of data. However, the use of secondary data has also been made in this study
by referring previous research papers & dissertations, books, journals, directories, year-
books, articles & websites pertaining to the research problem.
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Area of the study
The present study focussed its attention on the views of some sample customers
residing in Chennai city only.
Profile of the study area
Chennai being the fourth largest city in India, it is a major trade center. Chennai a
city that's teeming with varied cultural facets is undoubtedly one of the most beautiful
cities of India.
Chennai's acted as an incubator for the Indian retail industry, with the city
witnessing pioneering initiatives in the retail industry, be it consumer durables, general
provisions or books.
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Chennai is situated on the north-east end of Tamil Nadu on the coast of Bay of
Bengal. It lies between 12* 9' and 13* 9' of the northern latitude and 80* 12' and 80*
19' of the southern longitude on a `sandy shelving breaker swept beach'. It stretches
nearly 25.60 kms. along the Bay coast from Thiruvanmiyur in the south to Thiruvottiyur
in the north and runs inland in a rugged semi-circular fashion. It is bounded on the east
by the Bay of Bengal and on there maining three sides by Chengalpattu and Thiruvallur
Districts.
Table – 1.7
Census 2001 Data
Sl.No. Census Data Males Females Total
1 Total Population 21,61,605 20,54,663 42,16,268
2 Population below Age 7 1,90,044 1,84,045 3,74,089
3 Literates 16,70,094 14,08,910 30,79,004
4 Main Workers 11,23,246 2,20,332 13,43,578
5 Marginal Workers -- -- 97,804
6 Total Workers 11,92,924 2,48,458 14,41,382
Source: Statistical Department, Chennai
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Table – 1.8
Population Distribution and Literacy Rate
% Decadal
Growth Rate
Sex-Ratio (No.
of females per
1000 males)
Population
Density per
Sq.Km.
Literacy Rate
1981-
1991
1991-
2000 1991 2001 1991 2001
Males Females
1991 2001 1991 2001
17.24 9.76 934 951 22,077 24,231 87.86 84.71 74.87
75.32
Source: Statistical Department, Chennai
Chennai city had a population of 5.34 million, while the total metropolitan
population was 8.24 million. The estimated metropolitan population in 2006 is
4.5 million. With the area of the Chennai Corporation being extended to 456 km² the
population with in the area administered by the corporation was 5.6 million in 2001
which makes it the third largest city in India. In 2001, the population density in the city
was 24,682 per km² (63,926 per mi²), while the population density of the metropolitan
area was 5,922 per km² (15,337 per mi²), making it one of the most densely populated
cities in the world. The sex ratio is 951 females for every 1,000 males, slightly higher
than the national average of 944. The average literacy rate is 80.1%, much higher than
the national average of 64.5%.
34
AIR
Chennai International Airport
Chennai serves as a major gateway to southern India and the Chennai
International Airport, comprising the Anna international terminal and the Kamaraj
domestic terminal, is the third busiest airport in India. The city is connected to major
hubs across Asia, Europe, and North America through more than 30 national and
international carriers. The airport is the second busiest cargo terminus in the country. The
existing airport is undergoing further modernization and expansion, and a new Greenfield
airport is to be constructed at an estimated cost of 2,000 crore in Sriperumbudur
SEA
The city is served by two major ports, Chennai Port, one of the largest artificial
ports, and Ennore Port. The Chennai port is the largest in Bay of Bengal and India's
second busiest container hub, handling automobiles, motorcycles and general industrial
cargo. The Ennore Port handles cargo such as coal, ore and other bulk and rock mineral
products. A smaller harbour at Royapuram is used by fishing boats and trawlers.
RAIL
MRTS Train station in Chennai
Chennai is the headquarters of the Southern Railway. The city has two main
railway terminals. Chennai Central station, the city's largest, provides access to other
major cities as well as many other smaller towns across India. Chennai Egmore is a
terminus for trains to destinations primarily within Tamil Nadu; it also handles a few
inter-state trains. The Chennai suburban railway network, one of the oldest in the
35
country, consists of four broad gauge sectors terminating at two locations in the city,
namely Chennai Central and Chennai Beach. Regular services are offered in the
following sectors from these termini: Chennai Central/Chennai Beach - Arakkonam -
Tiruttani, Chennai Central/Chennai Beach – Gummidipoondi - Sullurpeta and Chennai
Beach – Tambaram - Chengalpattu – Tirumalpur (Kanchipuram). The fourth sector is an
elevated Mass Rapid Transit System (MRTS) which links Chennai
Beach to Velachery and is interlinked with the remaining rail network. Construction is
underway for an underground and elevated Chennai Metro rail.
ROAD
An MTC bus in Chennai
Numerous state highways link the city to Puducherry and other towns and cities in
Tamil Nadu and neighbouring states. The Chennai Mofussil Bus Terminus (CMBT), the
terminus for all intercity buses from Chennai, is the largest bus station in Asia. Seven
government-owned transport corporations operate inter-city and inter-state bus services.
Many private inter-city and inter-state bus companies also operate services to and from
Chennai.
The Metropolitan Transport Corporation (MTC) runs an extensive city bus system
consisting of 3280 buses on 643 routes, and moves an estimated 5.52 million passengers
each day. Vans, popularly known as Maxi Cabs and 'share' auto rickshaws ply many
routes in the city and provide an alternative to buses. Metered call taxis, tourist taxis and
auto rickshaws are also available on hire. Chennai's transportation infrastructure provides
coverage and connectivity, but growing use has caused traffic congestion and pollution.
The government has tried to address these problems by constructing grade
36
separators and flyovers at major intersections, starting with the Gemini flyover, built in
1973 over the most important arterial road, Annasalai to the recently
completed Kathipara Flyover.
Pilot Study
Pre-testing the questionnaire (or) pilot study was done before the questionnaire
was finalized. After the questionnaire was drafted, in order to measure its
comprehensiveness, it was distributed among a few respondents. Their information were
studied to determine the need for re-structuring the questionnaire, re-sequencing the
questions, addition or deletion of questions, giving more instruction for filling up, etc.,
was also decided. The respondents who formed part of the pilot study were carefully
included to form the actual group that was studied later. Based on the pre-test, necessary
modifications were done in the questionnaire and then it was released for use.
Data Collection Method
For obtaining the information, the study adopted a printed questionnaire covering
the different objectives of the study in the form of emergence of the different formats of
modern retailing, their impact on the customer‟s purchasing patterns, the current
inconveniences faced by the customers while shopping and the suggestions offered by
them were all included in the questionnaire. The customers were met in person and their
opinion elicited through Structured Interview Method.
Period of the study
The collection of information from the sample respondents started from the year
2007 and the collection and the analysis and the data collected was completed in
December 2010.
37
Sampling and Sampling size
Random sampling method is followed in collecting the required data from the
respondent. The entire geographical area of Chennai city was divided into 5 zones. - viz.,
North Chennai, South Chennai, East Chennai, West Chennai & Central Chennai. From
each zone a random of 60 persons was randomly selected and the printed questionnaire
was given to them. On the whole 300 questions were distributed to the respondents of
the different zones.
Tools for data analysis
Statistical technique constitutes an integral part of the research analysis. The data
compiled was subjected to relevant analysis to have inference and meaningful analysis.
In this context certain basic statistical tools like simple averages, percentages, variants
were applied in this research. The results were also diagrammatically exposed wherever
necessary. Advanced statistical tools like Chi-Square test, Anova test, Descriptive
sampling etc. is also used.
1.11 LIMITATIONS OF THE STUDY
The findings of the study are confined to the Chennai City alone. India is a
country of varied languages, culture, tradition and practices which vary from
place to place. Therefore, the results of this study cannot be equally applied in all
parts of India.
The opinion given by the customers may also vary because of individual
differences due to age, sex, income, profession, etc.
38
The opinion expressed by the respondents during the period of study may also
undergo changes at a subsequent period.
1.12. CHAPTERISATION
The present study was undertaken with a view to measure the growth of organized
retail, the emerging modern practices in retailing and to suggest necessary measures for
the improvement of the sector. The questionnaire was directed towards the consumers
and their information forms the core of the study.
Chapter-I: Introduction
The first chapter, Introduction gives a brief idea of the subject matter of the thesis.
The nature of the topic, the objectives of the study, the background of the study, the
methods used for the collection of data, the statistical methods used and the chapter
classification have also been presented.
Chapter-II: Review of Literature
The second chapter traces out the related reviews of literature to the study. This
chapter narrates the opinion expressed by eminent research scholars in the various
research studies that they have conducted about retailing practices.
Chapter-III: Retailing an Overview
The third chapter gives a description about the nature and importance of retailing,
retailing in other countries, retailing in India, emergence of modern store formats and
emergence of modern practices of retailing in Chennai.
39
Chapter-IV: Data Analysis and Interpretation -I
The fourth chapter starts with a statistical analysis of the data collected from the
customers. Customers are the real judges to decide the future course of the retailing
business units. Therefore, their opinion collected is analyzed in the form of percentages.
At the end of every question, conclusions were given.
Chapter-V: Data Analysis and Interpretation -II
The fifth chapter undertakes a detail study of the questionnaire by using advanced
statistical methods in the form of t test, chi-square test, ANOVA test and correlation and
regression methods. At the end of every test, detailed conclusions are given.
Chapter-VI: Findings, Suggestions and Conclusions
The sixth chapter gives a summary of the findings, suggestions and conclusion of
the study. The idea is to make the whole thesis a comprehensive study with a beginning,
middle and a proper end.
1.13 CONCLUSION
Retailing in our country is becoming increasingly important and organized
retailing is poised to grow at an exponential rate in the coming years. Research and
retailing is very important. Every retail organization needs to understand customer
preferences in choices before designing its processes for improvement. Understanding
customers and their expectations leads to better performance and research provides the
way forward for the organization to grow.
40
CHAPTER-II
REVIEW OF LITERATURE
2.1 INTRODUCTION
It is often said that the quality of a research study depends on the quality and
quantity of literature surveyed. The researcher first broadly selected the field of study
and the issues to be probed and decided on the information required. Later the
researcher discussed with the Guide in detail and other Senior Professors and Lecturers in
the Commerce Department while deciding the source of information.
Various websites and the libraries of Vivekananda College, Madras University
and IIM, Bangalore, provided volumes of information for almost all the research issues
and the other related matter. The archives in Chennai City provided historical and
anthropological facts. Some of the reputed newspaper organizations like The Hindu,
Times of India, etc. provided much published information. The publications of the
Government of India like Planning Commission, Statistical Department of the
Government of Tamil Nadu contained classified source of information for incorporating
in the research.
The information compiled from the above sources was first scanned and the
information was segregated on the basis of its importance. Then the summary of each
material was developed. The details indicated in the review literature are name of the
author, title of the book/report, place of publication, year of publication, etc. The final
information is presented in the order of the year in which it was published.
41
2.2 LIST OF REVIEWS
R.Krishnan (2001) in his research thesis titled “Technology in the Indian Retail
supply chain” pointed out the,” Information Technology can and will play a major role in
improving the efficiencies of the retail supply chain in India. Organizations have become
aware of the importance of technology to improve efficiencies and are taking definite
steps toward leveraging IT in improving the efficiencies of the supply chains.”
R. Thenmozhi (June 2004) in her article titled “Logistics Management”
summarized her opinion as,” The traditional concept of Logistics started with products at
Producer‟s Plants and ended with handing them over to Users. But the present concepts
of Logistics Management deal with both incoming and outgoing distributions. i.e the
entire Supply Chain, which is actually oriented to effect value – added flows from origin
to destination”.
Gibson G. Vedamani, (2006) CEO, Retailer Association of India, in his article
titled “A Revolution in the Making” highlighted the,” Availability of Quality Real Estate
is an important factor for Retailing to take off in a big way. In practical terms this means
that all the malls being planned should be available for Rattlers to exploit. This, along
with more brands appearing in the Indian Retail landscape, will enable Retailing to
achieve a growth rate of 30 % in the next 5 years”.
Simrit Kaur (2006-2007) in her research paper titled “Crisis of Retail Trade”
concluded with,” A rapid increase in the demand for real estate is escalating the rental
prices to a level that is way beyond the purchasing power of a common man. A large
42
number of small and marginal farmers are also likely to suffer on account of the non-
verifiable and arbitrary quality standards set by the modern retailers”.
Smriti Bajaj (2006–2007) submitted a dissertation titled “Consumer Perceptions
of Global and Local Brands in the Indian Retail Industry” came out with some useful
conclusions as,” Indian consumers were not prejudiced against foreign brand names. In
fact, they evaluated them higher on technology, quality, status and esteem than Indian
brands and attributed higher credibility to those countries of origin.”
Anuradha Kelhan, (2007) in her topic on “Impact of Malls on small shops
and Hawkers” pointed out to a decline in sales of groceries, fruits and vegetables,
processed foods, garments, shoes, electronic and electrical goods in these retail outlets,
ultimately threatening 5 per cent of them with closure or a major decline in business.
Only 14 per cent of the sample of small shops and hawkers has so far been able to
respond to the competitive threat of the malls with the institution of fresh sales-
promotion initiatives.
A. Sreejth and Dr. Jagathy Raj V.P. (2007) presented a research paper titled
“Organized Retail Market Boom and the Indian Society” narrated the, “Intense
competition among the players of various formats all help to increase the quality of
service of the existing local retailers and greater customer satisfaction in Indian society”.
Preeta Vyas and Ankush Sharma, (2007) representing Indian Institute of
Management, Ahmedabad, in their research paper titled “Indian Organised Apparel
Retail Sector and DSS” [Decision Support Systems] observed the, “ DSS [Decision
43
Support System ] which provide timely and accurate information can be viewed as an
integrated entity providing management with the tools and information to assist their
decision making. It appears that Indian apparel sector is in a trajectory and new players
are keen to enter with latest DSS tools to use information for decision making which may
provide them a competitive edge.”
Vijay Gobale, Ashutosh Dhekne, Piyush Masrani, Sumesh Tirodkar and
Tonmay Mande (2008) in their research study on “Demand Forecasting in the Indian
Retail Industry” came out with the “Demand forecasting remains a critical tool that plays
key roles in manufacturing, advertising, placement and allocation of resources. It is
useful for retailers who have their own brand labels and also for small scale retailers with
no brand labels.”
N. Poornima Srikrishna (2008, January 15) wrote an article titled “Satisfied
Customer is product goodwill ambassador” in which she highlighted the, “Customer is
the focal point of every business. The very existence of business depends on Customer
satisfaction. A sound product and a competitive price are a must to please the customer
but definitely not the only parameter that result in customer satisfaction “.
D. Murali (2008, January 26) wrote an article on “Build a Mall as a brand” in
which he narrated the “Make sure that the building is populated by brands that
communicate the right message by their very existence”.
Managala Ramamurthy (2008, February 9) wrote an article “Shop for answers”
in which she emphasized the boom trend for retail as “There are 400 million customers
44
waiting to be tapped. With a good quality product at the right price, our aim is to reach
out to India like the Indian Post Office System”.
Catherine Jana Glon (2008, March 3) wrote an article “Retail Renaissance” in
which she revealed the “Super Markets have a huge spread. To win the patronage of the
local market is a real challenge. How a Retailer caters to the needs of the local market
lays his success because customer is the undisputed King of the Retail Industry.”
Sandhiya Dev (2008, April 6) in her article titled “Purchase Power” and stressed
the, “Children constitute a major consumer market with direct purchasing power for
snacks and sweets and indirect purchase influence while shopping for high end items.”
Meera S (2008, May 4) presented an article on “Super Market Shopping in
Chennai” in which she highlighted the, “The Super Market culture is here to stay in
Chennai. One of the advantages of these outlets over the traditional grocery stores–which
are also going in for Super Market–like displays–knows clearly what is available. The
outlets have to introduce and promote products without compromising on their brand
neutrality.”
Anjali Prayag (2008, December 31) wrote an article titled “Luxury Segment
Consumers look for Value Retailing” in which she suggested, “Brand value, even in the
luxury segment has never been under so much scrutiny; Consumers are looking for the
return they will get from the experience of owning, wearing or giving fewer, better
things.”
45
Professor Joshuva Banfield, Director, Centre for Retail Research, Nottingham,
U.K., (2008, December) wrote an research article titled “Best of The Worst” in which he
analysed the following, “The costs of the retail crime, calculated on the basis of crimes
by customers, employees and suppliers / Vendors plus the costs of loss prevention were
112.8 billion dollars in 2008. These costs have to be paid by every one – Retailers,
Employees, Suppliers and Shoppers – and are equivalent to 229.73 dollars per family”.
Mr. Zainab Morbiwala (2008, December) wrote a research article titled
“Catalogue Retail in India” in which he emphasized the, “With the trend of Catalogue
retailing, yet to gain momentum in India, most Retailers – still focused on the brick and
mortar format – are yet to fully exploit the true potential of the medium”.
Sangeetha Gosh (2008, December) wrote a research article titled “Retail Kiosk -
Plug and Profit” in which she stressed upon the, “The Indian Retail Scenario has been
witnessing significant advancement with traditional Retail formats making way for more
innovative and technologically evolved formats. One of the innovations to watch out for
these the “The Retail Kiosk” which truly makes business sense for Retailers because of
its cost benefit structure “at the point of sale” establishment process and ease and
convenience for the customers too”.
Bhavya Misra (2008, December) wrote a research article titled “Stop! Reverse
and Play” in which she emphasized the importance of recycling with the, “Reverse
supply chain includes aspects such as remanufacturing and refurbishing, processing
returned merchandise due to damage, seasonal inventory, restock, salvage etc. No
46
business exists exclusive of its whole gamut of activities, with out paying attention to not
only forward supply chain but also the reverse of it”.
Sandhya Dev (2009, January 4) wrote an article titled “Making your Shopping
Experience Pleasurable” in which she highlighted the importance of malls as, “Mall
Management is pivotal to the growth of the business. Both the Mall and the Retailer are
interdependent. From the Customer‟s point of view he / she benefits to obtain a variety
under one roof”.
S. Meera (2009, February 22) wrote an article titled “All in One Place” in
which she pointed out the role of multi brand outlets as, “Men‟s, Women‟s and
Children‟s wear, different brands, from lipstick to belts, from bags to Garments-All under
one roof. This makes it easier for the customer to shop for the entire family, and for the
retail outlet to retain Customer loyalty.”
Vignesh Shankaran Rajaram (2009, May 10) presented a research article titled
“Big Gadgets, savvy customers” in which he emphasized the role of consumer in
retailing with the, “Today‟s consumer‟s is well informed and well updated, transforming
the way his choices are made. At the end of the day, it is the end customer who „makes‟
or „breaks‟ a gadget. Here, the customer certainly wins.”
Suranjana Basu and Shubra Saini (2009, November) presented an article titled
“Multiple Channels of Retail” in which they summarized the,” The evolution of Retail
is now directing itself to Multi - Channel retailing or cross channel retailing. Besides
47
brick and mortar stores retail is making ways to other channels like Internet, Mobile
Phones, TV and print to cross over the boundaries of usual form of retailing”.
G. Manokaran, (2009, November) presented a research paper on “Green
Marketing” narrated the following with reference to the role of retailing in environmental
protection as,“Companies that develop new and improved Products and Services with
environmental inputs in mind give themselves access to new markets, increase their
profit, sustainability, and competitive advantage over the companies which are not
concerned for the environment”.
M. Balasubramanian (2009, December) is Research Scholar in Jamal
Mohammed College, Trichy, presented a research paper on “Twinsumerism” in which he
highlighted the, “The twinsumer trend is part of an all – encompassing trend changing
who and what consumers rely on when making purchase decisions, both need and
impulse driven”.
Andrew Levermore, (2009) Executive, Buying & Merchandising Management,
Marco, South Africa, presented an research article titled “Are we paused or poised”
in which he suggested the, “Retailing is not an easy game that can be learnt in a board
room. It is some science, but mostly art. There is absolutely no substitute for starting at
the bottom”.
Geoff Hiscock, Business Journalist & Author, Sydney, Australia, (2009) wrote
an research article titled “Are there clouds in the Indian sky?” in which he came out
with the,“The shortcomings that do exist in India include a lack of good, affordable retail
48
space ; A lack of skills in jobs that range from Management to Merchandising to truck
driving ; a lack of reliable, good – quality suppliers ; and lack of logistics to get food and
other products on to store shelves in time and on budget. It is the sort of scenario that
opens a mountain of possibilities for Indian and Overseas investors and entrepreneurs”.
Dr. Ashok Gulati and Kavery Ganguli, Director, IFPRI, Asia, New Delhi, (2009)
presented a research paper titled “Retail Lift the Tail; ensuring competitiveness with
inclusiveness” in which they came out with the, “The recent performance of the
organised Retail sector particularly the food and grocery has been very impressive and
this resulted in unveiling a host of opportunities as well as challenges before the Agri -
Food Sector. The primary challenge lies in steering this impetus to ensure growth with
inclusiveness that is a policy priority and has enormous implications for a small holder –
driven agricultural sector”.
B.S. Nagesh, Chairman, Retailer Association of India, Customer care Associate
& M.D., Shopper’s Stop Ltd., (2009) presented a research paper on the “Challenges of
executing Modern Retail in India” in which he pointed as,” Human Resources are an
integral part of any Retail setup. Human Resources cost is amongst the top three
operating costs in the P & L of any Retailer. Retailers in India have to pay a very high
Salary for the Managerial staff thus squeezing on the money available for the front end
associates. This has led to big inequality in the stand cards of Associates thus leading to
high level of attrition and poor quality of service”.
49
Tim Eynon, Director, Provogue (India) Ltd., (2009) wrote a research article
titled “Growth planning for the Retail Industry” in which he emphasized the, “We must
recognize that the organized Retail Sector, whilst important for the growth of the overall
Indian Economy, must coexist with the traditional sector if we are to succeed in the
overall goal of improving the standards of living of everyone in India”.
Anshuman Magazine, Managing Director, CB Richard Ellis India, (2009)
published an article titled “Change in Dynamics of the Indian Retail Sector” in which
he indicated the, “The Retail Sector in India is witnessing unparalleled growth. Fresh
Retail geographies are emerging, innovative formats are being introduced and Retailers
are tapping new consumer segments with prolific product offerings.”
Damodar Mall, Group Customer Director, Future Group, (2009) wrote an
article titled “Green habits Retailing” in which he emphasized as,” Modern Retail is
following the foot steps of Telecom. There is certainly an opportunity to skip many
stages of the evolutionary cycle here as well. As we grow, modernize and consume more,
we can retain and encourage Green habits and transmit them to the rest of the world as
“Next practices”.
Jeyanth Kochar, Managing Director, GO FISH, Retail Solutions, (2009) in his
article “Who is caring for the Customer?” pointed out the role of customer service in
retailing as,” Customer Service is the greatest sustainable advantage that a Retailer has
and the sooner you learn this, the greater will be your potential profit.”
50
Brenda Sternquist, Professor of International Retailing, Michigan State
University, (2009) published an article titled “International Retail Trends and their
Impact on India” in which she stressed upon, “Scientific Logistics allow companies to
track inventory, make calculations about how trucks can be optimized in the
transportation paths and how inventory can be optimized. The importance of the
Scientific Logistics is in knowing the information behind the inventory”.
Archana Prakash, Director, People Tree, HR Services Pvt.Ltd., (2009) presented
an article titled “Exit it, Enter Retail” in which she pointed out the following as their
skills required of retailers,” Customer – handling skills, pleasing personality and
knowledge of English and local language is a must in the entertainment Retail segment”.
Rajneesh Mahajan, Director, Transaction Services, Retail Cushman &
Wakefield, India, (2009) wrote an article titled “City wise Real Estate Trends” in which
he compared the interdependence of retailing and real estate in the following manner -
“ Along side emerging directions in Retail formats, the Real Estate Developments are
also evolving top create quality spaces for Retailer‟s diverse market requirements”.
Sachin Khandelwal (2009) presented an article titled “New Growth
Opportunities” in which he emphasized the following about the role of various credit
cards in Retailing, “In a growing economy like India, card products are just beginning to
move beyond the urban affluent and upper middle class, opening potentially large new
growth opportunities”.
51
Manoj Kumar Jain, A.K. Dalela and Sandeep Kumar Tiwari (2009) presented a
research paper titled “Customer Relationship Management in Indian Retail Market”, in
which he highlighted the role of CRM in retail as; “CRM enhances customer satisfaction
and offers a pleasant shopping experience where the customer is treated important.
Indian retailers have to implement these strategies to have a better growth and improve
customer satisfaction.
Subeer Moitra of KPMG India,(2009-2010), in his article “The Present
Scenario about Retailing” in which he made an assessment of the present in retailing and
also predicted its future as,” India‟s rapid economic growth and the ongoing consumer
boom have contributed greatly to the growth of the Retail Sector. More specialized
consumer markets such as luxury goods, big-ticket durables, entertainment services and
housing may find further in roads in niche cities. Although niche cities may not appear as
large on the surface, consumption patterns may evolve more quickly, creating deeper
addressable markets”.
Mohit Khattar, Managing Director, Nature’s Basket Limited, (2010, January) in
his article “What is your pick, big or small” in which he narrated the role of packaging
as “Products that are consumed daily or by a larger percentage of the family members
typically do better with large sizes, whereas Products consumed infrequently or by some
members of the family do well with smaller sizes”.
Sharmila Das (2010, January) presented an article titled “Keeping your
employees motivated” in which she offered the following suggestions for motivating the
employees of retail outlets, “Keeping an employee of a retail outlet motivated has many
52
dimensions, providing opportunities for learning and growth, encouraging employees to
take additional responsibility, financial security and respect and having fair policies”.
Shubhra Saini, (2010, January) in her article, “Saving Paper is the need of the
hour” in which she gave the following ideas for the retailers about the usage of papers in
retail outlets as,” Retailers should ask their employees to use the paper judiciously,
should switch to paper bags from poly bags or should ask the customers to carry the
paper bags from home, should use cloth napkins instead of paper napkins for internal use,
should use waste papers for internal communication, should prefer online mode to
communicate with their customers, should prefer using recycled paper.
Vinitha Nayar (2010, February 7) in her article titled “The Thrill of a bargain”
narrates the experiences of the customers while shopping on the road side shops as,
“Shopping on the street will never go out of style even with the onslaught of swanky
malls and swish stores. One of the most enticing thrills of street shopping is of course the
great bargains which are why, even though Malls and state-of- the-art stores beckon, the
allure of street shopping will never fade.”
Meera.S (2010, February 21) in her article titled “Bar Codes make billing easy”
in which she emphasized the importance of bar-coding in retailing as, “It saves a lot of
time and at the same time it attempts to eliminate the errors arising on account of manual
intervention on billing or stock count.”
S. Meera (2010, February 28) in her article titled “Hyper Markets for Value
seekers” in which she highlighted the importance of hyper markets with the, “Hyper
53
Markets offer value on the retail purchase. They may be located a little far away but that
is not a deterrent because the savings would still justify that travel cost in case of bulk
buying.”
N. Kanimozhi & Dr. A. Jayakumar of Periyar University, Salem – 11 (2010,
February) presented a research paper titled “Challenges and opportunities of Rural
Marketing” in which they emphasized the potential of rural markets elaborately as, “The
importance of the rural market for some FMCG and durable marketers is underlined by
the fact that the rural market accounts for close to 70% of toilet soap users and 38 % of
all two wheelers purchased. The rural market accounts for half the total market for TV
sets, fans, pressure cookers, bicycles, washing soaps, blades, tea, salt and tooth powder.
What is more, the rural market for FMCG products is growing much faster than the urban
counterpart.”
Vishal Krishna (2010, February) wrote an article titled “Wild Cards” in which
he summarized the relevance of retail formats by the following critical comments as,”
The organized retail space has very little differentiation. Most business models are
similar. However, models are still evolving in the country and there is ample opportunity
for new players.”
S. Sathya Sundari (2010, March) in her research paper titled “Consumer
perception and behaviour”, in which she suggested the following to the retailers for
understanding the consumer behaviour is,” The study of consumer behaviour investigates
and develops methods to quantify, forecast and influence the behaviour of consumers.”
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K. Gopinath, CEO, Modern Technologies (2010, March) presented a paper titled
“Centralized Retail Solutions” in which he narrated the role of technology in retail
operations by way of the,“Managing the total Retail operations across all the branches
was a huge issue. For connecting the whole operations, we deployed RAYMEDI
Solution, and now I am viewing every single transaction from my desktop through online
billing station”.
Ramesh Jeyaraman, General Manager (India), ADT security (2010, March)
wrote an article titled “Safeguards for Retail Business” in which he offered the
following suggestions for loss prevention to the retailers is,“In the retail sector, we see
the market beginning to pick up and the loss prevention is especially gaining importance.
We are seeing an increased need for video surveillance, people counting and electronic
article surveillance solutions”.
Vyas Anand, Spokesperson, Dabur India Ltd.,(2010, May) in his article titled
“Slipping on a Retailer’s shoes” in which he expressed the importance of consumers in
relation to retail as, “In retail, consumers need convenience. The neighbourhood kirana
store by virtue of being the nearest store to consumers will always occupy that position of
convenience”.
Neeraj Jaipuria – Director – Sales, Asia Pacific, BI Retail (2010, May)
presented an article titled “Trends of retailing” in which he analysed the purchases of
consumers with the age group as,” There are multiple factors driving Indian Retail
Growth. With roughly 60% of the total population below 30 years of age, favourable
demographics are expected to drive consumption across categories. The much talked
55
about the purchasing power of a young consuming middle class is finally crystallizing
today”
Sahiba Sachdev, (2010, May) wrote an article titled “Gaming Retail Game
Plan” in which he narrated the, “Gaming is the new retail opportunity. With the
advancement of technology, the Internet and mobile phones, the craze for gaming, which
took birth in the mid 70‟s, has developed.”
Sailesh Chaturvedi, CEO & Director, Tommy, Hilfigure Apparels, India, (2010,
May) presented an article titled “Loyalty programme right!” in which he emphasized the
importance of Customer loyalty programme as, “A Customer loyalty programme is a
well thought - out and lasting marketing effort which provides encouragement to repeat
purchases by customers who display loyal buying behaviour. In retailing these
programmes generally reward loyal customers with discounts, special offers, rebates,
points or prices”.
Mary Luise Jacobsen, MD, Retail Management Solutions (RMS) Pvt. Ltd.,
Singapore, (2010, May) presented an article titled “Developing a Private Brand” in
which she highlighted the, “A successful brand is one that keeps the promise so that
customers will remain loyal. It involves much more than a name, logo and slick
marketing”.
Vivette D-Cruz, Manager, Retail and Consumer Products Practice, Earnst &
Young (2010, May), in her article “The Changing face of the Indian Retail” emphasized
56
the, “To capitalize on the opportunities in the retail sector, players are to have patience
and perseverance as retail is a capital and people intensive sector.”
Sujay Mehdudia (2010, July 8) wrote an article titled “Enhanced FDI in Retail
will transfer Rural Economy” in which he brought out the benefits of the FDI as, “FDI
in retail will generate amazing number of opportunities to the rural and urban youth and
also provide remunerative price for their produce to the farmers. Small vendors and
merchants will be ensured of products at whole sale prices and reasonable prices by the
big chains.”
Ramnath Subbu (2010, July 12) wrote an article titled “Lofty ambitions
rekindle interest in Retailing” in which he emphasized about the need for Foreign
Direct Investment in retail as, “When FDI flows into retail, there are a whole range of
benefits. For the end-consumer, prices will be kept in check by the large scale
competition and beneficiaries would encompass all from „Farm to Folk‟. Also, the supply
chain will become a value chain”.
Vijayalaskhmi Sridhar (2010, August 22) presented an article titled “Smart
Surveillance” in which she emphasized the need for store security as, with the retail
sector growing steadily and customer demands increasing, safety and security provisions
at retail establishments seem to be the need of the hour. Cameras and CCTVs installed at
suitable vantage points at retail outlets help the management to virtually „see‟ what is
happening at the store and to forestall thefts.”
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S. Meera (2010, August 29) in her article titled “Take your own bag” in which
she emphasized about the importance of cloth and jute bags in the retailing as “The cloth
or Jute bag was a faithful companion for the shoppers till plastics came into the picture. It
is time now to re introduce the traditional cloth bags in order to save the environment
from pollution”.
Vidhya Hattangadi, Director cum Professor (Marketing) of Management at
Anjuman – I – Islam‟s Allana Institute of Management Studies, Mumbai (September
2010) presented an article titled “In the Wonderland of Visual Merchandisers – All
that glitters is Gold” in which she highlighted the importance of Visual Merchandising in
the, “In the wake of the retail boom Visual Merchandising (VM) has begun to play a key
role in creating the right ambience within the stores and attracting the shopper‟s attention.
VM is fast catching up in the metros. Big retail companies are also investing a lot in
Visual Merchandising. It infuses a new life into the stores. Passion for design and
creativity are the trade marks of a good Visual Merchandiser”.
Priyanka Azad, Senior Lecturer, Marketing and Retail, New Delhi (September
2010) presented an article titled “Private Labels in the Indian retail sector spreading
their wings” in which she highlighted the importance of the private labels by the “Over
the past few years, private label brands have penetrated into the Indian retail markets and,
most arguably, have begun to dominate the National brands”.
Meera.S (2010, October 24) wrote an article titled “The insatiable need” in
which she emphasized the importance of trained man power for the retail outlets through
the, “Retail involves high levels of customer interaction; the employees have to have the
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adequate skill–set, knowledge and tools to be successful at the work place. A Retailer can
give training for his employees through independent training institutes or management
institutes”.
Vijayalakshmi Sridhar (2010, October 24) wrote an article titled “Changing
choices” in which she stressed about the importance of product variety by the, “Today‟s
customer is continuously looking for variety in his life in the products he / she uses. The
retail market has transformed to meet these new consumer requirements.”
Deepa Venkataraman (2010, November 7) presented an article titled “It is a
Mall World after all” in which she narrated about the emergence of Malls as
“Consumers have already felt the comfortable experience of having shopping,
entertainment and food all under one roof and hence there is a strong need to have Malls
located at various catchment areas which are still untapped.”
S. Jain (2010, November 14) wrote an article titled “Your virtual card gets
bigger” in which he highlighted the role of online shopping in the days to come through
the,“Shopping no longer means braving your way through traffic jams and crowds. You
can shop at an E-Store and in future, online retail will gain in popularity”.
Rahul Dev (2010, November 21) presented an article titled “What is in Sale? and
… discount !” in which he highlighted the importance of the bargain in the minds of the
customers as,“ The different kind of offer sales by retailers is like electricity. If used
wisely and with care, it can help save a lot of money as long as the shopping is planned
and executed well.”
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V. Rajesh, (2010, November 21) a retail expert wrote an article titled “They
bring Retail to you” in which he emphasized about the importance of moving retailers
as,“Moving retailers (Vendors, Push Carts and Moving Retailers of all kinds) help to
provide a direct connect to a specific customer group. There are possibilities to leverage
this connect, the buying behavior of the specific group, and maximize this format to
increase penetration. The ideas are limitless”.
Priyank Azad, Senior Lecturer, Marketing and retail Management, Delhi
Business School (November 2010) in her article titled “Seven Steps to Success in Indian
Retail” in which she suggested the, “1) Cost Management 2) merchandising 3) An
Integrated Supply Chain Network 4) Customer Satisfaction through Multi-Format
Retailing 5) Store Design and Ambience 6) Forming alliances 7) Innovations”
Meenal Dhotre, Assistant Professor in Viswa Karma Institute of Management
(VIM), Pune (November 2010) wrote an article titled “Customer Complaints – How to
turn them into assets?” in which she emphasized the following in relation to customer
satisfaction is,” While customer complaints can be a real challenge for a company, they
also provide an opportunity for the company to turn negative situations to positive ones.
By effectively dealing with the customer complaints, a company can not only appease a
dissatisfied customer but also build loyalty”.
Dr. I. Sathya Sundaram, Economists and Writer, Machilipatinam – 521001,
AP, (November 2010) wrote an article titled “FDI in Retail Sector” in which he
highlighted the role of FDI in retailing as , “FDI in retailing is likely to confer the
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benefits of new technologies on consumers. The bulk of the Indian economy would gain
from the emergence of well capitalized retail mobility. The retailers can ensure cost
reduction, and lower prices. Also, retailing can ensure the quality of the product, better
shopping, experience and customer services.”
Bhavana Nagpal (2010, December 5) wrote an article titled “The Power of
branding” in which she presented the following comments as, “ Retail is not just about
selling a specific product, it is not just about advertising. It is about understanding
customer needs, meeting their expectations, serving them well inside the store and
establishing the perception in the mind of the consumer that the brand is „reflection of
me”.
Meera.S (2010, December 5) wrote an article titled “Enhancing the Retail
Value Chain” in which she elaborated the social responsibility of the retailers as “The
retailer is becoming proactive in addressing social and environmental related issues
through stringent practices.”
V. Rajesh (2010, December 26) wrote an article titled “What is Impulse
Shopping?” in which he narrated the, “Impulse Shopping is serious business for any
self-service store as customers can end up buying as much as a third of their purchases
based on impulse triggers. Such purchases are triggered by the retailer using several cues
such as visibility, sound, smell, etc”.
Sandipan Deb, Faculty Associate, Faculty of Management, IU, Tripura (2010,
December) presented an article titled “Rethinking Sales – the promotional paradigm” in
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which he emphasized the changing ways of selling methods of retailers through the,“The
landscape of selling has changed dramatically. Over the last decade as a result of intense
competition and the changing business scenario. This requires the companies to adapt to
this rapidly changing context by exploring new avenues and revamping the existing
strategies.”
Pooja Pathak, Lecturer in School of Management Sciences, Lucknow, UP,
(2010, December) presented an article titled “The Celebrity endorsement Market in
India” in which she highlighted the, “Celebrity endorsements have a huge impact on the
Customer‟s minds and can „persuade‟ customers to buy a product. Retailers as marketers
have to successfully follow and implement Celebrity endorsements.”
Priyank Azad, Senior Lecturer, Marketing and Retail Management, Delhi
business School, New Delhi (2010, December) in her article titled “Wal-Mart in India –
Strategies and Scope” narrated the following relating to the performance of Wal-Mart
discount stores as, “Wal-Mart, world‟s No.1 retailer recently made an entry into the
Indian markets through a joint venture with Bharti Enterprises Ltd., Looking at Wal-
Mart‟s performance in the past few decades and its efficient implementation of strategies
in different markets across the world, its future seems bright and shining in India.”
Ramesh Srinivas, Executive Director, K.P.M.G Advisory Services (2010)
presented a paper titled “Hopes of Rapid Growth Revive” in which he emphasized the
role of FDI in India through the, “FDI or No FDI, India needs more retailers and
increased retail presence. The Governments favourable talks on FDI ignited ambitions in
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many of the global players to be among the first movers into a virgin retail territory,
namely, India”.
2.3 HOW THIS STUDY VARIES FROM THE PREVIOUS STUDIES
After the review of literature, the researcher observed that there are so many
studies existing in the field of retailing. But majority of them focus on one aspect of the
marketing viz. logistics, advertising, salesmanship, offers and discounts etc. But a
majority of them are yet to focus on the new emerging areas in the field of retailing.
The researcher has identified a gap to be filled by deciding to take up a
comprehensive study focusing the customers who constitute the deciding factor in retail
marketing. The present study analysis the customer opinion and also points out the
inconveniences faced by the customers and the retailers. It also offers suggestions to
overcome the present day problem and inconveniences met by the customers. Due to the
following reasons, the present study can be distinguished from others.
Brand consciousness is on the rise in the present environment. The above factor
is studied by measuring the relationship between manufacturer brands and private
brands.
Many new retail formats are emerging. Every one of them have their own special
features. The level of popularity in the minds of the customers is measured
among the sample customers.
The amount of retail sales is directly related to the incomes of the customers.
This factor is brought out in the above study.
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The type of retail payment and the most popular among the credit cards used by
the customers is brought to limelight in the above study.
Retailers use advertising to attract and retain customers. The advertising
programmes can be made effective by concentrating on the main purchase
decision-maker among the family members of the customers. The study analysis
the above feature of marketing.
Cold storage facilities are a must to preserve the products and present them in an
hygienic manner to the customers. The availability of infrastructure facilities like
rail/road connectivity is carefully analyzed in the above study.
The success of the shop-keeper is decided by how he is able to cater different
varieties of goods under one roof. The above factor is highlighted in the study.
Opinions of the customers in relation to Foreign Direct Investment, Value Added
Tax and the demand for the industry retail sector are brought to focus in the study.
Valuable suggestions given by anybody should be welcomes by the retailers and
implemented meticulously. The study offers a list of suggestions to the retailers
to improve employee performance, introduce modern practices and thereby
increase their overall profitability.
The entire researcher thereby has adopted a different approach and
presented a novel study on the emerging trends in retail marketing and also offered
valuable suggestions for the current problems facing the sector.
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CHAPTER-III
RETAILING – AN OVERVIEW
3.1. INTRODUCTION
Currently, multiple formats are present in the Indian Retail. Multiple formats are
necessary due to the diversity of our country. Retailers need to keep in mind local
preferences when deciding on the formats as internationally successful formats may not
work in India. Apart from the regional preferences and tastes, there is also the rural-
urban divide. Hence retailers need different formats to cater to the needs of different
segments. This explains the presence of many different formats in the country. Some of
the popular retail formats in India are discussed in this chapter.
3.2 RETAIL FORMATS AND THEIR EVOLUTION
Retailers need different formats to cater to the needs of different segments of the
population. This explains the presence of many different formats in the country.
Conventional Retail Formats Defined by the Marketplace
Retail formats in India first emerged when the barter system was in vogue with
the primitive format of the “shanty”, where the produce was brought to the market for
convenient access by consumers. As towns and cities grew, these retail stores began
stocking a mix of convenience merchandise, enabling the formation of high-street bazaars
that became the hub of retail activity in every city. To cite an instance, Ranganathan
Street in Chennai came into existence initially as a high-street destination, followed later
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by Pondy Bazaar, which had largely mom and pop outlets. Thus the gradual
development of the marketplace led to the emergence of new formats.
Contemporary Retail Formats by Customer Mediation
When we think of retail formats, the first thing that comes to our mind is the
various kinds of physical retail stores.
Most Indian organizations choose to reach the consumer through brick and mortar
retail store formats. However, there are other methods too; including non-store formats
such as catalogue, cable TV and the World Wide Web (WWW). While the method of
mediation in the physical store format is human interaction, a non-store format like
catalogue relies on paper and print. Television uses telecast/broadcast and the Internet,
the web-site. The most interesting aspect of a non-store format is that the entire store is
brought to the customer. In a physical store format, on the other hand, an attempt is made
to bring the customer to the store.
STORE FORMATS IN RETAIL PARLANCE
Store formats – their positioning and differentiation create a distinct image of the
store among its customers. These formats are defined in terms of location, layout, size,
design, merchandise, service experience offerings, etc. As there are many formats at
present, it makes sense to have a clear understanding of the key store format.
Store Formats by Location
If retail stores are multi-locational – linked by a common store presentation
created by its store design, a synergistic merchandising plan, a cohesive promotional and
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service strategy, and owned and operated by a single organization – the format is known
as the chain store format. Store formats are defined by their location too. If a retail chain
consciously seeks to locate its stores in busy shopping areas, it is known as the high-street
format (generally less than 2,000 sqft. With no parking facilities, and focused
merchandise categories)
Independent retail stores that are located in a particular area with alluring
propositions for the customers to visit the store with the primary intention of shopping
only there, rely on the destination format (usually large in size, with ample concessions,
huge parking space, wide merchandise categories).
Store Formats by Ownership
Retail stores owned and operated by individuals on behalf of (and licensed by) a
large supporting organization adopt the franchise format.When a retail store is owned by
a single person or a partnership, and not operated as part of a larger retail institution, it
comes under the independent store format classification.
Store Formats by Merchandise Categories
Retail store can be classified according to the merchandise categories they deal in.
In apparel retailing, if the store deals with all categories of merchandise to suit the
wardrobe of a family, the format is known as the family store. A retail store selling a
variety of a particular group of merchandise is known as an emporium (sari emporium,
art emporium etc.). Example: CIE-Bangalore, Chennai.
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Store Formats by Size
A single-level large store (usually more than 5,000 sft.) selling food and non-food
items are known as a superstore. A superstore is generally twice the size of a supermarket
and offers non-traditional goods and services like a pharmacy, flower shop, bookstore,
salad bar, bakery etc. under one roof. (Nilgiris, Chennai).
A shopping mall is an arrangement of retail stores and places for leisure activities
such as dining, entertainment, etc., selected according to their contribution to an overall
merchandising plan. A mall is spread over a large area of more than 200,000 sqft and run
as an integrated business by an individual or an organization, to which independent
retailers pay for opportunities to participate.
Shopping Malls
The new shopping malls that have been expanding their footprint across Indian
cities are well designed, built on international formats of retailing and integrated with
entertainment and restaurants to provide a complete family experience. Over 300 malls
are expected to be built over the next two years and most Indian cities with over a million
population will be exposed to this modern method of retailing.
A shopping centre or a plaza is a configuration of five or more tenant spaces of
approximately 1,000 sft each used for retailing, and developed under one building plan
such that it has a unified character (Fountain Plaza in Egmore, City center R.K.Salai,
Spencer Plaza in Anna Salai)
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Convenience store
If a retail store is located in a catchments area of its target customers who can
quickly access it and choose from a wide array of consumable products and services, it is
known as the convenience store format (typically less than 5,000 sqft, extended hours of
operation, parking for a few vehicles, convenience merchandise such as beverages, ready-
to-eat snacks, grocery type items, confectionery etc.)
Specialty stores
It deals in merchandise narrow in product lines but with a good depth within that
area. Specializing in a given type of merchandise, the Specialty stores offer attentive
customer service. For instance, Park Avenue by Raymond‟s is a men‟s specialty store.
They are retail formats that offer a wide range in a single category such as
apparel, foot wear, consumer electronics, healthcare, books, furniture, auto parts, music,
jewellery or opticals etc. Some of the prominent names in this category are: Adidas
(sportswear), Croma (electronic goods), Bon-Ton (opticals), Titan (watches), Metro
(shoes), Nakshtra (diamond jewellery) and Planet M for music and movies: all excellent
specialist stores in their respective categories.
Departmental Store
A store with several departments – apparel, cosmetics and fragrances, accessories,
home-ware, electronics, footware, jewellery, furniture etc. - under one roof with each
section within the store functioning as a strategic business unit (SBU) is known as a
department store (large in size, usually more than 10,000 sqft, often owned by national
chains, good concessions, with usually more than 100,000 SKUs). Shoppers‟ Stop is one
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of famous department stores in our country. Shoppers Stop is one of the largest
departmental stores chain having around 9 stores in India spreading in cities like
Mumbai, Delhi, Pune, Chennai, Hyderabad, Bangalore, etc. Departmental stores are
organized into separate departments for purpose of efficient buying, assortment and
providing ease of shopping for the consumer. They have witnessed a growth of 24% per
annum.
Super Market
A conventional supermarket is a self-service store of size 5,000 to 15,000 sq ft,
They are generally located close to residential localities in local shopping centers where
people can simply walk down or drive over for a quick purchase.A store that is
departmentalized, specializing in foodstuff, grocery and rations and limited non-food
categories with free access displays for customers so that they can pick products from the
shelves is known as the supermarket (large, usually more than 3,000 sq ft. and more than
30,000 SKUs).
Supermarkets mainly cater to the food and grocery segment of retail. They
normally sell grocery, fresh vegetables and fruits, toiletries, cosmetics, household
articles, health and beauty products, stationery, gift items and other items of daily use.
Supermarkets are the second most attractive retail formats after hypermarkets and are
currently growing at 28% annually.
A hypermarket is spread over 200,000 sqft and more, retailing in groceries and
general merchandise goods, with a pharmacy, flower shop, photo shop other concessions
etc. It has a wide variety of merchandise offerings in large quantities in each category
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selling huge volumes at low margins. It is a combination of supermarkets, departmental
stores, and discount stores. Hypermarkets are emerging as the most popular retail format
in our country with 30% growth rate. Of the $30 billion investments in retail forecasted to
come up over next 5 years, 38% of it is to be channeled into the hypermarket format.
Discount Stores
The store configuration can be defined by its pricing strategy as well. The
discount format retails merchandise at 25% or more below MRP. They purchase stock
lots from manufacturers in the form of irregulars like cut-sizes in apparel, unsold end-of-
season merchandise etc., and retail them at discounted prices. This is also known as a
bazaar format. There are discount specialty formats that specialize in a given type of
merchandise line. There are discount stores (found in the West in large numbers) that
adopt an everyday low pricing strategy, through the everyday-low-price (EDLP) format.
The warehouse format is a large sale of discounted merchandise by an individual
or an organization in the free-access ambience of a warehouse. This format has a large
width and depth in the many categories it retails.The factory outlet format is owned and
operated by the manufacturer selling discontinued merchandise, factory seconds,
cancelled orders, etc at very low prices and located in the vicinity of the factory itself.
Some textile mills in Mumbai have their factory outlets in their factory premises. Outlet
stores run by the manufacturers themselves or as their franchise are known as factory
outlets.
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The stopover store format is one that rides piggyback on another retail outlet, say
a petrol pump. This stopover format is a concession that offers instant use or ready-to-eat
categories of merchandise.
Kiosks
With the opening of a large number of malls and multiplexes in India, this retail
format is increasingly gaining popularity with both retailers and customers. Kiosks are
generally 100 sq ft. in size or smaller, tent-like structures, positioned strategically in mall
pathways or located centrally in the mall atriums. They are square in shape and open on
all sides or covered with glass on one side or two. With colourful and attractive displays,
these formats provide character and interest to a mall‟s design and layout.
In banking industry the ATM services offered by the banks come under this
category of retail format. Banks have successfully used technology to improve customer
service and increase it‟s penetration across the country through this new retail format.
Companies like Nestle, Cadburys‟. HLL, Coke, Pepsi are increasingly using this new
format of retailing.
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Table – 3.1
Various Retail Formats & their Characteristics
Source: Retail Management by Gibson G. Vedamani
Characteris
tics
Retail
Formats
Location Space/
Layout Merchandise
Customer Profile
Supermarket Marketplace in metros
towns, cities
Large Multiple, cohesive
food and household
categories
Family profile, mostly
loyal
Speciality
Store
Strategic Medium
sized
Focussed single
category
Individuals, groups
and cluster of same
class, mediocre to high
loyalty
Department
store
Destination towns,
metros and mega
metros
Large Cohesive category
clusters/ brands,
skewed toward
garments
Family, high loyalty
and involved
The Plaza Marketplace in metros,
large towns
Large Independent
categories
Family and
individuals, young at
heart and seeking to
spend time in hang-
outs
The Mall Destinations, mega
metros
Huge Independent but
profiled and defined
category mix like
shopping, dining ,
entertainment, etc.
Family and individual,
young at heart, fun-
loving entertainment
seekers and diner of
mediocre to high
loyalty.
The
Emporium
Marketplace Medium
sized/
small
Single group
category
Family and
individuals, need based
spenders
The Bazaar Strategic Large Multiple, cohesive
categories in reduced
price bands
Price conscious
individuals and family,
less loyalty
Stop-over Piggy back location Small to
medium
Multiple, cohesive
categories
Impulsive buyers
Single Price
Denominatio
n
Busy marketplace Medium
sized,
small
Multiple, non-
cohesive categories
scrambled
Bargain seekers
Kiosk Busy marketplace Very
small
Fast moving
consumables
Impulsive individuals
satisfying nick-of-the-
time needs
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Though there are many kinds of retail store formats, it is the innovative
combination of format elements that helps a retail store gain a competitive edge.
Cash and Carry
Cash and carry is a form of trade exclusively where goods are sold from a
wholesale warehouse. The wholesalers buy primarily from manufacturers and sell to
retailers, thus forming the link between the two.
Non-store retail
It is a segment witnessing a high growth rate of 32% over its small sales base.
Rising consumer confidence in internet retailing and home shopping spurred high growth
rates in these segments. The major categories of non-store retailing are direct selling,
Internet retailing and catalogue, mail order and television sales.
Direct selling
Non store retailing was mainly dominated by direct selling which accounted for
80% of non-store retailing. Direct sellers were able to leverage on their low capital
investment and lack of reliance on specific stores or locations. Most of these direct
sellers are concentrating on selling beauty/skin care products like cosmetics and toiletries
with increasing demand for these among young urban women. The direct selling scene is
mainly dominated by unemployed housewives as distributors with women accounting for
60% of the sales force. Most of the major direct selling companies use a multi-level
distribution system.
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Internet retailing
Also known as e-tailing, this is one of the fastest growing non-store retailing with
growth rate of 29%. Internet retailing is becoming a very popular channel with
consumers and retailers cannot afford to ignore this. The most popular products and
services are railway and flight booking, purchase and sale of stocks and investments. As
far as the retailers are concerned, it is also profitable for them as they can reach out to a
larger consumer base in the tier II cities also and can have a wide geographic reach
without having stores in all the cities. It also helps the retailer to track the shopping
patterns of consumers and thus can retain consumers more easily through targeted
advertising on the web pages. Even traditional retailers are offering their products
through the internet known as the “Bricks and Clicks” model. Internet retailing can see
higher growth in the near future if online security issues are tackled and other convenient
modes of payment apart from credit cards are put in place.
Catalogue, mail order and television sales
This category had a very small sales base but had a high growth rate of 32%. The
main reason for this was the higher penetration of television sets and cable television.Yet
this category has been constrained primarily due to the need of consumers to touch and
feel the products before buying them. Mail order catalogue were even more limited due
to the lesser impact they have on consumers in terms of conveying the product features
completely. The main products sold through this channel being fitness equipment,
jewellery, electronic items and household appliances.
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INTEGRATED STORES
This format is a combination of hyper mart and entertainment centre. Here, one
can get a double experience of shopping and entertainment at one place. The main idea
behind such stores is to combine two or more functions into a single store, which caters
to a wide cross section of customers.
Exclusive Brand Outlets (EBOs)
EBOs are retail outlets that sell merchandise exclusively of one brand, normally
having the store name as the brand name itself (e.g. Bata, Sony, Lilliput etc). They are
typically located either on high streets or within malls. Goods are priced at full-price
except during the clearance sale period. Normally, the trend followed by manufacturer
brands is to get into the market through MBOs, and gradually set up their own EBOs
outlets as their brand acquires recognition and a large loyal customer base.
Recent years have seen a quick turnaround for this format as rising brand
awareness and growing aspirations of the customer have led to a preference for brands
over non-branded local merchandise. People want best value, quality and choice for their
money, even if it is a little bit more expensive. The satisfaction from purchase of a
branded item far outweighs the higher price paid for it. Some of the EBOs that are doing
well in our country are Tanishq, Hidesign, Reebok, Adidas, Sony, LG, Levi‟s Nakshatra,
Freelook, Peter England to name just few.
Forecourt Retail
These are small format stores that are located in the front of a building, e.g. a
petrol pump. The focus being on convenience for the customer, these stores are usually
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open seven days a week. They work for extended periods during the day, opening early
and closing late. This concept has not been too successful in the past, but now in this era
of multi-tasking, when time is of essence, these have started gaining popularity. The
prominent players emerging in this sector are In & Out, Café Coffee Day, Crossword and
more recently, Vishal Corner Mart.
FOOD COURTS
No mall is complete without food courts. Normally positioned at the top most
floors in a mall or on the floor close to the multiplexes, these are mini-food counters of
food chains such as Pizza Hut, McKonalsd‟s Dosa Express, Sagar etc. clustered in a
chain-like structure with common sitting area in the centre for the customers.A
mall/multiplex attracts huge footfalls, especially on weekends, giving ample business
opportunity to the food court. How much any individual counter is able to succeed
depends entirely on its product appeal.
Express Formats
Express Formats are mostly extensions/smaller versions of large retail formats
such as hypermarkets and supermarkets or restaurant chains. For example, Pizza Hut
Express is the home delivery format of the Pizza Hut chain. Café Coffee Day has express
counters that it has set up in hypermarkets like Big Bazaar or department stores like
Lifestyle that cater to the store‟s customers. Some Express formats have also opened
smaller express counters in malls and high streets that cater to the fast young crowds on
the move. Express formats leverage the brand‟s pull to reach a larger customer base.
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3.3 EMERGING TRENDS IN RETAILING
Credit Cards
A barometer of the maturity of an economy with a few expectations is the stage of
development reached by its payment systems. Cash in the form of notes and a coin makes
up just one form of payment system. The development in banking brought about a
second phase in payment system, namely paper instruction such as cheques and credit
transfers. The requirements, for greater flexibility and convenience and development of
technology have given rise to electronic payments and this where plastic cards have
provided their worth.
The development of the credit card is one of the most significant phenomena of
the modern financial service scene. Basically the use of credit card of one of the two
essential aspects of the financial services function services function, the transmission of
payment and the granting of credit. The development of the credit card allowed for the
first time, the use of these two functions together.
Credit Cards in India
In India the foreign banks and organizations forayed first into the credit card
market the pioneer in the Indian field is the City Bank's Diner's Club Card, which entered
in 1969. Recognizing the potentiality of the credit cards, few Indian banks took early
initiative to introduce them. However it was only during 1981 when Andhra Bank
introduced its own credit card did the Indian bank constructively enter the field central
bank of Indian in association with Vysya Bank, United Bank, of India issued the central
card it 1985 the bank of Baroda along with Allahabad Bank launched the bob card. The
mercantile credit corporation limited merchant came in 1986 the Canara Bank made later
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entry into the credit card business in 1987 and the bank of India issued its own card, India
card in 1988. Among the foreign banks the ANZ Grindlays Bank came with visa classic
card by 1989. Citibank's master and visa card appeared in 1900m along with Taj
Premium Card market turned busy with all the twenty-eight public sector banks operating
in it.
The state bank of India has introduced also state bank cheque card. In 1992 the
hongs Kong bank entered the field with its visa international card and master card
international and recently it has launched the Hyatt regency prefer gold card. Credit card
is given by the banker to the customers in which the name of the customer is embossed in
blocks letters, the name of the bank of issues and expiry are also mentioned on the field
the reverse side of the card will bear the specimen signature of the customers. A list of
vendors or sellers will be given by the banker to the customers.
Credit Card which was considered to be a luxury, has become one of necessity. It
was considered to be used only by higher income group. But today, with development in
banking and trading activities, fixed income group or salaried class has also started using
the same. There may be the criticism that it includes for more purchases or makes people
spend thrift. This may be so in the initial stage, but when once a customer gets used to the
credit card, he/she will know how to use the same in a discretionary manner.
Applications of Information Technology in Retailing
Information technology is the capability to electronically input process, store, and
output, transmit, and receive data and information. It plays a very important role in
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today's business world. New technologies evolved in retailing are Radio Frequency
Identification (RFID), Smart Operating Solution Smart Ops, and Point of Sale (POS) etc.
The result indicates that, retail complexities may reduce with the help of
Information Technology solutions. The right solution can result in improved productivity
and major cost saving through key advantages such as more accurate supply chain,
forecasting and better inventory management. Information Technology also help retailers
to solve major problems related to customer services like customer loyalty and customer
satisfaction.
3.4. NEED OF INFORMATION TECHNOLOGY IN RETAILING
Most successful retail store has a reliable and efficient IT system. Retail needs IT
for all its core processes – planning, ordering, sales, finances, human resources and so
on. Few key indicators to this need could are as follows:
Which Goods are moving and which are not?
Are the vendors supplying goods on time?
Which goods are available at the warehouse and what needs to be ordered?
What should be ordered in the next season?
Which customer is buying which products?
The financial performance of the company.
Managing the employees of the organization.
Even in a single location large format store it would be difficult to manage these
issues without good data capture and analysis. In a multi location store this can become a
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huge problem. Inventory control and forecasting are just not possible without a good IT
system in place.
Diagram 3.1 Role of Retail Technology in India
(% of respondents)
Reduce Theft/Shrinkage 3
Replace Ageing POS
Technology
35
Provide Sales Assiciates
With Selling Tools
39
Provide Better
Product/Service
Information To
Shoppers
45
Improve Data Integrity 55
Increase
Reliability/Bandwidth of
Data Communication
Infrastructure
68
Faster Customer
Checkout Process
0 10 20 30 40 50 60 70
Source: The ETIG-IRMC 'State of Retail Technology in India' Survey
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It also forms the basis of supply chain initiatives like Quick Response or
Efficient Customer Response and Collaborative Planning and forecasting. Especially for
merchandising and supply chain IT is the major enabler. IT links the various areas of
retail business into one structure and helps the flow of information across organization.
This helps in managing several contact points both at the front end and the back end.
Without integrated systems the retailer may be unable to get timely information, which is
the key to future purchases for the store.
How Information Technology is involved in Retailing Operations
Forecasting: It is the process of estimation in unknown situations. It's an essential and
very important process in any business organization. Business leaders and economists are
continually involved in the process of trying to forecast, or predict, the future of business
in the economy. Business leaders engage in this process because much of what happens
in businesses today depends on what is going to happen in the future.
Retail Demand Forecasting: Modern demand-forecasting systems provide new
opportunities to improve retail performance. Although the art of the individual merchant
may never be replaced, it can be augmented by an efficient, objective and scientific
approach to forecasting demand. Large-scale systems are now capable of handling the
mass of retail transaction data – organizing it, mining it and projecting it into future
customer behavior. This new approach to demand forecasting in retail will contribute to
the accuracy of future plans, the satisfaction of future customers and the overall
efficiency and profitability of retail operations.
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Inventory Management
Inventory can be either raw materials, finished items already available for sale, or
goods in the process of being manufactured. Inventory is recorded as an asset on a
company's balance sheet. To optimize the deployment of inventory, retailers need to
manage the uncertainties, constraints, and complexities across their global supply chain
on continuous basis. This allows them to improve their inventory forecasting ability and
accurately set inventory targets. An IT solution is a proven and market leading solution
for determining optimal time-varying inventory targets for every item, at every location
throughout supply chain. This allows retailers you to significantly reduce inventory
without adversely affecting service levels.
Store Management
Another example where Information technology can be beneficial is a store
management. That alerts out-of-place or stock-out items. A store, commonly a shop or
stall for the retail sale of commodities, but also a place where wholesale supplies are
kept, exhibited, or sold. A place where something is deposited for safekeeping is called
store. The in-store system use magnetic strips or barcodes or RFID to monitor actual
versus intended product location on the floor or in the stockroom.
BARCODES
Bar coding is a proven technology for automated data collection needs of the
business. In layman terms, “a barcode actually contains any given alpha numeric
information encoded in the form of Bars and Spaces using international symbols which
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are like language of the barcode.” On retail products, the barcode normally contains the
product ID (e.g. item code, product code etc.) which is required to be entered into the
computer system to update the data at the time of billing, receiving or dispatch. With the
barcode in place, the data is fed into the system automatically by scanning the barcode
using a bar code scanner instead of punching the same through a keyboard.The advantage
of a barcode is that it helps avoid any error in capturing data as compared to typing in
details and ensures accuracy and speed.
In order to ensure consistency and avoid duplication there are standards for the
use of barcodes and each type of standard is relevant to a particular industry or
application. This also defines the extent of data or detail that has to be communicated
through a barcode. For example there are UPC codes (12 digits), EAN codes (14 digits),
etc.
Point of Sales
The fast checkout and reduced queues attracts more customers and ensures that
customer visit the store again and again. The Bar Code scanners at point of sales help in
the elimination of queues with fast checkout by automating the data entry into system.
The barcode scanner is basically a device which plugs into a computer system just like
another keyboard and feed the barcode data into a computer. The benefit is that the data
fed is nearly 100 per cent accurate and the whole Item code is scanned in a fraction of
second. The scanners come in lots of varieties to meet varied needs of retailers.
In the Store Barcodes solutions play an important role in utilising customised in-store
marketing, increasing up-selling and cross-selling opportunities, quickly locating
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merchandise, easily monitoring inventory and checking prices. The state-of-the art
solutions based on barcode technology enables retailers to improve the customer's
experience at the primary point of decision – the selling floor.The Portable Data
Terminals (PDT) allow the retailers to take the inventory status by scanning the items
barcodes without need of counting them.
Manufacturer to Distribution Centre
The barcode technology helps the retail products manufacturer (FMCG
companies) to automate their process from manufacturing to distribution centre (DC). At
the manufacturing floor, the fixed mount scanner integrated with conveyor system helps
in sorting the manufactured items based on their packing and other parameters. The fixed
mount scanner is basically a high performance scanner, which can operate on a 24x7x365
duty cycle. The use of 802.11 wireless networks with barcode technology, automate the
process of material shipments from plant to warehouse. While shipping, the total
shipment data then can be printed in the form of a 2D barcode. The 2D barcode can
contain the contents of entire shipment as a single barcode, which could be read at the
DC with the help of a 2D barcode scanner. The entire shipment data is entered into the
computer on the scan of just a single barcode.
Connectivity of Barcode Solutions
Barcode solutions can be integrated to any application software to enable the
printing and scanning of barcodes for various retail activities. Most of the industry
standard ERP (SAP etc.) solutions available for retail already support connectivity to
barcodeequipment.
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FDI, Participation in Retail Sector
India today represents the most compelling investment opportunity for mass
merchant and food retailers looking to expand overseas. According to A.T. Kearney's
annual global retail development index for 2005, India retail market totaling $300 billion
is vastly undeserved and has grown at an average rate of 10% in the last five years.
Present Government policy on FDI allows to have a presence of international brands
through different routes i.e. Franchise, Joint venture, Manufacturing, Distribution, Cash
and carry.
FDI is currently banned in the retail sector except for single brand retailing.
Currently the only routes available for a foreign player to enter the food and grocery
retail are:
Franchise agreements: Franchising is the most widely used entry route by
international retailers. A number of international firms like marks and Spencer,
Dominoes, Pizza Hut have entered the India through this route. It also led to the
high growth of franchises at 14% per annum.
Cash and carry wholesale trading: 100% FDI is allowed in cash and carry. In
this business model the wholesaler deals only with smaller retailers and not with
consumers. Metro AG of Germany and Shop rite of South Africa entered India
through this route. Wal-Mart is also planning to enter through this route in India.
Strategic licensing agreements: This route involved the foreign company
entering into a licensing agreement with a local retailer. Mango, the Spanish
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apparel brand has entered India through this route with an agreement with
Pyramid. SPAR has entered into a similar agreement with Radhakrishna
Foodlands Pvt Ltd.
Benefits and Impact on the Country
Inflow of funds and investments, Growth of Infrastructure, Knowledge Base-
Technical Know-how, Reduced cost and Increased Efficiency, Franchising Opportunity
for local Entrepreneurs. Investment in Supply Chain, Cold Storage facilities and
warehousing, Implementation of IT in Retail, Increase number and Improve Quality of
Employment. Provide better value to end Customer Indian farmers will get a
remunerative price for his contribution to retailers. Retailers can ensure lower prices,
quality, better shopping experience and better customer services. Hence it will lead to
overall economic growth and create Benchmark.
Online Marketing
E-business primarily concerns the applications of digital technologies to business
within the firm. E-business refers primarily to the digital enablement of transactions and
processes within a firm, involving information systems under the control of the firm. It
does not include commercial transactions involving an exchange of value across
organizational boundaries. For example, a company online inventory control mechanisms
are a component of e-business, but such internal processes do not directly generate
revenue for the firm from outside business or consumers. E-business applications turn
into e-commerce precisely when an exchange of value occurs. And e-commerce and e-
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business systems can and do blur together at the business firm boundary, at the point
where internal business systems link up with suppliers, for instance.
The people are living in an exciting time. The Power, capabilities, and worldwide
reach of the Internet are quickly changing the way the world does business. E-business
means any business conducted using electronic media such as the Internet, other
computer networks, wireless transmissions, etc. It also stands for electronic business and
refers to any kind of sales, services, purchasing or commerce on the Internet. E-
commerce means the use of internet and the web to transact business. E-commerce
primarily involves digitally enabled commercial transactions between and among
organizations and individuals.
E-Marketing or electronic marketing refers to the application of marketing
principles and techniques via electronic media and more specifically the Internet. The
terms E-Marketing, Internet marketing and online marketing, are frequently interchanged,
and can often be considered synonymous. E-Marketing is the process of marketing a
brand using the Internet. It includes both direct response marketing and indirect
marketing elements and uses a range of technologies to help connect businesses to their
customers. By such a definition, e-Marketing encompasses all the activities a business
conducts via the worldwide web with the aim of attracting new business, retaining current
business and developing its brand identity.
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Consumer e-Market in India
Market Size Estimate 2006-07 2007-08
Online Travel Industry 5,500 7,000
Online Non-Travel Industry 1,580 2,210
e-Tailing 850 1,150
Online Classifieds 540 820
Paid Content Subscription 20 30
Digital Downloads 170 255
Total B2C/C2C
E-Commerce Market
7,080 9,210
(Figures in Rs.Crores)
Source:IAMAI & IMRB Report:
„Consumer E-Commerce Market in India 2006/07‟
E-retail can play a very important role in the growing consumer economy by
providing access to organized retail into the deepest corners of the nation. The retailers
themselves employ people, but unlike in the case of tickets or services, in e-retail,
significant manpower is required to handle, deliver and track the packages. Multiple
companies in the ecosystem employ people to drive the vehicle, to carry the packages to
the customers, to assist in the call centre and to pack and process at the warehouse. E-
retail can lead to large scale employment generation.
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Prospective Luxury Retailing in India
Luxury retailing is still in its introductory stages in India and there is vast scope
of research, especially about the evolving marketing practices in the related field with
special reference to culturally-distinguished consumer groups.Luxury goods have always
been associated with high quality, craftsmanship, uniqueness, creativity, exclusivity and
innovation. Apart from these product attributes, consumers also get additional
psychological benefits like higher self-esteem, prestige and a sense of a high status that
reminds them and others that they belong to an exclusive group which can afford these
expensive goods.
The growth of India as a luxury products market, and its emerging potential is
very obvious now especially as the economy is booming, and there is a general positive
sentiment towards global brands. India, as a retail market, is not uniform, especially when
it comes to preference for luxury in terms of need fulfillment. Moreover, the market is
not as mature as the European market where consumers seek fulfillment through
experience. Few players have been able to fulfill the needs of the Indian consumer who
is seeking luxury goods/ services. Since this segment of the market remains untapped, a
huge potential lies in the same.
Having suitable store locations is indispensable for successful retailers. Having
prestigious store locations reinforces the core brand values and also the differentiated
status of luxury brands. Therefore, the success of luxury brands in India or anywhere
else is subjected to the availability of suitable store locations. In India, 80% of the
luxury brands retail through their outlets in various hotels, which provides a very
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restrictive environment, thereby affecting visual impact. „The Collection‟ in Bangalore
and „DLF Emporio‟ in Delhi are two major malls which retail luxury in India. With
increasing brand consciousness, the attitude towards luxury has changed and most of the
prestigious fashion brands have started establishing themselves in India. The luxury
goods industry is quite different from regular goods in terms of the market characteristics
and behavior of consumers. Also, the level of acceptance and understanding of luxury in
different markets is different. India is in the nascent stage of its development as a luxury
retail market. Only a few cities like Delhi, Mumbai and Bangalore enjoy the presence of
luxury culture thereby making the accessibility and visibility of these products quite low.
Many experts see India as an upcoming market and the next China for luxury and have a
huge potential for growth and development.
The economic aspects of corporate and social responsibility
Corporate social responsibility in the broader sense is taken to mean sustaining
economic/business activity by co-mingling social responsibility of the enterprise in their
external and internal relations with business prospects. Hence, corporate social
responsibility is more than charity. It has some underlying economic implication. It is an
innovative way to contribute by the firms to spend in towns and villages and to buy
products from millions of artisans who are at the bottom of the pyramid. The fortune of
the bottom of the pyramid calls for corporations to design products/services for the
enormous population at the bottom of the pyramid. The primary assumption is that this
population segment has some disposable income and firms can still make profits on large
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volume. Hence it moves the corporation towards a set of socially committed and aligned
work culture.
3.6 CHENNAI RETAILING
Chennai being the fourth largest city in India, it is a major trade center. The
nucleus of the city consists of the old residential areas of George Town , Chintadripet ,
Triplicane and Purasawalkam, which are now decaying and in need of an urban renewal.
The Central Business District (CBD) of Chennai is concentrated within a 3 kilometer
radius around Anna Salai in Central Chennai. The prime commercial complexes are all
located along the three main roads namely , Anna Salai , Dr.Radha krishnan Salai and
Nugambakkam High Road. In addition , other major commercial destinations are TTK
Road , Poonamalle High Road, Egmore and Adyar.
Keeping in view the fast pace of development of commercial and residential
developments in the city , a number of malls are coming up in the southern part of the
city by many private developers as stand alone malls as well as malls as part of
townships.
In keeping with the international demand where customers look for an altogether
different shopping experience, the shopping mall culture is fast gaining popularity.
Earlier, limited to City's main artery such as Anna Salai or Mount Road, Chennai is
experiencing an influx of newer, modern shopping centers all over the city. The feeling
that FDI in retail industry is around the corner has triggered much activity among
Chennai's well-known retailers. Even well established brands have been acquired by
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bigger pan-India retailers, some local companies have chosen to ramp up to compete with
the big boys.
3.7. RETAIL PIONEERS OF CHENNAI
Saravana Stores
Saravana Stores is a Chennai based chain store which is running very
successfully.It is owned by Mr.Yogarathinam and Rajarathinam , the chain has a legacy
of 60 years beginning with a small textile showroom in erstwhile , madras. Today ,
Saravana Stores is the one stop shop for all kinds of clothes-churidars,silk sarees,
ghagras, designers sarees, readymades, mens wear, kids wear, foot wear or perfumes.
The retailing philosophy that rules the Saravana Stores businesses is: Low margin,
high turnover. In fact, it is a known fact that most articles at Saravana stores are sold at
20 to 30 below their MRP. Even for consumer durables and electronics, one is bound to
get a product cheaper by at least one percent at Saravana compared to any where else.
The one lakh sq.ft Saravana stores showroom in T.Nagar, spread across five
floors , caters to shoppers from India and abroad. In 2004 , Saravana Stores set up a
30,000-liter-a-day ice cream production unit to launch their own ice-cream brand called
“Jamal” Saravana stores, a Rs 250 crore regional retail brand, retails stainless steel
utensils , jewellery, textiles, consumer durables and provisions. Their online jewellery
retail initiative a raging success with NRI‟s the world over.
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Pothys
Weavers to the maharajas of yore , “Pothys” was established 90 years back by
K.V.Pothy Moopanar under the brand name “ Pothy Moopanar” to sell cotton sarees ,
dhoties and towels woven in his own loom. In 1977 his son K.V. Sadayandi Moopanar
established the name and expanded the outfit with a self – styled retail showroom at
Srivilliputtur, branded as “ Pothys”. The next generation ventured to newer pastures ,
and opened a showroom in Tirunelveli in 1986. Today, Pothy‟s is indisputably the most
popular silk saree‟s showroom in Chennai- a fact corroborated by a survey conducted
Sun TV and AC Neilsen Survey. The store successfully entered the Guinness Book of
World Records for world‟s longest silk saree at 1276 feet , endowed with images that
trace the rich and varied heritage of India through five millennia. Pothy‟s opened their
largest showroom in Panagal Park , Chennai in 1999. This imposing six-storeyed
showroom is popularly known as an “ Aalayam”Pothys offers variety of silk sarees and
has a full floor dedicated to dressing up boys and girls , from tiny tots to teens.
Witco
Witco aims to be India‟s leading retailer in travel requisites in premium segment.
The store chain provides the best luggage and travel accessories brands under one roof.
Witco was founded in 1951 by late M-P-C Mohammed, the pioneer of plastic industry in
Chennai. Today , Witco has 17 outlets in Chennai and is also the exclusive retailer for
Samsonite in India and VIP luggage in South India. The store houses internationally
renowned premium travel brands such as Samsonite, VIP, Delsey, American Tourister
and Giordano. Witco is also the founder member of RAI (Retailers association of India)
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Nilgiri’s
It was started 10 decades ago as a family based organization. Nilgiri‟s Dairy Farm
operates 100 supermarkets in the southern cities of India including Chennai. UK based
Actis, along with Singapore – based GIC Investments affected a management by out of a
established brand in the south in October 2006. The group had a top line of around Rs
120 crore. Actis brought professional management and has attempted to modernize the
retail processes at Nilgiri‟s. Nilgiri‟s product include dairy products , bakery , chocolates
and a variety of other local foods and snacks. All of its products are soled under the brand
Nilgiri‟s. Ever since the take over, Nilgiri‟s has been aggressive in expanding its retail
presence, which consisted of 30 stores at the time of Actis entry. In addition to this, the
new investors have been strengthening the group‟s manufacturing operations in dairy,
bakery and food segments. The plan for the future is to take the number of retail outlets to
about 400 by 2010. Nilgiri‟s now offer about 1200 private labels, which are particularly
strong in the bakery and dairy segments. The company is in the process of setting up a hi-
tech distribution center of 1 lakh Sq.Ft at Chennai very shortly.
Univercell
A Eureka Forbes sales head in Karnataka , Mr.Satish Babu, launched Univercell
in 1997 with six employees in the beginning. Now the organization has 1300 employees
and from one showroom on T.T.K Road to 155 showrooms across the southern peninsula
dealing with Skycell ( now Air Tel) postpaid connections and genuine branded mobile
phones. Then the company went to partner with Skycell Teleshop and signed up the first
SkyCell Teleshop in Chennai. Univercell is aspiring a Rs. 1,000 – crore turnover. The
company signed up Mr.Madhavan, the film actor, to be its brand ambassador for a
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stronger zestful brand image. Univercell will be spreading to other regions of the country
very shortly. It plans to achieve 1000 showrooms by 2010. Univercell has plans to take
cell-phone to rural India as well.
Viveks
Vivek limited is the largest consumer electronics and a home appliance retail
chain in India. Lakshmi Narayana Setty influenced by the lofty ideals of Swami
Vivekananda setup a small shop of 200 sq-ft, at Mylapore, Chennai, with an investment
of only Rs. 10,000 to sell folding chairs. Slowly he added radios, fans, mixers, irons,
heaters and other household equipments. He named his business Vivek and Company
inspired by his Guru Swami Vivekananda. After his demise, B.A.Kodandaraman took
over the reins of Viveks and increased the turnover of Rs. 1,60,000 in the first year to a
stunning figure of Rs. 25,76,000 by 1980. Viveks grew from three stores and turnover
increased to over 80 million US dollars. It also becomes a public limited company a
family run enterprise. Viveks group has a 42-year old legacy and today operates 52
stores in South India in a total area of 1,75,000 sq.ft with an annual turnover of Rs.400
crores.
Vasanth & Co
Vasanth & Co , a Rs.2.5 billion turnover company is a leading Chennai – based
chain store dealing in consumer electronics and home appliances. The company was
established in 1978, and currently has a network of 39 showrooms operating in almost in
all towns of Tamil Nadu. Vasanth & Co enjoys tremendous brand loyalty amongst its
customers so much. So that those who purchased black and white TV sets from
96
Vasanth & co way back in 1978 , when TV‟s were launched in India, continue to be
Vasanth & Co. customers.
Style Spa
Headquartered in Chennai, India – Style Spa furniture limited, a company
promoted by the Zuari-Chambal group of the K K Birla conglomerate was established in
India in 1977 to manufacture and retail furniture. The manufacturing facility located near
Chennai is a fully automated sophisticated plant equipped to manufacture exquisite
pieces of furniture of impeccable quality. The plant is also one of Asia‟s most modern
and largest manufacturing facilities. The products-elegant and contemporary furniture for
homes and offices, mattresses and pillows-are retailed in exclusive Style Spa showrooms
spread across the country. Style Spa is the largest retailer of furniture in India with over
90 exclusive showrooms spanning the length and breadth of the country. Style Spa‟s
competitive edge lies in its elegant range of products which are difficult to replicate, its
state of the art manufacturing facility that ensures consistent quality, a large retail
network, experienced and qualified personnel that make up the Style Spa team and not to
mention the tens and thousand of homes that revel in the Style Spa a brand of “Good
Living”.
Apollo Pharmacy
Apollo Pharmacy, a division of Apollo Hospitals Enterprises Limited , is India‟s
largest branded pharmacy network, with over 700 hundred outlets, in key locations across
17 states including Andaman & Nicobar. The first Apollo Pharmacy was opened in
Chennai in the year 1983 and the chain has served over one crore customers. The
97
pharmacy business of Apollo is growing at a phenomenenal rate of 70%, with revenues
of Rs. 600 crores achieved last year and plans to increase the outlets to 1000 this year.
Apollo has started expanding through the franchise route. Recently, the company
launched a new concept – Nurse Station – at its pharmacy outlets where the nurses are
available to attend to the patients at their houses, or refer them to and Apollo Clinic near
by.
Land Mark
This book and music store chain was set up in 1987, with its first store at
Chennai‟s Apex Plaza. At present, landmark has ten outlets. The projection is to have 16
outlets very shortly. Land mark was present in 6 cities in 2006 but now it is present in 11
cities. In 2006 it had a total retail space of 2,15,000 Sq.ft. It now has a retail sq.ft of
4,35,000 sq.ft. In August 2005, Trent Limited, The retail arm of the TATA group,
acquired 76% stake in the chain.
Odyssey
Odyssey India Limited, the Chennai – based book retail venture belongs to
Deccan Chronicle Group, Publishers of Deccan Chronicle and The Asian Age
newspapers. In 2007, they had 20 stores, which they seek extended to 175 outlets in
2009. In terms of retail space, it had 1,42,363 sq.ft of retail space which they propose to
increase to 4,70,754 sq.ft by 2010.
98
Saravana Bhavan
Saravana Bhavan received for the 2008 Best of Mountain View Award in the
Restaurants category by the US Local Business Association (USLBA), which recognizes
outstanding local businesses throughout the country. Saravana Bhavan which has a chain
of high-quality vegetarian restaurants was launched in 1981. It has 22 outlets in South
India and 3 in North India. Besides, Saravana Bhavan is also present with 16 outlets in
6 other countries, namely, US, UK, Canada, Singapore, Malayasia, UAE and Oman.
The multi-cuisine restaurant has won accolades in every country of presence for
its unique cuisines cooked in strict ethnic flavours. Saravana Bhavan restaurants also
provide services in fast food, take away, outdoor catering.
Food World
In May, 1996, the 100-year old Chennai – based Spencer‟s and Company , started
a super market chain from Chennai with the brand name “ Food World” This company
has expanded in the south over the previous years. The company also operates other store
formats like Health and Glow and the Music World Chain stores. Food world began their
operations with a very professional approach and with good in – house training.
They were able to provide relatively higher levels of customer service. The
company is absolutely committed to retailing and this is justified by its efforts and
investment it has made in setting up a much – desired Retailing Management Institute to
train young managers in the principle of retailing.
99
Globus
Launched in January 1998, Globus is a part of the Rajan Raheja group. The
company opened its first store in 1999 at Indore followed by the launch of its second
store in Chennai (T.Nagar). Globus Stores Pvt. Ltd. was formed to contribute in the
revolution sweeping the retail industry. Globus promises to bring about a perceptible
change in the way apparel and lifestyle.
Lifestyle
Lifestyle is part of the Landmark Group, a Dubai-based retail chain. With over 30
years‟ experience in retailing, the Group has become the foremost retailer in the Gulf.
Positioned as a trendy, youthful and vibrant brand that offers customers a wide variety of
merchandise at exceptional value for money, Lifestyle began operations in 1998 with its
first store in Chennai in 1999 and now has 12 Lifestyle stores, 5 Home Centers and 1
Baby shop store across Chennai, Hyderabad, Bangalore, Gurgaon, Delhi, Mumbai and
Ahmedabad.
Pantaloon Retail
Pantaloon Retail (India) Limited, is India‟s leading retailer that operates multiple
retail formats in both the value and lifestyle segment of the Indian consumer marker. The
company‟s leading formats include Pantaloons, a chain of fashion outlets, Big Bazaar, a
uniquely Indian hypermarket chain, Food Bazaar, a supermarket chain, blends the look,
touch and feel of Indian bazaars with aspects of modern retail like choice, convenience
and quality. Some of its other formats include Depot, Shoe Factory, Brand Factory, Blue
100
Sky, Fashion Station, Top 10, mBazaar, Star and Sitara. The company also operates an
online portal, futurebazaar.com.
The Chennai Silks
The Chennai Silks was started in the textile town of Tirupur, South India, in the
early 1960s. The stores were metamorphosised into grand textile showrooms in the major
cities of Chennai, Coimbatore, Trichy, Erode and Tirupur. The Chennai Silks has its own
exclusive jewellery division, Sree Kumaran Thangamaligai having the unique distinction
of being the first BIS 916 hallmarked jewellery showroom in Tamilnadu.
The City Centre
The City Centre offers an awesome 1,50,000 sq. ft. of shopping area. Its ambience
seems to be adding a new dimension to the City's looks. It is promising to be a very
important one-stop entertainment destination.
Spencer Plaza
Spencer Plaza on Mount Road is a hot favorite particularly with children and
teens. The mall is 125,000 sq ft, fully air-conditioned and accommodates more than 400
shops. Located at about half-hour ride from the airport, all the leading international
brands have an outlet in Spencer Plaza. Branded apparel shops, reputed jewellery shops,
food, grocery, IT products, electronics and entertainment items, healthcare supplies,
handlooms and handicraft shops, bookshops provide an overwhelming shopping
experience to consumers.The world's first shopping mall dedicated entirely to gold has
been opened in the City. Luring the customers to buy branded jewellery, dress jewellery
101
as well as traditional gold seems to be the primary objective of this unique 'only gold
mall'.
Express Avenue
The Express Avenue is a venture of Express Infrastructure Private Limited which
is a 100% subsidiary of Express News Private Limited, With Express Avenue, express
infrastructure brought Chennai to the fore front of fashion in India. Being in the heart
of the Chennai, the location of the Express Avenue is a winner from the word go. The
Express Avenue is definitely a destination mall. The depth of the retail mix at Express
Avenue, with all the leading luxury brands, all zoned but under the same roof, is bound to
be the first in India. Similarly, its mixed- use status with a hotel and commercial spaces
on either ends makes it a home to the single largest captive audience for a shopping mall.
Express Avenue houses approximately 200 brands.
In the Express Avenue approximately 30% of tenant mix is franchise driven. It is
a new direction in Chennai‟s retail scenario, and it is successfully generating
overwhelming response from the people of Chennai.
The socio-Economic scenario in Chennai is destined to change with the arrival of
Express Avenue. There would be 8000 to 10,000 new jobs created on account of express
avenue. Also, Mount road would get a fresh lease of life. Express Avenue has amenities
that ensure comfort and shopping pleasure of the visitors. The visitors can have
unfettered movement around the mall through the means of escalators and elevators.
Facilities for the physically challenged, environment friendly features such as natural
lighting, water treatment facilities, recycling facilities and low emitting material are used
102
in the construction. Express Avenue has deployed state–of–the art equipments and trained
manpower to ensure that shopping experience is wholesome without any hitches.
Kirana Shops in Chennai
India is a land of kiranas and Chennai is no exception for it. Small retail outlets
with less than 500 Sq.ft , platform shops, hawkers and peddlers are doing considerable
business in Chennai. Some of the prominent places are Pondy Bazaar, Annai Satya
market in T.Nagar , Burma Bazaar in Parrys Corner Vegetable platform shops near
Mylapore tank and North Madras , and Ritchie Street near Anna Salai are some of the
prominent places.
The modern organised retailings are providing significant competition to the
standalone kiranas. Majority of kirana stores in Chennai believe that there has been a
change in consumer buying patterns since the onset of modern organised retailing. They
are confident that they will not be wiped out of the scene but will continue to co-exist
along with the modern organized retail outlets.
In order to counter the competition from organized retail, kiranas have used
certain transformational strategies: - while some have changed their store format,
majority of them have made changes in their merchandizing. A few have incorporated
value added customer service.
103
3.8. CONCLUSION
Over the last few years, retail has witnessed rapid transformation in many areas of
the business by setting scalable and profitable retail model across categories. New and
indigenized formats such as department stores, hypermarkets, supermarkets, specialty and
convenience stores, malls, multiplexes and fun zones are fast dotting the retail landscape.
The emergence of shopping centers is already beginning to define a new lifestyle. A
huge demand exists for clean, contemporary shopping and entertainment complexes that
will house local brands and retail formats and offer an exciting and rewarding shopping
experience for the whole family.
A number of winning solutions will doubtless emerge over the next few years but
the dominant centers for the long term will be those that are designed around the
consumer and cater to the long term specific needs of a particular location. Similarly,
many trends have also emerged in retailing it is up to the retailers to use all of them or a
few among them constructively for the betterment of their organization, society and the
economy as a whole.
104
CHAPTER-IV
DATA ANALYSIS AND INTERPRETATION-I
4.1 INTRODUCTION
Data analysis refers to the process of evaluation of the data collected using
analytical and logical reasoning to examine each component of the data. Data from
various sources is gathered, reviewed and then analyzed to form some sort of finding or
conclusion. The aim of the analysis is to organize, classify and summarize the collected
data so that they can be better comprehended and interpreted to give answers to the
questions that triggered the research.
The act or process of applying general principles or formulae to the explanation of
the results obtained in special cases is called as the Interpretation. It is the search for
finding a broader meaning of the findings. Analysis and interpretation are considered as
the key steps in the research process. Analysis cannot be complete without interpretation
and similarly, interpretation cannot proceed without analysis.
In this Chapter, a detailed analysis of the data collected has been attempted as per
the objectives of the study stated earlier, and ultimately, Inferences and Conclusions were
drawn. The following statistical techniques are used for analysis of the data collected for
the present study viz., Descriptive analysis.
105
Table 4.1
Descriptive Analysis on Sample Sl.No. Gender Frequency Percentage
1 Male 212 71
2 Female 88 29
Total 300 100
Source: Primary data
The above table shows the total number of males and females in the sample
customers surveyed. Male customers constitute 71%, while female customers constitute
29% of the total sample customers. With the above information relating to gender, we
can conclude that the male customers constitute the majority of the sample customers
surveyed.
Diagram – 4.1
Representing Gender
212
71
88
29
300
100
0
50
100
150
200
250
300
350
400
Frequency
Male Female Total
Gender
Percentage
Frequency
106
Table 4.2
Frequency Distribution of Age Group in years
Sl.No. Age group Frequency Percentage
1 Below 20 33 11
2 20 to 40 192 64
3 Above 40 75 25
Total 300 100
Source: Primary data
The table 4.2 shows the relation between the age group in years of the sample
customers. Sample customers in the age group of 20 to 40 constitute 64%, while
customers above 40 years of age constitute 25%. Customers below 20 years of age
constitute 11%. After consolidating the above information, we can conclude that people
in the age group of 20 to 40 years constitute the majority of the sample customers.
Diagram - 4.2.
Representing Age Group in Years
AGE GROUP
Below 20
20 to 40
Above 40
Below 20
20 to 40
Above 40
107
Table – 4.3
Frequency Distribution of Marital Status
Source: Primary data
The above table shows the marital status of the sample customers surveyed. 77%
of the customers are married, while 23% are unmarried. With the available information
relating to marital status of the sample customers, we can conclude that the married
customers constitute the majority of the sample customers surveyed.
Diagram 4.3
.Diagram Representing Marital Status
230
77
70
23
300
100
0
50
100
150
200
250
300
350
400
FREQUENCY
Married Unmarried Total
MARITAL STATUS
Percentage
Frequency
Sl.No. Marital Status Frequency Percentage
1 Married 230 77
2 Unmarried 70 23
Total 300 100
108
Table 4.4
Frequency Distribution of Educational Qualification
Sl.No. Educational Qualification Frequency Percentage
1 Upto HSC 75 25
2 Graduate 118 39
3 Professionals 82 27
4 Others 25 9
Total 300 100
Source: Primary data
The table 4.4 shows the educational qualification of the sample customers. 39%
of the sample customers are graduates, while 27% are professionals. Those who have
studied up to Higher Secondary constitute 25%, while others constitute 9% of the sample.
After consolidating the overall information, it can be concluded that graduates constitute
the majority of the sample surveyed.
Diagram 4. 4.
Representing Educational Qualification
75
25
118
39
82
27
259
300
100
0
50
100
150
200
250
300
350
400
FREQUENCY
Upto HSC Graduate Professional Others Total
EDUCATIONAL QUALIFICATION
Percentage
Frequency
109
Table - 4.5.
Frequency Distribution of Occupation
Sl.No. Occupation Frequency Percentage
1 Business 55 18
2 Professionals 33 11
3 Government Employees 36 12
4 Private Employees 71 24
5 Self-employed 63 21
6 Home maker 42 14
Total 300 100
Source: Primary data
The above table shows the occupation distribution of the sample customers
surveyed. 24% of the sample customers are private employees, while 21% of the sample
customers are self-employed. 18% of the sample customers are in business, while 14%
are home makers. Government employees constitute 12%, while professionals constitute
11% of the sample. After consolidating the overall information, it can be concluded that
private employees constitute the majority of the sample.
110
Diagram - 4.5
Representing Occupation
BusinessProfessional
Government
EmployeePrivate
Employee Self-
employed Home makerTotal
Percentage
Frequency
5533 36 71
6342
300
1811
12 2421
14
1000
50
100
150
200
250
300
FREQUENCY
OCCUPATION
Percentage
Frequency
Table - 4. 6.
Frequency Distribution of Monthly Income
Sl.No. Monthly income (in Rupees)
Frequency Percentage
1 Below 30,000 94 31
2 30,001 to 60,000 98 33
3 60,001 to 1,00,000 76 25
4 Above 1,00,000 32 11
Total 300 100
Source: Primary data
The table 4.6 shows the distribution of the monthly income among the sample
customers surveyed. 33% of the sample customers earn between Rs.30,001 to
Rs.60,000/-, while 31% of the sample customers earn below Rs.30,000/-. 25% earn
between Rs.60,001 to Rs.1,00,000/-, while 11% earn above Rs.1,00,000/- as monthly
income. On consolidating the overall information, it can be concluded that the monthly
111
income earners between Rs.30,001 to Rs.60,000/- constitute the majority of the sample
customers.
Diagram - 4. 6.
Representing Monthly Income
94
31
98
33
76
25
32
11
300
100
0
50
100
150
200
250
300
350
400
FREQUENCY
Below 30,000 30,001 to 60,000 60,001 to 1,00,000 Above 1,00,000 Total
MONTHLY INCOME
Percentage
Frequency
Table - 4.7.
Frequency Distribution of the Type of Goods
Generally Purchased From a Retail Unit
Sl.No. Type of brands Frequency Percentage
1 Manufacturer's brands 152 51
2 Private brands 137 46
3 I am not brand conscious 11 3
Total 300 100
Source: Primary data
The above table shows the views of the sample customers regarding the type of
goods generally purchased from a retail outlet. 51% of the sample customers prefer
manufacturer‟s brands, while 46% of the sample customers prefer private brands. 3% of
112
the sample customers are not brand conscious. On consolidating the overall information,
it can be concluded that the manufacturer’s brands constitute the majority of goods
generally purchased from a retail outlet
Diagram - 4.7
Representing the Type of Goods Generally Purchased From a Retail Unit
152
51
137
46
11
3
300
100
0
50
100
150
200
250
300
350
400
FREQUENCY
Manufacturer's
brands
Private brands I am not brand
conscious
Total
TYPE OF BRANDS
Percentage
Frequency
Table 4.8
Frequency Distribution of the Retail Outlets Generally Preferred For Shopping
Sl.No. Type of Retail Outlets Frequency Percentage
1 Department Stores 137 46
2 Chain Stores 57 19
3 Discount Stores 94 31
4 Shopping Malls 12 4
Total 300 100
Source: Primary data
The above table shows the retail outlets generally prefer for shopping by the
sample customers. 46% of the sample customers prefer Departmental Stores, while 31%
prefer Discount Stores for shopping. 19% of the sample customers prefer Chain Stores,
113
while Malls are prefer by 4% of the sample customers. After consolidating the overall
information, it can be concluded that departmental stores are prefer by the majority of
the sample customers.
Diagram - 4.8
Representing the Retail Outlets Generally Preferred For Shopping
Department Stores
46%
Chain Stores
19%
Discount Stores
31%
Shopping Malls
4%
Department Stores
Chain Stores
Discount Stores
Shopping Malls
Table – 4.9
Frequency Distribution of the Average Amount Spent in a Retail Outlet
Every Month
Sl.No
. Average amount spent in a retail outlet
every month
Frequency Percentage
1 Below Rs.1000 22 8
2 Rs.1001 to 5000 52 17
3 Rs.5001 to 10000 126 42
4 Above Rs.10000 100 33
Total 300 100
Source: Primary data
114
The table 4.9 shows the average amount spent in a retail outlet every month by
the sample customers. 42% of the sample customers spend on an average of Rs.5001/- to
Rs.10000/-, 33% of them spend above Rs.10000/- .17% of the sample customers spend
between Rs.1001/- to Rs.5000/- and 8% among them spend less than Rs.1000/- per
month. After consolidating the overall information, it can be concluded that the sample
customers spending between Rs.5001/- to Rs.10000/- constitute the majority of the
sample.
Diagram - 4.9
Representing the Average Amount Spent in a Retail
Outlet Every Month
22
8
52
17
126
42
100
33
300
100
0
50
100
150
200
250
300
FREQUENCY
Below
Rs.1000
Rs.1001 to
5000
Rs.5001 to
10000
Above
Rs.10000
Total
THE AVERAGE AMOUNT SPENT IN A RETAIL OUTLET
Frequency
Percentage
115
Table – 4.10
Frequency Distribution of the Different Forms of Payments Generally Made by the
Customers
Sl.No. Form of payments made by the
customers
Frequency Percentage
1 Cash only 40 13
2 Personal Cheques 29 10
3 Credit Cards 136 45
4 Debit Cards 95 32
Total 300 100
Source: Primary data
The table 4.10 shows the different forms of payments generally made by the
customers at the time of shopping. 45% of the sample customers use Credit cards, while
32% use Debit cards. 13% of the sample customers use cash only for making retail
payments, while 10% among them issue personal cheques. After consolidating the
overall information, it can be concluded that credit cards are used by the majority of the
sample customers.
Diagram – 4.10
Representing the Different Forms of Payments Generally Made by the Customers
4029
13 10
4532
100
300
95
136
Cash only Personal
cheques
Credit Cards Debit Cards Total
THE DIFFERENT FORMS OF PAYMENTS GENERALLY MADE BY THE
CUSTOMERS
FREQUENCY
Frequency
Percentage
116
Table - 4.11.
Frequency Distribution of the Different Credit Cards Used While Making
Retail Payments
Sl.No. Type of Credit Cards used Frequency Percentage
1 Visa 66 22
2 Master Card 39 13
3 American Express 28 9
4 ICICI 111 37
5 SBI 56 19
Total 300 100
Source: Primary Data
The above table shows the different types of credit cards used by the sample
customers while making retail payments. ICICI cards are used by 37% of the sample
customers, while Visa cards are used by 22% of the sample customers. SBI cards are
used by 19% of the sample customers and 13% among them use Master card. American
Express cards are used by 9% of the sample customers. After consolidating the overall
information, it can be concluded that ICICI cards are used by the majority of the sample
customers.
117
Diagram – 4.11
Representing the Different Credit Cards Used While Making
Retail Payments
300
56
28
111
3966
19
100
9 3713220
50
100
150
200
250
300
350
Visa Master
Card
American
Express
ICICI SBI Total
CREDIT CARDS USED BY THE CUSTOMERS WHILE MAKING RETAIL
PAYMENTS
FREQ
UENC
Y
Frequency
Percentage
Table - 4.12
Frequency Distribution of the Purchase Decision -Maker among the
Family Members
Sl.No. Purchase decision-maker Frequency Percentage
1 Husband 93 31
2 Wife 187 62
3 Children 14 5
4 All members of the family 6 2
Total 300 100
Source: Primary Data
The table 4.12 shows the purchase decision-maker among the family members of
the sample customers. Wife account for 62% of the purchase decision-maker, while
118
Husband account for 31% of the purchase decision-maker. Children constitute 5% of the
decision-maker, while all members of the family constitute 2% of the decision-maker.
After consolidating the overall information, it can be concluded that the wives constitutes
the majority of the purchase decision-maker among the members of the family
Diagram - 4.12
Representing the Purchase Decision -Maker among the
Family Members
31
62
5 2
100
187
93
146
300
0
50
100
150
200
250
300
350
Husband Wife Children All members of
the family
Total
PURCHASE DECISION-MAKER AMONG THE FAMILY MEMBERS
FREQ
UENC
Y
Frequency Percentage
Table – 4.13
Frequency Distribution of Having Witnessed the Presence of Cold Storage Facilities
Sl.No. Cold Storage facilities Frequency Percentage
1 Yes 213 71
2 No 39 13
3 Busy in shopping 48 16
Total 300 100
Source: Primary Data
119
The above table expresses the views of the sample customers about having
witnessed the presence of cold storage facilities in the retail outlets while shopping. 71%
of the sample customers have witnessed the presence of cold storage facilities, while 16%
among them say that they are busy in shopping. 13% of the sample customers have not
witnessed the presence of cold storage facilities. After consolidating the overall
information, it can be concluded that a majority of the sample customers have
witnessed the presence of cold storage facilities in the retail outlets while shopping.
Diagram – 4.13
Representing Having Witnessed the Presence of Cold Storage Facilities
213
39 48
300
71
13 16
100
0
50
100
150
200
250
300
350
Yes No Busy in shopping Total
OPINION FOR HAVING WITNESSED THE PRESENCE OF COLD STORAGE
FACILITIES IN THE RETAIL OUTLETS
FREQUENCY
Frequency
Percentage
Table – 4. 14.
Frequency Distribution of the Sufficiency of Infrastructure Facilities like
Rail/Road Connectivity
Sl.No. Rail/Road connectivity Frequency Percentage
1 Insufficient 6 2
2 Partly sufficient 62 21
3 Fully sufficient 232 77
Total 300 100
Source: Primary Data
120
The above table shows the sufficiency or otherwise of infrastructure facilities
like rail/road connectivity in the locality. 77% of the sample customers expressed that
the infrastructure facilities are fully sufficient. 21% of the sample customers have
expressed that the infrastructure facilities are partly sufficient, 2% of the sample
customers have expressed that the infrastructure facilities are insufficient. After
consolidating the overall information, it can be concluded that a majority of the sample
customers have expressed that the infrastructure facilities are fully sufficient.
Diagram -4.14
Representing the Sufficiency of Infrastructure Facilities like Rail/Road Connectivity
62
62
21
232
77
300
100
0
50
100
150
200
250
300
FREQUENCY
Insufficient Partly sufficient Fully sufficient Total
SUFFICIENCY OF THE INFRASTRUCTURE FACILITIES LIKE RAIL/ROAD
CONNECTIVITY AVAILABLE IN THE LOCALITY
Frequency Percentage
Table 4.15
Frequency Distribution of the Opinion about the Services Provided By the Employees
in the Retail Outlets
Sl.No.
Opinion about employees
services Frequency Percentage
1 Not always satisfactory 51 17
2 Sometimes satisfactory 114 38
3 Always satisfactory 135 45
Total 300 100
Source: Primary Data
121
The table 4.15 shows the views expressed by the sample customers whether the
employees in the retail outlets are always providing satisfactory services thereby inviting
the customers to make repeated purchases. 45% of the sample customers have expressed
that the services of the employees in the retail outlets are always satisfactory. 38% of
them have expressed that the services provided by the employees in the retail outlets are
sometimes satisfactory, 17% of the sample customers say that the services provided by
the employees of the retail outlets are not always satisfactory. After consolidating the
overall information, it can be concluded that a majority of the customers have expressed
the view that the services of the employees of the retail outlets are fully satisfactory.
Diagram - 4.15
Representing the Opinion about the Services provided by the employees in the Retail
Outlets
51
17
114
38
135
45
300
100
0
50
100
150
200
250
300
FREQUENCY
Not always
satisfactory
Sometimes
satisfactory
Always
satisfactory
Total
EMPLOYEES SERVICE SATISFACTION
Frequency
Percentage
122
Table - 4.16
Frequency Distribution of the Availability of Different Range Of Products under
One Roof
Sl.No.
Different range of products
under one roof Frequency Percentage
1 Not always 74 25
2 Sometimes 99 33
3 Always 127 42
Total 300 100
Source: Primary Data
The above table shows the opinion of the sample customers whether they
always get different range of products for the family members under one roof. 42% of
the sample customers expressed that they always get different range of products; while
33% have expressed that they sometimes get different range of products. 25% of the
sample customers have expressed the opinion that the different range of products for the
family members are not always available in the retail outlets. After consolidating the
overall information, it can be concluded that the majority of the customers have
expressed the opinion that they always get different range of products for the family
members under one roof.
123
Diagram – 4.16
Representing the Availability of Different Range Of Products under One Roof
Not always
25%
Sometimes
33%
Always
42% Not always
Sometimes
Always
Table - 4.17.
Frequency Distribution of the Inconveniences Normally Encountered
While Shopping
Sl.No. Inconveniences normally
encountered
Frequency Percentage
1
Traffic on the roads
127 42
2
Parking of vehicles
104 35
3 Waiting periods in billing & cash
payments
43 14
4 Lack of moving space inside the
shops
26 9
Total 300 100
Source: Primary Data
The above table shows the inconveniences that are normally encountered by
the sample customers while shopping. 42% of the sample customers have expressed that
the traffic on the roads constitute their normal inconvenience. 35% of the sample
customers have expressed the parking of vehicles constitute their normal inconvenience.
124
14% of the sample customers have expressed the waiting periods in billing & cash
payments constitute their normal inconvenience, while 9% among them have expressed
the lack of moving space inside the shops as their normal inconvenience. After
consolidating the overall information, it can be concluded that traffic on roads constitute
the majority of the normal inconveniences encountered by the customers while shopping.
Diagram – 4.17
Representing the Inconveniences Normally Encountered While Shopping
127
42
104
35 43
1426
9
300
100
0
50
100
150
200
250
300
FREQUENCY
Traffic on
the roads
Parking of
vehicles
Waiting
periods in
billing &
cash
payments
Lack of
moving
space
inside the
shops
Total
THE INCONVENIENCES NORMALLY ENCOUNTERED
BY THE CUSTOMERS
Frequency
Percentage
Table – 4.18
Frequency Distribution of the Opinion about MRP (Pricing Label)
On The Products
Sl.No. MRP(Pricing Label) Frequency Percentage
1 Welcome 188 63
2 Reject 63 21
3 No idea 49 16
Total 300 100
Source: Primary Data
125
The table 4.18 shows the opinion of the sample customers about MRP
(Pricing Label) on the products. 63% of the sample customers welcome the presence of
MRP (Pricing Label) on the products. 21% of the sample customers reject the presence
of MRP (Pricing Label) on the products, while 16% are of the opinion that they have no
idea about MRP (Pricing Label). After consolidating the overall information, it can be
concluded that the majority of the sample customers welcome the presence of MRP
(Pricing Label) on the products.
Diagram – 4.18
Representing the Opinion about MRP (Pricing Label) On the Products
188
6363 21
4916
300
100
0
50
100
150
200
250
300
FREQUENCY
Welcome Reject No idea Total
MRP (PRICING LABEL) ON THE PRODUCTS
Frequency
Percentage
126
Table - 4.19.
Frequency Distribution of the General Suggestions to Improve Store Security
Source: Primary Data
The above table shows the general suggestions of the customers to improve
store security. 44% of the sample customers have suggested for having bright lighting in
parking lots, while 32% of the sample customers have suggested for installing TV
cameras in strategic locations of the retail outlets. 13% of the sample customers have
suggested for having uniformed security guards and 11% of them have suggested for
having cover-personnel to compliment security guards. After consolidating the overall
information, it can be concluded that the opinion of the customers for having bright
lighting in parking lots constitute the majority of the suggestions to improve store
security.
Sl.No. Suggestions to improve store
security Frequency Percentage
1 Having bright lighting in parking lots 132 44
2 Installing TV cameras 96 32
3 Having uniformed security guards 39 13
4
Having cover-personnel to
compliment security guards 33 11
Total 300 100
127
Diagram – 4.19
Representing the General Suggestions to Improve Store Security
132
96
39 33
300
4432
13 11
100
0
50
100
150
200
250
300
350
Having bright
lighting in
parking lots
Installing TV
Camera
Having
uniformed
security
guards
Having cover-
personnel to
compliment
security
guards
Total
GENERAL SUGGESTIONS OF THE CUSTOMERS TO IMPROVE STORE SECURITY
FREQUENCY Frequency
Percentage
Table – 4.20
Frequency Distribution of the opinion about the Proposed Entry of FDI in to
Retail Sector
Sl.No. Opinion about the proposed entry
of FDI into retail sector
Frequency Percentage
1
We will wait and see
55 18
2 The existing businesses will improve
very well
152 51
3 The existing businesses will not
improve
30 10
4
No idea
63 21
Total 300 100
Source: Primary Data
The above table shows the opinion of the sample customers about the proposed
entry of FDI into retail sector. 51% of the sample customers have expressed their opinion
that the existing businesses will improve very well, while 21% of the sample customers
128
have expressed that they have no idea about the proposed entry of FDI into retail sector.
18% of the sample customers have expressed their opinion that we will wait and see,
while 10% of the sample customers have expressed that the existing retail businesses will
not improve. After consolidating the overall information, it can be concluded that the
majority of the sample customers have expressed that the existing businesses will improve
very well after the proposed entry of FDI into retail sector.
Diagram – 4.20
Representing the Opinion about the Proposed Entry of FDI into Retail Sector
We will wait
and see
The existing
businesses
will improve
very well
The existing
businesses
will not
improve
No idea Total
Percentage
Frequency
55
152
30
300
63
1851
10
100
21
0
50
100
150
200
250
300
FREQUENCY
OPINION ABOUT THE PROPOSED ENTRY OF FDI INTO RETAIL BUSINESS
Percentage
Frequency
129
Table 4.21
Frequency Distribution of the Modern Practices Suggested by the Customers
Sl.No. Modern practices to be introduced Frequency Percentage
1 On-line cash payments 72 24
2 On-line product selection 69 23
3 Automatic product vending machines 49 16
4 Door delivery, billing & collection
83 28
5
Informing the customers about product
availability through
e-mail/SMS
27 9
Total 300 100
Source: Primary Data
The table 4.21 shows some of the important modern practices suggested by
the customers to be introduced in the retail outlets in the near future. 28% of the sample
customers have suggested for the introduction of door delivery, billing and collection,
while 24% have suggested for the introduction of on-line cash payments. 23% of the
sample customers have suggested for the introduction of on-line product selection, while
16% among them have suggested for the introduction of automatic product vending
machines. 9% have suggested for informing the customers about product availability
through e-mail/SMS. After consolidating the overall information, it can be concluded
that the majority of the customers have suggested for the introduction of door delivery,
billing and collection.
130
Diagram – 4.21
Representing The Modern Practices Suggested By The Customers
72 6949
8327
300
239
24 16 28 100
0
50
100
150
200
250
300
350
On-line cash
payments
On-line
product
selection
Automatic
product
vending
machines
Door delivery,
billing &
collection
Informing the
customers
about product
availability
through
e-mail/SMS
Total
MODERN PRACTICES TO BE INTRODUCED IN THE NEAR FUTURE
FREQ
UENC
Y
Frequency
Percentage
Table – 4.22
Frequency Distribution showing how retailers can improve their profitability
Sl.No. How retailers can improve their
profitability
Frequency Percentage
1 By increasing advertisement programmes 63 21
2 By improving employee performance 127 42
3 By automating routine functions 18 6
4 By emphasising on quality 66 22
5 By understanding the specific needs of
the customers & satisfying them
26 9
Total 300 100
Source: Primary Data
The above table represents the views of sample customers as to how retailers
can improve their profitability. 42% of the sample customers have expressed for
improving employee performance, while 22% have expressed for emphasizing on quality.
131
21% of the sample customers are for increasing advertisement programmes, while 9%
among them are for understanding the specific needs of the customers and satisfying
them. 6% among them have felt for automating routine functions. After consolidating
the overall information, it can be concluded that the majority of the sample customers
have expressed for improving employee performance.
Diagram – 4.22
Frequency Distribution showing how retailers can improve their profitability
63
127
66
300
21
42
622
100
2618
90
50
100
150
200
250
300
350
By increasing
advertisement
programmes
By improving
employee
performance
By automatic
routine function
By emphasising
on quality
By understanding
the specific
needs of the
customer &
satisfying them
Total
THE FEELING OF THE CUSTOMERS AS TO HOW RETAILERS CAN IMPROVE THEIR
PROFITABILITY
FREQ
UENC
Y
Frequency
Percentage
Table – 4.23
Frequency Distribution of the Impact on the Purchases after the Introduction of VAT
System
Sl.No. Impact on purchases after the
introduction of VAT system
Frequency Percentage
1 Not much 101 34
2 We have to wait & see 165 55
3 Very much 34 11
Total 300 100
Source: Primary Data
132
The above table shows the impact on the purchases of the sample customers
after the introduction of VAT system. 55% of the sample customers have expressed that
we have to wait and see about its impact. 34% of the sample customers have expressed
that their purchases are not much affected, while 11% among them have said that their
purchases have been affected very much as a result of introduction of VAT System. After
consolidating the overall information, it can be concluded that the majority of the sample
customers have prefer to wait and see about the impact of VAT system.
Diagram – 4.23
Representing the impact on the Purchases After
The Introduction of VAT System
Not much
34%
We have to wait & see
55%
Very much
11%
Not much
We have to wait & see
Very much
133
Table – 4.24
Frequency Distribution of the Safety Measures Necessary for a Retail Unit
Sl.No. Safety measures necessary Frequency Percentage
1 Having fire-fighting devices at
strategic locations
188 63
2 Frequently mopping & inspecting
wet floors
48 16
3
Having no-slip floors
40 13
4 Keeping records that proper
maintenance has been done
24 8
Total 300 100
Source: Primary Data
The above table shows the safety measures necessary for a retail unit. 63% of
the sample customers are for having fire-fighting devices at strategic locations, while
16% of them have felt necessary for frequently mopping and inspecting wet floors. 13%
of them are for having no-slip floors; while 8% among them have felt for the necessity
of keeping records that proper maintenance has been done. After consolidating the
overall information, it can be concluded that the majority of the sample customers are for
having fire-fighting devices at strategic locations.
134
Diagram – 4.24
Representing the Safety Measures Necessary for a Retail
Unit
188
63
48
16
40
13
24
8
300
100
0
50
100
150
200
250
300
350
400
FREQUENCY
Having fire-
fighting devices
at strategic
locations
Frequently
mopping &
inspecting wet
floors
Having no-slip
floors
Keeping records
that proper
maintenance has
been done
Total
THE SAFETY MEASURES NECESSARY FOR A RETAIL UINT
Percentage
Frequency
Table – 4.25
Frequency Distribution about the Demand for Industry Status to the Retail Sector
Sl.No.
Demand for industry status to the
Retail sector Frequency Percentage
1
It is a welcome move
44 15
2
The problems of the retail sector can be
brought to the notice of the concerned
Minister
157 52
3 Loan facilities can be easily availed
from the banks
80 27
4
No idea
19 6
Total 300 100
Source: Primary Data
The above table shows the opinion of the sample customers about the demand
for industry status to the retail sector. 52% of the sample customers have expressed that
the problems of the retail sector can be brought to the notice of the concerned Minister,
135
while 27% among them have expressed that loan facilities can easily availed from the
banks. 15% among them have expressed that it is a welcome move, while 6% among
them have said that they have no idea. After consolidating the overall information, it
can be concluded that the majority of the sample customers have expressed that the
problems of the retail sector can be brought to the notice of the concerned Minister.
Diagram – 4.25
Representing the Demand for Industry Status to Retail Sector
44
15 157
52
80
27
19
6
300
100
0
50
100
150
200
250
300
350
400
FREQUENCY
It is a welcome move The problems of the
retail sector can be
brought to the notice
of the concerned
Minister
Loan facilities can be
easily availed from the
banks
No idea Total
DEMAND FOR INDUSTRY STAUS TO THE RETAIL SECTOR
Percentage
Frequency
Table – 4.26
Frequency Distribution of the Opinion Regarding the Quality of The Products and
Care of The Customers
Sl.No. Opinion about the quality of
the products/care of customers Frequency Percentage
1 Fully disagree 14 5
2 Partially agree 50 17
3 Fully agree 236 78
Total 300 100
Source: Primary Data
136
The table 4.26 shows the opinion of the sample customers about the quality of
the products and care of the customers. 78% of the sample customers have fully agreed
for taking good care in the quality of the products and care of the customers, while 18%
of the sample customers have partially agreed with the above statement. 5% of the
sample customers have fully disagreed with the above statement. After consolidating the
overall information, it can be concluded that the majority of the sample customers have
fully agreed for taking good care of the quality of the products and care of the customers.
Diagram – 4.26
Representing the Opinion Regarding the Quality of the Products And Care of the
Customers
Fully disagreePartially agree
Fully agree
Frequency
Percentage
0
50
100
150
200
250
FREQUENCY
OPINION REGARDING CARE TO BE ATTACHED TO THE CUSTOMERS AND QUALITY
Frequency
Percentage
137
CHAPTER-V
DATA ANALYSIS AND INTERPRETATION - II
5.1. Introduction
In this part of the tools of analysis, some of the most frequently applied
advanced statistical tools are discussed. In the paragraph that follow, the relevance of
each of advanced statistical tool is explained first and then the method applying them. As
an extension of this effort, interpretation of the results of the analysis is also made.
5.2. Inferential Analysis on sample
Inferential Analysis is used to make inferences about a population from a sample
in order to generalize (make assumptions about this wider population) and make
predictions about the future.
With inferential statistics, we can reach conclusions that extend beyond the
immediate data alone. The relevant tools included for this purpose are t test, f test, chi
square test and correlation and regression.
5.3. t test
t test is generally applied for testing hypothesis using sample data. It is used a)
for determining the significance of a sample mean, b) for determining the significance
of the difference between the means of two samples and if two samples are related for
determining the significance of means of the two related samples.
138
HYPOTHESIS-I Null Hypothesis:
There is no significant between married and unmarried customers with respect to
making repeated purchases.
Alternate Hypothesis:
There is significant between married and unmarried customers with respect to
making repeated purchases.
Table-5.1
Student t- test for significant between married and
unmarried with respect to making repeated purchases
The above table discusses the relation between married and unmarried sample
customers with respect to making repeated purchases.
From the above table 5.1. it is understood that since the p value is less than 0.01,
the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that
there is significant difference between married and unmarried customers with respect to
making repeated purchases.
While analyzing the table, it is very clear that married customers are making
repeated purchases than unmarried customers since the mean value of the married
customers is more (2.36) than unmarried customers (2.01).
Marital status Mean SD t value
P value
Married 2.36 0.72
3.509 0.001**
Unmarried 2.01 0.75
139
Null Hypothesis:
There is no significant difference between married and unmarried customers with
respect to different ranges of products under one roof.
Alternate Hypothesis:
There is significant difference between married and unmarried customers with
respect to different ranges of products under one roof.
Table 5.2
Student t- test for significant difference between married and unmarried
customers with respect to different ranges of products under one roof.
From the above table 5.2. it is understood that since the p value is less than 0.01,
the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that
there is significant difference between married and unmarried customers with respect to
different ranges of products under one roof.
While analyzing the table, it is very clear that married customers are getting
different ranges of products under one roof than unmarried customers since the mean
value of the married customers is more (2.30) than unmarried customers (1.77).
5.4 ANOVA – analysis of variants:
ANOVA is used to compare the variants of two independent samples. It helps
judge the significance of more than two sample means at one and the same time. This
Marital status Mean SD t value
P value
Married 2.30 0.75
5.029 0.000**
Unmarried 1.77 0.84
140
test helps make to the analysis of total variation in the data into different component and
the results are presented by indicating the sources and causes of variation.
HYPOTHESIS-II
Null Hypothesis:
There is no significant difference between age group with respect to sufficiency of
infrastructure facilities
Alternate Hypothesis:
There is significant difference between age group with respect to sufficiency of
infrastructure facilities
Table 5.3
ANOVA for significant difference between age group with respect to sufficiency of
infrastructure facilities.
Note: Different alphabets between the mean age group of customers denotes
significant at 5% level using Duncan multiple range test.
From the above table 5.3 it is understood that since the p value is less than 0.05,
the null hypothesis is rejected at 5% level of significance. Hence, it is concluded that
there is significant difference between age group with respect to sufficiency of
infrastructure facilities.
Based on Duncan Multiple Range test, the age group above 40 years (2.61) is
significantly different from the other age group of below 20 years (2.82) and 20 to 40
Age group in years Mean SD F value P value
Below 20 2.82b 0.39
4.454 0.012 * 20 to 40 2.80
b 0.43
Above 40 2.61a 0.60
141
years (2.80). There is no significant difference between customers in the age group
below 20 years and between 20 to 40 years with respect to sufficiency of infrastructure
facilities.
Null Hypothesis:
There is no significant difference between age group with respect to employee
service satisfaction leading to repeated purchases.
Alternate Hypothesis:
There is significant difference between age group with respect to employee
service satisfaction leading to repeated purchases.
Table 5.4
ANOVA for significant difference between age group with respect to employee service
satisfaction leading to repeated purchases
Note: Different alphabets between the mean age group of customers denotes
significant at 5% level using Duncan multiple range test.
The individual care given by the employees of the retail outlet towards customers
compels them to visit the retail outlets because they are fully and personally satisfied with
the services rendered by the employees.
From the above table 5.4.it is understood that since the p value is less than 0.01, the
null hypothesis is rejected at 1% level of significance. Hence, it is concluded that there is
Age group in years Mean SD F value
P value
Below 20
1.76a 0.79
13.644 0.000 ** 20 to 40
2.42c 0.72
Above 40
2.16b 0.64
142
significant difference between age group with respect to employee service satisfaction
leading to repeated purchases.
Based on Duncan Multiple Range test, the age group below 20 years (1.76) is
significantly different from the other age group between 20 to 40 years (2.42) and above
40 years (2.16) with respect to employee service satisfaction leading to repeated
purchases.
Null Hypothesis:
There is no significant difference between age group with respect to getting
different ranges of products under one roof.
Alternate Hypothesis:
There is significant difference between age group with respect to getting different
ranges of products under one roof.
Table 5.5
ANOVA for significant difference between age group with respect to getting different
ranges of products under one roof.
Note: Different alphabets between the mean age group of customers denotes
significant at 5% level using Duncan multiple range test.
If a retailer can know which group visits it retail outlet frequently for getting ranges
of products he can give more attention to them.
From the above table 5.5 it is understood that since the p value is less than 0.01, the
null hypothesis is rejected at 1% level of significance. Hence, it is concluded that there is
Age group in years Mean SD F value P value
Below 20
1.64a 0.82
9.998 0.000 ** 20 to 40
2.29b 0.82
Above 40
2.13b 0.62
143
significant difference between age group with respect to getting ranges of products under
on roof.
Based on Duncan Multiple Range test, the age group below 20 years (1.64) is
significantly different with the other age group of above 40 years (2.13) and 20 to 40
years (2.29). But there is no significant difference between customers in the age group
20 to 40 years and above 40 years with respect to getting different ranges of products
under one roof.
Null Hypothesis:
There is no significant difference between educational qualification with respect
to opinion about taking good care of the customers and goods
Alternate Hypothesis:
There is significant difference between educational qualification with respect to
opinion about taking good care of the customers and goods
Table 5.6
ANOVA for significant difference between educational qualification with respect to
opinion about taking good care of the customers and goods
Note: Different alphabets between the mean age group of customers denotes
significant at 5% level using Duncan multiple range test.
Educational
qualification Mean SD F value P value
Upto HSC 2.75a 0.54
3.421 0.018 *
Graduate 2.78ab
0.51
Professional 2.60a 0.61
Others 2.96b 0.20
144
A general statement about the opinion regarding taking good care of the customers
and goods was put forward to the customers with educational qualifications and their
opinion for the same is analyzed in this table.
From the above table 5.6 it is understood that since the p value is less than 0.05,
the null hypothesis is rejected at 5% level of significance. Hence, it is concluded that
there is significant difference between educational qualification with respect to opinion
about taking good care of the customers and goods.
Based on Duncan Multiple Range test, there is a significant difference between the
Professional customers (2.60) and others (2.96). There is also a significant between those
customers who have studied up to HSC (2.75) and others (2.96).
However, there is no significant difference between graduate customers (2.78) and
others (2.96) with respect to opinion about taking good care of the customers and
goods.
Null Hypothesis:
There is no significant difference between occupations with respect to sufficiency
of infrastructure facilities.
Alternate Hypothesis:
There is significant difference between occupations with respect to sufficiency of
infrastructure facilities.
145
Table 5.7
ANOVA for significant difference between occupation with respect to sufficiency of
infrastructure facilities
Note: Different alphabets between the mean age group of customers denotes
significant at 5% level using Duncan multiple range test.
The sufficiency about the availability of infrastructure facilities was put forward to
the customers with pursuing different occupation and their opinion is summarized in the
above table.
From the above table 5.7. it is understood that since the p value is less than 0.01,
the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that
there is significant difference between occupation of the customers with respect to
sufficiency of infrastructure facilities.
Based on Duncan Multiple Range test, there is a significant difference between
private employee (2.61) and Government employee (2.92) with respect to sufficiency of
infrastructure facilities. There is also a significant difference between private employee
Occupation
Mean SD F value P value
Business 2.87bc
0.34
3.725 0.003 **
Professional 2.76abc
0.44
Government employee 2.92c 0.28
Private employee 2.61a 0.62
Self-employed 2.67ab
0.48
Home maker 2.83bc
0.44
146
(2.61) and business (2.87), and private employee (2.61) and home-maker (2.83). There is
also a significant difference between private employee (2.61) and professional (2.76).
But there is no significant difference between private employee (2.61) and self-
employed (2.67). There is also no significant difference between professional (2.76) and
home-maker (2.83). There is also no significant difference between professional and
business (2.87) and Government employee (2.92).
Null Hypothesis:
There is no significant difference between occupations with respect to retail
employee service satisfaction leading to repeated purchases.
Alternate Hypothesis:
There is significant difference between occupations with respect to retail
employee service satisfaction leading to repeated purchases.
Table 5.8
ANOVA for significant difference between occupation withrespect to retail employee
service satisfaction leading torepeated purchases
Note: Different alphabets between the mean age group of customers denotes
significant at 5% level using Duncan multiple range test.
Occupation Mean SD F value P value
Business
2.45a 0.72
2.865 0.015 *
Professional
2.30ab
0.73
Government employee
2.19ab
0.92
Private employee
2.06a 0.65
Self-employed
2.27ab
0.68
Home maker
2.50b 0.74
147
The opinion about the service rendered by the employees of the retail outlet is
put forward to the customers pursuing different occupation and their opinion is
summarized in the above table.
From the above table 5.8 it is understood that since the p value is less than 0.05,
the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that
there is significant difference between occupations with respect to employee service
satisfaction leading to repeated purchases.
Based on Duncan Multiple Range test, there is a significant difference between
private employee (2.06) and Home-maker (2.50) with respect to employee service
satisfaction leading to repeated purchases. There is also a significant difference between
private employee (2.06) and business (2.45).
However there is no significant difference between Government employee (2.19),
self-employed (2.27) and professional (2.30). . There is also no significant difference
between business (2.45) and home-maker (2.50).
Null Hypothesis:
There is no significant difference between occupations with respect to getting
different ranges of products under one roof.
Alternate Hypothesis:
There is significant difference between occupations with respect to getting
different ranges of products under one roof.
148
Table 5.9
ANOVA for significant difference between occupation with respect to getting different
ranges of products under one roof.
Note: Different alphabets between the mean age group of customers denotes
significant at 5% level using Duncan multiple range test.
The opinion about getting different ranges of products under one roof was put
forward to the customers pursuing different occupation and their opinion is summarized
in the above table.
From the above table 5.9 it is understood that since the p value is less than 0.05,
the null hypothesis is rejected at 5% level of significance. Hence, it is concluded that
there is significant difference between occupations with respect to getting different
ranges of products under one roof.
Based on Duncan Multiple Range test, there is a significant difference between
private employee (1.97) and Home-maker (2.40). There is also a significant difference
between private employee and business (2.38). However, there is also significant
difference between private employee and professional (2.30). There is also a significant
difference between private employee and self-employed (2.27).There is also a significant
Occupation Mean SD F value P value
Business 2.38b 0.81
2.513 0.030 *
Professional 2.12ab
0.78
Government employee 2.17ab
0.94
Private employee 1.97a 0.72
Self-employed 2.11ab
0.79
Home maker 2.40b 0.77
149
difference between private employee and Government employee (2.19) with respect to
getting different ranges of products under one roof.
Null Hypothesis:
There is no significant difference between income with respect to opinion about
taking good care of the customers and goods.
Alternate Hypothesis:
There is significant difference between income with respect to opinion about
taking good care of the customers and goods.
Table 5.10
ANOVA for significant difference between income with
respect to opinion about taking good care of the customers and goods.
Income Mean SD F value P value
Below 30,000 2.87b 0.39
5.735 0.001 **
30,001 – 60,000 2.70b 0.54
60,001 – 1,00,000 2.75b 0.55
Above 1,00,000 2.44a 0.72
Note: Different alphabets between the mean age group of customers
denotes significant at 5% level using Duncan multiple range test.
The opinion about taking good care of the customers and goods was put forward
to the customers of different income groups and their opinion is summarized in the above
table.
From the above table 5.10. it is understood that since the p value is less than 0.01,
the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that
150
there is significant difference between income with respect to opinion about taking good
care of the customers and goods.
Based on Duncan Multiple Range test, there is a significant difference between the
customers in the income group above Rs. 1,00,000/- (2.44) and below Rs.30,000/- (2.87).
There is also a significant difference between customers in the income above
Rs.1,00,000/- and those earnings between Rs.60,001/- to Rs.1,00,000/- (2.75). There is
also a significant difference between customers earning above Rs.1,00,000/- and those
earnings between Rs.30,001 to Rs.60,000/- (2.70).
But there is no significant difference between customers in the income group
of below Rs.30,000/-, those income group of between Rs.30,001/- to Rs.60,000/- and
those in the income group of Rs.60,001 to Rs.1,00,000/- about taking good care of the
customers and goods.
Null Hypothesis:
There is no significant difference between retail outlets generally preferred for
shopping with respect to sufficiency of infrastructure facilities.
Alternate Hypothesis:
There is significant difference between retail outlets generally preferred for
shopping with respect to sufficiency of infrastructure facilities.
151
Table 5.11
ANOVA for significant difference between retail outlets generally preferred for
shopping with respect to sufficiency of infrastructure facilities.
Retail outlets generally
prefer for shopping Mean SD F value P value
Departmental Stores 2.66b 0.56
15.777 0.000 **
Chain Stores 2.77bc
0.42
Discount Stores 2.96c 0.20
Shopping Malls 2.17a 0.39
Note: Different alphabets between the mean age group of customers
denotes significant at 5% level using Duncan multiple range test.
The opinion about the customers for the retail outlets preferred for shopping with
respect to sufficiency of infrastructure facilities was analyzed in the above table.
From the above table 5.11 it is understood that since the p value is less than 0.01,
the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that
there is significant difference between the retail outlets generally preferred for shopping
with respect to sufficiency of infrastructure facilities.
Based on Duncan Multiple Range test, there is a significant difference between
Shopping Malls (2.17) and Discount Stores (2.96). There is also a significant difference
between Shopping Malls and Chain Stores (2.77). There is a significant difference
between Departmental Stores (2.66) and Discount stores (2.96). There is also a
significant difference between Shopping Malls and Departmental Stores and Shopping
Malls and Chain Stores.
152
However, there is no significant difference between Departmental Stores and
Chain Stores and Chain Stores and Discount Stores with respect to retail outlets preferred
for shopping.
Null Hypothesis:
There is no significant difference between purchase decision-makers with respect
to retail outlets employee service satisfaction leading to repeated purchases.
Alternate Hypothesis:
There is significant difference between purchase decision-makers with respect to
retail outlets employee service satisfaction leading to repeated purchases.
Table 5.12
ANOVA for significant difference between purchase decision-makers with respect to
retail outlets employee service satisfaction leading to repeated purchases.
Purchase decision
makers Mean SD F value P value
Husband 2.71c 0.46
21.054 0.000 **
Wife 2.12b 0.78
Children 2.00b
0.00
All members 1.33a 0.52
Note: Different alphabets between the mean age group of customers
denotes significant at 5% level using Duncan multiple range test.
The opinion of purchase decision-makers with respect to employee service
satisfaction of retail outlets is analyzed in the above table.
From the above table 5.12. it is understood that since the p value is less than 0.01,
the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that
153
there is a significant difference between purchase decision-makers with respect to retail
outlets employee service satisfaction leading to repeated purchases.
Based on Duncan Multiple Range test, there is a significant difference between
purchase decision made by All members of the family (1.33) and purchase decision made
by Husband (2.71) with respect to retail outlets employee service satisfaction thereby
leading to repeated purchases. There is also a significant difference between purchase
decision made by All members of the family and those purchase decision made by
Children (2.00). There is also a significant difference between purchase decision made
by All members of the family and Wife (2.12). There is also a significant difference
between purchase decision made by Children and purchase decision made by Husband.
There is also a significant difference made by wife and those made by husband with
respect to retail outlets employee service satisfaction thereby leading to repeated
purchases.
However, there is no significant difference between purchase decision made by
children and wife.
Null Hypothesis:
There is no significant difference between purchase decision-makers with respect
to getting different ranges of products under one roof.
Alternate Hypothesis:
There is significant difference between purchase decision-makers with respect to
getting different ranges of products under one roof.
154
Table 5.13
ANOVA for significant difference between purchase decision-maker with respect to
getting different ranges of products under one roof.
Purchase decision
makers Mean SD F value P value
Husband 2.71c
0.46
38.986 0.000 **
Wife 2.03b 0.79
Children 1.00a
0.00
All members 1.33a
0.52
Note: Different alphabets between the mean age group of customers
denotes significant at 5% level using Duncan multiple range test.
The opinion of purchase decision-makers with respect to getting different ranges of
products under one roof is analyzed in the above table.
From the above table 5.13 it is understood that since the p value is less than 0.01,
the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that
there is a significant difference between purchase decision-makers with respect to getting
different ranges of products under one roof.
Based on Duncan Multiple Range test, there is a significant difference between
purchase decision made by Children (1.00) and purchase decision made by Husband
(2.71) with respect to getting different ranges of products under one roof. There is also a
significant difference between purchase decision made by All members of the family
(1.33) and husband. There is also a significant difference between purchase decision
made by All members of the family and Wife (2.03). There is also a significant
155
difference between purchase decision made by wife and purchase decision made by
husband with respect to getting different ranges of products under one roof.
However, there is no significant difference between purchase decision made by
children and all members of the family with respect to getting different ranges of
products under one roof.
Null Hypothesis:
There is no significant difference between purchase decision-makers with respect
to opinion about taking good care of customers and goods.
Alternate Hypothesis:
There is significant difference between purchase decision-makers with respect to
opinion about taking good care of customers and goods.
Table 5.14
ANOVA for significant difference between purchase decision-maker with respect to
opinion about taking good care of customers and goods.
Purchase decision
makers Mean SD F value P value
Husband 2.60ab
0.53
5.374 0.001 **
Wife 2.80bc
0.53
Children 3.00bc
0.00
All members 2.33a 0.82
Note: Different alphabets between the mean age group of customers
denotes significant at 5% level using Duncan multiple range test.
The opinion of purchase decision-makers with respect to taking good care of
customers and goods is analyzed in the above table.
156
From the above table 5.14 it is understood that since the p value is less than 0.01,
the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that
there is a significant difference between purchase decision-makers with respect to
opinion about taking good care of customers and goods.
Based on Duncan Multiple Range test, there is a significant difference between
purchase decision made by All members of the family (2.33) and those made by Children
(3.00) with respect to opinion about taking good care of customers and goods. There is
also a significant difference between purchase decision made by All members of the
family and Wife (2.80). There is also a significant difference between purchase decision
made by husband and purchase decision made by children with respect to opinion about
taking good care of customers and goods. There is also a significant difference between
purchase decision made by wife and those made by children with respect to opinion about
taking good care of customers and goods.
However, there is no significant difference between purchase decision made by all
members of the family and husband. There is no significant difference between purchase
decision made by husband and wife.
There is no significant difference between purchase decision made by wife and
children with respect to opinion about taking good care of customers and goods.
157
5.5. CHI-SQUARE TEST
Chi-square test is based on the chi-square distribution. It is use for comparing a
sample variance to a theoretical population variance. These tests can be applied in any
type of distribution and they are easy to compute.
HYPOTHESIS-III
Null Hypothesis:
There is no association between type of goods purchased from retail outlets and
educational qualification of customers.
Alternate Hypothesis:
There is association between type of goods purchased from retail outlets and
educational qualification of customers.
Table 5.15
Chi-square test for association between type of goods purchased from retail outlets and
educational qualification of customers.
Note: 1. The value within ( ) refers to Row Percentage.
Type of
Branded
goods
purchased
from retail
outlets
Educational Qualification
Total
Chi-
square
Value
P Value
Upto
HSc Graduate Professional Others
Manufacture
r brands
29
(19.1%)
[36.7%]
59
(38.8%)
[50.0%]
56
(36.8%)
[71.8%]
8
(5.3%)
[32.0%]
152
25.607 0.000 **
Private
brands
47
(35.3%)
[59.5%]
56
(40.9%)
[47.5%]
19
(13.9%)
[24.4%]
15
(10.9%)
[60.0%]
137
Not brand
conscious
3
(27.3%)
[3.8%]
3
(27.3%)
[2.5%]
3
(27.3%)
[3.8%]
2
(18.2%)
[8.0%]
11
Total
79 118 78 25 300
158
2. The value within [ ] refers to Column Percentage.
3. ** denotes significant at 1% level
4. * denotes significant at 5% level
From the above table 5.15 it is understood that since the p value is less than 0.01,
the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that
there is a significant association between type of goods purchased from retail outlets and
educational qualification of customers.
Among those who have up to HSC 59.5% have purchased private brands, 36.7%
purchased manufacturer brands and 3.8% among them say they are not brand conscious.
Among the Graduates 50% purchased manufacturer brands, 47.5% purchased
private brands and 2.5% among them say they are not brand conscious.
Among the Professionals 71.8% purchased manufacturer brands, 24.4 %
purchased private brands and 3.8% among them say they are not brand conscious.
Among others 60% purchased private brands, 32.0% purchased manufacturer
brands, while 8% among them say they are not brand conscious.
While analyzing the relationship, it can be seen from the above table that a
majority of the customers who have opted for manufacturer brands are graduates
(38.8%), a majority of the customers who have opted for private brands (40.9%) are also
graduates. A majority of the customers who are not brand conscious are equally
distributed among Professional, Graduate and up to HSC.
159
Null Hypothesis:
There is no association between retail outlets preferred for shopping and age
group of consumers.
Alternate Hypothesis:
There is association between retail outlets preferred for shopping and age group of
consumers.
Table 5.16
Chi-square test for association between retail outlets preferred for shopping and age
group of consumers.
Retail outlets
prefer for
shopping
Age group in years Total
Chi-
square
Value
P Value
Below 20 20-40 Above 40
Depart mental
Store
13
(9.5%)
[39.4%]
79
(57.7%)
[41.1%]
45
(32.8%)
[60.0%]
137
36.927 0.000 **
Chain Store 17
(29.8%)
[51.5%]
31
(54.4%)
[16.1%]
9
(15.8%)
[12.0%]
57
Discount Store 2
(2.1%)
[6.1%]
74
(78.7%)
[38.5%]
18
(19.1%)
[24.0%]
94
Shopping Malls 1
(8.3%)
[3.0%]
8
(66.7%)
[4.2%]
3
(25.0%)
[4.0%]
12
Total 33 192 75 300
Note: 1. The value within ( ) refers to Row Percentage.
2. The value within [ ] refers to Column Percentage.
3. ** denotes significant at 1% level
4. * denotes significant at 5% level
From the above table 5.16 it is understood that since the p value is less than
0.01, the null hypothesis is rejected at 1% level of significance. Hence, it is concluded
160
that there is a significant association between retail outlets preferred for shopping and age
group of customers.
In the customers below 20 years of age, 51.5% prefer Chain Stores, 39.4% prefer
Departmental Stores, 6.1% prefer Discount Stores and 3% prefer Shopping Malls.
Among the customers in the age group of 20 to 40 years, 41.1% prefer
Departmental Stores, 38.5% prefer Discount Stores, 16.1% prefer Chain Stores and 4.2%
prefer Shopping Malls.
Among the customers who are aged above 40 years, 60% prefer Departmental
Stores, 24% prefer Discount Stores, 12% prefer Chain Stores and 4% prefer Shopping
Malls.
While analyzing the relationship, it can be seen from the above table that a
majority of the customers (57.7%) who have opted for Departmental Stores are
represented in the age group 20 to 40 years. A majority of the customers (78.7%) who
have opted for Discount Stores are represented in the age group 20 to 40 years prefer
Chain Stores. A majority of the customers (54.4%) who have opted for Chain Stores are
represented again in the age group 20 to 40 years. A majority of the customers (66.7%)
who have opted for Shopping Malls are represented in the age group 20 to 40 years.
Null Hypothesis:
There is no association between credit cards used for payment and age group of
customers.
161
Alternate Hypothesis:
There is association between credit cards used for payment and age group of
customers.
Table 5.17
Chi-square test for association between credit cards used for payment and age group of
customers.
Credit cards
used for
payment
Age group in years Total
Chi-
square
Value
P Value
Below 20 20-40 Above 40
Visa 7
(10.6%)
[21.2%]
45
(68.2%)
[23.4%]
14
(21.2%)
[18.7%]
66
31.975
0.000 **
Master Card 3
(7.7%)
[9.1%]
13
(33.3%)
[6.8%]
23
(59.0%)
[30.7%]
39
American
Express
2
(7.1%)
[6.1%]
19
(67.9%)
[9.9%]
7
(25.0%)
[9.3%]
28
ICICI 15
(13.5%)
[45.5%]
80
(72.1%)
[41.7%]
16
(14.4%)
[21.3%]
111
SBI 6
(10.7%)
[18.2%]
35
(62.5%)
[18.2%]
15
(26.8%)
[20.0%]
56
Total 33 192 75 300
Note: 1. The value within ( ) refers to Row Percentage.
2. The value within [ ] refers to Column Percentage.
3. ** denotes significant at 1% level
4. * denotes significant at 5% level
From the above table 5.17 it is understood that since the p value is less than 0.01,
the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that
there is a significant association between credit cards used for payment and age group of
customers.
162
Among those customers who are below 20 years of age 45.5% use ICICI Cards.
21.2% among them use Visa Cards, 18.2% among them use SBI Cards. 9.1% among
them use Master Cards and 6.1% among them use American Express Cards.
Among the customers age group 20 to 40 years, 41.7% use ICICI Cards, 23.4%
among them use Visa Cards, 18.2% among them use SBI Cards, 9.9% among them use
American Express Cards and 6.8% among them use Master Cards.
Among the customers above 40 years of age, 30.7% use Master Cards, 21.3%
among them use ICICI Cards, 20% among them use SBI Cards, 18.7% among them use
Visa Cards and 9.3% among them use American Express Cards.
While analyzing the relationship, it can be seen from the above table that the
customers (68.2%) who have opted for Visa Cards are represented in the age group of 20
to 40 years. A majority of the customers (59%) who have preferred Master Cards are in
the age group above 40 years. Customers (67.9%) who have preferred American Express
Cards are represented in the age group of 20 to 40 years. ICICI Cards are used a majority
of the customers in the age group of 20 to 40 years. SBI Cards are used a majority of the
customers (62.5%) in the age group of 20 to 40 years.
The reason for preferring a particular card in relation to others may be mainly due
to the service facility offered by the concerned banks.
163
Null Hypothesis:
There is no association between having witnessed the presence of cold-storage
facilities in retail outlets and family monthly income.
Alternate Hypothesis:
There is association between having witnessed the presence of cold-storage
facilities in retail outlets and family monthly income.
Table 5.18
Chi-square test for association between having witnessed the presence of cold-storage
facilities in retail outlets and family monthly income.
Note: 1. The value within ( ) refers to Row Percentage.
2. The value within [ ] refers to Column Percentage.
3. ** denotes significant at 1% level
Witnessed
the
presence of
cold
storage
facilities in
retail
outlets
Family Monthly Income
Total
Chi-
square
Value
P Value Below
30000
30001-
60000
60001-
100000
Above
100000
Yes 79
(37.1%)
[84.0%]
74
(34.7%)
[75.5%]
42
(19.7%)
[55.3%]
18
(8.5%)
[56.3%]
213
24.635 0.000 **
No 9
(23.1%)
[9.6%]
7
(17.9%)
[7.1%]
17
(43.6%)
[22.4%]
6
(
15.4%)
[18.8%]
39
Busy in
shopping
6
(12.5%)
[6.4%]
17
(35.4%)
[17.3%]
17
(35.4%)
[22.4%]
8
(16.7%)
[25.0%]
48
Total
94
98
76
32
300
164
4. * denotes significant at 5% level
From the above table 5.18 it is understood that since the p value is less than 0.01,
the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that
there is a significant association between having witnessed the presence of cold storage
facilities in retail outlets and family monthly income.
84% of the customers earning below Rs.30,000/- a month say „Yes‟ for having
witnessed the presence of cold storage facilities in retail outlets. While 9.6% among
them say „No‟, 6.4% among them say they are „Busy in shopping‟.
Among those customers in the income group of Rs.30,001 to Rs.60,000/- 75.5%
say „Yes‟ for having witnessed the presence of cold storage facilities in retail outlets.
While 17.3% among them say they are „Busy in shopping‟, 7.1% among them say „No‟.
Among those customers in the income group of Rs.60,001/- to Rs.1,00,000/-,
53.5% say „Yes‟ for having witnessed the presence of cold storage facilities in retail
outlets. While 22.4% among them say „No‟, 22.4% among them say they are „Busy in
shopping‟.
Among those customers who are earning above Rs.1,00,000/- per month,
56.3% say „Yes‟ for having witnessed the presence of cold storage facilities in retail
outlets. While 25% among them say they are „Busy in shopping‟, 18.8% say „No‟.
While analyzing the relationship from the above table, it can be seen that a
majority of the customers(37.1%) in the income below Rs.30,000/- say „Yes‟ for having
witnessed the presence of cold storage facilities. A majority of the customers (43.6%) in
165
the income group Rs.60,001/- to Rs.1,00,000/- say „No‟ for having witnessed the
presence of cold storage facilities. Customers (35.4%) in the income group Rs.30,001 to
Rs.60,000/- and the customers (35.4%) in the income group Rs.60,001/- to Rs.1,00,000/-
say they are „Busy in shopping‟.
Null Hypothesis:
There is no association between inconveniences encountered while shopping and
age group of customers.
Alternate Hypothesis:
There is association between inconveniences encountered while shopping and age
group of customers.
Table 5.19
Chi-square test for association between inconveniences encountered while shopping
and age group of customers.
Inconveniences
encountered while
shopping
Age group in years
Total
Chi-
square
Value
P Value
Below
20 20-40 Above 40
Traffic on the
roads
19
(15.0%)
[57.6%]
69
(55.3%)
[35.9%]
39
(30.7%)
[52.0%]
127
22.967 0.001 **
Parking of the
vehicles
11
(10.6%)
[33.3%]
65
(62.5%)
[33.9%]
28
(26.9%)
[37.3%]
104
Waiting periods in
billing and cash
payments
2
(4.7%)
[6.1%]
40
(93.0%)
[20.8%]
1
(2.3%)
[1.3%]
43
Lack of moving
space inside the
shops
1
(3.8%)
[3.0%]
18
(69.2%)
[9.4%]
7
(26.9%)
[9.3%]
26
Total
33 192 75 300
166
Note: 1. The value within ( ) refers to Row Percentage.
2. The value within [ ] refers to Column Percentage.
3. ** denotes significant at 1% level
4. * denotes significant at 5% level
From the above table 5.19 it is understood that since the p value is less than 0.01,
the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that
there is a significant association between inconveniences encountered while shopping and
age group of customers.
Among those customers who are age below 20 years, 57.6% feel traffic on the
roads as a source of inconvenience encountered while shopping. While 33.3% among
them feel parking of the vehicles, 6.1% among them feel waiting periods in billing and
cash payments as a source of inconvenience. 3% of the customers feel lack of moving
space inside the shops as a source of inconvenience.
Among the customers in the age group of 20 to 40 years, 35.9% feel traffic on
the roads as a source of inconvenience encountered while shopping. While 33.9%
among them feel parking of the vehicles as a source of inconvenience, 20.8% among
them feel waiting periods in billing and cash payments as a source of inconvenience.
9.4% among them feel lack of moving space inside the shops as a source of
inconvenience.
Among the customers aged above 40 years, 52% feel traffic on the roads as a
source of inconvenience. While 37.3% among them feel parking of the vehicles as a
source of inconvenience, 9.3% among them feel lack of moving space inside the shops as
167
a source of inconvenience. 1.3% among them feel waiting periods in billing and cash
payments as a source of inconvenience.
While analyzing the relationship, it can be seen from the above table that
among the customers who have spotted traffic on the roads such as inconvenience
(54.3%) are in the age group 20 to 40 years. Among the customers (62.5%) who have
mentioned parking of the vehicles as a major source of inconvenience belong to the age
group 20 to 40 years. Among the customers (93%) who have mentioned waiting periods
in billing and cash payments as a source inconvenience belong to the age group 20 to 40
years. Among the customers (69.2%) who have mentioned lack of moving space inside
the shops as a major source of inconvenience belong to the age group 20 to 40 years.
Null Hypothesis:
There is no association between welcoming MRP on the products and marital
status.
Alternate Hypothesis:
There is association between welcoming MRP on the products and marital status.
168
Table 5.20
Chi-square test for association between welcoming MRP on the products and marital
status.
Welcome
MRP
Products
Marital Status Total Chi
Square
Value
P Value
Married
Unmarried
Welcome 133
(70.7%)
[57.8%]
55
(29.3%)
[78.6%]
188
14.094 0.001 **
Reject 50
(79.4%)
[21.7%)
13
(20.6%)
[18.6%]
63
No idea 47
(95.9%)
[20.4%]
2
(4.1%)
[2.9%]
49
Total
230 70 300
Note: 1. The value within ( ) refers to Row Percentage.
2. The value within [ ] refers to Column Percentage.
3. ** denotes significant at 1% level
4. * denotes significant at 5% level
From the above table 5.20 it is understood that since the p value is less than 0.01,
the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that
there is a significant association between welcoming MRP on the products and marital
status.
Among the married customers, 57.8% welcome MRP on the products, while
21.7% reject it. 20.4% of the married customers say they have no idea about MRP.
Among the unmarried customers, 78.6% welcome MRP on the products, while
18.6% reject it. 2.9% among unmarried customers say they have no idea about MRP.
While analyzing the relationship, it can be seen from the above table that among
the customers (70.7%) who welcome MRP, married customers are the highest. Among
the customers (79.4%) who have rejected MRP, married customers are the highest.
169
Among the customers (95.9%) who said they have no idea about MRP on the products
married customers are the highest.
Null Hypothesis:
There is no association between opinion about FDI entry into retail business and
family monthly income.
Alternate Hypothesis:
There is association between opinion about FDI entry into retail business and family
monthly income.
Table 5.21
Chi-square test for association between opinion about FDI entry into retail business
and family monthly income.
Note: 1. The value within ( ) refers to Row Percentage.
2. The value within [ ] refers to Column Percentage.
Opinion about
FDI entry into
retail business
Family Monthly Income
Tota
l
Chi-
square
Value
P Value
Below
30000
30001-
60000
60001-
100000
Above
100000
The existing
businesses will
improve very
well
19
(34.5%)
[20.2%]
16
(29.1%)
[16.3%]
11
(20.0%)
[14.5%]
9
(16.4%)
[28.1%]
55
27.871 0.001 **
The existing
businesses will
not improve
49
(32.2%)
[52.1%]
51
(33.6%)
[52.0%]
46
(30.3%)
[60.5%]
6
(3.9%)
[18.8%]
152
We will wait
and see
4
(13.3%)
[5.3%]
8
(26.7%)
[8.2%]
9
(30.0%)
[11.8%]
9
(30.0%)
[28.1%]
30
No idea 22
(34.9%)
[23.4%]
23
(36.5%)
[23.5%]
10
(15.9%)
[13.2%]
8
(12.7%)
[25.0%]
63
Total
94 98 76 32 300
170
3. ** denotes significant at 1% level
4. * denotes significant at 5% level
From the above table 5.21 it is understood that since the p value is less than 0.01,
the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that
there is a significant association between opinion about FDI entry into retail business and
family monthly income.
Among those customers in the income group below Rs.30,000/-, 52.1% are of the
opinion that as a result of FDI entry into retail business, the existing businesses will not
improve, while 23.4% among them say they have no idea. While 20.2% customers in the
above group say that the existing businesses will improve very well, 5.3% among them
say we will wait and see.
Among those customers in the income group between Rs.30,001/- to Rs.60,000/-,
52% are of the opinion that as a result of FDI entry into retail business, the existing
businesses will not improve, while 23.5% among them say they have no idea. While
16.3% are of the opinion that the existing businesses will improve very well, 8.2% among
them say we will wait and see.
Among those customers in the income group between Rs.60,001/- to Rs.1,00,000/-,
60.5% are of the opinion that as a result of FDI entry into retail business, the existing
businesses will not improve, while 14.5% are of the opinion that the existing businesses
will improve very well. While 13.2% among them say they have no idea, while 11.8%
among them say we will wait and see.
171
Among those customers in the income group above Rs.1,00,000/-28.1% are of the
opinion that as a result of FDI entry into retail business, the existing businesses will
improve very well, while 28.1% among them also say we will wait and see. While 25%
among the above customers say they have no idea, 18.8% among them are of the opinion
that the existing businesses will not improve.
While analyzing the relationship, it can be seen from the above table a majority of
the customers (34.5%) who have mentioned that the existing business will improve very
well belong to the income group below Rs.30,000/-. Among the customers (33.6%)
who have mentioned that the existing businesses will not improve belong to the income
group between Rs.30,001/- to Rs.60,000/-. Among the customers (30%) who mentioned
that we will and see belong to the income group between Rs.60,001/- to Rs.1,00,000/-
.and above Rs.1,00,000/-. Among the customers (36.5%) who mentioned they have no
idea about FDI entry into retail business belong to the income group between
Rs.30,001/- to Rs.60,000/-.
.Null Hypothesis:
There is no association between modern practices of shopping and age group of
customers.
Alternate Hypothesis:
There is association between modern practices of shopping and age group of
customers.
172
Table 5.22
Chi-square test for association between modern practices of shopping and age group of
customers.
Modern practices of
shopping
Age group in years
Total
Chi-
square
Value
P Value
Below 20 20-40 Above
40
Online cash
payments
16
(22.2%)
[48.5%]
42
(58.3%)
[21.9%]
14
(19.4%)
[18.7%]
72
38.494 0.000 **
Online product
selection
9
(13.0%)
[27.3%]
44
(63.8%)
[22.9%]
16
(23.2%)
[21.3%]
69
Automatic product
vending machines
2
(4.1%)
[6.1%]
26
(53.1%)
[13.5%]
21
(42.9%)
[28.0%]
49
Door-delivery,
billing and collection
4
(4.8%)
[12.1%]
68
(81.9%)
[35.4%]
11
(13.3%)
[14.7%]
83
Informing the
customers about
product availability
through email/SMS
2
(7.4%)
[6.1%]
12
(44.4%)
[6.3%]
13
(48.1%)
[17.3%]
27
Total
33 192 75 300
Note: 1. The value within ( ) refers to Row Percentage.
2. The value within [ ] refers to Column Percentage.
3. ** denotes significant at 1% level
4. * denotes significant at 5% level
From the above table 5.22 it is understood that since the p value is less than 0.01, the
null hypothesis is rejected at 1% level of significance. Hence, it is concluded that there is
a significant association between modern practices of shopping and age group of
customers.
Among the customers who are below 20 years of age, 48.5% welcome on-line cash
payments, while 37.3% among them welcome on-line product selection. 12.1% among
them welcome door delivery, billing and collection, while 6.1% among them welcome
173
automatic product vending machines, 6.1% of the customers in the above age group
welcome informing the customers about product availability through email/SMS.
Among the customers in the age group 20 to 40 years, 35.4% welcome door
delivery, billing and collection, while 22.9% among them welcome on-line product
selection. While 21.9% among them welcome on-line cash payments, 13.5% customers
in the above age group welcome automatic product vending machines. 6.3% of the
customers in the above age group welcome informing the customers about product
availability through email/SMS.
Among the customers in the age group above 40 years, 28% welcome automatic
product vending machines, while 21.3% among them welcome on-line product selection.
18.7% belonging to the above age group welcome on-line cash payments, while 17.3%
are for informing the customers about product availability through email/SMS. 14.7% of
the customers in the above age group welcome door delivery, billing and collection.
While analyzing the relationship, it can be seen from the above table that among
the customers (58.3%) who have opted for on-line cash payments a majority belong to
the age group 20 to 40 years. Among the customers (63.8%) who have opted for on-line
product selection a majority of them are in the age group 20 to 40 years. Among the
customers (53.1%) who have opted for automatic product vending machines a majority of
them are in the age group 20 to 40 years. Among the customers (81.9%) who have opted
for door delivery, billing and collection, a majority of them are in the age group 20 to 40
years. Among those (48.1%) who have opted for informing the customers about product
availability through email/SMS belong to the age group above 40 years.
174
Null Hypothesis:
There is no association between impact on purchases as a result of introduction
of VAT system and family monthly income.
Alternate Hypothesis:
There is association between impact on purchases as a result of introduction of
VAT system and family monthly income.
Table 5.23
Chi-square test for association between impact on purchases as a result of VAT system
and family monthly income.
Note: 1. The value within ( ) refers to Row Percentage.
2. The value within [ ] refers to Column Percentage.
3. ** denotes significant at 1% level
4. * denotes significant at 5% level
From the above table 5.23 it is understood that since the p value is less than 0.01, the
null hypothesis is rejected at 1% level of significance. Hence, it is concluded that there is
VAT system
impact on
purchases
Family Monthly Income
Total
Chi-
square
Value
P Value
Below
30000
30001-
60000
60001-
100000
Above
100000
Not much 38
(37.6%)
[40.4%]
33
(32.7%)
[33.7%]
25
(24.8%)
[32.9%]
5
(5.0%)
[15.6%]
101
31.396 0.000 **
Very much 54
(32.7%)
[57.4%]
53
(32.1%)
[54.1%]
43
(26.1%)
[56.6%]
15
(9.1%)
[46.9%]
165
We have to wait
and see
2
(5.9%)
[2.1%]
12
(35.3%)
[12.2%]
8
(23.5%)
[10.5%]
12
(35.3%)
[37.5%]
34
Total
94 98 76 32 300
175
a significant association between impact on purchases as a result of introduction of VAT
system and family monthly income.
Among those customers in the income group below Rs.30,000/-, 57.4% say that the
impact will be „Very much‟ as a result of introduction of VAT system, while 40.4% of
the customers in the above group say that the impact on purchases „will not be much‟.
2.1% of the customers belonging to the above group say „we have to wait and see‟ about
the impact on purchases as a result of introduction of VAT System.
Among those customers in the income group Rs.30,001/- to Rs.60,000/-, 54.1% say
that the impact will be „Very much‟ as a result of introduction of VAT system, while
33.7% of the customers in the above group say that the impact on purchases „will not be
much‟. 12.2% of the customers belonging to the above group say „we have to wait and
see‟ about the impact on purchases as a result of introduction of VAT System.
Among those customers in the income group Rs.60,001/- to Rs.1,00,000/-, 56.6%
say that the impact will be „Very much‟ as a result of introduction of VAT system, while
32.9% of the customers in the above group say that the impact on purchases „will not be
much‟. 10.5% of the customers belonging to the above group say „we have to wait and
see‟ about the impact on purchases as a result of introduction of VAT System.
Among those customers in the income group above Rs.1,00,000/-, 46.9% say
that the impact will be „Very much‟ as a result of introduction of VAT system, while
37.5% of the customers in the above group say that „we have to wait and see‟ 15.6% of
176
the customers belonging to the above age group say that the impact on purchases „will
not be much‟ as a result of introduction of VAT System.
While analyzing the relationship, it can be seen from the above table that among
the customers (37.6%) who feel the impact of VAT system on purchases “will not be
much” belong to the income group below Rs.30,000/-. Among the customers (32.7%)
who feel the impact of VAT system on purchases will be “Very much” belong to the
income group below Rs.30,000/-. Among the customers (35.3%) who answered “we
have to wait and see” for the impact of VAT system on purchases are equally distributed
in the income group Rs.30,001/- to Rs.60,000/- and above Rs.1,00,000/-.
Null Hypothesis:
There is no association between safety measures necessary for a retail unit and
family monthly income.
Alternate Hypothesis:
There is association between safety measures necessary for a retail unit and
family monthly income.
177
Table 5.24
Chi-square test for association between safety measures necessary for a retail unit and
Family monthly income
Note: 1. The value within ( ) refers to Row Percentage.
2. The value within [ ] refers to Column Percentage.
3. ** denotes significant at 1% level
4. * denotes significant at 5% level
From the above table 5.24. it is understood that since the p value is less than 0.01,
the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that
there is a significant association between safety measures necessary for a retail unit and
family monthly income.
Safety
measures
necessary for
a retail unit
Family Monthly Income
Total
Chi-
square
Value
P Value
Below
30000
30000-
60000
60000-
100000
Above
100000
Having fire
fighting
devices at
strategic
locations
68
(36.2%)
[72.3%]
59
(31.4%)
[60.2%]
46
(24.5%)
[60.5%]
15
(8.0%)
[46.9%]
188
25.522 0.002 **
Frequently
mopping and
inspecting wet
floors
4
(8.3%)
[4.3%]
17
(35.4%)
[17.3%]
14
(29.2%)
[18.4%]
13
(27.1%)
[40.6%]
48
Having no-slip
floors
13
(32.5%)
[13.8%]
13
(32.5%)
[13.3%]
11
(27.5%)
[14.5%]
3
(7.5%)
[9.4%]
40
Keeping
records that
proper
maintenance
has been done
9
(37.5%)
[9.6%]
9
(37.5%)
[9.2%]
5
(20.8%)
[6.6%]
1
(4.2%)
[3.1%]
24
Total
94 98 76 32 300
178
Among those customers in the income group below Rs.30,000/-, 72.3% are for
having fire fighting devices, while 13.8% among them are for having no-slip floors, 9.6%
of the customers belonging to the above income group are for keeping records that proper
maintenance has been done. While 4.3% among them are for frequently mopping and
inspecting wet floors.
Among those customers in the income group between Rs.30,001/- to Rs.60,000/-,
60.2% are for having fire fighting devices, while 17.3% among them are for frequently
mopping and inspecting wet floors. 13.3% among the above customers, are for having
no-slip floors, while 9.2% among them are for keeping records that proper maintenance
has been done.
Among those customers in the income group between Rs.60,001/- to Rs.1,00,000/-
, 60.5% are for having fire fighting devices, while 18.4% among the above income group
are for frequently mopping and inspecting wet floors. 14.5% among the customers in
the above income group, are for having no-slip floors, while 6.6% among them are for
keeping records that proper maintenance has been done.
Among those customers belonging to the income group above Rs.1,00,000/-,
46.9% are for having fire fighting devices, while 40.6% among the above income group
are for frequently mopping and inspecting wet floors. 9.4% among the customers in the
above income group, are for having no-slip floors, while 3.1% among them are for
keeping records that proper maintenance has been done.
179
While analyzing the relationship, it can be seen from the above table that a
majority of the customers (36.2%) who have opted for having fire fighting devices at a
strategic location are in the income group below Rs.30,000/-. Among the customers
(35.4%) who have opted for frequently mopping and inspecting wet floors are in the
income group Rs.30,001/- to Rs.60,000/-. Among the customers (32.5%) who have
opted for having no-slip floors are equally distributed in the income groups below
Rs.30,000/- and in the income group between Rs.30,001 to Rs.60,000/-. Among the
customers (37.5%) who have opted for keeping records that proper maintenance has been
done are equally distributed in the income group below Rs.30,000/- and in the income
group between Rs.30,001/- to Rs.60,000/-.
5.6. CORRELATION
Correlation is a statistical measure of establishing qualitative relationship between
two or more variables. Through correlation, it is possible to indicate the direction of
relationship between variables.
Dependent variable
Opinion about taking good care of customers and goods.
Y
Independent variables 1. Sufficiency of Infrastructural facilities (X1)
2. Employees service satisfaction leading to repeated
purchases (X2)
Getting ranges of products under one roof (X3)
Multiple R Value 0.245
R Square Value 0.060
F Value 3.113
P Value 0.006
180
From the above showing the coefficient of correlation between sufficiency of
infrastructure facilities, employees service satisfaction, getting ranges of products under
one roof and opinion about taking good care of customers and goods.
Sufficiency of
infrastructure
facilities
Making
repeated
purchases
Getting ranges
of products
under one roof
Opinion about
good care of
customers and
goods
Sufficiency of
infrastructure
facilities
1.000 0.197 ** 0.317 ** 0.128 **
Making
repeated
purchases
- 1.000 0.919 ** 0.033 **
Getting ranges
of products
under one roof
- - 1.000 (-) 0.033
Opinion about
good care of
customers and
goods
- - - 1.000
From the above table, we can point out the following relationships between the
independent of the dependent variables.
There is a positive correlation between getting the ranges of products under one
roof and making repeated purchases. When the customers get different ranges of
products required by the different members of their family under one roof, automatically
they will be tempted to make repeated purchases.
The infrastructure facilities like rail/road connectivity have a great influence on the
sales of the retail outlets. When these facilities are fully sufficient they lead to a direct
increase in sales. The above table points out a positive relationship between
181
infrastructure facilities and employees service satisfaction leading to repeated purchases.
In both the above cases, the customers have a strong preference for taking good care of
customers and goods.
There is negative correlation between the opinion about taking good care of
customers and getting ranges of products under one roof. This statement shows that by
the mere presence of different ranges of goods without taking care of the customers
preferences is of no use.
5.7. REGRESSION
Regression is a statistical method of establishing quantitative relationship between
two variables. In simple regressions two variables are used. One variable (independent)
is the cause of the behaviour of another one (dependent). When there are more than two
independent variables, the analysis concerning relationship is known as multiple
correlation and the equation describing such relationship is called as multiple regression
equation.
Regression analysis is concerned with the derivation of an appropriate
mathematical expression for finding values of a dependent variable on the basis of
independent variable. It is thus designed to examine the relationship of a variable Y to a
set of other variables X1, X2, X3….Xn.
The most commonly used linear equation is Y = b1 X1 + b2 X2 +………+ bn Xn + bo .
182
Here Y is the dependent variable, which is to be found. X1, X2….and Xn are the
known variables with which predictions are to be made and b1, b2 ….. bn are coefficient of
the variables.
In this study, the Dependent variable is taking good care of customers and goods,
Independent variables are sufficiency of infrastructural facilities, employees service
satisfaction leading to repeated purchases and getting ranges of products for all the family
members under one roof. The analysis regarding them is discussed as follows:-
Dependent variable Opinion about taking good care of
customers and goods. Y
Independent variables 1. Sufficiency of Infrastructural
facilities (X1)
2. Employees service satisfaction
leading to repeated purchases (X2)
3. Getting ranges of products under
one roof (X3)
Multiple R Value 0.252
R Square Value 0.063
F Value 6.664
P Value 0.000 **
Table showing multiple regression analysis
Variables Unstandardised
coefficient SE of B
Standardised
coefficient t value P value
X1 0.235 0.069 0.209 3.411 0.001 **
X2 0.385 0.107 0.529 3.593 0.000 **
X3 0.392 0.102 0.586 3.846 0.000 **
Constant 2.069 0.199 - 10.387 0.000 **
The multiple correlation coefficient is 0.252 and its measures the degree of
relationship between the actual values and the predicted values of taking good care of
183
customers and goods. Because the predicted values are obtained as a linear combination
of sufficiency of infrastructure facilities (X1), employees service satisfaction leading to
repeated purchases (X2) and getting ranges of products under one roof (X3), the
coefficient value of 0.252 indicates that the relationship between taking good care of
customers and goods and the three independent variables is quite strong and positive.
The Coefficient of Determination R-square measures the goodness-of-fit of the
estimated Sample Regression Plane (SRP) in terms of the proportion of the variations in
the dependent variables explained by the fitted sample regression equation. Thus the
value of R Square is 0.063 simply means that about 6.3% of the variation in taking good
care of the customers and goods is explained by the estimated SRP that uses sufficiency
of infrastructure facilities, employees service satisfaction leading to repeated purchases
and getting ranges of products under one roof as the independent variables and R square
value is significant at 1% level.
The multiple regression equation is Y = 2.069 + 0.235 X1 + 0.385 X2 + 0.392 X3.
Here, the coefficient of X1 is 0.235. It represents the partial effect of sufficiency
of infrastructure facilities on taking good care of customers and goods, holding
employees service satisfaction and getting ranges of products under one roof as constant.
The estimated positive sign implies that such effect is positive that taking good care of
customers and goods would increase by 0.235 for every unit increase in sufficiency of
infrastructure facilities and this coefficient value is significant at 1% level.
184
The coefficient of . X2 is 0.385. It represents the partial effect of employees
service satisfaction on taking good care of customers and goods, holding sufficiency of
infrastructure facilities and getting ranges of products under roof as constant. The
estimated positive sign implies that such effect is positive that taking good care of
customers and goods would increase by 0.385 for every unit increase in employees
service satisfaction and this coefficient value is significant at 1% level.
The coefficient of X3. is 0.392. It represents the partial effect of getting ranges of
products under one roof on taking good care of customers and goods, holding sufficiency
of infrastructure facilities and employees service satisfaction as constant. The estimated
positive sign implies that such effect is positive that taking good care of customers and
goods would increase by 0.392 for every unit increase in getting ranges of products under
one roof and this coefficient value is significant at 1% level.
185
CHAPTER-VI
FINDINGS, SUGGESTIONS & CONCLUSIONS:
6.1 INTRODUCTION
Based upon the observations made for the various sectors of the retail segment,
we can confidentially say that the conditions are becoming favourable for the growth of
retail industry. The retail arena is very different and the opportunities are incredible. This
chapter is divided into three areas viz. findings, suggestions and conclusions. Under the
findings, the observations made through descriptive and inferential analysis are listed out.
Under suggestions, the ways for removing the present bottlenecks in the sector is
highlighted. Under the conclusions part the future trends of the sector are brought to
limelight.
6.2. FINDINGS
The finding of the study summarizes the conclusions that were arrived at through
data analysis. This is divided into two sections viz.
Section-1: Findings of the study from the descriptive analysis and
Section-2: Findings of the study from the inferential analysis
Section-1
Findings of the study from the descriptive analysis
For the purposes of the study a sample of 300 customers were taken up for
analysis. Among them male customers constituted a majority of the population
surveyed.
186
The sample was divided into three groups viz. young (below 20 years), middle
aged (between 20 to 40 years) and seniors (above 40 years). Among them
customers in the age group 20 to 40 years represented the majority of the sample.
Married customers were more in number than unmarried customers.
In order to study the relation between education and modern retail the customers
are divided into four groups viz. Upto HSC, Graduate, Professional and others.
Among this break-up of customers, Graduates formed a majority of the sample.
Occupation and retailing practices are inter-related. With this in view the sample
customers were divided into six group‟s viz. Business, Professional, Government
employee, Private employee, Self-employed and Home maker. Among them
Private employees represented the bulk of the sample.
The income earned by the customers has got a direct relation with respect to
money spending retail outlets. Taking this into consideration, the customers were
divided into four groups. Viz. Below Rs.30,000/-, between Rs.30,001/- to
Rs.60,000/-, between Rs.60,001 to Rs.1,00,000/- and above Rs.1,00,000/- as
monthly income. Among this population, customers earning Rs.30,001/- to
Rs.60,000/- formed a majority of the sample.
Considering the types of goods that are generally purchased from a retail unit, the
types of goods were divided into manufacturer brands, private brands and those
who do not purchase the above two types were brought under the heading as not
187
brand conscious. Manufacturer brands were purchased by a majority of the
sample customers.
Shopping is for the convenience of the customers. Their exists different types of
retail stores with different features. The customers can select any one of them
according to the convenience. For the purpose of this study retail outlets were
generally divided into four types viz. Department Stores, Chain Stores, Discount
Stores and Shopping Malls. Departmental Stores were preferred for shopping by a
majority of the sample customers.
Money spend in a retail outlet by the customers were taken up for analysis and it
was divided into four categories viz. below Rs.1,000/-Rs.1,001/- to Rs.5,000/-,
Rs.5,001/- to Rs.10,000/- and above Rs.10,000/-. Customers who spend on an
average of Rs.5,001/- to Rs.10,000/- constituted a majority of the sample.
With the improvements in banking, different forms of payments emerged. For
analyzing them the payments made by customers were classified as follows:- viz.
Cash only, Personal cheques, Credit cards and Debit cards. Among the various
forms of payment made Credit cards were the most popular among the sample
customers.
Among the various credit cards are generally used by the customers the following
were taken up for the study viz. Visa, Master Card, American Express, ICICI and
SBI. Among the different cards used by the customers ICICI cards are used by a
large number of customers.
188
Now-a-days shopping is made with all the members of the family. To find out
purchase decision-maker among them, the members of the family is classified into
Husband, Wife, Children and All the members of the family. In this study, Wife
constituted the chief purchase decision-maker among the family members of the
sample customers.
Cold storage facilities extend the life of the product in the retail outlets. When the
customers were asked about the presence of the cold storage facilities their
answers were grouped into three categories viz. Yes, No and Busy in shopping. A
majority of the customers replied in positive and said they witnessed the presence
of the cold storage facilities in the retail outlets while shopping.
The availability of infrastructure facilities forms the nucleus of the retail sector.
When the customers were asked their opinion about this it was divided into three
categories viz. Insufficient, Partly sufficient and Fully sufficient. A majority of
the customers replied that the infrastructure facilities like rail-road connectivity
were fully sufficient in their locality.
Employee service satisfaction pulls the customers to the retail outlets to make
repeated purchases. The customers were asked about the employee service
satisfaction through the following questions viz. not always satisfactory,
sometimes satisfactory, always satisfactory. A majority of the customers have
expressed that the employee service satisfaction were always satisfactory.
189
Now-a-days customers could not spare much time for shopping. They would like
to get all the products for the family members under one roof. The above
question was put forward to the sample customers as:- Not always, Sometimes
and Always. A majority of the customers were convinced and replied that they
always get different range of products for the family members under one roof.
Among the inconveniences encountered by customers, Traffic on the roads
formed a major source of inconvenience for a majority of the customers.
Government has introduced MRP to ensure uniformity in pricing. This was
welcomed by a majority of the sample customers.
Customers were asked to give suggestion for improving store security. A majority
of the customers suggested for having bright lighting in parking lots.
Foreign Direct Investment in retail has resulted in drastic changes in the retail
sector world-wide. When the opinion of the customers was asked about the
proposed entry of FDI, a majority replied that the existing businesses will
improve as a result of the proposed entry of FDI into retail.
On the area of modern practices to be introduced in the retail. Most of the
customers expressed a favourable reply for door delivery, billing and collection.
190
Customers were also asked as to how retailers can improve their profitability, for
which majority of them suggested that the improving employee performance
retailers can improve profitability.
About the impact in purchases after the introduction of VAT system in our
country, a majority of the customers opined that we have to wait and see.
Having fire fighting devices at strategic locations in a retail outlets formed the
majority of the suggestions expressed by the customers relating to the safety
measures necessary for a retail outlet.
“The problems of the retail sector can be brought to the notice of the concerned
Minister if retail is given an industry status”. This was the opinion expressed by a
majority of the sample customers about the demand for industry status to the retail
sector.
For retail business to succeed utmost care has to be taken to the quality of the
products as well as the needs of the customers. When the customer‟s opinion was
asked for the above statement most of them replied in the positive and asserted
that both the customers and the quality products formed the core of the retail
sector.
191
Section-2
Findings of the study from the inferential analysis
Customers below 20 years of age are of the opinion that the infrastructure
facilities are like rail/road connectivity‟s are fully sufficient in their locality.
Customers in the age group of 20 to 40 years have expressed maximum
satisfaction with respect to the services rendered by the employees of the retail
outlets which leads them to make repeated purchases.
Customers in the age group of 20 to 40 years have expressed the opinion that
they are getting different ranges of products which are required by their family
members under one roof.
“Retail merchandising consists of two factors: Customers and goods. If you
take good care in buying of the product it will not be return by the customer.
If you take good care of your customer they do come back”. The above
statement was fully endorsed by the customers who belong to the category of
„Others‟ under the educational qualification prescribed for the study.
Customers serving as Government employees say that the infrastructure
facilities are fully sufficient in their locality.
Among the sample customers classified under occupation, home-makers have
expressed that they are fully satisfied with the services of employees of the
retail outlets.
192
Among the sample customers classified under occupation, home-makers have
expressed that they are getting different ranges of products under one roof in
the retail outlets visited by them.
In reply to the customer‟s opinion about a statement “Retail merchandising
consists of two factors: Customers and goods. If you take good care in buying
of the product it will not be return by the customer. If you take good care of
your customer they do come back”. Sample customers in the income group
below Rs.30,000/- have fully agreed with the above statement.
Discount stores are preferred for shopping by the sample customers with
respect to sufficiency of infrastructure facilities.
Among the purchase decision-makers, Husbands are satisfied with the
services of the employees of the retail outlets.
Among the purchase decision-makers, Husbands have expressed the opinion
that they are getting different ranges of products under one roof.
Professionals represent a majority of the customers who have opted for
manufacturer brands. Among those customers who have opted for Private
brands are graduates.
Customers in the age group above 40 years prefer Departmental Stores since
the requirements are fully met in the above format. Customers in the age
group 20 to 40 years prefer Discount Stores since they are getting the products
193
at a lesser price. The age group of 20 to 40 years form the majority in
choosing in all the four modern formats taken up for study.
A majority of the customers who have preferred ICICI Cards are in the age
group 20 to 40 years.
Customers in the income group below Rs.30,000/- form the majority for
having witnessed the presence of cold storage facilities.
A majority of the customers in the age group below 20 years have spotted
traffic on the roads as a major source of inconvenience. Customers in the age
group 20 to 40 years are clever enough to point out all the major four
inconveniences encountered by them.
Married customers are very much careful and cautious about the price label on
the products. Among the customers surveyed, they welcome MRP which
ensures uniformity in prices.
Foreign inflow of funds will increase and lead to sufficient increase in
infrastructure facilities. Entry of Foreign Direct Investment will definitely
improve the existing businesses was the opinion suggested by the customers
in the income group Rs.60,001/- to Rs.1,00,000/-.
Customers seek convenience while shopping. The study in its questionnaire
enquired about some selected modern practices among the customers. The
194
study reveals expectation of convenience from all quarters of customers, but a
majority of them belong to the age group of 20 to 40 years.
Value Added Tax aims to bring about uniformity in tax system through out
the country. When the question of the impact of the newly introduced VAT
system on the purchases, customers belonging to every income group felt that
the impact was very much.
Safety measures become absolutely necessary when the number of customers
visiting retail outlets is on the rise. The opinion for safety measures is more or
less evenly distributed among the different income group, those belonging to
the income group below Rs.30,000/- and between Rs.30,001/- to Rs.60,000/-
have evinced greater interest in the safety measures.
There is positive correlation between infrastructure facilities and taking good
care of customers and goods.
Regression analysis shows that taking good care of customers and goods
would increase by 0.392 for every unit increase in getting ranges of products
under one roof and this coefficient value is significant at 1% level.
The following are the suggestions that can be considered for useful implementation
by the retail units on the basis of the extensive research conducted:-
Customer Focus.
Ability to attract the Critical mass.
Deciding on the Retail Format that will leverage the company‟s competencies.
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Ability to attain expertise in the retailing sector.
Supply Chain Management (Logistical Expertise).
Use of IT.
Ability to attract and retain talent.
Solid Financial backing.
Customer Focus
The most important factor that decides the success of any business is the
Customer focus. Retail companies have to start with the classic marketing rule of STP
(Segmentation, Targeting and positioning). Though this may seem simple and obvious, it
is usually not carried out meticulously. Many companies still operate with the notion of
“every one is our customer; we don‟t stop anyone from buying from us”. The only
problem with this approach would be that the marketing efforts may not be fruitful as
retailers are trying to reach out everyone, but not capable of satisfying anybody. This
however does not mean that the company should ignore the spill-over effect.
The “Indian Factor”
The Indian consumer is no longer termed “price sensitive” but is associated with
one who looks for “value for money” To put it simply, the consumer should feel that his
costs (monetary, time, energy, psychic) are less than the benefits (functional and
emotional) that he receives. Though the benefits that the consumer seeks may differ
across income groups, it also differs across the nature of products (low-involvement vs.
high involvement product).
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The stress is upon the fact that one cannot try and replicate retailing strategies that
worked in the U.S. because the consumers are different, their food, clothing and living
habits are different, their culture is different and more importantly, the retail formats that
these consumers have been exposed to is different.
Talking about values that a consumer derives, according to Dr.Ranjan Das, it is
now becoming clear that the Indian customer wants entertainment in whatever he does,
whether buying or consuming. Entertainment thus has now become his additional
criterion for deciding what to buy and from where to buy. This aspect was well conceived
and implemented in Abirami Mall of Chennai city with superb customer patronage.
CRM
Customer Relationship management is probably the new buzzword that is
catching up with all businesses. Whether hi-tech or not, the retailing format should be
able to understand the needs of the customer and use information available to attract,
serve and retain customers effectively.
Ability to attract the Critical mass
In retailing business there exists a necessary critical mass that helps the company
survive. The critical mass represents the number of customers of a particular retail
organization. The retail company should be able to estimate the critical mass and then put
strategies in the right place in order to attract and retain that critical mass.
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Deciding on the Retail Format that will leverage the company’s competencies
The retail format can be classified in two ways. The first is physical retail format and
the second is the product sector.
Small store, with complex but efficient supply chains
Small supermarkets that run on brand variety and tight inventory control
A mix of food and general merchandise stores
Hyper markets which are located out of the city.
Mid-sized retail propositions within town limits.
Small corner outlets with integrated home delivery.
Huge discount store, apart from the e-tailing format.
The right format for a retail store should be decided depending on the core
competency of the company and the targeted customer segment. While deciding on the
retail format a lot of attention should be given to the store design as well. Product sector
decision involves deciding whether the company should enter into groceries, apparel,
textiles, consumer durables, etc.
Ability to attain expertise in the retailing sector
Organized retailing is still in its nascent stage in our country. Any company
planning to enter in an organized way will have to attain sufficient expertise in setting up
and running retail chains. This expertise can be either bought by hiring consultants to
advise in this front or enter into an alliance or joint venture (as RPG has done) with a
partner who has prior expertise in this area.
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Supply chain Management – (Logistical Expertise)
Supply chain management is one of the key areas of the success for an organized
retailer. Most of the cost savings comes through with efficient supply chain
management. Companies like Walmart have built the biggest empire in retailing just by
concentrating on this aspect. Supply chain management is important to a specialty store
and also to a discount store. By efficiently handling the supply chain, the operating and
wastage costs can be drastically reduced thus increasing the operating margin. The
government should take adequate steps to do away with constraints on processing,
manufacturing, and distribution. As the existing formats make way for the modern ones
and the national footprint of the retailers expands, efficient supply chains will be setup
and consolidation of the logistics function will take place.
Use of IT
Deployment of IT in retail sector has helped to streamline the operations and
minimize the costs. Food world, one of the leading retail companies has benefited
considerably by using IT in its day-to-day operations. IT should be deployed with
considerable care and caution. The IT tool that is selected must be capable of being
scalable and also upgradeable.
Ability to attract, train and retain talent
Retailing necessitates hiring and retaining people who can help to grow the
customer base. Companies should be able to attract good talent and also train them to
operate in the new organized setup. The next step is to retain the bright, talented and
experienced workers. Companies should tie up with Management Institutes to enable its
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employees study related courses and at the same time help these institutes offer
specialization in retailing by helping them design such courses with the valuable field
experience of the retail company.
Solid Financial backing
Since any retail format will involve substantial initial investment and is operating
in a low margin industry, the company should have solid financial backing to help it
survive in the initial period while it gains the critical mass.
The need for industry status
Industry status to retailing is the first basic step needed for reforming the retailing
sector. The following are the benefits of granting industry status to retailing.
Greater Focus on Retailing Development
Granting industry status to retailing implies that retailing would then come under
the purview of a single ministry and would most likely have a nodal agency and an apex
body dedicated solely for the retailing sector. This would ensure that this sector gets the
very badly needed focus in development. Almost everybody connected with the retail
sector keep talking on the changes needed in this sector. But the lack of clear focus has
led to a situation where hardly any action has been possible in this highly potential field.
Fiscal Incentives for Retailing Industry
One of the major problems with Indian retailing has been the fact that the levels
of investment in organized retailing continue to be dismally low. Granting industry status
may facilitate the provision of fiscal incentives to this high potential sector. Incentives for
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investments in cold storage chains, infrastructure and investments in the supply chain can
go a long way in improving the current state of retailing in India.
Availability of Organized Financing
One major benefit from granting industry status would be the easier availability of
organized financing. Banks will find a new option of lending their increased reserves to
this emerging sector.
Establishment of Insurance norms
Insurance to retailers is still perceived to be a risky proposition. The main
problem faced by insurance companies while insuring small retailers has been the
absence of established norms and prior experience. Once the sector gets industry status
most of these problems would be taken care of easily.
Law Amendments
Most of the laws governing Indian retail are pretty archaic. Specifically speaking,
some of the laws that need to be reviewed on priority basis are :-
a. Essential Commodities Act
b. Weights and Measures
c. Agriculture products market Act
d. Prevention of food adulteration Act
e. Shops and Establishment Act
These are just some of the main areas that need attention.
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RECOMMENDATIONS
This section discusses the policy changes that are needed to ensure that Indian
retail significantly improves its productivity. While doing this, we try to identify the
stakeholders in the process of retail change, understand their viewpoint and their
relevance as potential bottlenecks, and finally define how best to address their issues.
Permit FDI in retail
FDI has played a key role in the rapid development of high quality retail in
several other developing countries. Allowing global retailers to invest in this sector
would attract best practice players into India. Several retailers (such as Tesco, Marks &
Spencer and Toys „R‟ Us) have already evinced an interest in building businesses here.
Relax SSI Reservation
The reservation of large sub-segments for the small-scale industry renders the
processing sector, particularly in food and apparel, inefficient. Therefore, the first step
should be to continue to relax restrictions and permit larger, more efficient players to
enter these sectors. It should be emphasized that this will allow small-scale firms to
increase their scale of operations and become more productive and competitive.
Remove distribution constraints
Retailers must be allowed to source directly from the farmers and food grains
should be allowed to be transported freely among the various states of our country.
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Organize market for real estate
Here the objective is to ensure a regular supply of real estate for retail and to
ensure transparency in dealings. There are four major areas of action that retailers should
focus on:
Ensure proper rent laws
Linking rents to market value will ease out businesses surviving on uneconomic
rental rates. Currently, rental laws in our country as well as their implementation are
extremely pro-tenant. Strict enforcement of rental laws will make landowners more
confident in getting their property back.
Make zoning laws more flexible
The government needs to be more flexible with zoning laws and ensure that usage
norms take into account both demand and supply without upsetting the balance both in
urban and suburban areas.
Restructure finances of municipal bodies
The responsibility for providing adequate local infrastructure rests with the local
governments. To improve their finances, these local governments need to enforce
property tax collection to raise funds for infrastructure development.
Increase land supply
City administrators need to bring government owned land into the market
regularly. This will encourage and aid large-scale developments both in the suburbs and
within the cities.
203
Simplify the tax structure
The government should ensure the adoption of a uniform sale tax rate across
states, and with time, introduce Value Added Taxation (VAT). It should also eliminate
octroi wherever it is levied. These policies are already being considered, and most states
have agreed to uniform taxation, at least in principle.
Ensure flexibility of labour laws
Permitting flexibility in the use of labour, without doing away with the benefits
accruing to them will permit retailers to better organize operations and improve capacity
utilization. This will include permitting retail businesses to stay open all days of the
week, encouraging use of part time labour, etc. Retailers in the state of Tamil Nadu
(Capital-Chennai) have agreed to these on the face of requests from some well
established retailers.
Better enforcement of tax collection from small retailers
Small retailers will derive several benefits from non-enforcement of labour and
taxation laws. While it will be difficult for the enforcement mechanism to regularly
monitor labour usage and electricity consumption by the millions of small retailers, it
should definitely improve the tax collection mechanism.
Ensure single window clearance for retail chains
State governments should make all licenses and permits available through a
single agency at least at the city level. Providing one-time licenses for multiple stores in
a chain will ease the bureaucratic hurdle experienced by modern retailers.
204
`
Eliminating bureaucratic hurdles
The state/local government is a critical stakeholder in retail. Several important
changes in retail environment imply a loss of power for government officials. These
comprise better enforcement of laws among small counter stores, simplification of
legislation and loss of tax revenue from sales and octroi levies. While the legislative
change may be easier to initiate, the behavioural change process will definitely take more
time.
Vendor relations and off take discounts on buying should be discussed and linked
with discounts offered to customers and end users. Vendor partnership is an essential
element in the success of the operations.
Stores management- The way it is done today should be reworked to support the
discount store concept. Manpower deployment at sales assistant level should be different
for different categories of goods. Here assortment of goods will become important based
on the size of the store. Effective category management will have to be incorporated in
retailing.
Display inside the store should be more self-explanatory which will guide the
customer for his buying decision. Price tags should be pasted depending on the
commodity so that they are visible irrespective of category of merchandise.
There are currently very few stores with stock - clearance programmes. They will
have to have the stock clearance of merchandise aged more than “n” Days.
205
Another best practice that needs to be present is sharing profits with the customer.
Customer participation in business can be introduced by way of customer loyalty
programme. This action will push the sales and over a period of time.
Innovation in terms of schemes and continuous introduction of best, latest
products and Brands at Customer Participation Price should be offered. The Vendor
could contribute part of this sharing. As off take increases vendor can offer turnover
discount, which will create a win-win situation for all - Vendor, Retailer & Consumer /
Customer.
Our country has major cultural diversity including diverse traditions and
practices, apart from language problems. Retail involves dealing with the local
consumers in a manner appropriate to their culture and traditions, and invariably in the
local languages. Local competitors who have strong hold in their respective markets
have to be reckoned with. Winning over their loyal customers will be necessary to build
a market share in each market.
In a similar way, it would be necessary to build a rapport with the local
authorities. Their support and co-operation is important for successfully entering and
developing business in the new market.
Organized retail is poised to grow at an astronomical pace over next few years. It
becomes crucial for retailers to identify and differentiate themselves on one or more
value-centric attributes that will provide them with long-term competitive advantage.
206
Retailers must adopt a phased approach when developing their customer analytics
capabilities.
Retailers need to look beyond the accepted methods of data collection and
analysis. Once retailers have identified the necessary customer data, defined and
implemented appropriate retail technology and analyzed the data for valuable insights,
they can create a competitive advantage that will directly improve both sales and margin.
To win consumer loyalties high quality of goods and services are to be offered.
Retailers must be capable of adapting to new situations in the market by
responding to changes in the environment by having innovative business models. This
will enable them to earn stable profits during different stages of the economy.
With the retail market size, increase in consumption expenditures as well as retail
sales, the opportunities for the retailer and consumer are immense. The sector‟s growth
potential is further reflected by the share of organized retail which forms 4% of the
country‟s retail industry.
Some distinctive trends are likely to emerge on the retail scenario. Domestic
retailers and mall developers will be moving into the smaller towns and cities in order to
respond to the growing consumers markets there and to capture the rising demand for
branded products.
Last but not the least, the market for luxury retail will gain critical mass and this
segment will witness substantial growth in the next few years. However, to enable this
sector to realize its full potential Foreign Direct Investments (FDI) restrictions in retail
207
will have to be relaxed further and retail rentals will need to undergo some degree of
rationalization
Personal Shopping Service
One of the key successes of the unorganized kirana stores is the home delivery
system. The very same practice can be successfully implemented in the organized retail
outlets also. This will increase customer loyalty and continued patronage for the store.
Utility/Help Desk
After the introduction of IT system it has become easier to pay dues to the
government in the form of taxes, LIC premium through internet and mobile. But still
some people continue to make payments for the above manually. A help desk manned by
an NGO to collect payments for utilities and water tax would offer tremendous value to
customers. This facility can be extended to ticket bookings also.
Value-Added Range
The immediate example that can be quoted under this category is the „Ready to
Eat‟ range of food products that are now available in some of the supermarkets. Apart
from offering immense convenience to customers, it generates much higher margins.
Darning/Tailoring/Alteration
In spite of readymade apparel having made inroads into most of our wardrobes,
there is still need for tailoring services. This service can be given to the customers
visiting an organized retail store also thereby enhancing its reputation. The actual work
need not be done at the store, thereby reducing the space required to its bare minimum.
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Product Hiring Service
This is done by most Retailers abroad and usually covers cutlery and crockery. A
similar service might find takers who would appreciate the convenience of just hiring
instead of having to purchase such items. Again, this is something that can be actually
offered by a third party, using the store as a connection point.
Service Support for Home Appliances
Several corporate retailers also have an electronic store format in their portfolio
and offer in-house service for electronics and electrical products. Help desks can be
installed in the supermarkets which would act as a collection and delivery points for
anyone wanting to avail of the service. One of the most common requirements of our
customers is the service/repair of the pressure cooker. This work can be undertaken by
the organized retailers also.
Connection Point for Domestic Help
Most hardware stores have a resident plumber, carpenter or electrician. They
sustain each other‟s business by purchasing from that store; the store could also refer
these people if there is any enquiry for work. In today‟s context, where domestic help is
hard to find, the neighborhood store can function as a connection point for the same.
Today there are agencies which offer to find and send such resources. A representative of
such an agency may be deployed at the store.
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Community Message Board
A soft board may be displayed in every store where customers can post simple
personal notes. The messages would be about sale of vehicles, homes for rent, tuition, pet
wanted, old guitar for sale etc.
Jumble Sales
Most of the customers have loads of things which they never use. A monthly
jumble sales organized in association with an NGO would provide yet another
opportunity for customers to get such things out of their homes. A part of the sales
proceeds could be donated to the needy. Customers could register their names to
participate by paying a nominal fee, which would take care of the organizational
expenses if any.
Overview of Basic Retail Concepts to Maximize the Returns
Conventional store owners are masters of Retailing. It is in their blood.
However, what they know is typically word of mouth knowledge which is based on past
experiences. The world and market place to day is changing and changing very fast. In
that context, these shop owners should attend some Retail training Programmes which
teaches the basics of assortment planning, store profitability, etc. Coupled with their
native wisdom, this conceptual knowledge would give them the edge to be more
competitive as also might open their minds to experimenting with some of the ideas from
the training programme.
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Explore Other Formats
Most of the corporate Retail in has adopted existing western models like
supermarkets, hypermarkets, etc. Also, real estate, density of population, lifestyle, etc.
are different and might be served better through differentiated formats. An example is
from the fast-food industry. Some of the pizza chains typically has a dine in restaurant
where one sits down and enjoys meal, while it also has a tele-ordering mechanism as
also a small outlet for takeaways only.
Corporate retail is only now experimenting with online shopping as an extension
of physical stores. But, some different physical formats like a store that sells mainly
damaged goods at steep discount can be experimented.
The implementation of the suggestions by the concerned authorities will go a long way in
improving the retail sector in the days to come.
CONCLUSIONS
After undertaking an in-depth study on the topic “Emerging Trends in Chennai
Retailing”, the following conclusions are arrived at:-
There is huge potential for organized retail.
Retail outlets exist in all shapes and sizes - from a “panwala” to a Shoppers‟ Stop.
However, most of these outlets are basic mom-and-pop stores - the traditional
“kirana” shops in the locality, which are smaller than 500 sq. ft. in area with very
basic offerings, fixed prices, zero use of technology, and little or no ambience.
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The well-known consultancy firm, Technopak has listed ten retail trends in their
recent report entitled Retail Outlook 2007. Technopak says that there is bound
to be an unprecedented investment over the coming five years.
Modern retail will grow but traditional retail will survive – both of them will
co-exist.
Consumption will shift to lifestyle categories - consumers shifting evaluation
from MRP to EMI.
New retail formats will emerge and grow. There will be an investment surge in
forecourt retailing and the country will witness the growth of super-specialty
formats.
Modern retail will witness enhanced private equity infusion.
There will be creation of large retailer brands (private labels). „Own label‟
branding trend will be on the rise, particularly in groceries, home care and
clothing. This will provide better profit margin advantage to retailers
There will be interplay between retailers & suppliers – branded firms will
collaborate with top retailers
New investments will happen in the back-end areas. There will be enhanced focus
on improving the supply chain, storage and display.
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Modern retail will benefit consumers and rural sector. Rural retailing formats
will ensure quality goods, easy accessibility and low rates. Monthly shopping bill
of the consumers will reduce by at least 10%
Consolidation will increase in the retail sector.
In addition to basic infrastructure like parking, real estate etc. would require
additional investments. However, given the nascent stage of the industry, most of
these investments will be in the form of equity.
In recent years, this sector has witnessed a lot of interest from both domestic and
global players, which will lead to increase in the share of modern retail from the
current 4.5 per cent to almost 25 per cent of the total retail market by 2018.
Modern retail will continue to grow since the long term fundamentals of the
Indian economy are still strong. Therefore, the fundamentals still support the
case for modern retail in India and there is no reason to believe that retailers will
not to continue to invest and expand as planned in the coming years.
On the operations front, the players are now starting global retail practices.
However it would take sometime before the players are able to bring their supply
chain infrastructure in line with the world-class standards to maximize benefit.
Besides the retailer would need to do substantial works on the front end of their
business models, which involve implementation of practices and processes for
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efficient customer management techniques and linking them to the merchandize
and supply chain planning systems of the company.
Retailers have realized that it is more important to focus on the basics and get
them right first. Accurate inventory control is the main requirement of an
enterprise retail system. Overall IT expenses in retail are on the rise and some
retailers are now looking beyond basic applications to higher levels of IT
functionalities.
Evidently, retail is one of the hottest industries both in India and in Chennai. The
changing profile of the consumer combined with the fresh interest displayed by
developers and retailers has meant the entry of new formats in the industry.
Retailers and developers are rushing to setup retail cum leisure destinations,
which bundle several options into a single offering to give customers what they
want. Apart from the metros smaller cities too are witnessing intense property
development.
The growing emphasis on retail IT among both the established and the new
players becomes evident from the fact that a large number of retailers are now
indicating increase in their IT budgets.
FDI will also enter retail sector in the very near future.
Current players are maturing, and new entrants are learning from their
experience. As of now major investments are on-hold awaiting a trigger e.g.
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financial success of some of the current icons, FDI permission for the sector,
real estate law reforms, grant of industry status etc. will further boost retailing.
Supply side constraints are showing sign of easing – next 5 years should see
substantial improvement.
Overall, in Indian scenario Retail would be one of the best 5 Business Sectors in
this Decade.
Kirana’s will continue to co-exist, along with organized retailers. They should
focus on value-added services, longer hours, innovative solutions that offer
convenience, etc.
Online transactions should start seeing a boom. People have moved onto the
online booking space with regard to travel and hotel bookings. This comfort level
coupled with stricter authentication measures by credit card companies would
make consumers open to online shopping. This is an excellent opportunity for
retailers to move into the online space.
Several allied and related value offerings are bound to start and some are already
around. Personal shoppers are sites that compare prices and consolidate offers
from various retailers. Similarly retail training institutes, logistics service
providers, housekeeping business etc. would also grow and thrive.
.
Initially, the corporate retail focus was on expansion and then with the downturn
it moved to consolidation, cost control and profitability. A very important
215
perspective is not yet on the radar of Indian retail, which are Green retail or eco-
friendly initiatives by retailers.
Similarly, there are innumerable other opportunity areas with regard to green
retail. Corporate retailers would wake up to this potential when they realize that
there is an opportunity to improve profitability by doing such initiatives and
thereby earning carbon credits. A few top of the mind ideas to explore are solar
panels for power generation, electric vehicles for neighbourhood delivery, gas kits
for the delivery trucks and recycling initiatives.
At least in the growing urban markets, the shift towards DIY and space-saving
products would start. Retailers who cater to this niche would stand to gain.
However, DIY cannot be a straight import as understood in the developed
countries. The Indian DIY would have to be structured keeping in mind the Indian
consumers.
All in all, it promises to be a great and exciting journey with tremendous learning
as also hard work.
A few clues can be taken from other emerging markets, where retail industry has
taken shape in the last couples of decades. Study of other emerging markets
shows that it takes 10-12 years for the organized industry to achieve 10 percent to
12 percent market share. Most of the emerging markets like Thailand, Indonesia,
Malaysia, which saw an emergence of organized retail in the 1980s, have now
achieved between 20 percent to 40 percent market shares. However, for India to
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achieve a similar level of penetration, it would have to overcome key roadblocks
like lack of FDI approval, complex taxation and infrastructure bottlenecks.
While some of these hurdles are easy to remove, others are politically sensitive
issues. And might take several years to get addressed. As a result, it is believed
that growth in the organized retailing in India might not be as rapid as seen in
other emerging markets. This would mean that the industry would continue to
remain in an investment stage for longer time compared to other emerging
markets.
A tremendous opportunity exists in the Indian market and organized retail will
prevail as in other parts of the world. It is only a matter of time before that
happens and it is probably closer than what we are imaging. This is the right time
to invest and continue investing in the business. Profits may come in only after 5
or 7 years but that‟s the way this industry operates and unlike some of the other
sectors, this is not a business to make profits from day one. But when it‟s setup,
its solid profits and nothing illusionary.
Indian retailers have been expanding swiftly in the last couple of years. There are
already seven retailers with more than 500 outlets in the country.
Earlier, most modern retail was targeted at upper middle/upper class of
consumers. Toady, more broad-based formats are being planned. Technopark
estimates, that in 2003, modern retail targeted hardly one per cent of the Indian
217
population. This has grown to about 7-8 per cent of the population now and is
expected to reach at least 40 – 50 per cent in the next five years.
Table 6.1
The future of organized retailing
2003 (in %) 2008 (in %) 2013 (in 5)
F & G 12.0 17 48
Misc. 22.0 15 13
Apparel 38.0 34 12
CDIT 9.0 9 11
Home
Improvement
2.0 2 8
Furniture 2.0 3 3
Footwear 7.0 9 2
Jewellery &
Watches
5.0 7 2
Pharmacy 3.0 4 1
Total 100 100 100
Source Technopak Research
Modern retail has now also expanded beyond the top 8 – 10 cities. It has now
already spread to almost 60 -70 cities of the country and is expected to reach
about 500 – 600 towns/rural hubs in the coming years.
More consumer goods companies are also now vertically integrating by setting up
their own retail channels. Having accumulated a wealth of consumer knowledge
over the years, they have come to realize that there is no better place to influence
218
the consumer than at the point-of-sale. This helps them not only in building brand
loyalty, but also, in gathering valuable consumer data to spot consumer trends.
In recent years, more retailers are looking at partnering with global players.
which helps them reach out to consumers with well-known brands. This helps
Indian retailers in introducing formats which are currently not there in their
portfolio and also allows them access to the best global practices in sourcing,
store operations, merchandising etc.
In the last few years we have also seen some mergers and acquisitions taking
place in the retail sector. Initially, companies looking at entering retail were
acquiring existing regional retailers to get valuable operational understanding of
the sector. Of late, consolidation is also taking place, with retailers seeking
acquisitions as a route for expansion or diversification to newer geographies and
categories.
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Diagram - 6.1
Indian Retail Growth across years
300
0
2,45
0
250
0
200
0
1,70
5
150
0
1,16
1
100
0
78
3
86
0
28
0
41
0
61
5
22
0
500 8
1
8
11
0
2003 2008 2013 2018
Modern Retail Retail GDP
Source: Techno Park Research
The mantra for the retailers, behind this would this be:-
“The customer is the most important visitor on our premises. He is not
dependent on us. We are dependent on him. He is not an interruption in our
work. He is the purpose for it. He is not an outsider in our business. He is part
of it. We are not doing him a favour by serving him. He is doing us a favour by
giving us opportunity to do so”
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