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Chapter-1
Introduction
2
1.1 Introduction To Retailing
Retailing consists of all business activities that involve in selling goods and services
to the final customer for personal and household use without any intention to resale.
Retailing has evolved globally into a high-tech business. Global Retail companies like
Wal-Mart have already topped fortune 500 companies in turnover. At the same time,
customers are gradually getting more quality conscious and preferring shopping in a
better environment. As the preferences of customer are changing, new business
opportunities are also coming up in retailing. This also gives rise to new areas of
study in retailing e.g. „Shopper buying behaviour‟ that retailers can use while making
shopper targeting strategy. Shopper is an individual who visits the retail outlet to
purchase merchandise unlike the consumer who uses the product. Many researchers
have studied consumer buying behaviour, but shopper behaviour is still a less
explored area. Shopper plays a critical role in retailing while developing target market
strategy.
Retailing can be defined as the last stage in a channel of distribution of goods and
services to end-users. So, retailers are the final businesses in distribution channel that
link manufacturers, wholesalers, other suppliers and the final consumers. A typical
distribution channel is shown in figure 1.1.
Distribution Channel:
Fig: 1.1
Source: Berman, B. and Evans, J., Retail Management, pp. 9
Often it is thought that retailing deals with the sale of tangible goods in stores.
However, retailing also involves sales of services. It does not have to involve a store.
Different services like stay in a hotel, haircut, a videotape rental, car rental, airline
travel etc. where service becomes a shopper‟s primary purchase also fall under the
purview of retail. Web transactions and vending machine sales also come under the
scope of retail. Examples of non-store retailing can be sales through internet, direct
sales and catalogue sales. Moreover, retailing does not have to involve an exclusive
retailer. Manufacturers, importers, wholesalers can act as retailers if they directly sell
Manufacturer Wholesaler
Retailer
Final
Cust
omer
3
the goods or services to the final consumer (e.g. Sony Center, Nokia Show Room
etc.). However, purchases made by manufacturers for their uses inside the
organization don‟t constitute part of the retailing.
1.1.1 Special Characteristic of Retailing
There are some special characteristics of retailer that distinguishes retailing from
all other type of Business. These can be small average sale, more impulse
purchases and maintaining store image that together influence the retailer‟s
strategy (fig-1.2)
Special Characteristics affecting Retailers:
Fig-1.2 Source: Berman, B. and Evans, J., Retail Management, pp. 12
The average sales transaction for a retailer is much less than for manufacturers.
The final consumers make many unplanned purchases compared to those who buy
for resale (wholesalers) or use in manufacturing products or running a business that
are much more systematic and planned. The customers for a retailer are mostly
drawn from a particular area (trade area) that is comparatively much smaller than
the trade area of a wholesaler or a brand owner.
The average sale per transaction (per trip of a particular customer) is much smaller.
These low amounts create a need for tight control on all sorts of cost associated
with each transaction like credit verification, sales personnel, bagging etc.
Small average sale
per transaction
Impulse purchase
Store Image
Retailer‟s
strategy
4
Moreover, it becomes more important for a retailer to entice the customers to visit
the outlet more and more. To maximize the number of customers drawn to the
outlet, the retailer puts special emphasis on ads and special promotions and tries to
increase impulse sales by visual merchandising and more aggressive selling. In
addition, small transactions bring new problems in retailing; demand forecasting,
inventory management and merchandising are often difficult for retailers because
of many small scale transactions to a large number of customers and rapidly
changing life style and preference of customers. A typical supermarket has 6000 to
7000 customer transactions per week and this makes harder for retailers to monitor
the existing stock and determine the popularity of various brands, sizes and prices
of merchandise. This needs computerized inventory and demand forecasting
systems. At the same time not all footfalls lead to transactions. So it necessitates
converting shoppers to actual buyers by different merchandising techniques.
A large percentage of customers don‟t have a shopping list before going to
shopping mall and also make purchases that are fully unplanned. This makes retail
sales often unplanned or impulse purchases. This sort of customer behaviour
indicates the value of point of purchase displays, attractive store layouts, well-
organized visual merchandising etc. Items like chocolates, snack foods, magazine,
ice cream, cosmetics can be sold as impulse goods if placed in high visible and
high traffic areas. Since, customers buy so many goods and services in an
unplanned manner, the retailer‟s ability to forecast, budget, order merchandise and
allocate right number of manpower on the selling floor becomes critical.
Store based retailers cater to the need of people from a particular location only
(unlike for a brand owner, where their customers are spread throughout the nation).
So, the retailer has to invest money to establish his brand in that particular area, as
the product or services, the outlet deals with may be available in other outlets also.
So, store location becomes quite critical for a retailer to ensure adequate footfall.
1.1.2 Functions performed by a Retailer
In a distribution channel retailers play a key role as the contact between
manufacturers, distributors, wholesalers, and other suppliers and the final
5
consumers. Retailers undertake all the business activity and perform the function
that adds value to the products and services to consumers.
Providing a large assortment of products and services
Holding the inventory
Breaking the bulk
Providing services that manufactures can‟t
Many manufacturers make only one or few basic type of items and sell their entire
inventory to few buyers (distributors or wholesalers). But the final consumers want
to choose from a variety of goods and services if they purchase a limited quantity.
So retailers collect an assortment of goods and services from various sources in
large quantities and offer them in small quantities to end consumers. This is called
sorting process (fig-1.3).
Sorting Process in Retailing:
Fig: 1.3 Source: Berman, B. and Evans, J., Retail Management, pp. 9
Manufacturer
Brand A
Manufacturer
Brand B
Manufacturer
Brand C
Manufacturer
Brand D
Manufacturer
Brand E
Manufacturer
Brand F
Wholesaler
Wholesaler
Wholesaler
R
E
T
A
I
L
E
R
Brand A
Customers
Brand B
Customers
Brand C
Customers
Brand D
Customers
Brand F
Customers
Brand E
Customers
6
To reduce transportation cost, manufacturers and wholesalers ship big volumes of
merchandise to retailers. Retailers then offer the product in smaller quantities
tailored to individual customer‟s needs and as per household consumption patterns.
This is called Breaking the bulk.
Holding Inventory: Retailers keep a huge amount of inventory so that products
will be available to the consumers whenever they want them. This enables
consumers to maintain a low level of inventory, as they know that the product is
available with the retailer all the time. So, retailers store products on behalf of the
customers and it reduces the storing cost of the customers. Apart from that retailers
provide various services to customers as well as to manufacturers. Retailers
provide credit to customers, display products, and provide information and help
customers purchase products. Retailers communicate both with customers and
manufacturers. Shoppers learn about availability and characteristic of goods and
services from ads, sales people and displays. Manufacturers, wholesalers get
informed about forecasts, customer preferences, delivery delays, customer
complaints etc. by the retailers. So, retailers act as a conduit between the original
manufacturer and end consumer in providing feedback to the manufacturer and
information on products to the consumer. Apart from that for small manufacturers
and wholesalers, retailers assist in transportation, storing, marketing and
advertising their products. In addition, retailers also provide additional customer
services as gift-wrapping, delivery and installation to customers.
Retailing is the last step of any distribution system that connects the end user and
the channel. Retailing acts as a two way communication between the consumers
and brand owners. However, the role of retailer and activities at the point of
Purchase has come out to be critically influential on shoppers because of the
evolution of modern formats of organised retailing. Shoppers have now more
choice in terms of retail outlets. At the same time they are bombarded with
multiple choices of product categories and variants. This is leading to shift in
buying behaviour of shoppers and the intention for shopping are gradually
changing from merely need based to hedonistic and impulsive.
1.1.3 Decision Process in Retailing
The very first step in retail decision process is to understand the retailing concept.
7
Retailing concept is a management orientation that focuses a retailer on
determining its target market‟s needs and satisfying those needs more effectively
and efficiently than its competitors. The retail strategy indicates how the retailer
plans to focus its resources to accomplish its objectives, which start with the
identification of the opportunities and deciding the market to enter. It defines: First
the target market towards which the retailer should direct its efforts (understanding
the shoppers‟ profile and their expectation and the competition in the said
category), 2nd the nature of the merchandise and services, the retailer will provide
considering the needs of the target market and finally how to build a long term
advantage over all competitors (sustainable value proposition). The retail Value
Proposition consists of:
Merchandise you offer (category of merchandise, items, brands etc.)
Supply chain strategy to make logistics costs lower and transfer the value
add to the customer in reducing prices, quick delivery etc.
Retail location, proper site selection
Having the optimum Lay out to help customers shop in favoured ambience
Promotion
Competitive Pricing
HR: managing the store employee to provide the best customer service
The key strategic decision areas in retailing strategy are:
1. Retail market strategy
2. Retail Financial strategy
3. Retail location
4. Site selection
5. Merchandising
6. Organizational structure and Human resource management
7. Supply chain management
8. Handling information systems
8
To implement the retail strategy, the retailer develops a retail mix that satisfies the
needs of the target market better than the competitors. The various elements in
retail mix include the type of merchandise and services offered, merchandising
pricing, advertising and promotional programmes, store designing, merchandise
display, assistance to customers and convenience of the store location.
The retail strategy boils down to merchandise management and Store management.
Merchandise management consists of:
Planning merchandise assortments
Organizing Buying systems
Buying merchandise
Pricing
Retail Communication Mix
Store management consists of:
Managing the store
Store layout, design and visual merchandise
Providing Customer services
1.2 Global Retail Scenario
Retail has played a major role world over in increasing productivity across a wide
range of consumer goods and services. The impact can be best seen in countries like
USA, UK, Mexico, Thailand and more recently China. Economies of countries like
Singapore, Malaysia, Hong Kong, Sri Lanka and Dubai are also heavily assisted by
the retail sector. In 1990, there was not a single retailer in the fortune 500 companies,
now there are close to 50 and Wal-Mart is the largest of all companies. At the same
time, the share of organised retailing has increased over past few years (table-1.1).
Retail is the second-largest industry in the United States both in number of
establishments and number of employees. It is also one of the largest worldwide. The
retail industry employs more than 22 million Americans and generates more than $3
9
trillion in retail sale annually. Wal-Mart is the world‟s largest retailer and the world‟s
largest employer with over 1million associates. Wal-Mart has become the most
successful retail brand in the world due its ability to leverage size, market clout, and
efficiency to create market dominance.
Global Retail Industry:
1999 2002 2005
Total Retail 150 180 225
Organised Retail(US
$ billion) 1.1 3.3 7
%share of organised
Retail 0.7 1.8 3.2
Table-1.1 Source: CSO, MGI Study
The latter half of the 20th
Century, in both Europe and North America, has seen the
emergence of the supermarket as the dominant grocery retail form. The search for
convenience in food shopping and consumption, coupled to car ownership, led to the
birth of the supermarket. As incomes rose and shoppers sought both convenience and
new tastes and stimulation, supermarkets were able to expand the products offered.
The invention of the bar code allowed a store to manage thousands of items and their
prices and led to 'just-in-time' store replenishment and the ability to carry tens of
thousands of individual items. Computer-operated depots and logistical systems
integrated store replenishment with consumer demand in a single electronic system.
This has led to many more modern formats of retailing.
On the Global Retail Stage, little has remained the same over the last decade. The
global economy has changed, consumer demand has shifted, and retailers‟ operating
systems today are infused with far more technology than was the case few years ago.
Saturated home markets, fierce competition and restrictive legislation have
relentlessly pushed major food retailers into the globalization mode. Since the mid-
1990s, numerous governments have opened up their economies as well, to the free
markets and foreign investment that has been a plus for many a retailer. However, a
more near-term concern has been the global economic slowdown that has resulted
from dramatic cutback in corporate IT and other types of capital spending. Consumers
10
themselves have become much more price sensitive and conservative in their buying,
particularly in the more advanced economies.
From an operational point of view organized retailing has given rise to few concerns:
deflation, lack of pricing power, global over-capacity, low interest rates, economic
stagnation, etc. But the global economic slowdown forced retailers into monitoring
costs more effectively. Technology has become the real enabler for retailers over the
last few years leading to cost control and supply chain innovations. There are few
positive forces also at work in retail consumer markets, that include high rates of
personal expenditures, low interest rates, low unemployment that are expected to give
fillip to the modern formats of retailing.
The global retail industry has traveled a long way from a small beginning to an
industry where the world wide retail sales alone were at $ 7 trillion1 and has gone up
to $12 trillion in 2010. The top 200 retailers alone account for 30% of worldwide
demand. Retail sales being generally driven by people‟s ability (disposable income)
and willingness (consumer confidence) to buy, compliments the fact that the money
spent on household consumption worldwide keep on increasing year on year. The
leader in retailing has in-disputably been the USA where some two-thirds of
American economy is consumer spending. About 40% of that is spending on
discretionary products and services. Coming to Europe, retail turnover in the EU is
approximately Euros 4000 billion and the sector average growth looks to be following
an upward pattern. The Food Retail Industry in the Far East has evolved into what
could be called „the breeding ground‟ for emerging models with countries like
Singapore being the home to some of the big players in the industry in these parts of
the world. The presence of all the major players of the retailing industry is found in
Singapore. Singapore is dominated by 2 hypermarkets, one run by Carrefour and the
other by Giant Hypermarket, part of Dairy Farm International. There are more than
11,000 market stalls operating in 150 markets located all across Singapore Island. The
markets further spread to China, Thailand, and Malaysia; thanks to the major support
that the local governments provided in creating the necessary regulatory framework in
establishing their presence. Singapore, Malaysia and Thailand not only fuelled the
retail industry within the country, but also attracted hordes of tourists to experience
1 Source:2010 Global Retail Report, Deloitte Touche Tohmatsu
11
the shopping “experiences” that they created in these islands. The markets are now
saturated with no additional space for a new entrant and are getting consolidated
gradually.
Apart from Singapore, which is a more recent development, Japan enjoys an active
spot on the retailers‟ map. The retail industry is as huge as US$ 1088 Billion, with a
split of US$ 594.8 Billion in the non-food segment and US$ 493.2 Billion in the food-
retailing sector. The leaders in sales in Japan are Ito-Yokado, Aeon, Daiei and
Takashimay. Several retailers, however, have made recent improvements in their
warehousing and distribution technologies to make their presence felt in the Japanese
market. Convenience stores, which are small and suitable in a country where land is
very expensive, continue to do well. Food, in fact, has been one of the few sectors that
have experienced growth over the last several years. In China, the retail markets have
mushroomed over the years of intense economic development to a very considerable
size. The total volume of retail sales for consumer goods and food increased by 10.6
percent in China over the last couple of years which shows tremendous growth.
Consumer spending has held strong. A decade ago, the top five retail enterprises in
China were all traditional merchandise companies, but now the top five are mainly
supermarkets and chain stores. In Indonesia, wet markets and supermarkets have
remained the major distribution channels for food products. In Thailand, the rapid
growth of the economy, particularly during the decade before the financial crisis
began, has led to dramatic changes in the structure of the food-retailing sector.
Modern supermarkets, superstores, hypermarkets and convenience stores developed at
breakneck pace to service the growing middle class with their demand for more
sophisticated food stores and a greater variety of products, many of which were
imported.
Over the years, few retailers have expanded their base and diversified into multiple
countries. The list of top ten Retailers (as per their Turnover) is as below in Table no
1.2.
Top 10 retailers worldwide:
Fortune
Rank
Retailer Revenue $
Million
1 Wal-Mart Stores 287, 989
2 Carrefour Group 90,382
12
3 The Home Depot, Inc 73, 094
4 Metro AG 70, 159
5 Royal Ahold 64, 676
6 The Kroger Co. 56, 434
7 Target Corporation 49, 934
8 COSTCO Wholesale 48, 107
9 Albertson‟s, Inc. 40, 052
10 Aeon 38, 943
Table-1.2 Source: Fortune, July 25, 2005, pgs. 119-139
The global retail sector is supposed to have grown in a phased manner. The organized
retail graduated from traditional mom and pop store. Though there is no substantial
evidence on the evolution of the retail industry, it is assumed that the retail sector
went through the following stages-
Development of retail chains as the retailers sought to increase their buying
power (consumer co-op- national retail chains).
Development of large retail formats- started in Belgium followed by France
and other European companies.
Development of large dedicated distribution systems by the large integrated
retailers- changing stage: traditional wholesaler and cash and carry to the more
integrated supply chain model.
Emergence of retail chains as national brands in their own right- this is in
effect to move from head to head price competition to a differentiation
strategy based on the range, service store format and location.
1.3 Indian Retail Scenario:
It is beyond doubt that Retailing in India is the most attractive sector of this decade.
While the retailing industry itself has been present through history in our country, it is
only the recent past that has witnessed so much dynamism and growth. It's the latest
bandwagon that has witnessed hoards of players leaping onto it. While international
retail store chains have caught the fancy of many travellers abroad, the action was
missing from the Indian business scene, at least till last 5 to 7 years. Among other
13
reasons the importance of retailing is its impact on the economy, its function in
distribution and relationships with firms selling goods and services to retailers for
resale. Moreover, after agriculture, the retail sector is the largest employer in India. In
addition to that, retail sector gives unique career opportunities and business
opportunities to the budding literate class of India.
Retailing, one of the largest sectors in the Indian economy, is still going through a
transition phase. For a long time, the corner grocery store was the only choice
available to the consumer, especially in the urban areas. This is slowly giving way to
new formats of retailing. The traditional food and grocery segment has seen the
emergence of supermarkets/grocery chains (Spenser‟s, Nilgiris, Reliance Fresh, More,
Star Bazaar) and fast-food chains (McDonalds, Dominos). The non-food segment has
also forayed into a variety of new sectors. These include lifestyle/fashion segments
(Shoppers' Stop, Globus, LifeStyle, Westside), apparel/accessories (Pantaloon, Levis,
Reebok), books/music/gifts (Archies, MusicWorld, Crosswords, Landmark),
appliances and consumer durables (Godrej Interio, Viveks), drugs and pharmacy
(Health and Glow, Apollo).
1.3.1 Indian Retail Segments:
In India, the organised retailing is making its presence felt, the share of organised
retailing has increased from 3% to 5.9% from 2004 to 2007 and to 8% in 2010.
Share of Organised Retail in total Indian Retail Market:
Retail Segment 2004 2005 2006 2007
Clothing, Textiles & Fashion
Accessories
13.60% 15.80% 18.90% 22.70%
Jewellery 2.00% 2.30% 2.80% 3.30%
Watches 39.60% 43.50% 45.60% 48.90%
Footwear 25.00% 30.30% 37.80% 48.40%
Health & Beauty Care Services 6.00% 7.60% 10.60% 14.30%
Pharmaceuticals 1.80% 2.20% 2.60% 3.20%
Consumer Durables, Home 7.80% 8.80% 10.40% 12.30%
14
Appliances/equipments
Mobile handsets. Accessories &
Services
6.50% 7.00% 8.00% 9.90%
Furnishings, Utensils, Furniture-
Home & Office
6.70% 7.60% 9.10% 11.00%
Food & Grocery 0.50% 0.60% 0.80% 1.10%
Out-of-Home Food (Catering)
Services
5.70% 5.80% 6.90% 8.00%
Books, Music & Gifts 9.80% 11.70% 12.60% 13.40%
Entertainment 2.60% 3.30% 4.10% 5.30%
TOTAL 3.00% 3.60% 4.60% 5.90%
Table- 1.3 Source: F& R Research, 2009
2In the overall Retail pie, Food and Grocery is the dominant category with 59.5 per
cent share, valued at Rs.792,000 crore, followed by Clothing and Accessories with a
9.9 per cent share at Rs.131,300 crore. Interestingly, out-of-home food (catering)
services (Rs.71,300 crore) has overtaken Jewellery (Rs.69,400 crore) to become the
third largest retail category, with a 5.4 per cent market share.
Consumer durables (Rs.57,500 crore) is the fifth largest retail category followed by
Health & Pharmaceuticals (Rs.48,800 crore), Entertainment (Rs.45,600 crore),
Furniture, Furnishings & Kitchenware (Rs.45,500 crore), Mobiles & Accessories
(Rs.27,200 crore), Leisure retail (Rs.16,400 crore), Footwear (Rs.16,000 crore),
Health & Beauty Care services (Rs.4,600 crore) and Watches & Eyewear (Rs.4,400
crore) in the order.
In the Organised retail segment, the picture is different altogether. Clothing & Fashion
Accessories is the largest category with 38.1 per cent of the market share, valued at
Rs.29,800 crore, followed by Food & Grocery accounting for 11.5 per cent of the
organised retail market at Rs.9,000 crore , Footwear with 9.9 per cent of the organised
retail market share at Rs.7,750 crore, Consumer Durables with 9.1 per cent market
share at the fourth place (Rs.7,100 crore), and Out-of-home food (catering) services
and Furniture, Furnishings & Kitchenware retail in the order.
2 India Retail Report 2009 by IMAGES F&R Research
15
India‟s biggest USP and asset base is its youthful population, whose appetite for
leisure and entertainment is galloping at 14 per cent p.a. With the rapid addition of
malls with multiplexes, there is a coming together of leisure retail, cinema and
gaming. It is indeed difficult to analyze each of these components in isolation. All
players are after all trying to get to capture a share of consumer‟s mind – his time and
money. As the consumer‟s spend on leisure and entertainment increases, the mix of
his spends is going through a churn like never before. The affluence across the
country has touched a large part of the population. Multiplexes, leisure retailers across
books, music, gaming all form a shared existence and whilst the shares of the pie keep
shifting the overall leisure and entertainment business is well on its way to become
big in future.
In the organized retail segment, however, the fastest growth has been recorded in the
health & beauty care services category (Rs.660 crore), which is expected to be
growing at 65%. The second fastest growing organised retail category is that of
Entertainment (53.8%), followed by the mobile phones & accessories and the food &
grocery retail categories.
At constant prices, growth in the fashion & accessories retail category, both in the
overall market and the organised retail segment, have been consistently positive since
2004: while the overall market is growing at 12.8 per cent, the organised segment is
growing at 35.5 per cent.
The overall market growth in the timewear category is declining over the years.
Popularity of mobile phones is to a large extent responsible for the dampening of the
overall market growth in this category while the renewed enthusiasm in the organised
segment is on account of the fillip from luxury brands and offerings that are
positioned more as a hi-end lifestyle statement than on the functionality aspect of the
product.
Footwear retail, the overall market as well as its organised segment, has been growing
faster year after year. The global brands have actually turned the heat on, and the
domestic brands too appear to have accepted the challenge in the true spirit.
Growth in the health and beauty care category has been remarkable. The demand is
stupendous but organised players have hardly much to boast of in terms of innovative
concepts and global standards when it comes to providing the customers with an
experience that is superior and radically different from what the unorganized segment
offers. This category needs to be positioned as a “wellness” category that provides
16
individualized services to customers with synergies of health & beauty care,
pharmaceuticals and specialized clinical services – all at one place.
Another category that merits special mention is Furnishings and Furniture retail,
where the overall market is growing at seven per cent, the organised segment is
showing a growth rate of 29.7 %, but this Rs.45,500 crore category calls for better
attention from organised players. Global players need to understand that Indian homes
are different and so are the Indian environments, maintenance standards. At present
most large players entering this segment are busy experimenting and in the process
have lost monies too.
Consumer durables and the mobile phone & accessories categories have both grown
in recent years. At constant prices, the overall food & grocery retail market is showing
single digit growth rate, but the organised retail segment in this category is growing at
more than 30% growth rate. Valued at Rs.9,000 crore, this organised market
constitutes barely 1.1 per cent of the total food & grocery retail market.
Timewear (48.9%) and Footwear (48.4%) are the most organised of all retail
categories. Clothing & fashion accessories retail comes next with the organised
segment controlling 22.7 per cent of the market.
Food and Grocery, that constitutes the majority of Indian Retail has less space in
organised retailing. However in last few years, Food and Grocery segment has shown
remarkable growth in organised retailing. Apart from Food and Grocery; Mobile
handsets and services and Health and Beauty care services are other two segments
that have shown phenomenal growth in past years (Table no- 1.4)
Indian Retail Market Segmentation (Total and Organised):
Retail Segments 2006
(Total
Retail
Market)
2007(Tota
l Retail
Market)
Gro
wth
2007
>
2006
(%)
2006
(Organ
ized
Retail
Marke
t)
2007
(organ
ized
Retail
market
)
Grow
th
2007
>
2006
(%)
Clothing, Textiles &
Fashion Accessories
113,500 131,300 15.7 21,400 29,800 39.3
17
Jewellery 60,200 69,400 15.3 1,680 2,300 36.9
Watches 3,950 4,400 11.4 1,800 2,150 19.4
Footwear 13,750 16,000 16.4 5,200 7,750 49
Health & Beauty Care
Services
3,800 4,600 21.1 400 660 65
Pharmaceuticals 42,200 48,800 15.6 1,100 1,540 40
Consumer Durables,
Home
Appliances/equipment
s
48,100 57,500 19.5 5,000 7,100 42
Mobile handsets.
Accessories &
Services
21,650 27,200 25.6 1,740 2,700 55.2
Furnishings, Utensils,
Furniture-Home
40,650 45,500 11.9 3,700 5,000 35.1
Food & Grocery 743,900 792,000 6.5 5,800 9,000 55.2
Out-of-Home Food
(Catering) Services
57,000 71,300 25.1 3,940 5,700 44.7
Books, Music & Gifts 13,300 16,400 23.3 1,680 2,200 30.9
Entertainment 38,000 45,600 20 1,560 2,400 53.8
TOTAL 1,200,000 1,330,000 10.8 55,000 78,300 42.4
Table- 1.4 Source: F& R Research, 2008
Despite the recent developments, retailing industry unlike in the west is less
structured and organized in India. Organized retailing was an evolution in the West
over more than 50 years where as it can be called as a revolution in India as the
exponential growth has happened in just last 5-7 years. Now, because of availability
of more number of retail formats and malls, customers have got abundance of choice
in relation to selection of a retail store and purchase of merchandise. Assuring quality
product or investment in brand building activities is not enough to acquire new
customers or to retain the existing customers. Customers are bombarded with more
and more options and the customers are confused on what to buy. This often results in
18
customers switching from one brand to the other, or to a substitute product. This
makes customers less „brand loyal‟ and more „variety seekers‟. In this case, product
availability and visual merchandising play critical role. Moreover, visual
merchandising also instrumental in inducing impulse purchase of unplanned
merchandise in customers.
1.3.2 Food and Grocery retailing in India
The research deals with shopper behaviour in supermarkets, that predominantly deal
with food and grocery merchandise. So, it becomes imperative to understand the
present scenario of food and grocery in India. Traditionally commodities like wheat
and sugar was preferred by the Indians to be bought from their neighbourhood stores,
conventionally called the kirana stores. A typical kirana store has a retail area of 200
sq ft and sells 500 to 800 stock keeping units (SKUs). The kirana stores used to focus
on dry food products because the infrastructure for cold storage was lacking. Thus,
inventory was a problem. There are huge risks of food getting spoiled and thus letting
out an impression of the place giving out unhygienic products.
Initially, the modern food retail format was seen in A-Class or tier I cities like
Mumbai, Delhi and Chennai. Mumbai began with, „Apna Bazaar‟ and Delhi with,
„Kendriya Bhandar‟. Escorts group in the late eighties diversified into non-auto
sectors by getting into food retailing. The first visible sign of the change in food
retailing was seen in mid-eighties. Around that time a few new food stores were set up
in all metro cities in India. Calcutta was the only exception where it started a little
later. At that time couple of leading food stores started operating such as "Morning
Stores" and "Modern Stores" in Delhi, "Nilgiri" in Bangalore, “Food Land" in
Mumbai, "Spencers Food Stores" in Chennai. Spencers were the first to tie up with a
Singapore based large retail chain "Dairyland" to set up the food stores in Chennai. In
Mumbai, Garware group during the late eighties had set up a large food store, which
is now reported to have been closed down.
Until the late 1990s, food retailing has been concentrated in the south of the country.
Southern India has been witnessing revolutionized activity in food retailing. It has
thoroughly experienced the food retailing in various formats such as the supermarkets,
hypermarkets and neighbourhood stores. These include Food World, Subhiksha,
Nilgiris, Margin Free, and Big Bazaar. Since then, however, organised food retailing
has emerged across the country, inspired by the presence of high potential markets in
19
the north, west and east as well as the success of some non-food retailers and food
services companies in these regions. Table no. 1.5 below mentions different grocery
retailers in India.
Top Grocery Retailers in India 2008:
Retailer Fascia/s
Market
entry date Format/s
No of
stores
Pantaloon
Retail
Food Bazaar,
Pantaloons,
Big Bazaar,
KB's Fairprice,
Central Mall 2002 S, O, H, D 693
Reliance
Retail*
Reliance
Fresh,
Reliance Mart 2006 C, H 688
RPG
Spencer's
Hyper,
Spencer's 1996 H, S 420
Aditya Birla
Retail
more.for you,
more.
MEGASTORE 1986 S, H 251
Dairy Farm
Foodworld,
Health &
Glow 1999 S, H&B 74
Trent
Star India
Bazaar 2004 H 4
Spar
International Spar 2004 H 3
Shoprite Shoprite 2004 S 1
* Reliance also operates a number of non-food fascias.
Key: S – Supermarkets, H&B – Health & Beauty, H – Hypermarket,
D – Discount, C – Convenience, C & C – Cash & Carry, O – Others
Table: 1.5 Source: IGD estimates, retailers 2008
3Food and grocery (F&G) segment comprises 60 per cent of the $ 270 billion (Rs
1,200,000 crore) Indian retail market. Only one per cent of this segment is in the
organized sector and the organized F&G sector is witnessing a year on- year growth
3 Source: (India Retail Report, 2009)
20
of 30.8 per cent compared to 2.2 per cent growth of the total F&G retail market. This
indicates huge opportunities in organized retail in food segment.
1.3.3 Opportunities in Indian Retail
Favourable demographic and psychographic changes relating to India‟s consumer
class, international exposure, availability of quality retail space, wider availability of
products and brand communication are some of the factors that are driving the retail
in India. Over the last few years, many international retailers have entered the Indian
market on the strength of rising affluence levels of the young Indian population along
with the heightened awareness of global brands, international shopping experiences
and the increased availability of retail real estate space.
Development of India as a sourcing hub will further make India as an attractive retail
opportunity for the global retailers. Retailers like Wal-Mart, GAP, Tesco, JC Penney,
H&M, Karstadt-Quelle, Sears, etc stepping up their sourcing requirements from India
and moving from third-party buying offices to establishing their own wholly owned /
wholly managed sourcing & buying offices shall further make India an attractive
retail opportunity for the global players.
Manufacturers in industries such as FMCG, consumer durables, paints etc are waking
up to the growing clout of the retailers as a shift in bargaining power from the former
to the latter becomes more discernible. Already, a number of manufacturers in India,
in line with trends in developed markets, have set up dedicated units to service the
retail channel. Also, instead of viewing retailers with suspicion, or as a „necessary
evil‟ as was the case earlier, manufacturers are beginning to acknowledge them as
channel members to be partnered with for providing solutions to the end-consumer
more effectively.
Though lucrative opportunities exist across product categories, food and grocery,
nevertheless, presents the most significant potential in the Indian context as consumer
spending is highest on food. Further, „wet groceries‟ i.e. fresh fruits and vegetables is
the most promising segment within food and grocery though initially all retailers
foraying in to this segment had to face had wide spread protest from traders, small
shop keepers.
21
The next level of opportunities in terms of product retail expansion lies in categories
such as apparel, jewellery and accessories, consumer durables, catering services and
home improvement. These sectors have already witnessed the emergence of organized
formats though more players are expected to join the bandwagon. Some of the niche
categories like leisure and entertainment (Books, Music and Gifts in particular) offer
interesting opportunities for the retail players.
Currently the fashion sector in India commands a lion‟s share in the organised retail
pie. This is in line with the retail evolution in other parts of the world, where fashion
led the retail development in the early stages of evolution and was followed by other
categories like Food & Grocery, Durables etc. Fashion across lifestyle categories
makes up for over 50 per cent of organised retail and with the kind of retail space
growth that India is witnessing we can certainly foresee a very healthy prospect for
the fashion industry.
The most important categories for luxury goods are housing, travel, education, higher
end automobiles, electronics and other home improvement products besides fashion,
lifestyle and fine dining. The most important reason for luxury retail not taking off in
India so far has been the lack of luxury retail environment. The presence has been
primarily confined to luxury hotels‟ with shopping plazas.
In nutshell India provides an atmosphere for both luxury and staple merchandise
retailing not only in metros, but also in smaller towns.
1.4 Visual Merchandising
Visual Merchandising (VM) is the activity of promoting the sale of goods, especially
by their presentation in retail outlets4. This includes combining product, environment,
and space into a stimulating and engaging display to encourage the sale of a product
or service. It has become an important element in retailing that is a team effort
involving senior management, architects, merchandising managers, buyers, the visual
merchandising director, designers, and staff. Visual merchandising starts with the
store building itself. The management decides on the store design to reflect the
4 New Oxford Dictionary of English, 1999, Oxford University Press
22
products the store is going to sell and how to create a warm, friendly, and
approachable atmosphere for its potential customers.
In other words, Visual Merchandising is the art of displaying merchandise in a
manner that is appealing to the eyes of the customer. It includes everything that a
customer sees from the time he walks up to, into and through a retail environment.
This is also called Point of Purchase Display. VM is very important to create a lasting
first impression in the minds of the consumers. Customers entering the store are
greatly influenced by the information they gather in the first few seconds after
entering a retail outlet. A successful retailing business requires that a distinct and
consistent image be created in the customer‟s mind that permeates all product and
service offerings. Visual merchandising can help create that positive customer image
that leads to successful sales. It not only communicates the store‟s image, but also
reinforces the stores advertising efforts and encourages impulse buying by the
customer.
Many elements can be used by visual merchandisers in creating displays, including
colour, lighting, space, product information, sensory inputs such as smell, touch, and
sound as well as technologies such as digital displays and interactive installations.
Visual merchandising is not a science; there are no absolute rules. Visual
merchandising is one of the final stages in trying to set out a store in a way that
customers will find attractive and appealing and it should follow and reflect the
principles that underpin the store‟s image. Visual merchandising is the way one
displays 'goods for sale' in the most attractive manner with the end purpose of making
a sale.
Visual merchandising is the art of implementing effective design ideas to increase
store traffic and sales volume. VM is an art and science of displaying merchandise to
enable maximum sale. This is a tool to achieve sales and targets, a tool to enhance
merchandise on the floor, and a mechanism to communicate to a customer and
influence his decision to buy. VM uses season based displays to introduce new
arrivals to customers, and thus increase conversions through a planned and systematic
approach by displaying stocks available. Recently visual merchandising has gained in
importance as a quick and cost effective way to revamp retail stores.
23
1.4.1 Purpose of Visual merchandising
The basic objective for visual merchandising is a desire to attract customers to a place
of business in order to sell the merchandise. Visual merchandising is offered to the
customer through exterior and interior presentation. Each should be coordinated with
the other using the store‟s overall theme. Creating and maintaining a store‟s visual
merchandising plan, however, is not a simple task. It is necessary to continually
determine what the customer sees. This evaluation from the customer‟s perspective
starts on the exterior and works through the interior of the store. Each customer has a
mental image of a store and its merchandise. A store should have an inviting
appearance that makes the customer feel comfortable and yet eager to buy. The
purpose of visual merchandising can be summarised below:
- Informing the customer about the various products creatively and effectively
- Adding value to the store ambience and enhancing the selling process from
browsing to buying
- Creating an atmosphere conducive to buying
- Offering a distinct identity to a retail outlet vis-à-vis competitors
- Linking fashion, product design and marketing keeping the product in prime
focus
- Routing Traffic into and within the store
- Promoting the sale of merchandise
- Catching attention and enticing entry into the store
- Creating awareness about the type of merchandise available in the store
- Enhancing quick product identification
- Attracting attention to stimulate impulsive buying
1.4.2 Techniques of Visual Merchandising
a) Idea oriented Presentation: It is a method of presenting merchandise base on
the idea or an image of a store. Individual items are grouped to show customers
how the items could be used and combined. This approach encourages customer
to make multiple complementary purchases.
24
b) Style/Item presentation: All discount stores, grocery stores, hardware stores
and drugstores employ this method for nearly every category of merchandise. For
e.g. in a departmental store, when customers look for specific merchandise, like
trousers, they expect to find all items in the same location.
c) Colour presentation: A colour symbolizing a specific theme is used by
displaying the same colour apparels throughout the store in a specific period.
d) Price lining: A price conscious customer is taken care of, by the price lining
type of merchandise presentation technique, wherein customer can easily find an
item at a price he wants to pay. All SKU‟s of a product are arranged in such a way
that it gives the flexibility to the customers in terms of selection.
e) Vertical merchandising: This technique uses a simple fact of eye movement
of a customer, after entering and during searching for the specific item. Arranging
national brands at eye level and store brands on lower shelves can be said to be a
part of vertical merchandising as customers scan from eye level down.
f) Tonnage Merchandising: Huge quantities of merchandise is displayed
together to perceive the items as “low price “items as customer always-associate
large quantity to the less price. The “price image “of the store is portrayed by
using Tonnage Merchandising presentation technique.
g) Frontage presentation: The product is exposed to the customer to the
maximum possible extent in frontage presentation technique.
For e.g.- In Crossword bookstores, the “New arrival “ category of books is so
arranged as to see the entire front cover.
1.4.3 Various Components of Visual Merchandising
Visual Merchandising can be carried out in various ways; however, a proportionate
mixture of an assortment of components is essential to creating the desirable impact
on the prospective buyers. These components can be listed as below:
25
– Architecture/ Facades
– Decoratives and props
– Fixtures
– Flooring
– Furniture
– Lighting
– Mannequins
– Ceilings
– Wall coverings
– Store windows
Various Components of Visual merchandising can be categorised as below:
1. Addressing the senses:
Music, lighting, smell etc come under addressing the senses. These components
create the right store atmosphere for a customer to shop in the outlet. This
means creating a sensual experience in the store by paying attention not only to
sight, but also to smell, touch and sound. Sound/Music is an essential element
in any store. It helps accentuate and build your atmosphere. It can also add
texture to the environment. Customers tend to stay longer in environments with
appropriate music and if they stay longer, they typically buy more.
2. Housekeeping Standards:
Housekeeping standards are also critical for maintaining a proper atmosphere
within a retail outlet. Housekeeping standards enhance the image of the store
and provide the right ambience.
3. Store windows:
The storefront windows are an ideal opportunity to attract customers‟ attention
and drag them into the store. Store windows can be used for sales promotion,
seasonal changes, new arrivals or high demand items to facilitate higher stock
turnover.
4. Creative displays: Creative displays portray the image of the store.
5. Signages : Majority of sales for low involvement products are generated at
point of purchase by signage, displays and events within the store. Signage is
the "silent salesperson" for the retailer and must reflect the image.
Signages can be of following types:
26
• Promotional signs: For off-price events or specials.
• Location signs: For direction to specific departments.
• Institutional signs: For store policies, charitable events.
• Informational signs: For product related features/benefits/prices.
Retailers try to make the most profitable use of every square foot of space in the store
and in the warehouse. Since this space is so costly, retailers take a strategic approach
to its use. Floor patterns, location of merchandise, levels of inventory and appropriate
displays are all key factors in the proper use of space. It is very important for every
store to create a suitable atmosphere and appealing visual presentations in order to
trigger the consumer's buying decision. In a world where one can find identical
merchandise in more than one store, presentation of merchandise becomes the key
differentiating factor.
Visual merchandising has to be aimed at the target customer. A retailer can have the
most unique, creative and different store on the planet, but if doesn't conform to what
customers want and expect, then it is of no value. The entire store concept has to be
built around the target customer. So how does one go about building the visual
merchandising, the answer lies in Planogram.
Plan-o-grams: A plan-o-gram is nothing more than a picture of how various fixtures,
shelves and walls will present your merchandise. It is a simple but a very powerful
tool because it takes into consideration what is known about the psychology of
consumer buying habits. Creating a plan-o-gram forces the retailer to carefully
evaluate which products go where and how many will be displayed.
1.5 Visual Merchandising In Indian Retail
Visual merchandising is given a high priority in Western countries. But the Indian
Industry understanding and practice of this concept is still in its growth stage. This
concept was first used in a scientific and organised way in the Indian textile Industry
to project the uniqueness of each product in an innovative way to attract consumers.
For most retailers, this concept was unknown and hence not adopted in a strategic
manner. For them, it jus meant dressing up a window and cluttering it with all the
27
available products. As seasons change, the merchandise collections too change in a
retail store. When such changes take place the store too undergoes a transformation in
decor and visual presentation to appeal to the consumers while announcing new
arrivals in merchandise collection. This phenomenon of transformation of visual
presentations and displays of merchandise accompanied by relevant thematic props, is
still very new in India.
5According to the Global Retail Development Index 2009, by the management
consulting firm A.T. Kearney, India has retained its topmost position in the annual
study of retail investment attractiveness among 30 emerging markets. With the fast
emerging trend of retail, the lifestyle of people has undergone various changes.
Promotion of the store and its products has become essential. Customers are driven by
glamour and trends. Hence, many retailers have started considering this concept and
adopting it in the design of the retail outlet. Many international design trends are also
being adopted in the Indian market. As the concept of large retail stores gains ground
in India, the practice and concept of VM is likely to grow exponentially.
1.6 Retail Location
Retail site location is a very strategic decision. It is often said within the retailing
industry that only three things matter: location, location and location. The logic of this
is that if the right site is acquired, success should be a simple matter of opening for
business. The selection of the location site is of key importance and this requires a
systematic approach to the acceptance or rejection of certain areas in favour of others.
This is because of several issues:
1. Consumer choice: The location is often the most important consumer
behaviour consideration in a customer‟s decision of where to shop.
2. The need for competitive advantage: The decision over where to develop a
retail outlet will be of strategic importance because retailers can gain long-
term competitive advantage if they develop in the best locations.
3. Consideration of trends: any decision on location has to consider the
recent social and structural changes- greater use of the motor car, the
5http://www.atkearney.com/index.php/Publications/a-game-changing-year-for-global-
retailers-eaxii-1.html
28
importance of out-of-town shopping centers, regional shopping areas, the
growth of multiple retailers, the power of retailer brands, and so on;
4. High investment: development of a retail site is accompanied by high
investment and rental costs and long lead times, which requires decisions
regarding long-term financial implications;
5. Property asset: it is important to select carefully as the final property
assets of a company can be valued as high as their annual turnover;
1.6.1 Trade Area
A trade area is a geographic area that will contain the potential customers of a specific
retailer or shopping area and hence accounts for the majority of the store‟s sales and
customers. This is based upon three zones which take the retail outlet or shopping
centre as the epicenter from which bands emanate, based upon access, distance and
travelling time. The trade area is made up of following three zones:
1. Primary trade area is the geographic area from which the store or shopping
centre derives 60-65 % of its customers
2. Secondary trade area can be any distance from two to seven miles, or
under 20 minutes drive time from the outlet, deriving around 20% of the
sales
3. Fringe or tertiary trade area (the outermost ring) includes those who
occasionally shop as an alternative to local shopping. This zone depends
on the type and size of outlet, and the alternative size and experience to be
enjoyed in other market areas.
1.6.2 Factors affecting the demand for a Trade Area
The best regions and trade areas are those that generate the highest demand or sales
for the retailer. To assess overall demand in a particular region/ market or trade area,
the retailer analyst considers:
a) The population‟s demographic and lifestyle characteristics
b) The business climate
c) Competition from other retailers in the area
d) The retailer‟s propensity to manage multiple stores and economies of scale
versus cannibalization.
29
1.6.3 Location Sites
The types of location are associated with different types of site selection. A number of
different options exist but a retailer may decide to locate in one of three typical types
of site:
A solitary site- a single free-standing retail outlet isolated from other
retailers and positioned on a road or street. Its strengths are lack of
competition, low rental costs, lower operating costs which can be passed
on to the customer, higher impact of presence given traffic visibility is not
a problem, and probable ease of parking.
An unplanned shopping area site- a retail location with two or more outlets
in close proximity to each other. Unplanned retailing, as the term implies,
has evolved in a gradual or piecemeal pattern.
A planned shopping district/centre- a retail location which has been
architecturally planned to provide a unified theme for a number of outlets.
The planned retail area is a deliberately developed site with
complementary retail outlets. They are developed as an amalgam of
different retailers to reflect the market catchment area.
1.6.4 Factors affecting choice of the site
Three factors confront the owner-manager in choosing a location: selection of a city;
choice of an area or type of location within a city; and identification of a specific site.
If one plans to relocate in another city, the following factors need to be considered:
• Size of the city's trading area.
• Population and population trends in the trading area.
• Total purchasing power and the distribution of the purchasing
power.
• Total retail trade potential for different lines of trade.
• Number, size, and quality of competition.
• Progressiveness of competition.
In choosing an area or type of location within a city the factors that are evaluated are:
• Customer attraction power of the particular store and the shopping
district.
• Quantitative and qualitative nature of competitive stores.
• Availability of access routes to the stores.
30
• Nature of zoning regulations.
• Direction of the area expansion.
• General appearance of the area.
Pinpointing the specific site is particularly important. In business districts, small
stores depend upon the traffic created by large stores. Large stores in turn depend on
attracting customers from the existing flow of traffic. However, where sales depend
on nearby residents, selecting the trading area is more important than picking the
specific site. Following factors are critical when choosing a specific site:
• Adequacy and potential passing the site.
• Ability of the site to intercept traffic en route from one place to
another.
• Complementary nature of the adjacent stores.
• Adequacy of parking.
• Vulnerability of the site to unfriendly competition.
• Cost of the site.
Site Selection Checklist:
Customers-
potential/actual
Accessibility Competition Costs
Numbers by
demographics
Income/
employment by
occupation,
industry, trends
Spending
patterns
Population
growth, density
and trends
Lifestyles
Car ownership
Site visibility
Pedestrian
Barriers such as
railway tracks,
rivers
Type of location
zone
Road conditions
and network
Parking
Public transport
Amount and
level
Type and
Numbers
Saturation
index
Proximity of
key
competitors,
traders, brand
leaders
Buildin
g costs
Rent
Costs
Rates
payable
Deliver
y costs
Insuran
ce costs
Labour
rates
Table: 1.6
31
1.7 Problem Statement
Retailing industry, unlike in the West, is less structured and organized in India.
Organized retailing was an evolution in the West where as it can be called as a
revolution in India in last 5-7 years. So, now because of availability of more number
of retail formats and malls, customers have got abundance of choice in relation to
selection of a retail stores and purchase of merchandise.
Although “organised” retailing has been in practice for a long time in some product
categories like textiles and shoes, they have been driven by the manufacturer. The
changes witnessed in the industry where the retailers are organizing themselves
started only in the last decade. The traditional small and unorganized entrepreneurs
dominate the sector. India has the highest number of retail outlets (more than 12
million) in the world, though the per capita retail space is the lowest (CII-Mckinsey &
Company, 2009). The organised sector‟s share is very low compared to other
countries including those in Asia. Up to 80 per cent of all retail sales in the United
States is controlled by the organised retail sector. The corresponding number in
Western Europe is 70 per cent. The scenario of organised retailing in Asia is lopsided.
In Taiwan the share of the organised sector is 81 per cent, followed by Malaysia and
Thailand, at 45 and 40 per cent, respectively, whereas China and India stand at 15 and
8 per cent, respectively. Each of the new retailers is trying different formats. Most of
them are yet to find out a successful formula. With the emergence of big players (both
local and national), the street corner kirana shop has also transformed itself, giving
rise to a unique format. A number of traditional “kirana” shops have expanded in size
allowing self service and provided customers with deeper and wider assortments.
These “transformed kirana stores” have offered facilities like home delivery,
replacements and credit. Despite the current changes, there is a lack of studies that
have focused on the nature of shopping behaviour exhibited in the Indian
environment. Most research in this area is still proprietary in nature and hence is
outside the public domain. In such a scenario, there remains a need for studying the
shopper behaviour. Given the rapid rate at which new retail formats have been
introduced in the Indian market in recent times, many with limited success, it is
imperative for Indian businesses to understand changing shopping behaviour among
consumers, especially with regard to their preferred points of purchase. With growth
in disposable incomes and improving infrastructure, consumers have a wide choice of
32
stores where they can choose to shop. It is therefore, necessary for retailers to
understand shoppers‟ motivations and to attract customers residing beyond the
catchment areas around their stores.
Assuring quality product or investment in brand building activities is not just enough
to acquire new customers or retain the existing customers. As customers are
bombarded with more and more options, they are confused on what to buy. This leads
to customers being less brand loyal and more variety seekers. This often results in
customers switching from one brand to the other, or to a substitute product. In his
case, product availability and visual merchandising plays important role. Moreover,
visual merchandising is helpful in inducing impulse purchase of unplanned
merchandise in customers also. Though visual merchandising a critical decision area
in retail, the importance of same has not yet been felt in India. Most modern formats
of retailing arrange their merchandising without any scientific study or use of a
planogram. Similarly stores come up on the basis of availability of real estate and
price proximity. But hardly any study has been done to understand the implications of
retail location and visual merchandising.
So this research aims at studying the shopper decision process „in selection of retail
outlet‟ and „the impact of visual merchandising‟ on select category of products. This
will be helpful in identifying factors determining shopper buying behaviour and
understanding the importance of visual merchandising and store selection in modern
formats of organised retailing. Retailers can use the research in designing their
merchandising and market targeting strategy.
The primary research is limited to supermarkets in Pune. The research first tries to
understand the different attributes that influence shopper buying behaviour. The
understanding of the attributes is developed from existing literature and the same is
verified by exploratory survey with shoppers in Pune. Once the attributes are
finalised, data from shoppers are collected on those attributes on an importance scale.
The data is processed through SPSS using factor analysis to create factors that affect
shopper buying behaviour and subsequently factor scores are computed. Factor scores
are used in cluster analysis to create shopper clusters and understand their
demographics and behaviour.
33
1.8 Aims And Objectives
1. Explore consumer decision process in retail by understanding
the different triggers for shopper buying behaviour
2. Identify the various factors influencing customer behaviour and
create an understanding of retailers‟ approach towards consumer
behaviour
3. Understand the different factors (after clubbing different
triggers into factors) and their relative importance in shopper
buying behaviour.
4. Impact of visual merchandising on select merchandise sell
5. Understand shopper clusters in terms of their buying behaviour
###