0RGANIZED RETAIL IN INDIA: PRESENT SCENARIO AND FUTURE CHALLENGES INTRODUCTION The Indian retailing industry is continuously been evolving in the last decade. Major international as well as Indian players are introducing innovative store formats and trying to woo the customers. The supply as well as demand side are both responsible for these significant changes in retail sector which is leading to expanding organised retail outlets share in a country which had been so far dominated by unorganised retail outlets. The globalization of retailing has been occurring for many years; but research related to retailing especially in countries like India where retailing is still dominated by the unorganized sector has a relatively short history. The new organised retail players are competing with each other as well as the unorganised sector aggressively for consumer’s attention. Retail shopping behaviour has been one of the major research areas in developed countries where it is a major contributor to the GDP of the nations but comparatively in countries like India where organised retailing is yet making in roads shopping behaviour is not the area much researched upon. The purpose of the study is to investigate the retail store choice criteria. More specifically we will be trying to explore the drivers of store choice for the organised retail outlets. It is very important for the new organised retailers to understand store choice behaviour to be able to attract and retain consumers. The study focuses on studying the importance that customers attach to a set of attributes drawn mainly from the existing literature (Swinyard and Rinne, 1994; Lindquist, 1974: Arnold et al; Solgaard and Hansen, 2003). These consumer oriented attributes reflect the personality of the store and create an image in the mind of the consumers (Martineau, 1958). The more distinct the image in the mind of the customers the grater will be the differentiation from the other stores and thus they will be able to successfully influence the store choice behaviour. The research domain retail store choice deals with research studies pertaining to literature on “Why do consumers shop at the stores they do?” Marketing academics and practitioners have long recognized the importance of this question because it affects not only where consumers buy, but what and how much they buy. Store choice and patronage behaviour involve a decision process related to where consumers shop, how they shop and what they purchase.Moreover, the consumer's perceptions and attitudes derived from experiences, information and need towards certain store attributes have been recognized as the most influential in the patronage decision making process . Store choice literature Byoungho Jin, Jin Yong Park, Jay Sang Ryu (2010) To help US apparel firms successfully enter these promising markets, the study compares the evaluative attributes that Chinese and Indian consumers utilize when purchasing denim jeans. Data was collected in Shanghai, China and Bangalore, India. To measure consumers’ evaluative criteria in more realistic settings, this study employs a conjoint analysis method. The purpose of this study is to compare apparel evaluative criteria between Chinese and Indian consumers when they purchase apparel employing conjoint analysis. The findings of this study confirmed that Chinese and Indian consumers ranked the importance of attributes differently when they purchased denim jeans. For Chinese consumers, price was the most important attribute, followed by fitting, brand country of origin, quality and design whereas Indian consumers placed importance on fitting, brand country of origin, design, price, and quality in a descending order. For three evaluative attributes (brand country of origin, price and design), Chinese and Indian consumers showed significant differences. Price was more important to Chinese consumers whereas brand country of origin and design were more important to Indian consumers. Paul W. Ballantine , Richard Jack and Andrew G. Parsons (2010)in their study , “Atmospheric cues and their effect on the hedonic retail experience”, suggest that the experiential retail concept had evolved into a fuller hedonic experience desire for customers, and in this respect an holistic approach which looks to understand the hedonic immersion a customer seeks and experiences because of the atmospherics present is more relevant for today’s shopper environment. Research was conducted using a within-subjects comparative case study design, with the data being qualitative in nature. To satisfy these conditions, two consumer electronics stores in Christchurch, New Zealand, were selected for the study. The store type was chosen due to the availability of experiential retailers in this industry, and the precedent of using such high involvement goods to ensure that both central and peripheral cues were noted by participants the study found that the conceptual integration of experiential consumption, hedonic consumption and atmospherics had been long overdue, and the study had provided a theoretical link and applied it in real store settings. This study also suggested that while the effective use of attractive stimuli like interactive product displays or attractive display features are important, consumers must be enabled through the use of facilitating stimuli such as comfort and lighting. Jonathan Elms, Catherine Canning, Ronan de Kervenoael, Paul Whysall, Alan Hallsworth (2010) The purposed in their this paper to investigate the extent of retail change in the UK grocery sector over the last 30 years Through reconsidering 30 years of retail change, the paper highlights that with time how do you shop has come to pose at least as interesting a question as where do you shop. In 1980, a press article by Richard Milner and Patience Wheatcroft attempted to anticipate retail change by 1984. Taking that as a template, the paper examined how retail did, in fact, change over a much longer timescale: with some unanticipated innovations in place even by 1984. Reference was made to academic research on grocery retailing in progress at the time and which had recently been revisited. The determinants of customer loyalty are identified for a large U.S. retailer based on a survey of 972 customers by Toyin A. Clottey, David A. Collier, , USA Michael Stodnick, , (2008). An ordered logistic regression was used to estimate the proportion of a retailer’s customers who were willing to recommend the retailers products to others based on survey results. The research identifies three statistically significant determinants of customer loyalty and uses ordered logistic regressions to estimate the proportion of a retailer‘s customers who are willing to recommend the retailer‘s products to others. An ordered logistic regression model supported the three hypotheses that product quality, service quality, and brand image are drivers of customer loyalty in a retail setting Brand image was the strongest driver of customer loyalty followed by product quality then service quality. Parimal H. Vyas, Keyur Patel and Mayank Bhatt (2009) The researchers have attempted to replicate a conceptual framework (Kathleen, Seiders, Glenn B. Voss, Dhruv Grewal, and Andrea L. Godfrey, 2005) that explains why two customers with the same (different) levels of satisfaction engage in different (the same) patterns of repurchase behavior. The researchers to make an attempt to understand the association of key moderators influencing the relationship . the study aimed to identify factors influencing the repurchase intentions of retail customer; to investigate the factors affecting the repurchase intension of the retail customers., and to study the relationships between the factors with repurchase intentions of retail customers. The necessary Primary data was collected using a survey method with the help of a structured nondisguised questionnaire structured questionnaire administered in person on customers when s/he came out of the retail stores viz., Big Bazaar, Reliance Super, and Subhiksha located in the twin-cities of Anand and Vallabh Vidyanagar of the Central part of the State of the Gujarat. The study found that here existed significant correlation between satisfaction and Involvement and satisfaction and decision convenience. The research study yielded significant correlation between repurchase intention and post benefits convenience, repurchase intension and involvement and repurchase intension and satisfaction. From the study it was found that satisfaction, involvement, post benefit convenience, accessibility convenience, transaction convenience, and time convenience are the most influencing factors for repurchase intentions of retail customer. The study provided significant correlation between satisfaction and involvement, satisfaction and repurchases intention and satisfaction and decision convenience. A significant correlation between repurchase intention and post benefit convenience was found. The retailers cannot neglect the mentioned 7 factors at any cost, as they are very important for customer satisfaction and repurchase intension. Retailing in India The Indian retail sector started transforming in the 1990’s.According to ASSOCHAM report (2009) the overall size of Indian retail sector has been estimated to grow by USD 55 billion in 2010, at a compound annual growth rate (CAGR) of 5.5 per cent, to become USD 410 billion market by 2010. Also, organized retail, which currently accounts for nearly 5 per cent of the retail market, is pegged at around USD 9.23 billion and expected to grow at a CAGR of 2.3 per cent to touch USD 13 billion by 2010. Indian retail market, ranked as the most attractive emerging market for investment in the retail sector and the fifth largest retail destination globally, is likely to regain strength with income of major retail players expected to grow consistently to average more than 30 percent by the end of current fiscal, according to an Assocham Financial Pulse Study. (Financial Pulse “Prospects in Indian Retail Sector” Dec 2009 by Ravish Jaggi, Asscocham Research Bureau). The international consulting firm, A.T. Kearney, annually ranks emerging market economies based on more than 25 macroeconomic and retail-specific variables through their Global Retail Development Index (GRDI). For three years (2005, 2006, 2007) and was again at the top position in 2009. India lost its top position to Vietnam in 2008 because of the increased real estate prices and highly competitive market. India has been ranked as number one indicating that the country is the most attractive market for global retailers to enter. The high economic growth during the last few years raising disposable incomes rapidly, favourable demographics placing incomes on younger population with less dependency, and urbanization are some of the major factors fuelling the Indian retail market. The Indian retail market is the fastest growing, highly competitive, complex and most dramatically changing retail market of the world for the last decade. The strength of the sector is apparent from the fact that even during the world slow down the sector The Indian retail industry can be bifurcated into organised and unorganized sectors. The popular traditional form of retail has been the so-called ‘unorganized’ form of retailing mostly represented by small family-owned stores, selling one particular category of product, e.g Kirana shops, drug stores, located in the market place or residential areas, road-side stalls, hand-cart and pavement vendors etc( Shaoni Shabnam and Bino Paul J.D, 2008). Organised retail, one of the most notable emerging sectors of the Indian economy, continues to attract significant investment and interest from leading national and international players (Govil Gaurav, Balaraman Rajesh and Nair Vinod, 2008). The last 3-4 years have witnessed the entry of a number of organized retailers opening stores in various modern formats in metros and other important cities. Still, the overall share of organized retailing in total retail business has remained low (Joseph, Soundrajan, Gupta, and Sahu 2008). A variety of formats are being rolled out, at a fast rate with mixed success. Both retailers and shoppers are currently in an evaluation phase with no clear verdict as to what may drive the choice of stores in the longer term. The newly established stores are able to attract shoppers into stores due to its ambience, but they are finding conversions into purchases to be lower than expected and hence lower profitability for retailers. Rapid evolution and adoption of new technologies present both opportunities and risks for companies seeking to innovate. Thus, it may be worthwhile to understand the store choice behaviour and offer recommendations for enhancing customer orientation of organized retail sector RESEARCH METHODOLOGY The literature indicates that store choice behaviour is influenced by the image and perception thus influencing the selection of the retail store. The image is dependent on a number of factors such as availability of goods, store format and size, distance from home, availability of parking space, cleanliness of the store. The emergence of organised retail in not a very old phenomenon as a result the research work related to shopping behaviour in these stores is limited. Therefore it was decided to go for an exploratory research to identify the store attributes that were considered important by the consumers for evaluation of stores. The broad research objectives that formed the basis of this exploratory research are: 1. To identify factors considered important by the customers while choosing an organized retail outlet for a visit. 2. To find the store choice attributes dimensions that retailers need to identify to be able to concentrate on them strategically. 3. To find out the extent to which customer choice behaviour varies by customer age, gender and income. Hypothesis H1: There is no significant difference in importance of store choice attributes across age. H2: There is no significant difference in importance of store choice attributes across gender. H3: There is no significant difference in importance of store choice attributes across income. The study involved collection of data from three areas in North India – The capital city New Delhi, Union territory Chandigarh and prominent and prosperous city of Punjab Ludhiana as organised retailers made their first move in these areas. The research was carried out in tightly controlled store intercept method. A sampling frame from which a random sample could be drawn was unavailable, however. Judgemental sampling was chosen to serve the purpose of Data collection. Initially, four organised retail outlets were randomly selected from each city as primary data collection canters. Data was collected at different days of the week as well as at uniformly distributed time intervals to assure high degree of representation of the population of the sample and to minimize day and time related response bias. Customers were approached in the vicinities of the selected locations and were asked to fill the questionnaire. From each city data was collected with 40 questionnaires. A total of 120 questionnaires were there, but 18 were excluded due to inconsistencies in response and incomplete answers. So, we obtained 102 valid responses. The respondents were administered a structured questionnaire. The responses were recorded using a set of 20 statements measured on a likert type scale. The statements were derived from literature survey (Swinyard and Rinne, 1994; Lindquist, 1974: Arnold et al; Solgaard and Hansen, 2003). The questionnaire was finalised on the basis of discussions with the experts and retailers. Responses were also sought related to patronage behaviour. it was made sure that the respondents had shopped at least thrice at organised retail outlet. The profile of the sample is given below. GENDER Male 59 Female 43 Age <20 11 20-29 35 30-39 29 40-49 20 50-59 4 >60 3 OCCUPATION student 27 home maker 11 service 37 business 15 retired 2 self employed 10 MARITAL STATUS unmarried married 34 68 NO OF FAMILY MEMEBERS Single 5 2-5 74 >6 23 NUCLEAR/JOINT 50 Nuclear Joint 52 INCOME <10000 6 10000-30000 26 30000-60000 36 60000-100000 19 >100000 15 Frequency of visiting organised retail outlet more than twice a week 8 twice a week 14 once a week 34 once in fortnight 14 once in month 28 once in six months 4 The sample constituted of shoppers at Department stores 59.8% (Ebony, Pantaloon and Westside), Supermarket 29.4% (More, Easy Day and Spencer’s) and Hypermarkets 10.8 %( Vishal Mart). Sixty eight percent of the respondents had visited the organised retail store more than once a month. Thirty five percent visited the store once a week. Men constituted of the 57 percent of the sample. And about 66 percent of the sample population was married. 73 percent of the sample is less than 40 yrs. The minimum age of the respondents was 18 years of age as this is the age when an average Indian can shop without the influence of parents independently. STATISTICAL ANALYSIS The 102 usable questionnaires were analysed using SPSS software version 12.0. frequencies were used to generate a profile of the key demographic characteristics of the respondents. Descriptive statistics were utilised to calculate the mean and standard errors scores of the 20 store selection attributes. An exploratory factor analysis was used to uncover the underlying dimensions of the store selection attributes which influence the store image and thereby influencing the store choice. A series of analysis of variance (ANOVA) tests were performed to explore the differences among consumers with respect to gender, age and income. RESULTS AND DISCUSSIONS The mean and standard deviation of the 20 attributes of retail store selection are shown in table. Attributes with the mean score equal to or greater than 4 were considered important since the value denoted moderately important on the scale used. The descriptive statistics revealed that the respondents highly rated the importance of quality of merchandise, availability of good brands, extensive assortment and range of merchandise and availability of good brands . These results are consistent with earlier studies (e.g Kunkle Berry, 1968; Berry,1969; Bearden,1977,and Sinha and Banerjee, 2004,). The respondents also gave importance to parking space and location of the store and proximity to home. Arnold et al (1997) and Seiders Tigers(2000) found that location was very important attribute in choosing a store. The attributes which were having rating with mean equal to or greater than 3 were availability of required product, neat and clean public areas such as changing rooms and restrooms and layout along with fairness of the prices. The lowest ratings were given to accepting different payment modes, ease of walking around the aisles, fast check out even during peak hours and convenient operating hours. Indians are used to carrying cash and in todays competitive scenario almost all the retailers are offering different modes of payment option, are open for convenient hours and have multiple counters for payment. Table: Means and Standard Deviation of Selection Attributes Descriptive Statistics Store Attributes Store attributes Store has what I want Merchandise quality is good Extensive assortment of merchandise Availability of good brands Fairness of prices Low priced advertised specials Advertised goods are available attractive design and layout Neat and clean public areas Mean Std. Deviation 3.83 0.81 4.07 0.86 4.05 0.93 4.06 0.92 3.56 3.38 3.28 3.52 3.73 3.22 1.06 1.03 1.02 1.01 1.05 1.00 Excellent return policy friendly and helpful staff members Knowledgeable staff members available Store atmosphere is good Ease of walking around the aisles Location is convenient Availability of parking space Accept different payment modes Convenient operating hours Close to home 3.17 3.16 3.31 0.97 0.97 0.92 2.63 4.00 4.05 2.61 2.75 3.92 2.71 0.90 0.90 0.94 0.96 1.02 0.90 0.95 Grouping of Store Selection Attributes Exploratory factor analysis was used to group 20 important attributes into meaningful , manageable factors representing the dimensions of store selection in selected cities of North India. Before running the factor analysis, the Kaiser –Meyer-Olkin (KMO) Measure of sampling adequacy and the Bartlett’s test of sphericity were performed. Table: KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Approx. Chi-Square Bartlett's Test of Sphericity df Sig. 0.769 1729.24 190 0.000 The above table shows the suitability of the data for factor analysis. The Kaiser-Meyer-Olkin Measure of Sampling Adequacy is a static which indicates the proportion of variance in our variables which is common variance, i.e which might be caused by underlying factors. It can be seen that Bartlett’s test of Sphericity is significant.the Kaiser-Meyer Olkin measure of sampling adequacy was larger than 0.6, which showed that the use of factor analysis was appropriate. Table: Factor Analysis of Store Selection Attributes Store selection Attributes Store has what I want Merchandise quality is good 1 0.898 0.859 2 3 4 5 6 Extensive assortment of 0.841 merchandise Availability of good brands 0.841 Fairness of prices 0.860 Low priced advertised specials 0.920 Advertised goods are available 0.894 attractive design and layout 0.880 Neat and clean public areas 0.834 Excellent return policy 0.829 Friendly and helpful staff members 0.910 Knowledgeable staff members 0.897 available Store atmosphere is good 0.887 Ease of walking around the aisles 0.846 Location is convenient 0.873 Availability of parking space 0.909 Accept different payment modes 0.842 Convenient operating hours 0.912 Close to home 0.844 Fast check out even during peak 0.858 hours Rotation converged in 6 iterations. Percentage of variance explained 83.47%. Extraction Method: Principal Component Analysis: Rotation Method : Varimax with Kaiser Normalization As shown in the table above four attributes had a high loading on the first factor. These attributes are availability of goods required by the consumer, quality of the merchandise, extensive assortment of merchandise and availability of good brands. This factor can be clubbed into “Merchandise” and it is consistent with earlier findings that merchandise is the most important element of retail marketing mix. The factors showed a high correlation amongst each other ranging from0 .771-0.832 at 0.01 significance level. The second factor “Convenience” had high coefficients on the items ease of walking around the aisles, accepting different payment modes, convenient operating hours and fast check out even during rush hours. The attributes accepting different payment modes and fast check out exhibited high correlation amongst each other (0.795) which is due to increasing paucity of time among customers. The third factor can be labelled as “price and promotion” which had high co-efficient on fairness of prices, low priced advertised specials and availability of advertised goods. The correlation among last two variables is as high as 0.958. The fourth factor is “Store Atmosphere” with high coefficients among attractive design and store layout, neat and clean public places and attractive appearance of the store. The fifth factor is “Service” included excellent return policy of the store, friendly staff members and availability of helpful and knowledgeable staff. The last two factors are having high correlation 0.942. The sixth factor “Location and Access “had high coefficients on convenient location, availability of parking space and proximity to home. In India the unorganised sector still is competing with the organised sector as it is able t o provide easy accessibility to the customer. Table: Reliability Indices for the dimensions. Dimensions Merchandise Price and Promotion Service Location /Access Convenience Store atmosphere Alpha Reliability 0.9406 0.9273 0.8848 0.8685 0.9077 0.8817 Demographic Characteristics and store choice Dimensions The purpose of this section is to explore how respondents differ in terms of their demographic characteristics – age , gender and Income across the six dimensions which have been identified with the help of Exploratory Factor analysis. To achieve this series of one way analysis of variance (ANOVA) tests were run. In these tests the factor scores produced by the factor analysis were used as dependent variables. A summary of the results has been is displayed in the table. Major findings of the results are that the importance of Service dimension differs across age. In Merchandise dimension only variable related to quality of Merchandise showed variation. The male and female consumers had a significant different importance for the location dimensions but did not show any variation across the other dimensions of store. The results of ANOVAs test were significant across all the major dimensions including Merchandise, convenience, Price and Promotion, Store atmosphere and Service. The last dimension Location/Accessibility did not show any variations across the Income groups. Table: Summary of ANOVA tests age gender Income Store choice Dimensions Merchandise Store has what I want Merchandise quality is good Extensive assortment of merchandise Availability of good brands Convenience Ease of walking around the aisles Accept different payment modes Convenient operating hours Fast check out even duting peak hours Price and Promotion Fairness of prices Low priced advertised specials Advertised goods are available Store Atmosphere attractive design and layout Neat and clean public areas Store atmosphere is good Service Excellent return policy friendlyand helpful staff members Knowledgable staff members available Location /Accessibility Location is convenient Availability of parking space Close to home F Sig. F Sig. F Sig. 1.055 2.491 1.51 0.654 0.390 0.036 0.194 0.659 2.920 2.677 0.057 2.734 0.091 0.105 0.812 0.101 4.859 8.925 7.200 6.324 0.001 0.000 0.000 0.000 0.501 1.261 1.317 0.766 0.774 0.287 0.263 0.576 6.344 0.358 1.667 1.987 0.013 0.551 0.200 0.162 2.949 4.543 3.940 1.877 0.024 0.002 0.005 0.121 0.108 0.624 0.385 0.990 0.682 0.858 2.310 1.626 0.550 0.132 0.205 0.460 5.203 6.190 6.960 0.001 0.000 0.000 0.817 0.46 0.865 0.541 0.805 0.508 2.331 0.848 0.011 0.130 0.359 0.916 3.389 4.128 1.694 0.012 0.004 0.158 3.227 4.91 4.323 0.01 0.000 0.001 0.554 1.474 1.675 0.458 0.228 0.199 5.707 12.885 11.592 0.000 0.000 0.000 0.604 1.04 0.588 0.697 0.399 0.709 9.035 9.909 1.590 0.003 0.002 0.210 1.840 1.106 1.420 0.127 0.358 0.233 Hypothesis testing The study found that the there exists no significant difference in the importance of store choice attributes across age and gender and therefore, H1 and H2 are accepted. There exists statistically significant difference in importance of store choice attributes across income and therefore, H3 is rejected. CONCLUSION AND IMPLICATIONS In this paper, we addressed the store selection criteria by collecting data from organised retail outlets in selected cities of North India. The consumer survey revealed that Merchandise related factors are the most important. Customers rated the quality of Merchandise, extensive assortment and range of merchandise and availability of good brands as most important. Interestingly, customers attach considerable importance to availability of parking space, location of the store and proximity of the store to their home. This can be attributed to the fact that due to lack of well planned shopping areas parking is a major problem being faced by the people. They like to visit stores which are easily approachable and have ample of parking area. Considerable importance was also given to factors such as availability of the required product as well as neat and clean public areas such as trial rooms and rest rooms. In addition factors such as acceptance of different payment modes, ease of walking around the aisles, fast check out even during peak hours and convenient operating hours did not rate very high. We tried to group these factors into more manageable dimensions and with the help of Exploratory Factor Analysis generated six dimensions which are “Merchandise”, “Convenience”, “Price and promotion”, Store atmosphere”, “Services” and Location /Accessibility. The statistical analysis revealed that these dimensions importance did not differ across age and gender. But we found that there exists significant difference across various income groups in their importance dimensions of Merchandise, Convenience, price and Promotion, store atmosphere, services but the sixth dimension location did not show variance. Store attributes can help in formulation of store image and influence decision making for the store selection. For researchers, the present findings shed some light on the under researched area of retail store choice behaviour in North India. The dimensions identified in the study can be further validated in the Indian Retail context. The retailing sector is evolving over time with consumers becoming more confident about their choices and preferences. They are demanding newer services and better quality. Our limitations of the study are the use of relatively small sample and the study being restricted to three main cities of North India. Future research in more cities can be conducted as there has been considerable growth of organised retail even in II tier cities of India. REFERENCES Abdulla M. 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