CHAPTER – I

INTRODUCTION

1.1 MEANING, DEFINITION OF RETAILING

Introduction

Retailing is the activity of selling goods and services to final consumers for their

own personal use. It is concerned with getting views in their finished state into the hands

of customers, who are prepared to pay for the pleasure of eating, wearing or experiencing

particular product item.

Retailing forms an integral part of the marketing mix. Customers are first

introduced to the product at the retail store. Retail stores serve as communication hubs

for customers. The role of retailing in the marketing mix is very significant. Retailing

can be divided into two major classifications, viz., organized and unorganized.

Organized retailing is one in which there is a proper organized ownership, permanent

employees, fixed place involving standardized business practices.

Unorganized retailing is one which is not organized. Often, the family members

take care of the business. The size of the business is very small and sometimes its form

part of the residence of the owner. There is no fixed place for shop and the business

practices are not at all organized. In India, majority of the retail outlets come under the

unorganized category. The organized sector is slowly entering the Indian market.

Retailing consists of all business activities associated with the sale of all goods

and services in small quantities directly to the consumers for their personal, family or

2

household use. It involves the sale of merchandize from a fixed location, such as a store,

for direct consumption by the customer. It can be defined as an activity that ensures

maximum satisfaction for the customers from the buying process.

Retailing as an activity can be traced back to the times when human beings

stopped producing all their requirements by them self and trading came in to being.

Retailing involves a retailer, traditionally a store or service establishment that deals with

consumers who are acquiring goods and services for their own use rather than for resale.

Retailer is a company or an organization that purchases products from individuals

or companies with the intent to resell those goods and services to the ultimate, or final,

consumer. Retailers provide the accessibility of location and convenience of timing, size,

information and life style support. When retailers perform these activities, they create

value for their customers, who pay for the services. These values are created continuously

through a combination of service, price, accessibility and convenience.

Viewed in the context of the channel of distribution, retailers are the important

final link in the process that brings goods or services from producers to consumers.

Retailing is the business of buying goods in large quantity from a manufacturer or a

wholesaler and then selling these products to consumers.

Retailing services consist of the sale of goods or merchandise for personal or

household consumption and related subordinated services. Retailing is the interface

between the producer and the individual consumer buying for personal consumption.

3

A retailer buys goods or products in large quantities from manufacturers or

importers, either directly or through a wholesaler, and then sells individual items or small

quantities to the general public or end-user customers at a margin of profit. Thus retailers

are at the end of the supply chain and retailing is the last link that connects the individual

consumer with the manufacturing and distribution chain.

The retail trade sector comprises establishments engaged in retailing,

merchandise, generally without transformation, and rendering services incidental to the

sale of merchandise. The retailing process is the final step in the distribution of

merchandise. Retailers are, therefore, organized to sell merchandise in small quantities to

the consumers and not for resale.

The word „retail‟ is derived from the French word „retailer‟, meaning „to cut piece

off‟ or „to break bulk‟. In simple terms, it implies a first-hand transaction with the

customer. Retailing involves direct interface with the customer and the coordination of

business activities from end to end – right from the concept or design stage of a product

or offering, to its delivery and post delivery service to the customer.

Retailing is activity concerned with getting goods in the finished state into the

hands of the customers who are prepared to pay for the pleasure of eating, wearing or

experiencing particular product items. Retailing is all about the distribution of goods and

services because retailers play a key role in the journey that products make from a

manufacturer, a grower or service-provider to the person who consumes. Retailers

provide a collection of service benefits to their customers such as being located in

convenient places, editing product ranges according to shopping tasks and selling goods

4

in quantities that match personal consumption level. Retailing is therefore a deceptively

simple management process–yet fascinating complex in its detail.

1.2. BACKGROUND OF THE STUDY

Manusmriti and Kautilya‟s Arthastra, provided guidelines for dealing with

customers, after-sales service, quality and price guarantees. Such scholarly works

provided the equivalence of for exchange in case of barter. They also defined the tax

structure for retail and wholesale transactions. Kautilya commented on the location of

stores dealing in specific products in the city. Memoirs of traders who came from Europe

indicate that Indian merchants carried out business with low margins in order to enhance

sales.

Indian history and archaeology record the existences of markets during the

Harappan civilization also. Elaborate descriptions of local and periodic hats have also

been found. These were the places were commodity exchange was carried out and people

congregated and derived several non-economic values. Retailing as an occupation came

into existence when farmers started producing surplus food than they require.

Early signs of organized retail were visible in the 1970‟s when Nilgiri‟s (food),

Vivek‟s (consumer durables) and Nalli‟s (silksarees) started diversifying their operations.

While these retailers gave the necessary ambience to the customer, little effort was made

to introduce world-class customer care practices and improve operating efficiencies.

Moreover most of these modern developments were restricted to South India, particularly

Chennai which is still regarded as one of the important land mark of Indian Retail”.

5

On account of the liberalization drive in the 1990‟s, several structural and

demographic changes helped the industry to grow. The GDP grew by 6.6 percent in the

last decade resulting in increased income levels and higher purchasing power of the

population. Increasing literacy levels, increasing number of working women, increasing

media penetration has raised aspiration levels of the population, resulting in demand for

better shopping experience and larger variety of goods.

India has close to 54 per cent of population below the age of 25, which translates

into higher prospects of increased consumption levels in the future. Finally interest rates

have also declined in the past few years further propelling the consumption demand.

These factors were the key drivers for the retail wave in the industry. Notably among the

early entrants were players like Shoppers Stop, Pantaloon, Ebony, and Food world etc.

Initially, the growth in organized retail was very slow and concentrated mainly in

the metros with South India holding its ground as the pioneer in organized retail growth,

on account of the low cost of real estate. Due to the high investments required in the

early stages and the fact that the real estate was the key-deciding factor for success of

stores, real estate developers have been the major players in the industry.

6

Table 1.1

Sponsors

Group Retail Businesses

Rajan Raheja – Real Estate Developer Globus – chain of departmental stores

K Raheja – Real Estate Developer

Shoppers Stop – chain of departmental

stores

Hiranandani – Real Estate Developer Haiko supermarket, Loft shoe store and

Hakone mall

TATA - Diversified Business House

Westside – chain of departmental stores

DS Group – Rea Estate Developer Ebony - chain of departmental stores

RPG – Diversified Business House

Food World, supermarkets, Giant

hypermarkets, Health & Glow beauty and

health stores

DLF – Real Estate Developer DLF malls

ITC – Diversified Business House Wills Sport – chain of apparel stores.

Source: KSA – Techno Park Research

In the early 90‟s as the players were lower down on the learning curve many

faltered in their models, and growth of the industry remained slow. The second half of

the 1990‟s saw many players making losses and exiting from the business.

The concept of retailing in India dates back to ancient times when it was mainly

in the form of weekly markets and the village fairs (Melas). Changing socio-economic

patterns and consumption levels shifted the focus of retailing to mainly convenience

stores (mom and pop stores) for daily needs with few prominent retailers on the high

street in each city. While talking of Indian Retail, a special mention must be made of the

role played by the PDS outlets, Co-operatives and Khadi stores. The Indian

Government‟s Public Distribution System (PDS) Outlet chain is amongst the largest retail

chains in the world.

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Retailing has always been here in our country – we have centuries old tradition of

retailing. Indian retail industry is perhaps the oldest in the universe. Our focus in retail

could be traced way back in the history when Veda assigned „Vaisya‟ community to do

trading and business. The common bath (paid baths) at Mohenjodaro is perhaps one of

the earlier examples of service retailing. Melas could be examples of temporary malls

complete with shopping, food and entertainment options. Today, every town has its

„retail stars‟ – these can be found in Karolbagh in Delhi, or Pondy Bazaar in Chennai, or

in Chickpet in Bangalore.

The retail industry in India can be broadly classified as organized and

unorganized. Unorganized retail refers to traditional retail formats which are owner-

managed while organized retail refers to professionally managed retail stores. Indian

retail industry has been largely dominated by unorganized retail which accounts for 96%

of the total retail industry.

Most international brands which have entered India in the past few years have set

up franchises to provide high visibility and retain identity, rather than succumb to the

clutter of a 75 sq m multi-brand independent retailer. Many such as Arrow, Lacoste and

Lee, are not retailers elsewhere in the world, but their Indian licensees have judged sales

through exclusive shops to be essential to establishing the brand successfully.

8

Diagram 1.1

Comparative Penetration of Organized Retail

15%

19%

45%

60%

70%

80%

96%

U S Taiwan Malaysia Thailand Indonesia China India

Source: KPMG Report

Unorganized industry can be further classified as those occupying fixed locations

like kirana stores, drug stores and pan shops and mobile retail like street vendors and

hawkers who sell at village mandis and on push carts.

9

1.3 SIGNIFICANCE OF THE STUDY:

Retailing is one of the fast emerging sectors in a developing country like ours. Its

future and prosperity is dependent on other related sectors like agriculture and industry.

Therefore, the development of retail automatically leads to the development of other

related sectors, which ultimately leads to the development of the country‟s economy as a

whole.

The following points highlight the importance of retailing and its implications on the

various related sectors of the economy:-

Development of Real estate: The retail industry‟s real-estate requirement will be

in millions of square feet in the years to come. This will release for productive use

large tracts of land lying with various government agencies. 100% FDI is allowed

in real estate development and this will make a large chunk of quality

infrastructure available for modern retailing.

Improvement of Tourism: One of the best features of any city that attracts a

large number of tourists every year – London, Singapore, Dubai, New York and

so on–is a well–developed shopping environment. Organized retailing will help

significantly in developing our cities as tourist destinations. And, if well-marketed

and managed, it can significantly enhance government revenues, apart from

spreading the word about ethnic Indian brands across the world.

Higher GDP: The value that retailing can add to the economy should not be

underestimated. Organized retailing has huge potential, which could lead to

10

higher GDP growth and result in increased consumption. Organized retailing

could also bring about the transformation of the agricultural supply chain, remove

inefficiencies in the distribution of consumer goods and improve productivity

while providing consumers with a better range of products at better prices in a

better ambience at the same time.

Economic Growth: India‟s economy in the past has primarily been agrarian in

nature, but the services sector has been growing exponentially and now forms 47

per cent of the GDP. Software services, in particular are booming and fuelling the

GDP growth. Consumer price inflation is lower than the double-digit inflation of

the early 1990s, leading to higher disposable incomes.

Outsourcing opportunities: Organized retailing is a billion dollar industry.

Outsourcing will be undertaken on everything from supply chain management to

pilferage control and loyalty management.

Expenses on advertising and promotions have also gone up many times, which

will result in considerable increase in revenue for retailers. In countries where

retailing and modernization has progressed, it has favorably affected the value-

capturing capacity and modernization of the farming industry. It has also

restructured the supply chain for all FMCG products, brought down customer

prices on a sustained basis, created significant employment opportunities. The

revenues of the various State Governments and the Central Governments has

increased through taxes collected, ultimately leading to increase in national

11

wealth. For instance, the success of the VAT proposal depends on it being

implemented at the retailer level.

The country‟s dynamic retail landscape presents a great opportunity to investors

from across the globe, to use India as a strategic business hub.

One of the major advantages of a developed and advanced retailing setup is the

generation of competition. This leads to reduction of prices, better products and

innovations and enhanced customer experience.

Retailing is the last mile infrastructure to access and deliver goods to consumers.

Retail forms the backbone of the nation’s delivery system and its importance can

be exemplified by the network of KVIC (Khadi & Village Industries Corporation)

outlets which support small and medium handicraft manufacturers.

The Indian retail sector is no more nascent today. The Indian retail sector is only now

beginning to evolve in line with the transformation that has swept other large economies.

There has been a significant change in retail trading over the years, from small

kiranawalas in the vicinity to big super markets; a transition is happening from the

traditional retail sector to organized retailing. The unorganized sector still holds a

dominant position in this industry. The organized segment holds just about 1.2% of the

current US$ 245 billion retail market, which is expected to reach about US$ 385 billion

by the middle of this decade.

With consumers looking at convenience with multiplicity of choice under one roof

and expectations evolving over time, consumer demand is truly the driving force for

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organized retailing in the country. As India goes through this transformation, a new

business with sales of $ 1 billion - $ 2 billion will be created in grocery and $250 million

- $500 million in apparel as per KSA estimate. Smaller, but interesting opportunities will

be created in other sectors like books, electronics and music.

A growing presence is increasing consumer awareness, accessibility and

loyalty to brands. This provides the opportunity of large and better-organized retailers to

grow and develop.

The Indian retail sector is going through a period of consolidation and fast

changes. A number of new players – both domestic and foreign – are entering the

industry. Driven by rising incomes, favourable demographics and changing lifestyles, the

Indian retail industry is witnessing increased activity in terms of expansion: entry of

international brands: and increasing focus on technology and operations.

1.4. STATEMENT OF THE PROBLEM

Retailing is one of the biggest sectors of Indian economy with a turnover of

around $245 billion. Yet it remains an underdeveloped, fragmented and inefficient sector

in the country. With around 13% contribution to the GDP and 7% employment of the

national workforce, retailing no doubt is a strong pillar of the Indian economy. What it

requires is more corporate backed retail operations that have started to emerge over the

couple of years.

13

The unorganized sector is highly fragmented and consists of family owned

businesses. India has the highest shop density in the world with 11 shops for every 1000

persons. 95% of these outlets have shop area of less than 500 square feet.

A majority of retail outlets are basically kirana stores with basic offerings, fixed

prices and little ambience, and result in little more than subsistence for their owners.

Organized retail overall stands at 2% of the total industry, and this figure varies across

categories.

India has the highest number of retail outlets per capita in the world but has the

lowest retail space per capita in the world (2 ft / person). Out of these 5 million outlets

96% are smaller than 500 sq.ft. in area 3. About 350 million people live, within one-

minute walk of these retail shops. According to retail census, Rs.4,79,568 crore worth of

products were sold through these 5 million retail outlets.

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Diagram 1.2

Traditional Stores – Continuing to Expand

7.8

-

7.6

-

7.4

-

7.2

-

7.0

-

6.8

-

6.6

- 6.5

6.4

-

6.2

-

2003 2004 2005 2006 2007

Source: AC Nielson

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Unorganized retail in India is growing at an annual rate of 3% in contrast to

organized retail which is growing at 32%.

Euromonitor International report on Indian retail industry

In 1950 India had a population of around 350 million and had 2,50,000 retail

outlets. By the year 1999 the population of India had grown to 970 million and

simultaneously the number of retail outlets has also grown to 53,70,000 outlets. This

makes India one of the countries wit the highest number of retail outlets per capita in the

world.

However 96% of the retail sales come from small unorganized retailing with shop

space less than 500 sq.ft. The shop space per capita in India is around 2 sq.ft. which is

significantly smaller than developed markets? For example, USA has shop space per

capita of around 19 sq.ft. The number of persons being catered to by each store in India

is approximately 180, the corresponding figure for US is approximately 2100. The retail

outlets in India include large and medium sized chains, chemist‟s shops and others

(mainly paan bidi kiosks)

Retail industry in India is estimated to be US $330 billion industry and is

expected to reach $430 billion by 2010. India has been ranked number one in

A.T.Kearney‟s Global Retail Development Index in both 2005 and 2006 on the basis of

market attractiveness, risk and saturation. Organized retail accounts for only 4% of this

industry and thus presents a huge opportunity for new players to enter this market and

exploit the opportunity.

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This is clearly indicative of small-shop ownership crowding the unorganized

segment of retailing. While this fragmented market structure does pose significant

challenges for organized retailing, potential does exist if modern information and supply

chain management systems are deployed to support the development of convenience

shops that match customer expectations.

Retailing is not yet a structurally organized industry, probably as a result of the

sheer size of the country, its regional diversity and until now, fairly limited infrastructural

support. This has precluded the possibility of infusion of better systems and the

technology for improving retail performance, while retail management skills have been

concentrated in the store‟s owner-manager.

Most small-scale retail formats in India operate on low cost, minimum tax and

cheap labour models to offer customers low prices despite fragmented and long supply

chains. Organized retail in India is a recent phenomenon and is still evolving. Organized

retail is a fast growing industry and is estimated to grow at a CAGR of 50% and set to

become $90 billion industry by 2010. It is estimated that it will increase its share from

current 4% to over 20% by 2010.

Manufacturer retailers, mostly in the form of exclusive stores, had driven modern

formats retailing in pre-liberalization period. And we had a host of independent

multibrand store, kiranas and so on. In the post liberalization era, we have seen a few

pioneering efforts to showcase modern format retailing.

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Table 1.2

Organized retail sector having a $90 billion share. 2006 r

ank

Countr

y

Reg

ion

Countr

y r

isk

Mar

ket

att

ract

iven

ess

Mar

ket

sat

ura

tio

n

Tim

e pre

ssure

GR

DI

score

Weight 25% 25% 30% 20%

1 India Asia 55 34 89 76 100

2 Russia

Eastern

Europe

43 59 53 90 85

3 Vietnam Asia 55 43 24 87 81 84

4 Ukraine

Eastern

Europe

42 37 76 81 83

5 China Asia 55 58 40 57 86 82

6 Chile America 67 57 47 48 71

7 Latvia

Eastern

Europe

58 50 31 88 69

8 Slovenia

Eastern

Europe

78 52 25 70 68

9 Croatia

Eastern

Europe

57 51 28 91 67

10 Turkey

Mediterran

ean

46 59 64 40 66

Source: AT Kearney report: “Building the optimal global footprint”

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The sales through organized retailing in India are still lower compared to the total

sales of unorganized sector. The investments made in this sector are also minimal

compared to other sectors.

There are many reasons why organized retailing has not been undertaken to any

major extent in India in the past. Some of them are:

The Indian market was closed and protected till 1990. The absence of foreign

brands had led to a sense of complacency in the Indian players. Thus brand

creation and management was more of an exception than a rule.

The major competition was from unorganized players. These were family run

units. They had very low overhead costs. Moreover, their practice of giving

credit also made them popular in the locality where they operated.

The Indian middle class mindset that big well decorated shop will be expensive

also led to non-development of organized retailing.

The organized penetration being so low, it presents immense opportunities for

growth. Several new players are entering the industry with the existing players making

huge expansion plans. With Government policies becoming more favourable and

emerging technologies facilitating operations, the organized retail industry is growing at a

rapid pace.

Thus the problem of study is to highlight the importance of organized retailing, its

prospects of yielding higher revenue by way of increase in GDP and the Government by

way of taxes and also to suggest measures for solving the problems faced in retailing by

the retailers.

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1.5. RETAIL SCENARIO – GLOBAL

Retailing is big business in developed countries and it is better organized than our

country. According to recent reports, the US$ 9 trillion retail industry is one of the

world‟s largest industries and the sector is still growing. 47 of the Global Fortune 500

companies and 25 of Asia‟s top 200 companies are retailers. Organized retailing,

however, has gained a great deal of momentum in China in the last few years especially

after the opening up of the sector to 100% FDI in 2004,and it accounts for 20% of the

total retail sales currently. According to the US Department of Labour, about 22 million

Americans are employed in the retailing industry in more than 2 million retail stores –

that is, one out of every five workers employed. Traditionally, local players tend to

dominate in their home markets. Wal-Mart, the world‟s leading retailer, has about 8% of

the market in the USA. Similarly, Tesco has a market share of about 13% in the UK

market.

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Table 1.3

The percentage of organized and unorganized/ Traditional retailing in selected

countries

Country Organized Traditional Retailing

USA 80% 20%

West Europe 70% 30%

Malaysia 50% 50%

Thailand 50% 50%

Brazil 40% 60%

Argentina 40% 60%

Philippines 35% 65%

Indonesia 25% 75%

China 20% 80%

South Korea 15% 85%

India 6% 94%

Source: Mc Kinsey Study

According to the UK based research firm Euro monitor International, in the

global scenario, the emerging retail markets of India and China are witnessing strong

growth and India especially is among the biggest and the fastest growing retail markets

globally.

1.6. RETAIL SCENARIO – INDIA

The Indian retail industry is no more nascent today. The Indian retail industry is

only now beginning to evolve in line with the transformation that has swept other large

economies. There has been a significant change in retail trading over the years, from

21

small kiranawalas in the vicinity to big super markets; a transition is happening from the

traditional retail sector to organized retailing. The unorganized sector still holds a

dominant position in this industry. The organized segment holds just about 1.2% of the

current US$ 245 billion retail market, which is expected to reach about US$ 385 billion

by the middle of this decade.

Retail is the country‟s largest source of employment after agriculture, has the

deepest penetration into rural India, and generates more than 10% of India‟s GDP. With

close to 12 million retail outlets, India has the highest retail outlet density on the world.

In spite of this, retail is also India‟s least evolved industries. In fact, it hasn‟t even been

accorded the status of an industry.

1.7. REASONS FOR GROWTH OF RETAIL

Based upon the observations made on the various sectors of the retail segment we

can say that the conditions are becoming favourable for the growth of retail sector. The

factors can be listed as follows:-

Consumer Pull: In the pre-liberalization market the power rested clearly with the

manufacturers. In today‟s demand-led market, it is the consumer who calls the shots.

Over the last decade, there has been a significant evolution in the Indian consumer,

mainly due to the liberalization of the consumer goods industry

Rising Incomes: Over the past decade, India‟s middle-and high-income population has

grown at a rapid pace of over 10% per annum. Further, the number of households earning

22

above Rs.1, 50,000 per annum is about 80 million today and is expected to grow to 200

million by 2015.

Explosion of Media: There has been an explosion in media as well during the past

decade. This media bombardment has exposed the Indian consumer to the lifestyles of

more affluent countries and raised their aspirations and expectations from the shopping

experience – they want more choice, value, service experience and convenience.

Change in Consumer Behaviour: The urban woman today is literate and, in many

cases, employed. There is greater work pressure and increased commuting time. And

with a shift in the family structure, nuclear families have become a significant component

of urban markets.

Consumerism Cycle: The consumer cycle starts with the retail sector dictating the

market. The distributor gains control over the market and becomes an important link

between manufacturer and customer. When the market starts developing and expanding

its horizons, retailers turn into the vital link in this supply chain. Manufacturers have also

realized that retailer recommendations matter, particularly in smaller towns where

retailers are figures of authority or opinion leaders.

Establishment of the Supply Chain: Over the past few years, the consumer goods

sector has been transformed by increased liberalization, continuous reduction in customs

duty, a shift from quota to tariff-based systems for imports and sophistication in

manufacturing. Entry restrictions for multinationals have been removed in nearly all

sectors. All this has enabled chain retailers to enjoy wider range and sourcing options as

well as improved average margins.

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Favourable demographics: India has one of the youngest populations in the world. The

median age in India is 24 years and about 60% of the population is below the age of 30

years. This segment has emerged as the fastest growing consumer group.

Table – 1.4

Consumer Growing Group

Ageing Population 1996 2001 2006

0 - 14n Years 37.8% 35.3% 30.6%

15 – 59 Years 55.6% 58.7% 61.9%

60 & above 6.7% 7.0% 7.5%

Source: Statistical Outline of India, 2001-02.

As stated above, a huge population potential with an increasingly number of

economically active people is bound to increase the demand exponentially for retail

industry in India.

Table – 1.5

Structure of the Indian Market

Households Million ( % of population

Classification

Annual Household

Income

1995 – 96 2001 – 02 2006 – 07

Very Rich

(>INR 3,60,001)

1.2 0.8% 2.6 1.5% 5.2 2.7%

Consuming Class

(INR 80001 – 360000)

32.5 20.1% 46.4 25.9% 75.5 39.5%

Climbers

(INR 40001 – 80000)

54.1 33.7% 74.4 41.9% 81.7 43.1%

Aspirants

(INR 28001 – 40000)

44 27.4% 33.1 18.8% 20.2 10.7%

Destitute

(<INR 28,000)

33 20.5% 24.1 13.7% 16.5 8.7%

Source: NCAER Projections on Structure of Indian Market released in 2001.

24

The above factors are increasing the number of people with higher disposable

incomes and thus have fueled the demand for retail industry in India.

Easy availability of credit: Credit mechanisms including credit cards, personal loans

and EMI schemes have boosted retail spending. For large purchases, consumers have the

option of paying through Equated Monthly Installments, thus reducing the impact on

consumer wallets. Consumer credit has been on the rise mainly due to low interest rates

and higher ownership of credit cards. The average income group today is not averse to

taking loans.

Development of real estate: FDI is allowed 100% in real estate and as a result the

demand for retail space also increased leading to the emergence of malls.

Increase in availability of products and brands: Present day consumers are

increasingly being exposed to international brands and styles due to the impact of

globalization. Increasing number of manufacturers are now trying to satisfy this demand,

leading to an increase in the number of products and brands available to the consumer.

Retailers are increasingly focusing on the supply chain thus resulting in better product

availability for the consumer.

Increased supply of organized retail: The arrival of the international retail chain brands

in India which have brought along with them the state-of-the-art technology and

processes management for the organized retail chains. Large corporate houses are

evincing interest in organized retail.

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Favourable Legislation: Changes in land reforms are making it more conducive for the

large retail chains to get real estate at economical bargains. Introduction of uniform taxes

and VAT will make the retail chains more comfortable to handle the logistic issues with

better location for their warehouses.

Increased demand for the better shopping experience: The income level of the class A

customers is increasing which also implies that the whole base has moved upwards thus

making more disposable income available for consumption.

Increased sourcing options: The suppliers and manufacturers have improved their

quality with improved supply chain solutions thus making their offering more

competitive and comparable to the global standards.

Changing Psychographics: With liberalization came the western media, which gave the

Indian an idea about the culture and customs out there. This did change the dynamics of

the psychographics in India. With changing psychographics, there was a greater need

felt for an organized and a professionally run retail formats to cater to the ever increasing

consumer expectations.

Penetration of Global trends: With the advent of western media and the internet, the

information across the globe has been made easy to access. As a result of this,

organizations operating in many nations have to adopt uniform practices across countries

in terms of the quality of products, service and the value proposition. This to a great

extent has fueled the demand for organized and professionally run retail formats.

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Table – 1.6

Estimated Share of Organized Retail and Per capita Retail Sales

Country Estimated Share of

Organized Retail (%)

Estimated Per Capita

Retail Sales (US $)

USA 85 9,973

Japan 66 9,249

United Kingdom 80 7,851

France 80 7,7124

Germany 80 5,109

South Korea 15 4,144

Czech Republic 30 3,301

Russia 33 1,940

Brazil 36 1,520

Argentina 40 1,359

Malaysia 55 1,264

Thailand 40 1,043

Indonesia 30 665

China 20 599

Philippines 35 591

Pakistan 1 404

Vietnam 22 309

India 4 287

Source: Various, Including ICRIER and Third Eyesight Analysis.

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1.8 OBJECTIVES OF STUDY

To understand the importance of retailing

To focus on the current status of retailing in Chennai.

To list out and elaborate the key drivers of growth of retailing

To provide a clear understanding of the emerging physical store/Non store

formats.

To identify the modern practices adopted by the present day retailers.

To analyze the policies of the government towards retail sector and to provide

feedback for the development of the sector.

To describe the projected retail trends and the growth path as studied by research

agencies.

To study the problems and challenges facing the retail sector and offer suitable

suggestions for the same.

1.9 HYPOTHESES

The starting point of any research is the formulation of Hypotheses. To verify the

validity from the analysis of data, the following hypotheses were formulated for this

study.

There is significant between male and female with respect to making repeated

purchases.

There is significant difference between married and unmarried with respect to

getting ranges of products under one roof.

There is significant difference between age group with respect to sufficiency of

infrastructure facilities.

28

There is significant difference between age group with respect to employee

service satisfaction leading to repeated purchases.

There is significant difference between age group with respect to getting ranges of

products under one roof.

There is significant difference between age group with respect to opinion about

taking good care of the customers and goods.

There is significant difference between educational qualification with respect to

opinion about taking good care of the customers and goods

There is significant difference between occupations with respect to sufficiency of

infrastructure facilities.

There is significant difference between occupations with respect to retail

employee service satisfaction leading to repeated purchases.

There is significant difference between occupations with respect to getting ranges

of products under one roof.

There is significant difference between income with respect to opinion about good

care of the customers and goods.

There is significant difference between retail outlets generally prefer for shopping

with respect to sufficiency of infrastructure facilities.

There is significant difference between purchase decision-makers with respect to

retail outlets employee service satisfaction leading to repeated purchases.

There is significant difference between purchase decision-makers with respect to

getting different ranges of products under one roof.

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There is significant difference between purchase decision –makers with respect to

opinion about taking good care of customers and goods.

There is association between type of goods purchased from retail outlets and

educational qualification of consumers

There is association between retail outlets prefer for shopping and age group of

consumers.

There is association between credit cards used for payment and age group of

consumers.

There is association between purchase decision-makers in the family and marital

status.

There is association between having witnessed the presence of cold-storage

facilities in retail outlets and family monthly income.

There is association between inconveniences encountered while shopping and age

group of consumers.

There is association between welcoming MRP on the products and marital status.

There is association between suggestion to improve store security and occupation.

There is association between opinion about FDI into retail business and family

monthly income.

There is association between modern practices of shopping and age group of

consumers

There is association between VAT system impact on purchases and family

monthly income.

30

There is association between safety measures necessary for a retail unit and

family monthly income.

1.10 METHODOLOGY

This study has adopted descriptive and analytical methodology according to the

situation. Descriptive methodology has been considered vital for the review of

theoretical background of the concept of retailing and customer satisfaction and the issues

relating to the research problem. The adoption of analytical methodology has become a

compelling factor as it concentrates on the views expressed by the customer and their

satisfactory levels across the different retail format. The research design used in this

study is explained in brief below

Sources of data

This study is mostly based on a primary data collected from the sample clients

chosen for this study. As the primary data is the information collected for the first time, a

printed list of questions arranged in sequence was given to elicit the response from the

respondents. A printed and well drafted questionnaire was prepared and distributed

among the respondents. They were assured that the information furnished would be kept

confidential. Mainly structured questionnaire was used as it would help the respondents

to answer the questions quickly by taking minimum time. Further, it becomes easier for

the researcher to make necessary arrangements in advance for classification and

tabulation of data. However, the use of secondary data has also been made in this study

by referring previous research papers & dissertations, books, journals, directories, year-

books, articles & websites pertaining to the research problem.

31

Area of the study

The present study focussed its attention on the views of some sample customers

residing in Chennai city only.

Profile of the study area

Chennai being the fourth largest city in India, it is a major trade center. Chennai a

city that's teeming with varied cultural facets is undoubtedly one of the most beautiful

cities of India.

Chennai's acted as an incubator for the Indian retail industry, with the city

witnessing pioneering initiatives in the retail industry, be it consumer durables, general

provisions or books.

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Chennai is situated on the north-east end of Tamil Nadu on the coast of Bay of

Bengal. It lies between 12* 9' and 13* 9' of the northern latitude and 80* 12' and 80*

19' of the southern longitude on a `sandy shelving breaker swept beach'. It stretches

nearly 25.60 kms. along the Bay coast from Thiruvanmiyur in the south to Thiruvottiyur

in the north and runs inland in a rugged semi-circular fashion. It is bounded on the east

by the Bay of Bengal and on there maining three sides by Chengalpattu and Thiruvallur

Districts.

Table – 1.7

Census 2001 Data

Sl.No. Census Data Males Females Total

1 Total Population 21,61,605 20,54,663 42,16,268

2 Population below Age 7 1,90,044 1,84,045 3,74,089

3 Literates 16,70,094 14,08,910 30,79,004

4 Main Workers 11,23,246 2,20,332 13,43,578

5 Marginal Workers -- -- 97,804

6 Total Workers 11,92,924 2,48,458 14,41,382

Source: Statistical Department, Chennai

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Table – 1.8

Population Distribution and Literacy Rate

% Decadal

Growth Rate

Sex-Ratio (No.

of females per

1000 males)

Population

Density per

Sq.Km.

Literacy Rate

1981-

1991

1991-

2000 1991 2001 1991 2001

Males Females

1991 2001 1991 2001

17.24 9.76 934 951 22,077 24,231 87.86 84.71 74.87

75.32

Source: Statistical Department, Chennai

Chennai city had a population of 5.34 million, while the total metropolitan

population was 8.24 million. The estimated metropolitan population in 2006 is

4.5 million. With the area of the Chennai Corporation being extended to 456 km² the

population with in the area administered by the corporation was 5.6 million in 2001

which makes it the third largest city in India. In 2001, the population density in the city

was 24,682 per km² (63,926 per mi²), while the population density of the metropolitan

area was 5,922 per km² (15,337 per mi²), making it one of the most densely populated

cities in the world. The sex ratio is 951 females for every 1,000 males, slightly higher

than the national average of 944. The average literacy rate is 80.1%, much higher than

the national average of 64.5%.

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AIR

Chennai International Airport

Chennai serves as a major gateway to southern India and the Chennai

International Airport, comprising the Anna international terminal and the Kamaraj

domestic terminal, is the third busiest airport in India. The city is connected to major

hubs across Asia, Europe, and North America through more than 30 national and

international carriers. The airport is the second busiest cargo terminus in the country. The

existing airport is undergoing further modernization and expansion, and a new Greenfield

airport is to be constructed at an estimated cost of 2,000 crore in Sriperumbudur

SEA

The city is served by two major ports, Chennai Port, one of the largest artificial

ports, and Ennore Port. The Chennai port is the largest in Bay of Bengal and India's

second busiest container hub, handling automobiles, motorcycles and general industrial

cargo. The Ennore Port handles cargo such as coal, ore and other bulk and rock mineral

products. A smaller harbour at Royapuram is used by fishing boats and trawlers.

RAIL

MRTS Train station in Chennai

Chennai is the headquarters of the Southern Railway. The city has two main

railway terminals. Chennai Central station, the city's largest, provides access to other

major cities as well as many other smaller towns across India. Chennai Egmore is a

terminus for trains to destinations primarily within Tamil Nadu; it also handles a few

inter-state trains. The Chennai suburban railway network, one of the oldest in the

35

country, consists of four broad gauge sectors terminating at two locations in the city,

namely Chennai Central and Chennai Beach. Regular services are offered in the

following sectors from these termini: Chennai Central/Chennai Beach - Arakkonam -

Tiruttani, Chennai Central/Chennai Beach – Gummidipoondi - Sullurpeta and Chennai

Beach – Tambaram - Chengalpattu – Tirumalpur (Kanchipuram). The fourth sector is an

elevated Mass Rapid Transit System (MRTS) which links Chennai

Beach to Velachery and is interlinked with the remaining rail network. Construction is

underway for an underground and elevated Chennai Metro rail.

ROAD

An MTC bus in Chennai

Numerous state highways link the city to Puducherry and other towns and cities in

Tamil Nadu and neighbouring states. The Chennai Mofussil Bus Terminus (CMBT), the

terminus for all intercity buses from Chennai, is the largest bus station in Asia. Seven

government-owned transport corporations operate inter-city and inter-state bus services.

Many private inter-city and inter-state bus companies also operate services to and from

Chennai.

The Metropolitan Transport Corporation (MTC) runs an extensive city bus system

consisting of 3280 buses on 643 routes, and moves an estimated 5.52 million passengers

each day. Vans, popularly known as Maxi Cabs and 'share' auto rickshaws ply many

routes in the city and provide an alternative to buses. Metered call taxis, tourist taxis and

auto rickshaws are also available on hire. Chennai's transportation infrastructure provides

coverage and connectivity, but growing use has caused traffic congestion and pollution.

The government has tried to address these problems by constructing grade

36

separators and flyovers at major intersections, starting with the Gemini flyover, built in

1973 over the most important arterial road, Annasalai to the recently

completed Kathipara Flyover.

Pilot Study

Pre-testing the questionnaire (or) pilot study was done before the questionnaire

was finalized. After the questionnaire was drafted, in order to measure its

comprehensiveness, it was distributed among a few respondents. Their information were

studied to determine the need for re-structuring the questionnaire, re-sequencing the

questions, addition or deletion of questions, giving more instruction for filling up, etc.,

was also decided. The respondents who formed part of the pilot study were carefully

included to form the actual group that was studied later. Based on the pre-test, necessary

modifications were done in the questionnaire and then it was released for use.

Data Collection Method

For obtaining the information, the study adopted a printed questionnaire covering

the different objectives of the study in the form of emergence of the different formats of

modern retailing, their impact on the customer‟s purchasing patterns, the current

inconveniences faced by the customers while shopping and the suggestions offered by

them were all included in the questionnaire. The customers were met in person and their

opinion elicited through Structured Interview Method.

Period of the study

The collection of information from the sample respondents started from the year

2007 and the collection and the analysis and the data collected was completed in

December 2010.

37

Sampling and Sampling size

Random sampling method is followed in collecting the required data from the

respondent. The entire geographical area of Chennai city was divided into 5 zones. - viz.,

North Chennai, South Chennai, East Chennai, West Chennai & Central Chennai. From

each zone a random of 60 persons was randomly selected and the printed questionnaire

was given to them. On the whole 300 questions were distributed to the respondents of

the different zones.

Tools for data analysis

Statistical technique constitutes an integral part of the research analysis. The data

compiled was subjected to relevant analysis to have inference and meaningful analysis.

In this context certain basic statistical tools like simple averages, percentages, variants

were applied in this research. The results were also diagrammatically exposed wherever

necessary. Advanced statistical tools like Chi-Square test, Anova test, Descriptive

sampling etc. is also used.

1.11 LIMITATIONS OF THE STUDY

The findings of the study are confined to the Chennai City alone. India is a

country of varied languages, culture, tradition and practices which vary from

place to place. Therefore, the results of this study cannot be equally applied in all

parts of India.

The opinion given by the customers may also vary because of individual

differences due to age, sex, income, profession, etc.

38

The opinion expressed by the respondents during the period of study may also

undergo changes at a subsequent period.

1.12. CHAPTERISATION

The present study was undertaken with a view to measure the growth of organized

retail, the emerging modern practices in retailing and to suggest necessary measures for

the improvement of the sector. The questionnaire was directed towards the consumers

and their information forms the core of the study.

Chapter-I: Introduction

The first chapter, Introduction gives a brief idea of the subject matter of the thesis.

The nature of the topic, the objectives of the study, the background of the study, the

methods used for the collection of data, the statistical methods used and the chapter

classification have also been presented.

Chapter-II: Review of Literature

The second chapter traces out the related reviews of literature to the study. This

chapter narrates the opinion expressed by eminent research scholars in the various

research studies that they have conducted about retailing practices.

Chapter-III: Retailing an Overview

The third chapter gives a description about the nature and importance of retailing,

retailing in other countries, retailing in India, emergence of modern store formats and

emergence of modern practices of retailing in Chennai.

39

Chapter-IV: Data Analysis and Interpretation -I

The fourth chapter starts with a statistical analysis of the data collected from the

customers. Customers are the real judges to decide the future course of the retailing

business units. Therefore, their opinion collected is analyzed in the form of percentages.

At the end of every question, conclusions were given.

Chapter-V: Data Analysis and Interpretation -II

The fifth chapter undertakes a detail study of the questionnaire by using advanced

statistical methods in the form of t test, chi-square test, ANOVA test and correlation and

regression methods. At the end of every test, detailed conclusions are given.

Chapter-VI: Findings, Suggestions and Conclusions

The sixth chapter gives a summary of the findings, suggestions and conclusion of

the study. The idea is to make the whole thesis a comprehensive study with a beginning,

middle and a proper end.

1.13 CONCLUSION

Retailing in our country is becoming increasingly important and organized

retailing is poised to grow at an exponential rate in the coming years. Research and

retailing is very important. Every retail organization needs to understand customer

preferences in choices before designing its processes for improvement. Understanding

customers and their expectations leads to better performance and research provides the

way forward for the organization to grow.

40

CHAPTER-II

REVIEW OF LITERATURE

2.1 INTRODUCTION

It is often said that the quality of a research study depends on the quality and

quantity of literature surveyed. The researcher first broadly selected the field of study

and the issues to be probed and decided on the information required. Later the

researcher discussed with the Guide in detail and other Senior Professors and Lecturers in

the Commerce Department while deciding the source of information.

Various websites and the libraries of Vivekananda College, Madras University

and IIM, Bangalore, provided volumes of information for almost all the research issues

and the other related matter. The archives in Chennai City provided historical and

anthropological facts. Some of the reputed newspaper organizations like The Hindu,

Times of India, etc. provided much published information. The publications of the

Government of India like Planning Commission, Statistical Department of the

Government of Tamil Nadu contained classified source of information for incorporating

in the research.

The information compiled from the above sources was first scanned and the

information was segregated on the basis of its importance. Then the summary of each

material was developed. The details indicated in the review literature are name of the

author, title of the book/report, place of publication, year of publication, etc. The final

information is presented in the order of the year in which it was published.

41

2.2 LIST OF REVIEWS

R.Krishnan (2001) in his research thesis titled “Technology in the Indian Retail

supply chain” pointed out the,” Information Technology can and will play a major role in

improving the efficiencies of the retail supply chain in India. Organizations have become

aware of the importance of technology to improve efficiencies and are taking definite

steps toward leveraging IT in improving the efficiencies of the supply chains.”

R. Thenmozhi (June 2004) in her article titled “Logistics Management”

summarized her opinion as,” The traditional concept of Logistics started with products at

Producer‟s Plants and ended with handing them over to Users. But the present concepts

of Logistics Management deal with both incoming and outgoing distributions. i.e the

entire Supply Chain, which is actually oriented to effect value – added flows from origin

to destination”.

Gibson G. Vedamani, (2006) CEO, Retailer Association of India, in his article

titled “A Revolution in the Making” highlighted the,” Availability of Quality Real Estate

is an important factor for Retailing to take off in a big way. In practical terms this means

that all the malls being planned should be available for Rattlers to exploit. This, along

with more brands appearing in the Indian Retail landscape, will enable Retailing to

achieve a growth rate of 30 % in the next 5 years”.

Simrit Kaur (2006-2007) in her research paper titled “Crisis of Retail Trade”

concluded with,” A rapid increase in the demand for real estate is escalating the rental

prices to a level that is way beyond the purchasing power of a common man. A large

42

number of small and marginal farmers are also likely to suffer on account of the non-

verifiable and arbitrary quality standards set by the modern retailers”.

Smriti Bajaj (2006–2007) submitted a dissertation titled “Consumer Perceptions

of Global and Local Brands in the Indian Retail Industry” came out with some useful

conclusions as,” Indian consumers were not prejudiced against foreign brand names. In

fact, they evaluated them higher on technology, quality, status and esteem than Indian

brands and attributed higher credibility to those countries of origin.”

Anuradha Kelhan, (2007) in her topic on “Impact of Malls on small shops

and Hawkers” pointed out to a decline in sales of groceries, fruits and vegetables,

processed foods, garments, shoes, electronic and electrical goods in these retail outlets,

ultimately threatening 5 per cent of them with closure or a major decline in business.

Only 14 per cent of the sample of small shops and hawkers has so far been able to

respond to the competitive threat of the malls with the institution of fresh sales-

promotion initiatives.

A. Sreejth and Dr. Jagathy Raj V.P. (2007) presented a research paper titled

“Organized Retail Market Boom and the Indian Society” narrated the, “Intense

competition among the players of various formats all help to increase the quality of

service of the existing local retailers and greater customer satisfaction in Indian society”.

Preeta Vyas and Ankush Sharma, (2007) representing Indian Institute of

Management, Ahmedabad, in their research paper titled “Indian Organised Apparel

Retail Sector and DSS” [Decision Support Systems] observed the, “ DSS [Decision

43

Support System ] which provide timely and accurate information can be viewed as an

integrated entity providing management with the tools and information to assist their

decision making. It appears that Indian apparel sector is in a trajectory and new players

are keen to enter with latest DSS tools to use information for decision making which may

provide them a competitive edge.”

Vijay Gobale, Ashutosh Dhekne, Piyush Masrani, Sumesh Tirodkar and

Tonmay Mande (2008) in their research study on “Demand Forecasting in the Indian

Retail Industry” came out with the “Demand forecasting remains a critical tool that plays

key roles in manufacturing, advertising, placement and allocation of resources. It is

useful for retailers who have their own brand labels and also for small scale retailers with

no brand labels.”

N. Poornima Srikrishna (2008, January 15) wrote an article titled “Satisfied

Customer is product goodwill ambassador” in which she highlighted the, “Customer is

the focal point of every business. The very existence of business depends on Customer

satisfaction. A sound product and a competitive price are a must to please the customer

but definitely not the only parameter that result in customer satisfaction “.

D. Murali (2008, January 26) wrote an article on “Build a Mall as a brand” in

which he narrated the “Make sure that the building is populated by brands that

communicate the right message by their very existence”.

Managala Ramamurthy (2008, February 9) wrote an article “Shop for answers”

in which she emphasized the boom trend for retail as “There are 400 million customers

44

waiting to be tapped. With a good quality product at the right price, our aim is to reach

out to India like the Indian Post Office System”.

Catherine Jana Glon (2008, March 3) wrote an article “Retail Renaissance” in

which she revealed the “Super Markets have a huge spread. To win the patronage of the

local market is a real challenge. How a Retailer caters to the needs of the local market

lays his success because customer is the undisputed King of the Retail Industry.”

Sandhiya Dev (2008, April 6) in her article titled “Purchase Power” and stressed

the, “Children constitute a major consumer market with direct purchasing power for

snacks and sweets and indirect purchase influence while shopping for high end items.”

Meera S (2008, May 4) presented an article on “Super Market Shopping in

Chennai” in which she highlighted the, “The Super Market culture is here to stay in

Chennai. One of the advantages of these outlets over the traditional grocery stores–which

are also going in for Super Market–like displays–knows clearly what is available. The

outlets have to introduce and promote products without compromising on their brand

neutrality.”

Anjali Prayag (2008, December 31) wrote an article titled “Luxury Segment

Consumers look for Value Retailing” in which she suggested, “Brand value, even in the

luxury segment has never been under so much scrutiny; Consumers are looking for the

return they will get from the experience of owning, wearing or giving fewer, better

things.”

45

Professor Joshuva Banfield, Director, Centre for Retail Research, Nottingham,

U.K., (2008, December) wrote an research article titled “Best of The Worst” in which he

analysed the following, “The costs of the retail crime, calculated on the basis of crimes

by customers, employees and suppliers / Vendors plus the costs of loss prevention were

112.8 billion dollars in 2008. These costs have to be paid by every one – Retailers,

Employees, Suppliers and Shoppers – and are equivalent to 229.73 dollars per family”.

Mr. Zainab Morbiwala (2008, December) wrote a research article titled

“Catalogue Retail in India” in which he emphasized the, “With the trend of Catalogue

retailing, yet to gain momentum in India, most Retailers – still focused on the brick and

mortar format – are yet to fully exploit the true potential of the medium”.

Sangeetha Gosh (2008, December) wrote a research article titled “Retail Kiosk -

Plug and Profit” in which she stressed upon the, “The Indian Retail Scenario has been

witnessing significant advancement with traditional Retail formats making way for more

innovative and technologically evolved formats. One of the innovations to watch out for

these the “The Retail Kiosk” which truly makes business sense for Retailers because of

its cost benefit structure “at the point of sale” establishment process and ease and

convenience for the customers too”.

Bhavya Misra (2008, December) wrote a research article titled “Stop! Reverse

and Play” in which she emphasized the importance of recycling with the, “Reverse

supply chain includes aspects such as remanufacturing and refurbishing, processing

returned merchandise due to damage, seasonal inventory, restock, salvage etc. No

46

business exists exclusive of its whole gamut of activities, with out paying attention to not

only forward supply chain but also the reverse of it”.

Sandhya Dev (2009, January 4) wrote an article titled “Making your Shopping

Experience Pleasurable” in which she highlighted the importance of malls as, “Mall

Management is pivotal to the growth of the business. Both the Mall and the Retailer are

interdependent. From the Customer‟s point of view he / she benefits to obtain a variety

under one roof”.

S. Meera (2009, February 22) wrote an article titled “All in One Place” in

which she pointed out the role of multi brand outlets as, “Men‟s, Women‟s and

Children‟s wear, different brands, from lipstick to belts, from bags to Garments-All under

one roof. This makes it easier for the customer to shop for the entire family, and for the

retail outlet to retain Customer loyalty.”

Vignesh Shankaran Rajaram (2009, May 10) presented a research article titled

“Big Gadgets, savvy customers” in which he emphasized the role of consumer in

retailing with the, “Today‟s consumer‟s is well informed and well updated, transforming

the way his choices are made. At the end of the day, it is the end customer who „makes‟

or „breaks‟ a gadget. Here, the customer certainly wins.”

Suranjana Basu and Shubra Saini (2009, November) presented an article titled

“Multiple Channels of Retail” in which they summarized the,” The evolution of Retail

is now directing itself to Multi - Channel retailing or cross channel retailing. Besides

47

brick and mortar stores retail is making ways to other channels like Internet, Mobile

Phones, TV and print to cross over the boundaries of usual form of retailing”.

G. Manokaran, (2009, November) presented a research paper on “Green

Marketing” narrated the following with reference to the role of retailing in environmental

protection as,“Companies that develop new and improved Products and Services with

environmental inputs in mind give themselves access to new markets, increase their

profit, sustainability, and competitive advantage over the companies which are not

concerned for the environment”.

M. Balasubramanian (2009, December) is Research Scholar in Jamal

Mohammed College, Trichy, presented a research paper on “Twinsumerism” in which he

highlighted the, “The twinsumer trend is part of an all – encompassing trend changing

who and what consumers rely on when making purchase decisions, both need and

impulse driven”.

Andrew Levermore, (2009) Executive, Buying & Merchandising Management,

Marco, South Africa, presented an research article titled “Are we paused or poised”

in which he suggested the, “Retailing is not an easy game that can be learnt in a board

room. It is some science, but mostly art. There is absolutely no substitute for starting at

the bottom”.

Geoff Hiscock, Business Journalist & Author, Sydney, Australia, (2009) wrote

an research article titled “Are there clouds in the Indian sky?” in which he came out

with the,“The shortcomings that do exist in India include a lack of good, affordable retail

48

space ; A lack of skills in jobs that range from Management to Merchandising to truck

driving ; a lack of reliable, good – quality suppliers ; and lack of logistics to get food and

other products on to store shelves in time and on budget. It is the sort of scenario that

opens a mountain of possibilities for Indian and Overseas investors and entrepreneurs”.

Dr. Ashok Gulati and Kavery Ganguli, Director, IFPRI, Asia, New Delhi, (2009)

presented a research paper titled “Retail Lift the Tail; ensuring competitiveness with

inclusiveness” in which they came out with the, “The recent performance of the

organised Retail sector particularly the food and grocery has been very impressive and

this resulted in unveiling a host of opportunities as well as challenges before the Agri -

Food Sector. The primary challenge lies in steering this impetus to ensure growth with

inclusiveness that is a policy priority and has enormous implications for a small holder –

driven agricultural sector”.

B.S. Nagesh, Chairman, Retailer Association of India, Customer care Associate

& M.D., Shopper’s Stop Ltd., (2009) presented a research paper on the “Challenges of

executing Modern Retail in India” in which he pointed as,” Human Resources are an

integral part of any Retail setup. Human Resources cost is amongst the top three

operating costs in the P & L of any Retailer. Retailers in India have to pay a very high

Salary for the Managerial staff thus squeezing on the money available for the front end

associates. This has led to big inequality in the stand cards of Associates thus leading to

high level of attrition and poor quality of service”.

49

Tim Eynon, Director, Provogue (India) Ltd., (2009) wrote a research article

titled “Growth planning for the Retail Industry” in which he emphasized the, “We must

recognize that the organized Retail Sector, whilst important for the growth of the overall

Indian Economy, must coexist with the traditional sector if we are to succeed in the

overall goal of improving the standards of living of everyone in India”.

Anshuman Magazine, Managing Director, CB Richard Ellis India, (2009)

published an article titled “Change in Dynamics of the Indian Retail Sector” in which

he indicated the, “The Retail Sector in India is witnessing unparalleled growth. Fresh

Retail geographies are emerging, innovative formats are being introduced and Retailers

are tapping new consumer segments with prolific product offerings.”

Damodar Mall, Group Customer Director, Future Group, (2009) wrote an

article titled “Green habits Retailing” in which he emphasized as,” Modern Retail is

following the foot steps of Telecom. There is certainly an opportunity to skip many

stages of the evolutionary cycle here as well. As we grow, modernize and consume more,

we can retain and encourage Green habits and transmit them to the rest of the world as

“Next practices”.

Jeyanth Kochar, Managing Director, GO FISH, Retail Solutions, (2009) in his

article “Who is caring for the Customer?” pointed out the role of customer service in

retailing as,” Customer Service is the greatest sustainable advantage that a Retailer has

and the sooner you learn this, the greater will be your potential profit.”

50

Brenda Sternquist, Professor of International Retailing, Michigan State

University, (2009) published an article titled “International Retail Trends and their

Impact on India” in which she stressed upon, “Scientific Logistics allow companies to

track inventory, make calculations about how trucks can be optimized in the

transportation paths and how inventory can be optimized. The importance of the

Scientific Logistics is in knowing the information behind the inventory”.

Archana Prakash, Director, People Tree, HR Services Pvt.Ltd., (2009) presented

an article titled “Exit it, Enter Retail” in which she pointed out the following as their

skills required of retailers,” Customer – handling skills, pleasing personality and

knowledge of English and local language is a must in the entertainment Retail segment”.

Rajneesh Mahajan, Director, Transaction Services, Retail Cushman &

Wakefield, India, (2009) wrote an article titled “City wise Real Estate Trends” in which

he compared the interdependence of retailing and real estate in the following manner -

“ Along side emerging directions in Retail formats, the Real Estate Developments are

also evolving top create quality spaces for Retailer‟s diverse market requirements”.

Sachin Khandelwal (2009) presented an article titled “New Growth

Opportunities” in which he emphasized the following about the role of various credit

cards in Retailing, “In a growing economy like India, card products are just beginning to

move beyond the urban affluent and upper middle class, opening potentially large new

growth opportunities”.

51

Manoj Kumar Jain, A.K. Dalela and Sandeep Kumar Tiwari (2009) presented a

research paper titled “Customer Relationship Management in Indian Retail Market”, in

which he highlighted the role of CRM in retail as; “CRM enhances customer satisfaction

and offers a pleasant shopping experience where the customer is treated important.

Indian retailers have to implement these strategies to have a better growth and improve

customer satisfaction.

Subeer Moitra of KPMG India,(2009-2010), in his article “The Present

Scenario about Retailing” in which he made an assessment of the present in retailing and

also predicted its future as,” India‟s rapid economic growth and the ongoing consumer

boom have contributed greatly to the growth of the Retail Sector. More specialized

consumer markets such as luxury goods, big-ticket durables, entertainment services and

housing may find further in roads in niche cities. Although niche cities may not appear as

large on the surface, consumption patterns may evolve more quickly, creating deeper

addressable markets”.

Mohit Khattar, Managing Director, Nature’s Basket Limited, (2010, January) in

his article “What is your pick, big or small” in which he narrated the role of packaging

as “Products that are consumed daily or by a larger percentage of the family members

typically do better with large sizes, whereas Products consumed infrequently or by some

members of the family do well with smaller sizes”.

Sharmila Das (2010, January) presented an article titled “Keeping your

employees motivated” in which she offered the following suggestions for motivating the

employees of retail outlets, “Keeping an employee of a retail outlet motivated has many

52

dimensions, providing opportunities for learning and growth, encouraging employees to

take additional responsibility, financial security and respect and having fair policies”.

Shubhra Saini, (2010, January) in her article, “Saving Paper is the need of the

hour” in which she gave the following ideas for the retailers about the usage of papers in

retail outlets as,” Retailers should ask their employees to use the paper judiciously,

should switch to paper bags from poly bags or should ask the customers to carry the

paper bags from home, should use cloth napkins instead of paper napkins for internal use,

should use waste papers for internal communication, should prefer online mode to

communicate with their customers, should prefer using recycled paper.

Vinitha Nayar (2010, February 7) in her article titled “The Thrill of a bargain”

narrates the experiences of the customers while shopping on the road side shops as,

“Shopping on the street will never go out of style even with the onslaught of swanky

malls and swish stores. One of the most enticing thrills of street shopping is of course the

great bargains which are why, even though Malls and state-of- the-art stores beckon, the

allure of street shopping will never fade.”

Meera.S (2010, February 21) in her article titled “Bar Codes make billing easy”

in which she emphasized the importance of bar-coding in retailing as, “It saves a lot of

time and at the same time it attempts to eliminate the errors arising on account of manual

intervention on billing or stock count.”

S. Meera (2010, February 28) in her article titled “Hyper Markets for Value

seekers” in which she highlighted the importance of hyper markets with the, “Hyper

53

Markets offer value on the retail purchase. They may be located a little far away but that

is not a deterrent because the savings would still justify that travel cost in case of bulk

buying.”

N. Kanimozhi & Dr. A. Jayakumar of Periyar University, Salem – 11 (2010,

February) presented a research paper titled “Challenges and opportunities of Rural

Marketing” in which they emphasized the potential of rural markets elaborately as, “The

importance of the rural market for some FMCG and durable marketers is underlined by

the fact that the rural market accounts for close to 70% of toilet soap users and 38 % of

all two wheelers purchased. The rural market accounts for half the total market for TV

sets, fans, pressure cookers, bicycles, washing soaps, blades, tea, salt and tooth powder.

What is more, the rural market for FMCG products is growing much faster than the urban

counterpart.”

Vishal Krishna (2010, February) wrote an article titled “Wild Cards” in which

he summarized the relevance of retail formats by the following critical comments as,”

The organized retail space has very little differentiation. Most business models are

similar. However, models are still evolving in the country and there is ample opportunity

for new players.”

S. Sathya Sundari (2010, March) in her research paper titled “Consumer

perception and behaviour”, in which she suggested the following to the retailers for

understanding the consumer behaviour is,” The study of consumer behaviour investigates

and develops methods to quantify, forecast and influence the behaviour of consumers.”

54

K. Gopinath, CEO, Modern Technologies (2010, March) presented a paper titled

“Centralized Retail Solutions” in which he narrated the role of technology in retail

operations by way of the,“Managing the total Retail operations across all the branches

was a huge issue. For connecting the whole operations, we deployed RAYMEDI

Solution, and now I am viewing every single transaction from my desktop through online

billing station”.

Ramesh Jeyaraman, General Manager (India), ADT security (2010, March)

wrote an article titled “Safeguards for Retail Business” in which he offered the

following suggestions for loss prevention to the retailers is,“In the retail sector, we see

the market beginning to pick up and the loss prevention is especially gaining importance.

We are seeing an increased need for video surveillance, people counting and electronic

article surveillance solutions”.

Vyas Anand, Spokesperson, Dabur India Ltd.,(2010, May) in his article titled

“Slipping on a Retailer’s shoes” in which he expressed the importance of consumers in

relation to retail as, “In retail, consumers need convenience. The neighbourhood kirana

store by virtue of being the nearest store to consumers will always occupy that position of

convenience”.

Neeraj Jaipuria – Director – Sales, Asia Pacific, BI Retail (2010, May)

presented an article titled “Trends of retailing” in which he analysed the purchases of

consumers with the age group as,” There are multiple factors driving Indian Retail

Growth. With roughly 60% of the total population below 30 years of age, favourable

demographics are expected to drive consumption across categories. The much talked

55

about the purchasing power of a young consuming middle class is finally crystallizing

today”

Sahiba Sachdev, (2010, May) wrote an article titled “Gaming Retail Game

Plan” in which he narrated the, “Gaming is the new retail opportunity. With the

advancement of technology, the Internet and mobile phones, the craze for gaming, which

took birth in the mid 70‟s, has developed.”

Sailesh Chaturvedi, CEO & Director, Tommy, Hilfigure Apparels, India, (2010,

May) presented an article titled “Loyalty programme right!” in which he emphasized the

importance of Customer loyalty programme as, “A Customer loyalty programme is a

well thought - out and lasting marketing effort which provides encouragement to repeat

purchases by customers who display loyal buying behaviour. In retailing these

programmes generally reward loyal customers with discounts, special offers, rebates,

points or prices”.

Mary Luise Jacobsen, MD, Retail Management Solutions (RMS) Pvt. Ltd.,

Singapore, (2010, May) presented an article titled “Developing a Private Brand” in

which she highlighted the, “A successful brand is one that keeps the promise so that

customers will remain loyal. It involves much more than a name, logo and slick

marketing”.

Vivette D-Cruz, Manager, Retail and Consumer Products Practice, Earnst &

Young (2010, May), in her article “The Changing face of the Indian Retail” emphasized

56

the, “To capitalize on the opportunities in the retail sector, players are to have patience

and perseverance as retail is a capital and people intensive sector.”

Sujay Mehdudia (2010, July 8) wrote an article titled “Enhanced FDI in Retail

will transfer Rural Economy” in which he brought out the benefits of the FDI as, “FDI

in retail will generate amazing number of opportunities to the rural and urban youth and

also provide remunerative price for their produce to the farmers. Small vendors and

merchants will be ensured of products at whole sale prices and reasonable prices by the

big chains.”

Ramnath Subbu (2010, July 12) wrote an article titled “Lofty ambitions

rekindle interest in Retailing” in which he emphasized about the need for Foreign

Direct Investment in retail as, “When FDI flows into retail, there are a whole range of

benefits. For the end-consumer, prices will be kept in check by the large scale

competition and beneficiaries would encompass all from „Farm to Folk‟. Also, the supply

chain will become a value chain”.

Vijayalaskhmi Sridhar (2010, August 22) presented an article titled “Smart

Surveillance” in which she emphasized the need for store security as, with the retail

sector growing steadily and customer demands increasing, safety and security provisions

at retail establishments seem to be the need of the hour. Cameras and CCTVs installed at

suitable vantage points at retail outlets help the management to virtually „see‟ what is

happening at the store and to forestall thefts.”

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S. Meera (2010, August 29) in her article titled “Take your own bag” in which

she emphasized about the importance of cloth and jute bags in the retailing as “The cloth

or Jute bag was a faithful companion for the shoppers till plastics came into the picture. It

is time now to re introduce the traditional cloth bags in order to save the environment

from pollution”.

Vidhya Hattangadi, Director cum Professor (Marketing) of Management at

Anjuman – I – Islam‟s Allana Institute of Management Studies, Mumbai (September

2010) presented an article titled “In the Wonderland of Visual Merchandisers – All

that glitters is Gold” in which she highlighted the importance of Visual Merchandising in

the, “In the wake of the retail boom Visual Merchandising (VM) has begun to play a key

role in creating the right ambience within the stores and attracting the shopper‟s attention.

VM is fast catching up in the metros. Big retail companies are also investing a lot in

Visual Merchandising. It infuses a new life into the stores. Passion for design and

creativity are the trade marks of a good Visual Merchandiser”.

Priyanka Azad, Senior Lecturer, Marketing and Retail, New Delhi (September

2010) presented an article titled “Private Labels in the Indian retail sector spreading

their wings” in which she highlighted the importance of the private labels by the “Over

the past few years, private label brands have penetrated into the Indian retail markets and,

most arguably, have begun to dominate the National brands”.

Meera.S (2010, October 24) wrote an article titled “The insatiable need” in

which she emphasized the importance of trained man power for the retail outlets through

the, “Retail involves high levels of customer interaction; the employees have to have the

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adequate skill–set, knowledge and tools to be successful at the work place. A Retailer can

give training for his employees through independent training institutes or management

institutes”.

Vijayalakshmi Sridhar (2010, October 24) wrote an article titled “Changing

choices” in which she stressed about the importance of product variety by the, “Today‟s

customer is continuously looking for variety in his life in the products he / she uses. The

retail market has transformed to meet these new consumer requirements.”

Deepa Venkataraman (2010, November 7) presented an article titled “It is a

Mall World after all” in which she narrated about the emergence of Malls as

“Consumers have already felt the comfortable experience of having shopping,

entertainment and food all under one roof and hence there is a strong need to have Malls

located at various catchment areas which are still untapped.”

S. Jain (2010, November 14) wrote an article titled “Your virtual card gets

bigger” in which he highlighted the role of online shopping in the days to come through

the,“Shopping no longer means braving your way through traffic jams and crowds. You

can shop at an E-Store and in future, online retail will gain in popularity”.

Rahul Dev (2010, November 21) presented an article titled “What is in Sale? and

… discount !” in which he highlighted the importance of the bargain in the minds of the

customers as,“ The different kind of offer sales by retailers is like electricity. If used

wisely and with care, it can help save a lot of money as long as the shopping is planned

and executed well.”

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V. Rajesh, (2010, November 21) a retail expert wrote an article titled “They

bring Retail to you” in which he emphasized about the importance of moving retailers

as,“Moving retailers (Vendors, Push Carts and Moving Retailers of all kinds) help to

provide a direct connect to a specific customer group. There are possibilities to leverage

this connect, the buying behavior of the specific group, and maximize this format to

increase penetration. The ideas are limitless”.

Priyank Azad, Senior Lecturer, Marketing and retail Management, Delhi

Business School (November 2010) in her article titled “Seven Steps to Success in Indian

Retail” in which she suggested the, “1) Cost Management 2) merchandising 3) An

Integrated Supply Chain Network 4) Customer Satisfaction through Multi-Format

Retailing 5) Store Design and Ambience 6) Forming alliances 7) Innovations”

Meenal Dhotre, Assistant Professor in Viswa Karma Institute of Management

(VIM), Pune (November 2010) wrote an article titled “Customer Complaints – How to

turn them into assets?” in which she emphasized the following in relation to customer

satisfaction is,” While customer complaints can be a real challenge for a company, they

also provide an opportunity for the company to turn negative situations to positive ones.

By effectively dealing with the customer complaints, a company can not only appease a

dissatisfied customer but also build loyalty”.

Dr. I. Sathya Sundaram, Economists and Writer, Machilipatinam – 521001,

AP, (November 2010) wrote an article titled “FDI in Retail Sector” in which he

highlighted the role of FDI in retailing as , “FDI in retailing is likely to confer the

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benefits of new technologies on consumers. The bulk of the Indian economy would gain

from the emergence of well capitalized retail mobility. The retailers can ensure cost

reduction, and lower prices. Also, retailing can ensure the quality of the product, better

shopping, experience and customer services.”

Bhavana Nagpal (2010, December 5) wrote an article titled “The Power of

branding” in which she presented the following comments as, “ Retail is not just about

selling a specific product, it is not just about advertising. It is about understanding

customer needs, meeting their expectations, serving them well inside the store and

establishing the perception in the mind of the consumer that the brand is „reflection of

me”.

Meera.S (2010, December 5) wrote an article titled “Enhancing the Retail

Value Chain” in which she elaborated the social responsibility of the retailers as “The

retailer is becoming proactive in addressing social and environmental related issues

through stringent practices.”

V. Rajesh (2010, December 26) wrote an article titled “What is Impulse

Shopping?” in which he narrated the, “Impulse Shopping is serious business for any

self-service store as customers can end up buying as much as a third of their purchases

based on impulse triggers. Such purchases are triggered by the retailer using several cues

such as visibility, sound, smell, etc”.

Sandipan Deb, Faculty Associate, Faculty of Management, IU, Tripura (2010,

December) presented an article titled “Rethinking Sales – the promotional paradigm” in

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which he emphasized the changing ways of selling methods of retailers through the,“The

landscape of selling has changed dramatically. Over the last decade as a result of intense

competition and the changing business scenario. This requires the companies to adapt to

this rapidly changing context by exploring new avenues and revamping the existing

strategies.”

Pooja Pathak, Lecturer in School of Management Sciences, Lucknow, UP,

(2010, December) presented an article titled “The Celebrity endorsement Market in

India” in which she highlighted the, “Celebrity endorsements have a huge impact on the

Customer‟s minds and can „persuade‟ customers to buy a product. Retailers as marketers

have to successfully follow and implement Celebrity endorsements.”

Priyank Azad, Senior Lecturer, Marketing and Retail Management, Delhi

business School, New Delhi (2010, December) in her article titled “Wal-Mart in India –

Strategies and Scope” narrated the following relating to the performance of Wal-Mart

discount stores as, “Wal-Mart, world‟s No.1 retailer recently made an entry into the

Indian markets through a joint venture with Bharti Enterprises Ltd., Looking at Wal-

Mart‟s performance in the past few decades and its efficient implementation of strategies

in different markets across the world, its future seems bright and shining in India.”

Ramesh Srinivas, Executive Director, K.P.M.G Advisory Services (2010)

presented a paper titled “Hopes of Rapid Growth Revive” in which he emphasized the

role of FDI in India through the, “FDI or No FDI, India needs more retailers and

increased retail presence. The Governments favourable talks on FDI ignited ambitions in

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many of the global players to be among the first movers into a virgin retail territory,

namely, India”.

2.3 HOW THIS STUDY VARIES FROM THE PREVIOUS STUDIES

After the review of literature, the researcher observed that there are so many

studies existing in the field of retailing. But majority of them focus on one aspect of the

marketing viz. logistics, advertising, salesmanship, offers and discounts etc. But a

majority of them are yet to focus on the new emerging areas in the field of retailing.

The researcher has identified a gap to be filled by deciding to take up a

comprehensive study focusing the customers who constitute the deciding factor in retail

marketing. The present study analysis the customer opinion and also points out the

inconveniences faced by the customers and the retailers. It also offers suggestions to

overcome the present day problem and inconveniences met by the customers. Due to the

following reasons, the present study can be distinguished from others.

Brand consciousness is on the rise in the present environment. The above factor

is studied by measuring the relationship between manufacturer brands and private

brands.

Many new retail formats are emerging. Every one of them have their own special

features. The level of popularity in the minds of the customers is measured

among the sample customers.

The amount of retail sales is directly related to the incomes of the customers.

This factor is brought out in the above study.

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The type of retail payment and the most popular among the credit cards used by

the customers is brought to limelight in the above study.

Retailers use advertising to attract and retain customers. The advertising

programmes can be made effective by concentrating on the main purchase

decision-maker among the family members of the customers. The study analysis

the above feature of marketing.

Cold storage facilities are a must to preserve the products and present them in an

hygienic manner to the customers. The availability of infrastructure facilities like

rail/road connectivity is carefully analyzed in the above study.

The success of the shop-keeper is decided by how he is able to cater different

varieties of goods under one roof. The above factor is highlighted in the study.

Opinions of the customers in relation to Foreign Direct Investment, Value Added

Tax and the demand for the industry retail sector are brought to focus in the study.

Valuable suggestions given by anybody should be welcomes by the retailers and

implemented meticulously. The study offers a list of suggestions to the retailers

to improve employee performance, introduce modern practices and thereby

increase their overall profitability.

The entire researcher thereby has adopted a different approach and

presented a novel study on the emerging trends in retail marketing and also offered

valuable suggestions for the current problems facing the sector.

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CHAPTER-III

RETAILING – AN OVERVIEW

3.1. INTRODUCTION

Currently, multiple formats are present in the Indian Retail. Multiple formats are

necessary due to the diversity of our country. Retailers need to keep in mind local

preferences when deciding on the formats as internationally successful formats may not

work in India. Apart from the regional preferences and tastes, there is also the rural-

urban divide. Hence retailers need different formats to cater to the needs of different

segments. This explains the presence of many different formats in the country. Some of

the popular retail formats in India are discussed in this chapter.

3.2 RETAIL FORMATS AND THEIR EVOLUTION

Retailers need different formats to cater to the needs of different segments of the

population. This explains the presence of many different formats in the country.

Conventional Retail Formats Defined by the Marketplace

Retail formats in India first emerged when the barter system was in vogue with

the primitive format of the “shanty”, where the produce was brought to the market for

convenient access by consumers. As towns and cities grew, these retail stores began

stocking a mix of convenience merchandise, enabling the formation of high-street bazaars

that became the hub of retail activity in every city. To cite an instance, Ranganathan

Street in Chennai came into existence initially as a high-street destination, followed later

65

by Pondy Bazaar, which had largely mom and pop outlets. Thus the gradual

development of the marketplace led to the emergence of new formats.

Contemporary Retail Formats by Customer Mediation

When we think of retail formats, the first thing that comes to our mind is the

various kinds of physical retail stores.

Most Indian organizations choose to reach the consumer through brick and mortar

retail store formats. However, there are other methods too; including non-store formats

such as catalogue, cable TV and the World Wide Web (WWW). While the method of

mediation in the physical store format is human interaction, a non-store format like

catalogue relies on paper and print. Television uses telecast/broadcast and the Internet,

the web-site. The most interesting aspect of a non-store format is that the entire store is

brought to the customer. In a physical store format, on the other hand, an attempt is made

to bring the customer to the store.

STORE FORMATS IN RETAIL PARLANCE

Store formats – their positioning and differentiation create a distinct image of the

store among its customers. These formats are defined in terms of location, layout, size,

design, merchandise, service experience offerings, etc. As there are many formats at

present, it makes sense to have a clear understanding of the key store format.

Store Formats by Location

If retail stores are multi-locational – linked by a common store presentation

created by its store design, a synergistic merchandising plan, a cohesive promotional and

66

service strategy, and owned and operated by a single organization – the format is known

as the chain store format. Store formats are defined by their location too. If a retail chain

consciously seeks to locate its stores in busy shopping areas, it is known as the high-street

format (generally less than 2,000 sqft. With no parking facilities, and focused

merchandise categories)

Independent retail stores that are located in a particular area with alluring

propositions for the customers to visit the store with the primary intention of shopping

only there, rely on the destination format (usually large in size, with ample concessions,

huge parking space, wide merchandise categories).

Store Formats by Ownership

Retail stores owned and operated by individuals on behalf of (and licensed by) a

large supporting organization adopt the franchise format.When a retail store is owned by

a single person or a partnership, and not operated as part of a larger retail institution, it

comes under the independent store format classification.

Store Formats by Merchandise Categories

Retail store can be classified according to the merchandise categories they deal in.

In apparel retailing, if the store deals with all categories of merchandise to suit the

wardrobe of a family, the format is known as the family store. A retail store selling a

variety of a particular group of merchandise is known as an emporium (sari emporium,

art emporium etc.). Example: CIE-Bangalore, Chennai.

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Store Formats by Size

A single-level large store (usually more than 5,000 sft.) selling food and non-food

items are known as a superstore. A superstore is generally twice the size of a supermarket

and offers non-traditional goods and services like a pharmacy, flower shop, bookstore,

salad bar, bakery etc. under one roof. (Nilgiris, Chennai).

A shopping mall is an arrangement of retail stores and places for leisure activities

such as dining, entertainment, etc., selected according to their contribution to an overall

merchandising plan. A mall is spread over a large area of more than 200,000 sqft and run

as an integrated business by an individual or an organization, to which independent

retailers pay for opportunities to participate.

Shopping Malls

The new shopping malls that have been expanding their footprint across Indian

cities are well designed, built on international formats of retailing and integrated with

entertainment and restaurants to provide a complete family experience. Over 300 malls

are expected to be built over the next two years and most Indian cities with over a million

population will be exposed to this modern method of retailing.

A shopping centre or a plaza is a configuration of five or more tenant spaces of

approximately 1,000 sft each used for retailing, and developed under one building plan

such that it has a unified character (Fountain Plaza in Egmore, City center R.K.Salai,

Spencer Plaza in Anna Salai)

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Convenience store

If a retail store is located in a catchments area of its target customers who can

quickly access it and choose from a wide array of consumable products and services, it is

known as the convenience store format (typically less than 5,000 sqft, extended hours of

operation, parking for a few vehicles, convenience merchandise such as beverages, ready-

to-eat snacks, grocery type items, confectionery etc.)

Specialty stores

It deals in merchandise narrow in product lines but with a good depth within that

area. Specializing in a given type of merchandise, the Specialty stores offer attentive

customer service. For instance, Park Avenue by Raymond‟s is a men‟s specialty store.

They are retail formats that offer a wide range in a single category such as

apparel, foot wear, consumer electronics, healthcare, books, furniture, auto parts, music,

jewellery or opticals etc. Some of the prominent names in this category are: Adidas

(sportswear), Croma (electronic goods), Bon-Ton (opticals), Titan (watches), Metro

(shoes), Nakshtra (diamond jewellery) and Planet M for music and movies: all excellent

specialist stores in their respective categories.

Departmental Store

A store with several departments – apparel, cosmetics and fragrances, accessories,

home-ware, electronics, footware, jewellery, furniture etc. - under one roof with each

section within the store functioning as a strategic business unit (SBU) is known as a

department store (large in size, usually more than 10,000 sqft, often owned by national

chains, good concessions, with usually more than 100,000 SKUs). Shoppers‟ Stop is one

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of famous department stores in our country. Shoppers Stop is one of the largest

departmental stores chain having around 9 stores in India spreading in cities like

Mumbai, Delhi, Pune, Chennai, Hyderabad, Bangalore, etc. Departmental stores are

organized into separate departments for purpose of efficient buying, assortment and

providing ease of shopping for the consumer. They have witnessed a growth of 24% per

annum.

Super Market

A conventional supermarket is a self-service store of size 5,000 to 15,000 sq ft,

They are generally located close to residential localities in local shopping centers where

people can simply walk down or drive over for a quick purchase.A store that is

departmentalized, specializing in foodstuff, grocery and rations and limited non-food

categories with free access displays for customers so that they can pick products from the

shelves is known as the supermarket (large, usually more than 3,000 sq ft. and more than

30,000 SKUs).

Supermarkets mainly cater to the food and grocery segment of retail. They

normally sell grocery, fresh vegetables and fruits, toiletries, cosmetics, household

articles, health and beauty products, stationery, gift items and other items of daily use.

Supermarkets are the second most attractive retail formats after hypermarkets and are

currently growing at 28% annually.

A hypermarket is spread over 200,000 sqft and more, retailing in groceries and

general merchandise goods, with a pharmacy, flower shop, photo shop other concessions

etc. It has a wide variety of merchandise offerings in large quantities in each category

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selling huge volumes at low margins. It is a combination of supermarkets, departmental

stores, and discount stores. Hypermarkets are emerging as the most popular retail format

in our country with 30% growth rate. Of the $30 billion investments in retail forecasted to

come up over next 5 years, 38% of it is to be channeled into the hypermarket format.

Discount Stores

The store configuration can be defined by its pricing strategy as well. The

discount format retails merchandise at 25% or more below MRP. They purchase stock

lots from manufacturers in the form of irregulars like cut-sizes in apparel, unsold end-of-

season merchandise etc., and retail them at discounted prices. This is also known as a

bazaar format. There are discount specialty formats that specialize in a given type of

merchandise line. There are discount stores (found in the West in large numbers) that

adopt an everyday low pricing strategy, through the everyday-low-price (EDLP) format.

The warehouse format is a large sale of discounted merchandise by an individual

or an organization in the free-access ambience of a warehouse. This format has a large

width and depth in the many categories it retails.The factory outlet format is owned and

operated by the manufacturer selling discontinued merchandise, factory seconds,

cancelled orders, etc at very low prices and located in the vicinity of the factory itself.

Some textile mills in Mumbai have their factory outlets in their factory premises. Outlet

stores run by the manufacturers themselves or as their franchise are known as factory

outlets.

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The stopover store format is one that rides piggyback on another retail outlet, say

a petrol pump. This stopover format is a concession that offers instant use or ready-to-eat

categories of merchandise.

Kiosks

With the opening of a large number of malls and multiplexes in India, this retail

format is increasingly gaining popularity with both retailers and customers. Kiosks are

generally 100 sq ft. in size or smaller, tent-like structures, positioned strategically in mall

pathways or located centrally in the mall atriums. They are square in shape and open on

all sides or covered with glass on one side or two. With colourful and attractive displays,

these formats provide character and interest to a mall‟s design and layout.

In banking industry the ATM services offered by the banks come under this

category of retail format. Banks have successfully used technology to improve customer

service and increase it‟s penetration across the country through this new retail format.

Companies like Nestle, Cadburys‟. HLL, Coke, Pepsi are increasingly using this new

format of retailing.

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Table – 3.1

Various Retail Formats & their Characteristics

Source: Retail Management by Gibson G. Vedamani

Characteris

tics

Retail

Formats

Location Space/

Layout Merchandise

Customer Profile

Supermarket Marketplace in metros

towns, cities

Large Multiple, cohesive

food and household

categories

Family profile, mostly

loyal

Speciality

Store

Strategic Medium

sized

Focussed single

category

Individuals, groups

and cluster of same

class, mediocre to high

loyalty

Department

store

Destination towns,

metros and mega

metros

Large Cohesive category

clusters/ brands,

skewed toward

garments

Family, high loyalty

and involved

The Plaza Marketplace in metros,

large towns

Large Independent

categories

Family and

individuals, young at

heart and seeking to

spend time in hang-

outs

The Mall Destinations, mega

metros

Huge Independent but

profiled and defined

category mix like

shopping, dining ,

entertainment, etc.

Family and individual,

young at heart, fun-

loving entertainment

seekers and diner of

mediocre to high

loyalty.

The

Emporium

Marketplace Medium

sized/

small

Single group

category

Family and

individuals, need based

spenders

The Bazaar Strategic Large Multiple, cohesive

categories in reduced

price bands

Price conscious

individuals and family,

less loyalty

Stop-over Piggy back location Small to

medium

Multiple, cohesive

categories

Impulsive buyers

Single Price

Denominatio

n

Busy marketplace Medium

sized,

small

Multiple, non-

cohesive categories

scrambled

Bargain seekers

Kiosk Busy marketplace Very

small

Fast moving

consumables

Impulsive individuals

satisfying nick-of-the-

time needs

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Though there are many kinds of retail store formats, it is the innovative

combination of format elements that helps a retail store gain a competitive edge.

Cash and Carry

Cash and carry is a form of trade exclusively where goods are sold from a

wholesale warehouse. The wholesalers buy primarily from manufacturers and sell to

retailers, thus forming the link between the two.

Non-store retail

It is a segment witnessing a high growth rate of 32% over its small sales base.

Rising consumer confidence in internet retailing and home shopping spurred high growth

rates in these segments. The major categories of non-store retailing are direct selling,

Internet retailing and catalogue, mail order and television sales.

Direct selling

Non store retailing was mainly dominated by direct selling which accounted for

80% of non-store retailing. Direct sellers were able to leverage on their low capital

investment and lack of reliance on specific stores or locations. Most of these direct

sellers are concentrating on selling beauty/skin care products like cosmetics and toiletries

with increasing demand for these among young urban women. The direct selling scene is

mainly dominated by unemployed housewives as distributors with women accounting for

60% of the sales force. Most of the major direct selling companies use a multi-level

distribution system.

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Internet retailing

Also known as e-tailing, this is one of the fastest growing non-store retailing with

growth rate of 29%. Internet retailing is becoming a very popular channel with

consumers and retailers cannot afford to ignore this. The most popular products and

services are railway and flight booking, purchase and sale of stocks and investments. As

far as the retailers are concerned, it is also profitable for them as they can reach out to a

larger consumer base in the tier II cities also and can have a wide geographic reach

without having stores in all the cities. It also helps the retailer to track the shopping

patterns of consumers and thus can retain consumers more easily through targeted

advertising on the web pages. Even traditional retailers are offering their products

through the internet known as the “Bricks and Clicks” model. Internet retailing can see

higher growth in the near future if online security issues are tackled and other convenient

modes of payment apart from credit cards are put in place.

Catalogue, mail order and television sales

This category had a very small sales base but had a high growth rate of 32%. The

main reason for this was the higher penetration of television sets and cable television.Yet

this category has been constrained primarily due to the need of consumers to touch and

feel the products before buying them. Mail order catalogue were even more limited due

to the lesser impact they have on consumers in terms of conveying the product features

completely. The main products sold through this channel being fitness equipment,

jewellery, electronic items and household appliances.

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INTEGRATED STORES

This format is a combination of hyper mart and entertainment centre. Here, one

can get a double experience of shopping and entertainment at one place. The main idea

behind such stores is to combine two or more functions into a single store, which caters

to a wide cross section of customers.

Exclusive Brand Outlets (EBOs)

EBOs are retail outlets that sell merchandise exclusively of one brand, normally

having the store name as the brand name itself (e.g. Bata, Sony, Lilliput etc). They are

typically located either on high streets or within malls. Goods are priced at full-price

except during the clearance sale period. Normally, the trend followed by manufacturer

brands is to get into the market through MBOs, and gradually set up their own EBOs

outlets as their brand acquires recognition and a large loyal customer base.

Recent years have seen a quick turnaround for this format as rising brand

awareness and growing aspirations of the customer have led to a preference for brands

over non-branded local merchandise. People want best value, quality and choice for their

money, even if it is a little bit more expensive. The satisfaction from purchase of a

branded item far outweighs the higher price paid for it. Some of the EBOs that are doing

well in our country are Tanishq, Hidesign, Reebok, Adidas, Sony, LG, Levi‟s Nakshatra,

Freelook, Peter England to name just few.

Forecourt Retail

These are small format stores that are located in the front of a building, e.g. a

petrol pump. The focus being on convenience for the customer, these stores are usually

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open seven days a week. They work for extended periods during the day, opening early

and closing late. This concept has not been too successful in the past, but now in this era

of multi-tasking, when time is of essence, these have started gaining popularity. The

prominent players emerging in this sector are In & Out, Café Coffee Day, Crossword and

more recently, Vishal Corner Mart.

FOOD COURTS

No mall is complete without food courts. Normally positioned at the top most

floors in a mall or on the floor close to the multiplexes, these are mini-food counters of

food chains such as Pizza Hut, McKonalsd‟s Dosa Express, Sagar etc. clustered in a

chain-like structure with common sitting area in the centre for the customers.A

mall/multiplex attracts huge footfalls, especially on weekends, giving ample business

opportunity to the food court. How much any individual counter is able to succeed

depends entirely on its product appeal.

Express Formats

Express Formats are mostly extensions/smaller versions of large retail formats

such as hypermarkets and supermarkets or restaurant chains. For example, Pizza Hut

Express is the home delivery format of the Pizza Hut chain. Café Coffee Day has express

counters that it has set up in hypermarkets like Big Bazaar or department stores like

Lifestyle that cater to the store‟s customers. Some Express formats have also opened

smaller express counters in malls and high streets that cater to the fast young crowds on

the move. Express formats leverage the brand‟s pull to reach a larger customer base.

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3.3 EMERGING TRENDS IN RETAILING

Credit Cards

A barometer of the maturity of an economy with a few expectations is the stage of

development reached by its payment systems. Cash in the form of notes and a coin makes

up just one form of payment system. The development in banking brought about a

second phase in payment system, namely paper instruction such as cheques and credit

transfers. The requirements, for greater flexibility and convenience and development of

technology have given rise to electronic payments and this where plastic cards have

provided their worth.

The development of the credit card is one of the most significant phenomena of

the modern financial service scene. Basically the use of credit card of one of the two

essential aspects of the financial services function services function, the transmission of

payment and the granting of credit. The development of the credit card allowed for the

first time, the use of these two functions together.

Credit Cards in India

In India the foreign banks and organizations forayed first into the credit card

market the pioneer in the Indian field is the City Bank's Diner's Club Card, which entered

in 1969. Recognizing the potentiality of the credit cards, few Indian banks took early

initiative to introduce them. However it was only during 1981 when Andhra Bank

introduced its own credit card did the Indian bank constructively enter the field central

bank of Indian in association with Vysya Bank, United Bank, of India issued the central

card it 1985 the bank of Baroda along with Allahabad Bank launched the bob card. The

mercantile credit corporation limited merchant came in 1986 the Canara Bank made later

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entry into the credit card business in 1987 and the bank of India issued its own card, India

card in 1988. Among the foreign banks the ANZ Grindlays Bank came with visa classic

card by 1989. Citibank's master and visa card appeared in 1900m along with Taj

Premium Card market turned busy with all the twenty-eight public sector banks operating

in it.

The state bank of India has introduced also state bank cheque card. In 1992 the

hongs Kong bank entered the field with its visa international card and master card

international and recently it has launched the Hyatt regency prefer gold card. Credit card

is given by the banker to the customers in which the name of the customer is embossed in

blocks letters, the name of the bank of issues and expiry are also mentioned on the field

the reverse side of the card will bear the specimen signature of the customers. A list of

vendors or sellers will be given by the banker to the customers.

Credit Card which was considered to be a luxury, has become one of necessity. It

was considered to be used only by higher income group. But today, with development in

banking and trading activities, fixed income group or salaried class has also started using

the same. There may be the criticism that it includes for more purchases or makes people

spend thrift. This may be so in the initial stage, but when once a customer gets used to the

credit card, he/she will know how to use the same in a discretionary manner.

Applications of Information Technology in Retailing

Information technology is the capability to electronically input process, store, and

output, transmit, and receive data and information. It plays a very important role in

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today's business world. New technologies evolved in retailing are Radio Frequency

Identification (RFID), Smart Operating Solution Smart Ops, and Point of Sale (POS) etc.

The result indicates that, retail complexities may reduce with the help of

Information Technology solutions. The right solution can result in improved productivity

and major cost saving through key advantages such as more accurate supply chain,

forecasting and better inventory management. Information Technology also help retailers

to solve major problems related to customer services like customer loyalty and customer

satisfaction.

3.4. NEED OF INFORMATION TECHNOLOGY IN RETAILING

Most successful retail store has a reliable and efficient IT system. Retail needs IT

for all its core processes – planning, ordering, sales, finances, human resources and so

on. Few key indicators to this need could are as follows:

Which Goods are moving and which are not?

Are the vendors supplying goods on time?

Which goods are available at the warehouse and what needs to be ordered?

What should be ordered in the next season?

Which customer is buying which products?

The financial performance of the company.

Managing the employees of the organization.

Even in a single location large format store it would be difficult to manage these

issues without good data capture and analysis. In a multi location store this can become a

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huge problem. Inventory control and forecasting are just not possible without a good IT

system in place.

Diagram 3.1 Role of Retail Technology in India

(% of respondents)

Reduce Theft/Shrinkage 3

Replace Ageing POS

Technology

35

Provide Sales Assiciates

With Selling Tools

39

Provide Better

Product/Service

Information To

Shoppers

45

Improve Data Integrity 55

Increase

Reliability/Bandwidth of

Data Communication

Infrastructure

68

Faster Customer

Checkout Process

0 10 20 30 40 50 60 70

Source: The ETIG-IRMC 'State of Retail Technology in India' Survey

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It also forms the basis of supply chain initiatives like Quick Response or

Efficient Customer Response and Collaborative Planning and forecasting. Especially for

merchandising and supply chain IT is the major enabler. IT links the various areas of

retail business into one structure and helps the flow of information across organization.

This helps in managing several contact points both at the front end and the back end.

Without integrated systems the retailer may be unable to get timely information, which is

the key to future purchases for the store.

How Information Technology is involved in Retailing Operations

Forecasting: It is the process of estimation in unknown situations. It's an essential and

very important process in any business organization. Business leaders and economists are

continually involved in the process of trying to forecast, or predict, the future of business

in the economy. Business leaders engage in this process because much of what happens

in businesses today depends on what is going to happen in the future.

Retail Demand Forecasting: Modern demand-forecasting systems provide new

opportunities to improve retail performance. Although the art of the individual merchant

may never be replaced, it can be augmented by an efficient, objective and scientific

approach to forecasting demand. Large-scale systems are now capable of handling the

mass of retail transaction data – organizing it, mining it and projecting it into future

customer behavior. This new approach to demand forecasting in retail will contribute to

the accuracy of future plans, the satisfaction of future customers and the overall

efficiency and profitability of retail operations.

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Inventory Management

Inventory can be either raw materials, finished items already available for sale, or

goods in the process of being manufactured. Inventory is recorded as an asset on a

company's balance sheet. To optimize the deployment of inventory, retailers need to

manage the uncertainties, constraints, and complexities across their global supply chain

on continuous basis. This allows them to improve their inventory forecasting ability and

accurately set inventory targets. An IT solution is a proven and market leading solution

for determining optimal time-varying inventory targets for every item, at every location

throughout supply chain. This allows retailers you to significantly reduce inventory

without adversely affecting service levels.

Store Management

Another example where Information technology can be beneficial is a store

management. That alerts out-of-place or stock-out items. A store, commonly a shop or

stall for the retail sale of commodities, but also a place where wholesale supplies are

kept, exhibited, or sold. A place where something is deposited for safekeeping is called

store. The in-store system use magnetic strips or barcodes or RFID to monitor actual

versus intended product location on the floor or in the stockroom.

BARCODES

Bar coding is a proven technology for automated data collection needs of the

business. In layman terms, “a barcode actually contains any given alpha numeric

information encoded in the form of Bars and Spaces using international symbols which

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are like language of the barcode.” On retail products, the barcode normally contains the

product ID (e.g. item code, product code etc.) which is required to be entered into the

computer system to update the data at the time of billing, receiving or dispatch. With the

barcode in place, the data is fed into the system automatically by scanning the barcode

using a bar code scanner instead of punching the same through a keyboard.The advantage

of a barcode is that it helps avoid any error in capturing data as compared to typing in

details and ensures accuracy and speed.

In order to ensure consistency and avoid duplication there are standards for the

use of barcodes and each type of standard is relevant to a particular industry or

application. This also defines the extent of data or detail that has to be communicated

through a barcode. For example there are UPC codes (12 digits), EAN codes (14 digits),

etc.

Point of Sales

The fast checkout and reduced queues attracts more customers and ensures that

customer visit the store again and again. The Bar Code scanners at point of sales help in

the elimination of queues with fast checkout by automating the data entry into system.

The barcode scanner is basically a device which plugs into a computer system just like

another keyboard and feed the barcode data into a computer. The benefit is that the data

fed is nearly 100 per cent accurate and the whole Item code is scanned in a fraction of

second. The scanners come in lots of varieties to meet varied needs of retailers.

In the Store Barcodes solutions play an important role in utilising customised in-store

marketing, increasing up-selling and cross-selling opportunities, quickly locating

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merchandise, easily monitoring inventory and checking prices. The state-of-the art

solutions based on barcode technology enables retailers to improve the customer's

experience at the primary point of decision – the selling floor.The Portable Data

Terminals (PDT) allow the retailers to take the inventory status by scanning the items

barcodes without need of counting them.

Manufacturer to Distribution Centre

The barcode technology helps the retail products manufacturer (FMCG

companies) to automate their process from manufacturing to distribution centre (DC). At

the manufacturing floor, the fixed mount scanner integrated with conveyor system helps

in sorting the manufactured items based on their packing and other parameters. The fixed

mount scanner is basically a high performance scanner, which can operate on a 24x7x365

duty cycle. The use of 802.11 wireless networks with barcode technology, automate the

process of material shipments from plant to warehouse. While shipping, the total

shipment data then can be printed in the form of a 2D barcode. The 2D barcode can

contain the contents of entire shipment as a single barcode, which could be read at the

DC with the help of a 2D barcode scanner. The entire shipment data is entered into the

computer on the scan of just a single barcode.

Connectivity of Barcode Solutions

Barcode solutions can be integrated to any application software to enable the

printing and scanning of barcodes for various retail activities. Most of the industry

standard ERP (SAP etc.) solutions available for retail already support connectivity to

barcodeequipment.

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FDI, Participation in Retail Sector

India today represents the most compelling investment opportunity for mass

merchant and food retailers looking to expand overseas. According to A.T. Kearney's

annual global retail development index for 2005, India retail market totaling $300 billion

is vastly undeserved and has grown at an average rate of 10% in the last five years.

Present Government policy on FDI allows to have a presence of international brands

through different routes i.e. Franchise, Joint venture, Manufacturing, Distribution, Cash

and carry.

FDI is currently banned in the retail sector except for single brand retailing.

Currently the only routes available for a foreign player to enter the food and grocery

retail are:

Franchise agreements: Franchising is the most widely used entry route by

international retailers. A number of international firms like marks and Spencer,

Dominoes, Pizza Hut have entered the India through this route. It also led to the

high growth of franchises at 14% per annum.

Cash and carry wholesale trading: 100% FDI is allowed in cash and carry. In

this business model the wholesaler deals only with smaller retailers and not with

consumers. Metro AG of Germany and Shop rite of South Africa entered India

through this route. Wal-Mart is also planning to enter through this route in India.

Strategic licensing agreements: This route involved the foreign company

entering into a licensing agreement with a local retailer. Mango, the Spanish

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apparel brand has entered India through this route with an agreement with

Pyramid. SPAR has entered into a similar agreement with Radhakrishna

Foodlands Pvt Ltd.

Benefits and Impact on the Country

Inflow of funds and investments, Growth of Infrastructure, Knowledge Base-

Technical Know-how, Reduced cost and Increased Efficiency, Franchising Opportunity

for local Entrepreneurs. Investment in Supply Chain, Cold Storage facilities and

warehousing, Implementation of IT in Retail, Increase number and Improve Quality of

Employment. Provide better value to end Customer Indian farmers will get a

remunerative price for his contribution to retailers. Retailers can ensure lower prices,

quality, better shopping experience and better customer services. Hence it will lead to

overall economic growth and create Benchmark.

Online Marketing

E-business primarily concerns the applications of digital technologies to business

within the firm. E-business refers primarily to the digital enablement of transactions and

processes within a firm, involving information systems under the control of the firm. It

does not include commercial transactions involving an exchange of value across

organizational boundaries. For example, a company online inventory control mechanisms

are a component of e-business, but such internal processes do not directly generate

revenue for the firm from outside business or consumers. E-business applications turn

into e-commerce precisely when an exchange of value occurs. And e-commerce and e-

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business systems can and do blur together at the business firm boundary, at the point

where internal business systems link up with suppliers, for instance.

The people are living in an exciting time. The Power, capabilities, and worldwide

reach of the Internet are quickly changing the way the world does business. E-business

means any business conducted using electronic media such as the Internet, other

computer networks, wireless transmissions, etc. It also stands for electronic business and

refers to any kind of sales, services, purchasing or commerce on the Internet. E-

commerce means the use of internet and the web to transact business. E-commerce

primarily involves digitally enabled commercial transactions between and among

organizations and individuals.

E-Marketing or electronic marketing refers to the application of marketing

principles and techniques via electronic media and more specifically the Internet. The

terms E-Marketing, Internet marketing and online marketing, are frequently interchanged,

and can often be considered synonymous. E-Marketing is the process of marketing a

brand using the Internet. It includes both direct response marketing and indirect

marketing elements and uses a range of technologies to help connect businesses to their

customers. By such a definition, e-Marketing encompasses all the activities a business

conducts via the worldwide web with the aim of attracting new business, retaining current

business and developing its brand identity.

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Consumer e-Market in India

Market Size Estimate 2006-07 2007-08

Online Travel Industry 5,500 7,000

Online Non-Travel Industry 1,580 2,210

e-Tailing 850 1,150

Online Classifieds 540 820

Paid Content Subscription 20 30

Digital Downloads 170 255

Total B2C/C2C

E-Commerce Market

7,080 9,210

(Figures in Rs.Crores)

Source:IAMAI & IMRB Report:

„Consumer E-Commerce Market in India 2006/07‟

E-retail can play a very important role in the growing consumer economy by

providing access to organized retail into the deepest corners of the nation. The retailers

themselves employ people, but unlike in the case of tickets or services, in e-retail,

significant manpower is required to handle, deliver and track the packages. Multiple

companies in the ecosystem employ people to drive the vehicle, to carry the packages to

the customers, to assist in the call centre and to pack and process at the warehouse. E-

retail can lead to large scale employment generation.

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Prospective Luxury Retailing in India

Luxury retailing is still in its introductory stages in India and there is vast scope

of research, especially about the evolving marketing practices in the related field with

special reference to culturally-distinguished consumer groups.Luxury goods have always

been associated with high quality, craftsmanship, uniqueness, creativity, exclusivity and

innovation. Apart from these product attributes, consumers also get additional

psychological benefits like higher self-esteem, prestige and a sense of a high status that

reminds them and others that they belong to an exclusive group which can afford these

expensive goods.

The growth of India as a luxury products market, and its emerging potential is

very obvious now especially as the economy is booming, and there is a general positive

sentiment towards global brands. India, as a retail market, is not uniform, especially when

it comes to preference for luxury in terms of need fulfillment. Moreover, the market is

not as mature as the European market where consumers seek fulfillment through

experience. Few players have been able to fulfill the needs of the Indian consumer who

is seeking luxury goods/ services. Since this segment of the market remains untapped, a

huge potential lies in the same.

Having suitable store locations is indispensable for successful retailers. Having

prestigious store locations reinforces the core brand values and also the differentiated

status of luxury brands. Therefore, the success of luxury brands in India or anywhere

else is subjected to the availability of suitable store locations. In India, 80% of the

luxury brands retail through their outlets in various hotels, which provides a very

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restrictive environment, thereby affecting visual impact. „The Collection‟ in Bangalore

and „DLF Emporio‟ in Delhi are two major malls which retail luxury in India. With

increasing brand consciousness, the attitude towards luxury has changed and most of the

prestigious fashion brands have started establishing themselves in India. The luxury

goods industry is quite different from regular goods in terms of the market characteristics

and behavior of consumers. Also, the level of acceptance and understanding of luxury in

different markets is different. India is in the nascent stage of its development as a luxury

retail market. Only a few cities like Delhi, Mumbai and Bangalore enjoy the presence of

luxury culture thereby making the accessibility and visibility of these products quite low.

Many experts see India as an upcoming market and the next China for luxury and have a

huge potential for growth and development.

The economic aspects of corporate and social responsibility

Corporate social responsibility in the broader sense is taken to mean sustaining

economic/business activity by co-mingling social responsibility of the enterprise in their

external and internal relations with business prospects. Hence, corporate social

responsibility is more than charity. It has some underlying economic implication. It is an

innovative way to contribute by the firms to spend in towns and villages and to buy

products from millions of artisans who are at the bottom of the pyramid. The fortune of

the bottom of the pyramid calls for corporations to design products/services for the

enormous population at the bottom of the pyramid. The primary assumption is that this

population segment has some disposable income and firms can still make profits on large

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volume. Hence it moves the corporation towards a set of socially committed and aligned

work culture.

3.6 CHENNAI RETAILING

Chennai being the fourth largest city in India, it is a major trade center. The

nucleus of the city consists of the old residential areas of George Town , Chintadripet ,

Triplicane and Purasawalkam, which are now decaying and in need of an urban renewal.

The Central Business District (CBD) of Chennai is concentrated within a 3 kilometer

radius around Anna Salai in Central Chennai. The prime commercial complexes are all

located along the three main roads namely , Anna Salai , Dr.Radha krishnan Salai and

Nugambakkam High Road. In addition , other major commercial destinations are TTK

Road , Poonamalle High Road, Egmore and Adyar.

Keeping in view the fast pace of development of commercial and residential

developments in the city , a number of malls are coming up in the southern part of the

city by many private developers as stand alone malls as well as malls as part of

townships.

In keeping with the international demand where customers look for an altogether

different shopping experience, the shopping mall culture is fast gaining popularity.

Earlier, limited to City's main artery such as Anna Salai or Mount Road, Chennai is

experiencing an influx of newer, modern shopping centers all over the city. The feeling

that FDI in retail industry is around the corner has triggered much activity among

Chennai's well-known retailers. Even well established brands have been acquired by

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bigger pan-India retailers, some local companies have chosen to ramp up to compete with

the big boys.

3.7. RETAIL PIONEERS OF CHENNAI

Saravana Stores

Saravana Stores is a Chennai based chain store which is running very

successfully.It is owned by Mr.Yogarathinam and Rajarathinam , the chain has a legacy

of 60 years beginning with a small textile showroom in erstwhile , madras. Today ,

Saravana Stores is the one stop shop for all kinds of clothes-churidars,silk sarees,

ghagras, designers sarees, readymades, mens wear, kids wear, foot wear or perfumes.

The retailing philosophy that rules the Saravana Stores businesses is: Low margin,

high turnover. In fact, it is a known fact that most articles at Saravana stores are sold at

20 to 30 below their MRP. Even for consumer durables and electronics, one is bound to

get a product cheaper by at least one percent at Saravana compared to any where else.

The one lakh sq.ft Saravana stores showroom in T.Nagar, spread across five

floors , caters to shoppers from India and abroad. In 2004 , Saravana Stores set up a

30,000-liter-a-day ice cream production unit to launch their own ice-cream brand called

“Jamal” Saravana stores, a Rs 250 crore regional retail brand, retails stainless steel

utensils , jewellery, textiles, consumer durables and provisions. Their online jewellery

retail initiative a raging success with NRI‟s the world over.

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Pothys

Weavers to the maharajas of yore , “Pothys” was established 90 years back by

K.V.Pothy Moopanar under the brand name “ Pothy Moopanar” to sell cotton sarees ,

dhoties and towels woven in his own loom. In 1977 his son K.V. Sadayandi Moopanar

established the name and expanded the outfit with a self – styled retail showroom at

Srivilliputtur, branded as “ Pothys”. The next generation ventured to newer pastures ,

and opened a showroom in Tirunelveli in 1986. Today, Pothy‟s is indisputably the most

popular silk saree‟s showroom in Chennai- a fact corroborated by a survey conducted

Sun TV and AC Neilsen Survey. The store successfully entered the Guinness Book of

World Records for world‟s longest silk saree at 1276 feet , endowed with images that

trace the rich and varied heritage of India through five millennia. Pothy‟s opened their

largest showroom in Panagal Park , Chennai in 1999. This imposing six-storeyed

showroom is popularly known as an “ Aalayam”Pothys offers variety of silk sarees and

has a full floor dedicated to dressing up boys and girls , from tiny tots to teens.

Witco

Witco aims to be India‟s leading retailer in travel requisites in premium segment.

The store chain provides the best luggage and travel accessories brands under one roof.

Witco was founded in 1951 by late M-P-C Mohammed, the pioneer of plastic industry in

Chennai. Today , Witco has 17 outlets in Chennai and is also the exclusive retailer for

Samsonite in India and VIP luggage in South India. The store houses internationally

renowned premium travel brands such as Samsonite, VIP, Delsey, American Tourister

and Giordano. Witco is also the founder member of RAI (Retailers association of India)

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Nilgiri’s

It was started 10 decades ago as a family based organization. Nilgiri‟s Dairy Farm

operates 100 supermarkets in the southern cities of India including Chennai. UK based

Actis, along with Singapore – based GIC Investments affected a management by out of a

established brand in the south in October 2006. The group had a top line of around Rs

120 crore. Actis brought professional management and has attempted to modernize the

retail processes at Nilgiri‟s. Nilgiri‟s product include dairy products , bakery , chocolates

and a variety of other local foods and snacks. All of its products are soled under the brand

Nilgiri‟s. Ever since the take over, Nilgiri‟s has been aggressive in expanding its retail

presence, which consisted of 30 stores at the time of Actis entry. In addition to this, the

new investors have been strengthening the group‟s manufacturing operations in dairy,

bakery and food segments. The plan for the future is to take the number of retail outlets to

about 400 by 2010. Nilgiri‟s now offer about 1200 private labels, which are particularly

strong in the bakery and dairy segments. The company is in the process of setting up a hi-

tech distribution center of 1 lakh Sq.Ft at Chennai very shortly.

Univercell

A Eureka Forbes sales head in Karnataka , Mr.Satish Babu, launched Univercell

in 1997 with six employees in the beginning. Now the organization has 1300 employees

and from one showroom on T.T.K Road to 155 showrooms across the southern peninsula

dealing with Skycell ( now Air Tel) postpaid connections and genuine branded mobile

phones. Then the company went to partner with Skycell Teleshop and signed up the first

SkyCell Teleshop in Chennai. Univercell is aspiring a Rs. 1,000 – crore turnover. The

company signed up Mr.Madhavan, the film actor, to be its brand ambassador for a

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stronger zestful brand image. Univercell will be spreading to other regions of the country

very shortly. It plans to achieve 1000 showrooms by 2010. Univercell has plans to take

cell-phone to rural India as well.

Viveks

Vivek limited is the largest consumer electronics and a home appliance retail

chain in India. Lakshmi Narayana Setty influenced by the lofty ideals of Swami

Vivekananda setup a small shop of 200 sq-ft, at Mylapore, Chennai, with an investment

of only Rs. 10,000 to sell folding chairs. Slowly he added radios, fans, mixers, irons,

heaters and other household equipments. He named his business Vivek and Company

inspired by his Guru Swami Vivekananda. After his demise, B.A.Kodandaraman took

over the reins of Viveks and increased the turnover of Rs. 1,60,000 in the first year to a

stunning figure of Rs. 25,76,000 by 1980. Viveks grew from three stores and turnover

increased to over 80 million US dollars. It also becomes a public limited company a

family run enterprise. Viveks group has a 42-year old legacy and today operates 52

stores in South India in a total area of 1,75,000 sq.ft with an annual turnover of Rs.400

crores.

Vasanth & Co

Vasanth & Co , a Rs.2.5 billion turnover company is a leading Chennai – based

chain store dealing in consumer electronics and home appliances. The company was

established in 1978, and currently has a network of 39 showrooms operating in almost in

all towns of Tamil Nadu. Vasanth & Co enjoys tremendous brand loyalty amongst its

customers so much. So that those who purchased black and white TV sets from

96

Vasanth & co way back in 1978 , when TV‟s were launched in India, continue to be

Vasanth & Co. customers.

Style Spa

Headquartered in Chennai, India – Style Spa furniture limited, a company

promoted by the Zuari-Chambal group of the K K Birla conglomerate was established in

India in 1977 to manufacture and retail furniture. The manufacturing facility located near

Chennai is a fully automated sophisticated plant equipped to manufacture exquisite

pieces of furniture of impeccable quality. The plant is also one of Asia‟s most modern

and largest manufacturing facilities. The products-elegant and contemporary furniture for

homes and offices, mattresses and pillows-are retailed in exclusive Style Spa showrooms

spread across the country. Style Spa is the largest retailer of furniture in India with over

90 exclusive showrooms spanning the length and breadth of the country. Style Spa‟s

competitive edge lies in its elegant range of products which are difficult to replicate, its

state of the art manufacturing facility that ensures consistent quality, a large retail

network, experienced and qualified personnel that make up the Style Spa team and not to

mention the tens and thousand of homes that revel in the Style Spa a brand of “Good

Living”.

Apollo Pharmacy

Apollo Pharmacy, a division of Apollo Hospitals Enterprises Limited , is India‟s

largest branded pharmacy network, with over 700 hundred outlets, in key locations across

17 states including Andaman & Nicobar. The first Apollo Pharmacy was opened in

Chennai in the year 1983 and the chain has served over one crore customers. The

97

pharmacy business of Apollo is growing at a phenomenenal rate of 70%, with revenues

of Rs. 600 crores achieved last year and plans to increase the outlets to 1000 this year.

Apollo has started expanding through the franchise route. Recently, the company

launched a new concept – Nurse Station – at its pharmacy outlets where the nurses are

available to attend to the patients at their houses, or refer them to and Apollo Clinic near

by.

Land Mark

This book and music store chain was set up in 1987, with its first store at

Chennai‟s Apex Plaza. At present, landmark has ten outlets. The projection is to have 16

outlets very shortly. Land mark was present in 6 cities in 2006 but now it is present in 11

cities. In 2006 it had a total retail space of 2,15,000 Sq.ft. It now has a retail sq.ft of

4,35,000 sq.ft. In August 2005, Trent Limited, The retail arm of the TATA group,

acquired 76% stake in the chain.

Odyssey

Odyssey India Limited, the Chennai – based book retail venture belongs to

Deccan Chronicle Group, Publishers of Deccan Chronicle and The Asian Age

newspapers. In 2007, they had 20 stores, which they seek extended to 175 outlets in

2009. In terms of retail space, it had 1,42,363 sq.ft of retail space which they propose to

increase to 4,70,754 sq.ft by 2010.

98

Saravana Bhavan

Saravana Bhavan received for the 2008 Best of Mountain View Award in the

Restaurants category by the US Local Business Association (USLBA), which recognizes

outstanding local businesses throughout the country. Saravana Bhavan which has a chain

of high-quality vegetarian restaurants was launched in 1981. It has 22 outlets in South

India and 3 in North India. Besides, Saravana Bhavan is also present with 16 outlets in

6 other countries, namely, US, UK, Canada, Singapore, Malayasia, UAE and Oman.

The multi-cuisine restaurant has won accolades in every country of presence for

its unique cuisines cooked in strict ethnic flavours. Saravana Bhavan restaurants also

provide services in fast food, take away, outdoor catering.

Food World

In May, 1996, the 100-year old Chennai – based Spencer‟s and Company , started

a super market chain from Chennai with the brand name “ Food World” This company

has expanded in the south over the previous years. The company also operates other store

formats like Health and Glow and the Music World Chain stores. Food world began their

operations with a very professional approach and with good in – house training.

They were able to provide relatively higher levels of customer service. The

company is absolutely committed to retailing and this is justified by its efforts and

investment it has made in setting up a much – desired Retailing Management Institute to

train young managers in the principle of retailing.

99

Globus

Launched in January 1998, Globus is a part of the Rajan Raheja group. The

company opened its first store in 1999 at Indore followed by the launch of its second

store in Chennai (T.Nagar). Globus Stores Pvt. Ltd. was formed to contribute in the

revolution sweeping the retail industry. Globus promises to bring about a perceptible

change in the way apparel and lifestyle.

Lifestyle

Lifestyle is part of the Landmark Group, a Dubai-based retail chain. With over 30

years‟ experience in retailing, the Group has become the foremost retailer in the Gulf.

Positioned as a trendy, youthful and vibrant brand that offers customers a wide variety of

merchandise at exceptional value for money, Lifestyle began operations in 1998 with its

first store in Chennai in 1999 and now has 12 Lifestyle stores, 5 Home Centers and 1

Baby shop store across Chennai, Hyderabad, Bangalore, Gurgaon, Delhi, Mumbai and

Ahmedabad.

Pantaloon Retail

Pantaloon Retail (India) Limited, is India‟s leading retailer that operates multiple

retail formats in both the value and lifestyle segment of the Indian consumer marker. The

company‟s leading formats include Pantaloons, a chain of fashion outlets, Big Bazaar, a

uniquely Indian hypermarket chain, Food Bazaar, a supermarket chain, blends the look,

touch and feel of Indian bazaars with aspects of modern retail like choice, convenience

and quality. Some of its other formats include Depot, Shoe Factory, Brand Factory, Blue

100

Sky, Fashion Station, Top 10, mBazaar, Star and Sitara. The company also operates an

online portal, futurebazaar.com.

The Chennai Silks

The Chennai Silks was started in the textile town of Tirupur, South India, in the

early 1960s. The stores were metamorphosised into grand textile showrooms in the major

cities of Chennai, Coimbatore, Trichy, Erode and Tirupur. The Chennai Silks has its own

exclusive jewellery division, Sree Kumaran Thangamaligai having the unique distinction

of being the first BIS 916 hallmarked jewellery showroom in Tamilnadu.

The City Centre

The City Centre offers an awesome 1,50,000 sq. ft. of shopping area. Its ambience

seems to be adding a new dimension to the City's looks. It is promising to be a very

important one-stop entertainment destination.

Spencer Plaza

Spencer Plaza on Mount Road is a hot favorite particularly with children and

teens. The mall is 125,000 sq ft, fully air-conditioned and accommodates more than 400

shops. Located at about half-hour ride from the airport, all the leading international

brands have an outlet in Spencer Plaza. Branded apparel shops, reputed jewellery shops,

food, grocery, IT products, electronics and entertainment items, healthcare supplies,

handlooms and handicraft shops, bookshops provide an overwhelming shopping

experience to consumers.The world's first shopping mall dedicated entirely to gold has

been opened in the City. Luring the customers to buy branded jewellery, dress jewellery

101

as well as traditional gold seems to be the primary objective of this unique 'only gold

mall'.

Express Avenue

The Express Avenue is a venture of Express Infrastructure Private Limited which

is a 100% subsidiary of Express News Private Limited, With Express Avenue, express

infrastructure brought Chennai to the fore front of fashion in India. Being in the heart

of the Chennai, the location of the Express Avenue is a winner from the word go. The

Express Avenue is definitely a destination mall. The depth of the retail mix at Express

Avenue, with all the leading luxury brands, all zoned but under the same roof, is bound to

be the first in India. Similarly, its mixed- use status with a hotel and commercial spaces

on either ends makes it a home to the single largest captive audience for a shopping mall.

Express Avenue houses approximately 200 brands.

In the Express Avenue approximately 30% of tenant mix is franchise driven. It is

a new direction in Chennai‟s retail scenario, and it is successfully generating

overwhelming response from the people of Chennai.

The socio-Economic scenario in Chennai is destined to change with the arrival of

Express Avenue. There would be 8000 to 10,000 new jobs created on account of express

avenue. Also, Mount road would get a fresh lease of life. Express Avenue has amenities

that ensure comfort and shopping pleasure of the visitors. The visitors can have

unfettered movement around the mall through the means of escalators and elevators.

Facilities for the physically challenged, environment friendly features such as natural

lighting, water treatment facilities, recycling facilities and low emitting material are used

102

in the construction. Express Avenue has deployed state–of–the art equipments and trained

manpower to ensure that shopping experience is wholesome without any hitches.

Kirana Shops in Chennai

India is a land of kiranas and Chennai is no exception for it. Small retail outlets

with less than 500 Sq.ft , platform shops, hawkers and peddlers are doing considerable

business in Chennai. Some of the prominent places are Pondy Bazaar, Annai Satya

market in T.Nagar , Burma Bazaar in Parrys Corner Vegetable platform shops near

Mylapore tank and North Madras , and Ritchie Street near Anna Salai are some of the

prominent places.

The modern organised retailings are providing significant competition to the

standalone kiranas. Majority of kirana stores in Chennai believe that there has been a

change in consumer buying patterns since the onset of modern organised retailing. They

are confident that they will not be wiped out of the scene but will continue to co-exist

along with the modern organized retail outlets.

In order to counter the competition from organized retail, kiranas have used

certain transformational strategies: - while some have changed their store format,

majority of them have made changes in their merchandizing. A few have incorporated

value added customer service.

103

3.8. CONCLUSION

Over the last few years, retail has witnessed rapid transformation in many areas of

the business by setting scalable and profitable retail model across categories. New and

indigenized formats such as department stores, hypermarkets, supermarkets, specialty and

convenience stores, malls, multiplexes and fun zones are fast dotting the retail landscape.

The emergence of shopping centers is already beginning to define a new lifestyle. A

huge demand exists for clean, contemporary shopping and entertainment complexes that

will house local brands and retail formats and offer an exciting and rewarding shopping

experience for the whole family.

A number of winning solutions will doubtless emerge over the next few years but

the dominant centers for the long term will be those that are designed around the

consumer and cater to the long term specific needs of a particular location. Similarly,

many trends have also emerged in retailing it is up to the retailers to use all of them or a

few among them constructively for the betterment of their organization, society and the

economy as a whole.

104

CHAPTER-IV

DATA ANALYSIS AND INTERPRETATION-I

4.1 INTRODUCTION

Data analysis refers to the process of evaluation of the data collected using

analytical and logical reasoning to examine each component of the data. Data from

various sources is gathered, reviewed and then analyzed to form some sort of finding or

conclusion. The aim of the analysis is to organize, classify and summarize the collected

data so that they can be better comprehended and interpreted to give answers to the

questions that triggered the research.

The act or process of applying general principles or formulae to the explanation of

the results obtained in special cases is called as the Interpretation. It is the search for

finding a broader meaning of the findings. Analysis and interpretation are considered as

the key steps in the research process. Analysis cannot be complete without interpretation

and similarly, interpretation cannot proceed without analysis.

In this Chapter, a detailed analysis of the data collected has been attempted as per

the objectives of the study stated earlier, and ultimately, Inferences and Conclusions were

drawn. The following statistical techniques are used for analysis of the data collected for

the present study viz., Descriptive analysis.

105

Table 4.1

Descriptive Analysis on Sample Sl.No. Gender Frequency Percentage

1 Male 212 71

2 Female 88 29

Total 300 100

Source: Primary data

The above table shows the total number of males and females in the sample

customers surveyed. Male customers constitute 71%, while female customers constitute

29% of the total sample customers. With the above information relating to gender, we

can conclude that the male customers constitute the majority of the sample customers

surveyed.

Diagram – 4.1

Representing Gender

212

71

88

29

300

100

0

50

100

150

200

250

300

350

400

Frequency

Male Female Total

Gender

Percentage

Frequency

106

Table 4.2

Frequency Distribution of Age Group in years

Sl.No. Age group Frequency Percentage

1 Below 20 33 11

2 20 to 40 192 64

3 Above 40 75 25

Total 300 100

Source: Primary data

The table 4.2 shows the relation between the age group in years of the sample

customers. Sample customers in the age group of 20 to 40 constitute 64%, while

customers above 40 years of age constitute 25%. Customers below 20 years of age

constitute 11%. After consolidating the above information, we can conclude that people

in the age group of 20 to 40 years constitute the majority of the sample customers.

Diagram - 4.2.

Representing Age Group in Years

AGE GROUP

Below 20

20 to 40

Above 40

Below 20

20 to 40

Above 40

107

Table – 4.3

Frequency Distribution of Marital Status

Source: Primary data

The above table shows the marital status of the sample customers surveyed. 77%

of the customers are married, while 23% are unmarried. With the available information

relating to marital status of the sample customers, we can conclude that the married

customers constitute the majority of the sample customers surveyed.

Diagram 4.3

.Diagram Representing Marital Status

230

77

70

23

300

100

0

50

100

150

200

250

300

350

400

FREQUENCY

Married Unmarried Total

MARITAL STATUS

Percentage

Frequency

Sl.No. Marital Status Frequency Percentage

1 Married 230 77

2 Unmarried 70 23

Total 300 100

108

Table 4.4

Frequency Distribution of Educational Qualification

Sl.No. Educational Qualification Frequency Percentage

1 Upto HSC 75 25

2 Graduate 118 39

3 Professionals 82 27

4 Others 25 9

Total 300 100

Source: Primary data

The table 4.4 shows the educational qualification of the sample customers. 39%

of the sample customers are graduates, while 27% are professionals. Those who have

studied up to Higher Secondary constitute 25%, while others constitute 9% of the sample.

After consolidating the overall information, it can be concluded that graduates constitute

the majority of the sample surveyed.

Diagram 4. 4.

Representing Educational Qualification

75

25

118

39

82

27

259

300

100

0

50

100

150

200

250

300

350

400

FREQUENCY

Upto HSC Graduate Professional Others Total

EDUCATIONAL QUALIFICATION

Percentage

Frequency

109

Table - 4.5.

Frequency Distribution of Occupation

Sl.No. Occupation Frequency Percentage

1 Business 55 18

2 Professionals 33 11

3 Government Employees 36 12

4 Private Employees 71 24

5 Self-employed 63 21

6 Home maker 42 14

Total 300 100

Source: Primary data

The above table shows the occupation distribution of the sample customers

surveyed. 24% of the sample customers are private employees, while 21% of the sample

customers are self-employed. 18% of the sample customers are in business, while 14%

are home makers. Government employees constitute 12%, while professionals constitute

11% of the sample. After consolidating the overall information, it can be concluded that

private employees constitute the majority of the sample.

110

Diagram - 4.5

Representing Occupation

BusinessProfessional

Government

EmployeePrivate

Employee Self-

employed Home makerTotal

Percentage

Frequency

5533 36 71

6342

300

1811

12 2421

14

1000

50

100

150

200

250

300

FREQUENCY

OCCUPATION

Percentage

Frequency

Table - 4. 6.

Frequency Distribution of Monthly Income

Sl.No. Monthly income (in Rupees)

Frequency Percentage

1 Below 30,000 94 31

2 30,001 to 60,000 98 33

3 60,001 to 1,00,000 76 25

4 Above 1,00,000 32 11

Total 300 100

Source: Primary data

The table 4.6 shows the distribution of the monthly income among the sample

customers surveyed. 33% of the sample customers earn between Rs.30,001 to

Rs.60,000/-, while 31% of the sample customers earn below Rs.30,000/-. 25% earn

between Rs.60,001 to Rs.1,00,000/-, while 11% earn above Rs.1,00,000/- as monthly

income. On consolidating the overall information, it can be concluded that the monthly

111

income earners between Rs.30,001 to Rs.60,000/- constitute the majority of the sample

customers.

Diagram - 4. 6.

Representing Monthly Income

94

31

98

33

76

25

32

11

300

100

0

50

100

150

200

250

300

350

400

FREQUENCY

Below 30,000 30,001 to 60,000 60,001 to 1,00,000 Above 1,00,000 Total

MONTHLY INCOME

Percentage

Frequency

Table - 4.7.

Frequency Distribution of the Type of Goods

Generally Purchased From a Retail Unit

Sl.No. Type of brands Frequency Percentage

1 Manufacturer's brands 152 51

2 Private brands 137 46

3 I am not brand conscious 11 3

Total 300 100

Source: Primary data

The above table shows the views of the sample customers regarding the type of

goods generally purchased from a retail outlet. 51% of the sample customers prefer

manufacturer‟s brands, while 46% of the sample customers prefer private brands. 3% of

112

the sample customers are not brand conscious. On consolidating the overall information,

it can be concluded that the manufacturer’s brands constitute the majority of goods

generally purchased from a retail outlet

Diagram - 4.7

Representing the Type of Goods Generally Purchased From a Retail Unit

152

51

137

46

11

3

300

100

0

50

100

150

200

250

300

350

400

FREQUENCY

Manufacturer's

brands

Private brands I am not brand

conscious

Total

TYPE OF BRANDS

Percentage

Frequency

Table 4.8

Frequency Distribution of the Retail Outlets Generally Preferred For Shopping

Sl.No. Type of Retail Outlets Frequency Percentage

1 Department Stores 137 46

2 Chain Stores 57 19

3 Discount Stores 94 31

4 Shopping Malls 12 4

Total 300 100

Source: Primary data

The above table shows the retail outlets generally prefer for shopping by the

sample customers. 46% of the sample customers prefer Departmental Stores, while 31%

prefer Discount Stores for shopping. 19% of the sample customers prefer Chain Stores,

113

while Malls are prefer by 4% of the sample customers. After consolidating the overall

information, it can be concluded that departmental stores are prefer by the majority of

the sample customers.

Diagram - 4.8

Representing the Retail Outlets Generally Preferred For Shopping

Department Stores

46%

Chain Stores

19%

Discount Stores

31%

Shopping Malls

4%

Department Stores

Chain Stores

Discount Stores

Shopping Malls

Table – 4.9

Frequency Distribution of the Average Amount Spent in a Retail Outlet

Every Month

Sl.No

. Average amount spent in a retail outlet

every month

Frequency Percentage

1 Below Rs.1000 22 8

2 Rs.1001 to 5000 52 17

3 Rs.5001 to 10000 126 42

4 Above Rs.10000 100 33

Total 300 100

Source: Primary data

114

The table 4.9 shows the average amount spent in a retail outlet every month by

the sample customers. 42% of the sample customers spend on an average of Rs.5001/- to

Rs.10000/-, 33% of them spend above Rs.10000/- .17% of the sample customers spend

between Rs.1001/- to Rs.5000/- and 8% among them spend less than Rs.1000/- per

month. After consolidating the overall information, it can be concluded that the sample

customers spending between Rs.5001/- to Rs.10000/- constitute the majority of the

sample.

Diagram - 4.9

Representing the Average Amount Spent in a Retail

Outlet Every Month

22

8

52

17

126

42

100

33

300

100

0

50

100

150

200

250

300

FREQUENCY

Below

Rs.1000

Rs.1001 to

5000

Rs.5001 to

10000

Above

Rs.10000

Total

THE AVERAGE AMOUNT SPENT IN A RETAIL OUTLET

Frequency

Percentage

115

Table – 4.10

Frequency Distribution of the Different Forms of Payments Generally Made by the

Customers

Sl.No. Form of payments made by the

customers

Frequency Percentage

1 Cash only 40 13

2 Personal Cheques 29 10

3 Credit Cards 136 45

4 Debit Cards 95 32

Total 300 100

Source: Primary data

The table 4.10 shows the different forms of payments generally made by the

customers at the time of shopping. 45% of the sample customers use Credit cards, while

32% use Debit cards. 13% of the sample customers use cash only for making retail

payments, while 10% among them issue personal cheques. After consolidating the

overall information, it can be concluded that credit cards are used by the majority of the

sample customers.

Diagram – 4.10

Representing the Different Forms of Payments Generally Made by the Customers

4029

13 10

4532

100

300

95

136

Cash only Personal

cheques

Credit Cards Debit Cards Total

THE DIFFERENT FORMS OF PAYMENTS GENERALLY MADE BY THE

CUSTOMERS

FREQUENCY

Frequency

Percentage

116

Table - 4.11.

Frequency Distribution of the Different Credit Cards Used While Making

Retail Payments

Sl.No. Type of Credit Cards used Frequency Percentage

1 Visa 66 22

2 Master Card 39 13

3 American Express 28 9

4 ICICI 111 37

5 SBI 56 19

Total 300 100

Source: Primary Data

The above table shows the different types of credit cards used by the sample

customers while making retail payments. ICICI cards are used by 37% of the sample

customers, while Visa cards are used by 22% of the sample customers. SBI cards are

used by 19% of the sample customers and 13% among them use Master card. American

Express cards are used by 9% of the sample customers. After consolidating the overall

information, it can be concluded that ICICI cards are used by the majority of the sample

customers.

117

Diagram – 4.11

Representing the Different Credit Cards Used While Making

Retail Payments

300

56

28

111

3966

19

100

9 3713220

50

100

150

200

250

300

350

Visa Master

Card

American

Express

ICICI SBI Total

CREDIT CARDS USED BY THE CUSTOMERS WHILE MAKING RETAIL

PAYMENTS

FREQ

UENC

Y

Frequency

Percentage

Table - 4.12

Frequency Distribution of the Purchase Decision -Maker among the

Family Members

Sl.No. Purchase decision-maker Frequency Percentage

1 Husband 93 31

2 Wife 187 62

3 Children 14 5

4 All members of the family 6 2

Total 300 100

Source: Primary Data

The table 4.12 shows the purchase decision-maker among the family members of

the sample customers. Wife account for 62% of the purchase decision-maker, while

118

Husband account for 31% of the purchase decision-maker. Children constitute 5% of the

decision-maker, while all members of the family constitute 2% of the decision-maker.

After consolidating the overall information, it can be concluded that the wives constitutes

the majority of the purchase decision-maker among the members of the family

Diagram - 4.12

Representing the Purchase Decision -Maker among the

Family Members

31

62

5 2

100

187

93

146

300

0

50

100

150

200

250

300

350

Husband Wife Children All members of

the family

Total

PURCHASE DECISION-MAKER AMONG THE FAMILY MEMBERS

FREQ

UENC

Y

Frequency Percentage

Table – 4.13

Frequency Distribution of Having Witnessed the Presence of Cold Storage Facilities

Sl.No. Cold Storage facilities Frequency Percentage

1 Yes 213 71

2 No 39 13

3 Busy in shopping 48 16

Total 300 100

Source: Primary Data

119

The above table expresses the views of the sample customers about having

witnessed the presence of cold storage facilities in the retail outlets while shopping. 71%

of the sample customers have witnessed the presence of cold storage facilities, while 16%

among them say that they are busy in shopping. 13% of the sample customers have not

witnessed the presence of cold storage facilities. After consolidating the overall

information, it can be concluded that a majority of the sample customers have

witnessed the presence of cold storage facilities in the retail outlets while shopping.

Diagram – 4.13

Representing Having Witnessed the Presence of Cold Storage Facilities

213

39 48

300

71

13 16

100

0

50

100

150

200

250

300

350

Yes No Busy in shopping Total

OPINION FOR HAVING WITNESSED THE PRESENCE OF COLD STORAGE

FACILITIES IN THE RETAIL OUTLETS

FREQUENCY

Frequency

Percentage

Table – 4. 14.

Frequency Distribution of the Sufficiency of Infrastructure Facilities like

Rail/Road Connectivity

Sl.No. Rail/Road connectivity Frequency Percentage

1 Insufficient 6 2

2 Partly sufficient 62 21

3 Fully sufficient 232 77

Total 300 100

Source: Primary Data

120

The above table shows the sufficiency or otherwise of infrastructure facilities

like rail/road connectivity in the locality. 77% of the sample customers expressed that

the infrastructure facilities are fully sufficient. 21% of the sample customers have

expressed that the infrastructure facilities are partly sufficient, 2% of the sample

customers have expressed that the infrastructure facilities are insufficient. After

consolidating the overall information, it can be concluded that a majority of the sample

customers have expressed that the infrastructure facilities are fully sufficient.

Diagram -4.14

Representing the Sufficiency of Infrastructure Facilities like Rail/Road Connectivity

62

62

21

232

77

300

100

0

50

100

150

200

250

300

FREQUENCY

Insufficient Partly sufficient Fully sufficient Total

SUFFICIENCY OF THE INFRASTRUCTURE FACILITIES LIKE RAIL/ROAD

CONNECTIVITY AVAILABLE IN THE LOCALITY

Frequency Percentage

Table 4.15

Frequency Distribution of the Opinion about the Services Provided By the Employees

in the Retail Outlets

Sl.No.

Opinion about employees

services Frequency Percentage

1 Not always satisfactory 51 17

2 Sometimes satisfactory 114 38

3 Always satisfactory 135 45

Total 300 100

Source: Primary Data

121

The table 4.15 shows the views expressed by the sample customers whether the

employees in the retail outlets are always providing satisfactory services thereby inviting

the customers to make repeated purchases. 45% of the sample customers have expressed

that the services of the employees in the retail outlets are always satisfactory. 38% of

them have expressed that the services provided by the employees in the retail outlets are

sometimes satisfactory, 17% of the sample customers say that the services provided by

the employees of the retail outlets are not always satisfactory. After consolidating the

overall information, it can be concluded that a majority of the customers have expressed

the view that the services of the employees of the retail outlets are fully satisfactory.

Diagram - 4.15

Representing the Opinion about the Services provided by the employees in the Retail

Outlets

51

17

114

38

135

45

300

100

0

50

100

150

200

250

300

FREQUENCY

Not always

satisfactory

Sometimes

satisfactory

Always

satisfactory

Total

EMPLOYEES SERVICE SATISFACTION

Frequency

Percentage

122

Table - 4.16

Frequency Distribution of the Availability of Different Range Of Products under

One Roof

Sl.No.

Different range of products

under one roof Frequency Percentage

1 Not always 74 25

2 Sometimes 99 33

3 Always 127 42

Total 300 100

Source: Primary Data

The above table shows the opinion of the sample customers whether they

always get different range of products for the family members under one roof. 42% of

the sample customers expressed that they always get different range of products; while

33% have expressed that they sometimes get different range of products. 25% of the

sample customers have expressed the opinion that the different range of products for the

family members are not always available in the retail outlets. After consolidating the

overall information, it can be concluded that the majority of the customers have

expressed the opinion that they always get different range of products for the family

members under one roof.

123

Diagram – 4.16

Representing the Availability of Different Range Of Products under One Roof

Not always

25%

Sometimes

33%

Always

42% Not always

Sometimes

Always

Table - 4.17.

Frequency Distribution of the Inconveniences Normally Encountered

While Shopping

Sl.No. Inconveniences normally

encountered

Frequency Percentage

1

Traffic on the roads

127 42

2

Parking of vehicles

104 35

3 Waiting periods in billing & cash

payments

43 14

4 Lack of moving space inside the

shops

26 9

Total 300 100

Source: Primary Data

The above table shows the inconveniences that are normally encountered by

the sample customers while shopping. 42% of the sample customers have expressed that

the traffic on the roads constitute their normal inconvenience. 35% of the sample

customers have expressed the parking of vehicles constitute their normal inconvenience.

124

14% of the sample customers have expressed the waiting periods in billing & cash

payments constitute their normal inconvenience, while 9% among them have expressed

the lack of moving space inside the shops as their normal inconvenience. After

consolidating the overall information, it can be concluded that traffic on roads constitute

the majority of the normal inconveniences encountered by the customers while shopping.

Diagram – 4.17

Representing the Inconveniences Normally Encountered While Shopping

127

42

104

35 43

1426

9

300

100

0

50

100

150

200

250

300

FREQUENCY

Traffic on

the roads

Parking of

vehicles

Waiting

periods in

billing &

cash

payments

Lack of

moving

space

inside the

shops

Total

THE INCONVENIENCES NORMALLY ENCOUNTERED

BY THE CUSTOMERS

Frequency

Percentage

Table – 4.18

Frequency Distribution of the Opinion about MRP (Pricing Label)

On The Products

Sl.No. MRP(Pricing Label) Frequency Percentage

1 Welcome 188 63

2 Reject 63 21

3 No idea 49 16

Total 300 100

Source: Primary Data

125

The table 4.18 shows the opinion of the sample customers about MRP

(Pricing Label) on the products. 63% of the sample customers welcome the presence of

MRP (Pricing Label) on the products. 21% of the sample customers reject the presence

of MRP (Pricing Label) on the products, while 16% are of the opinion that they have no

idea about MRP (Pricing Label). After consolidating the overall information, it can be

concluded that the majority of the sample customers welcome the presence of MRP

(Pricing Label) on the products.

Diagram – 4.18

Representing the Opinion about MRP (Pricing Label) On the Products

188

6363 21

4916

300

100

0

50

100

150

200

250

300

FREQUENCY

Welcome Reject No idea Total

MRP (PRICING LABEL) ON THE PRODUCTS

Frequency

Percentage

126

Table - 4.19.

Frequency Distribution of the General Suggestions to Improve Store Security

Source: Primary Data

The above table shows the general suggestions of the customers to improve

store security. 44% of the sample customers have suggested for having bright lighting in

parking lots, while 32% of the sample customers have suggested for installing TV

cameras in strategic locations of the retail outlets. 13% of the sample customers have

suggested for having uniformed security guards and 11% of them have suggested for

having cover-personnel to compliment security guards. After consolidating the overall

information, it can be concluded that the opinion of the customers for having bright

lighting in parking lots constitute the majority of the suggestions to improve store

security.

Sl.No. Suggestions to improve store

security Frequency Percentage

1 Having bright lighting in parking lots 132 44

2 Installing TV cameras 96 32

3 Having uniformed security guards 39 13

4

Having cover-personnel to

compliment security guards 33 11

Total 300 100

127

Diagram – 4.19

Representing the General Suggestions to Improve Store Security

132

96

39 33

300

4432

13 11

100

0

50

100

150

200

250

300

350

Having bright

lighting in

parking lots

Installing TV

Camera

Having

uniformed

security

guards

Having cover-

personnel to

compliment

security

guards

Total

GENERAL SUGGESTIONS OF THE CUSTOMERS TO IMPROVE STORE SECURITY

FREQUENCY Frequency

Percentage

Table – 4.20

Frequency Distribution of the opinion about the Proposed Entry of FDI in to

Retail Sector

Sl.No. Opinion about the proposed entry

of FDI into retail sector

Frequency Percentage

1

We will wait and see

55 18

2 The existing businesses will improve

very well

152 51

3 The existing businesses will not

improve

30 10

4

No idea

63 21

Total 300 100

Source: Primary Data

The above table shows the opinion of the sample customers about the proposed

entry of FDI into retail sector. 51% of the sample customers have expressed their opinion

that the existing businesses will improve very well, while 21% of the sample customers

128

have expressed that they have no idea about the proposed entry of FDI into retail sector.

18% of the sample customers have expressed their opinion that we will wait and see,

while 10% of the sample customers have expressed that the existing retail businesses will

not improve. After consolidating the overall information, it can be concluded that the

majority of the sample customers have expressed that the existing businesses will improve

very well after the proposed entry of FDI into retail sector.

Diagram – 4.20

Representing the Opinion about the Proposed Entry of FDI into Retail Sector

We will wait

and see

The existing

businesses

will improve

very well

The existing

businesses

will not

improve

No idea Total

Percentage

Frequency

55

152

30

300

63

1851

10

100

21

0

50

100

150

200

250

300

FREQUENCY

OPINION ABOUT THE PROPOSED ENTRY OF FDI INTO RETAIL BUSINESS

Percentage

Frequency

129

Table 4.21

Frequency Distribution of the Modern Practices Suggested by the Customers

Sl.No. Modern practices to be introduced Frequency Percentage

1 On-line cash payments 72 24

2 On-line product selection 69 23

3 Automatic product vending machines 49 16

4 Door delivery, billing & collection

83 28

5

Informing the customers about product

availability through

e-mail/SMS

27 9

Total 300 100

Source: Primary Data

The table 4.21 shows some of the important modern practices suggested by

the customers to be introduced in the retail outlets in the near future. 28% of the sample

customers have suggested for the introduction of door delivery, billing and collection,

while 24% have suggested for the introduction of on-line cash payments. 23% of the

sample customers have suggested for the introduction of on-line product selection, while

16% among them have suggested for the introduction of automatic product vending

machines. 9% have suggested for informing the customers about product availability

through e-mail/SMS. After consolidating the overall information, it can be concluded

that the majority of the customers have suggested for the introduction of door delivery,

billing and collection.

130

Diagram – 4.21

Representing The Modern Practices Suggested By The Customers

72 6949

8327

300

239

24 16 28 100

0

50

100

150

200

250

300

350

On-line cash

payments

On-line

product

selection

Automatic

product

vending

machines

Door delivery,

billing &

collection

Informing the

customers

about product

availability

through

e-mail/SMS

Total

MODERN PRACTICES TO BE INTRODUCED IN THE NEAR FUTURE

FREQ

UENC

Y

Frequency

Percentage

Table – 4.22

Frequency Distribution showing how retailers can improve their profitability

Sl.No. How retailers can improve their

profitability

Frequency Percentage

1 By increasing advertisement programmes 63 21

2 By improving employee performance 127 42

3 By automating routine functions 18 6

4 By emphasising on quality 66 22

5 By understanding the specific needs of

the customers & satisfying them

26 9

Total 300 100

Source: Primary Data

The above table represents the views of sample customers as to how retailers

can improve their profitability. 42% of the sample customers have expressed for

improving employee performance, while 22% have expressed for emphasizing on quality.

131

21% of the sample customers are for increasing advertisement programmes, while 9%

among them are for understanding the specific needs of the customers and satisfying

them. 6% among them have felt for automating routine functions. After consolidating

the overall information, it can be concluded that the majority of the sample customers

have expressed for improving employee performance.

Diagram – 4.22

Frequency Distribution showing how retailers can improve their profitability

63

127

66

300

21

42

622

100

2618

90

50

100

150

200

250

300

350

By increasing

advertisement

programmes

By improving

employee

performance

By automatic

routine function

By emphasising

on quality

By understanding

the specific

needs of the

customer &

satisfying them

Total

THE FEELING OF THE CUSTOMERS AS TO HOW RETAILERS CAN IMPROVE THEIR

PROFITABILITY

FREQ

UENC

Y

Frequency

Percentage

Table – 4.23

Frequency Distribution of the Impact on the Purchases after the Introduction of VAT

System

Sl.No. Impact on purchases after the

introduction of VAT system

Frequency Percentage

1 Not much 101 34

2 We have to wait & see 165 55

3 Very much 34 11

Total 300 100

Source: Primary Data

132

The above table shows the impact on the purchases of the sample customers

after the introduction of VAT system. 55% of the sample customers have expressed that

we have to wait and see about its impact. 34% of the sample customers have expressed

that their purchases are not much affected, while 11% among them have said that their

purchases have been affected very much as a result of introduction of VAT System. After

consolidating the overall information, it can be concluded that the majority of the sample

customers have prefer to wait and see about the impact of VAT system.

Diagram – 4.23

Representing the impact on the Purchases After

The Introduction of VAT System

Not much

34%

We have to wait & see

55%

Very much

11%

Not much

We have to wait & see

Very much

133

Table – 4.24

Frequency Distribution of the Safety Measures Necessary for a Retail Unit

Sl.No. Safety measures necessary Frequency Percentage

1 Having fire-fighting devices at

strategic locations

188 63

2 Frequently mopping & inspecting

wet floors

48 16

3

Having no-slip floors

40 13

4 Keeping records that proper

maintenance has been done

24 8

Total 300 100

Source: Primary Data

The above table shows the safety measures necessary for a retail unit. 63% of

the sample customers are for having fire-fighting devices at strategic locations, while

16% of them have felt necessary for frequently mopping and inspecting wet floors. 13%

of them are for having no-slip floors; while 8% among them have felt for the necessity

of keeping records that proper maintenance has been done. After consolidating the

overall information, it can be concluded that the majority of the sample customers are for

having fire-fighting devices at strategic locations.

134

Diagram – 4.24

Representing the Safety Measures Necessary for a Retail

Unit

188

63

48

16

40

13

24

8

300

100

0

50

100

150

200

250

300

350

400

FREQUENCY

Having fire-

fighting devices

at strategic

locations

Frequently

mopping &

inspecting wet

floors

Having no-slip

floors

Keeping records

that proper

maintenance has

been done

Total

THE SAFETY MEASURES NECESSARY FOR A RETAIL UINT

Percentage

Frequency

Table – 4.25

Frequency Distribution about the Demand for Industry Status to the Retail Sector

Sl.No.

Demand for industry status to the

Retail sector Frequency Percentage

1

It is a welcome move

44 15

2

The problems of the retail sector can be

brought to the notice of the concerned

Minister

157 52

3 Loan facilities can be easily availed

from the banks

80 27

4

No idea

19 6

Total 300 100

Source: Primary Data

The above table shows the opinion of the sample customers about the demand

for industry status to the retail sector. 52% of the sample customers have expressed that

the problems of the retail sector can be brought to the notice of the concerned Minister,

135

while 27% among them have expressed that loan facilities can easily availed from the

banks. 15% among them have expressed that it is a welcome move, while 6% among

them have said that they have no idea. After consolidating the overall information, it

can be concluded that the majority of the sample customers have expressed that the

problems of the retail sector can be brought to the notice of the concerned Minister.

Diagram – 4.25

Representing the Demand for Industry Status to Retail Sector

44

15 157

52

80

27

19

6

300

100

0

50

100

150

200

250

300

350

400

FREQUENCY

It is a welcome move The problems of the

retail sector can be

brought to the notice

of the concerned

Minister

Loan facilities can be

easily availed from the

banks

No idea Total

DEMAND FOR INDUSTRY STAUS TO THE RETAIL SECTOR

Percentage

Frequency

Table – 4.26

Frequency Distribution of the Opinion Regarding the Quality of The Products and

Care of The Customers

Sl.No. Opinion about the quality of

the products/care of customers Frequency Percentage

1 Fully disagree 14 5

2 Partially agree 50 17

3 Fully agree 236 78

Total 300 100

Source: Primary Data

136

The table 4.26 shows the opinion of the sample customers about the quality of

the products and care of the customers. 78% of the sample customers have fully agreed

for taking good care in the quality of the products and care of the customers, while 18%

of the sample customers have partially agreed with the above statement. 5% of the

sample customers have fully disagreed with the above statement. After consolidating the

overall information, it can be concluded that the majority of the sample customers have

fully agreed for taking good care of the quality of the products and care of the customers.

Diagram – 4.26

Representing the Opinion Regarding the Quality of the Products And Care of the

Customers

Fully disagreePartially agree

Fully agree

Frequency

Percentage

0

50

100

150

200

250

FREQUENCY

OPINION REGARDING CARE TO BE ATTACHED TO THE CUSTOMERS AND QUALITY

Frequency

Percentage

137

CHAPTER-V

DATA ANALYSIS AND INTERPRETATION - II

5.1. Introduction

In this part of the tools of analysis, some of the most frequently applied

advanced statistical tools are discussed. In the paragraph that follow, the relevance of

each of advanced statistical tool is explained first and then the method applying them. As

an extension of this effort, interpretation of the results of the analysis is also made.

5.2. Inferential Analysis on sample

Inferential Analysis is used to make inferences about a population from a sample

in order to generalize (make assumptions about this wider population) and make

predictions about the future.

With inferential statistics, we can reach conclusions that extend beyond the

immediate data alone. The relevant tools included for this purpose are t test, f test, chi

square test and correlation and regression.

5.3. t test

t test is generally applied for testing hypothesis using sample data. It is used a)

for determining the significance of a sample mean, b) for determining the significance

of the difference between the means of two samples and if two samples are related for

determining the significance of means of the two related samples.

138

HYPOTHESIS-I Null Hypothesis:

There is no significant between married and unmarried customers with respect to

making repeated purchases.

Alternate Hypothesis:

There is significant between married and unmarried customers with respect to

making repeated purchases.

Table-5.1

Student t- test for significant between married and

unmarried with respect to making repeated purchases

The above table discusses the relation between married and unmarried sample

customers with respect to making repeated purchases.

From the above table 5.1. it is understood that since the p value is less than 0.01,

the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that

there is significant difference between married and unmarried customers with respect to

making repeated purchases.

While analyzing the table, it is very clear that married customers are making

repeated purchases than unmarried customers since the mean value of the married

customers is more (2.36) than unmarried customers (2.01).

Marital status Mean SD t value

P value

Married 2.36 0.72

3.509 0.001**

Unmarried 2.01 0.75

139

Null Hypothesis:

There is no significant difference between married and unmarried customers with

respect to different ranges of products under one roof.

Alternate Hypothesis:

There is significant difference between married and unmarried customers with

respect to different ranges of products under one roof.

Table 5.2

Student t- test for significant difference between married and unmarried

customers with respect to different ranges of products under one roof.

From the above table 5.2. it is understood that since the p value is less than 0.01,

the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that

there is significant difference between married and unmarried customers with respect to

different ranges of products under one roof.

While analyzing the table, it is very clear that married customers are getting

different ranges of products under one roof than unmarried customers since the mean

value of the married customers is more (2.30) than unmarried customers (1.77).

5.4 ANOVA – analysis of variants:

ANOVA is used to compare the variants of two independent samples. It helps

judge the significance of more than two sample means at one and the same time. This

Marital status Mean SD t value

P value

Married 2.30 0.75

5.029 0.000**

Unmarried 1.77 0.84

140

test helps make to the analysis of total variation in the data into different component and

the results are presented by indicating the sources and causes of variation.

HYPOTHESIS-II

Null Hypothesis:

There is no significant difference between age group with respect to sufficiency of

infrastructure facilities

Alternate Hypothesis:

There is significant difference between age group with respect to sufficiency of

infrastructure facilities

Table 5.3

ANOVA for significant difference between age group with respect to sufficiency of

infrastructure facilities.

Note: Different alphabets between the mean age group of customers denotes

significant at 5% level using Duncan multiple range test.

From the above table 5.3 it is understood that since the p value is less than 0.05,

the null hypothesis is rejected at 5% level of significance. Hence, it is concluded that

there is significant difference between age group with respect to sufficiency of

infrastructure facilities.

Based on Duncan Multiple Range test, the age group above 40 years (2.61) is

significantly different from the other age group of below 20 years (2.82) and 20 to 40

Age group in years Mean SD F value P value

Below 20 2.82b 0.39

4.454 0.012 * 20 to 40 2.80

b 0.43

Above 40 2.61a 0.60

141

years (2.80). There is no significant difference between customers in the age group

below 20 years and between 20 to 40 years with respect to sufficiency of infrastructure

facilities.

Null Hypothesis:

There is no significant difference between age group with respect to employee

service satisfaction leading to repeated purchases.

Alternate Hypothesis:

There is significant difference between age group with respect to employee

service satisfaction leading to repeated purchases.

Table 5.4

ANOVA for significant difference between age group with respect to employee service

satisfaction leading to repeated purchases

Note: Different alphabets between the mean age group of customers denotes

significant at 5% level using Duncan multiple range test.

The individual care given by the employees of the retail outlet towards customers

compels them to visit the retail outlets because they are fully and personally satisfied with

the services rendered by the employees.

From the above table 5.4.it is understood that since the p value is less than 0.01, the

null hypothesis is rejected at 1% level of significance. Hence, it is concluded that there is

Age group in years Mean SD F value

P value

Below 20

1.76a 0.79

13.644 0.000 ** 20 to 40

2.42c 0.72

Above 40

2.16b 0.64

142

significant difference between age group with respect to employee service satisfaction

leading to repeated purchases.

Based on Duncan Multiple Range test, the age group below 20 years (1.76) is

significantly different from the other age group between 20 to 40 years (2.42) and above

40 years (2.16) with respect to employee service satisfaction leading to repeated

purchases.

Null Hypothesis:

There is no significant difference between age group with respect to getting

different ranges of products under one roof.

Alternate Hypothesis:

There is significant difference between age group with respect to getting different

ranges of products under one roof.

Table 5.5

ANOVA for significant difference between age group with respect to getting different

ranges of products under one roof.

Note: Different alphabets between the mean age group of customers denotes

significant at 5% level using Duncan multiple range test.

If a retailer can know which group visits it retail outlet frequently for getting ranges

of products he can give more attention to them.

From the above table 5.5 it is understood that since the p value is less than 0.01, the

null hypothesis is rejected at 1% level of significance. Hence, it is concluded that there is

Age group in years Mean SD F value P value

Below 20

1.64a 0.82

9.998 0.000 ** 20 to 40

2.29b 0.82

Above 40

2.13b 0.62

143

significant difference between age group with respect to getting ranges of products under

on roof.

Based on Duncan Multiple Range test, the age group below 20 years (1.64) is

significantly different with the other age group of above 40 years (2.13) and 20 to 40

years (2.29). But there is no significant difference between customers in the age group

20 to 40 years and above 40 years with respect to getting different ranges of products

under one roof.

Null Hypothesis:

There is no significant difference between educational qualification with respect

to opinion about taking good care of the customers and goods

Alternate Hypothesis:

There is significant difference between educational qualification with respect to

opinion about taking good care of the customers and goods

Table 5.6

ANOVA for significant difference between educational qualification with respect to

opinion about taking good care of the customers and goods

Note: Different alphabets between the mean age group of customers denotes

significant at 5% level using Duncan multiple range test.

Educational

qualification Mean SD F value P value

Upto HSC 2.75a 0.54

3.421 0.018 *

Graduate 2.78ab

0.51

Professional 2.60a 0.61

Others 2.96b 0.20

144

A general statement about the opinion regarding taking good care of the customers

and goods was put forward to the customers with educational qualifications and their

opinion for the same is analyzed in this table.

From the above table 5.6 it is understood that since the p value is less than 0.05,

the null hypothesis is rejected at 5% level of significance. Hence, it is concluded that

there is significant difference between educational qualification with respect to opinion

about taking good care of the customers and goods.

Based on Duncan Multiple Range test, there is a significant difference between the

Professional customers (2.60) and others (2.96). There is also a significant between those

customers who have studied up to HSC (2.75) and others (2.96).

However, there is no significant difference between graduate customers (2.78) and

others (2.96) with respect to opinion about taking good care of the customers and

goods.

Null Hypothesis:

There is no significant difference between occupations with respect to sufficiency

of infrastructure facilities.

Alternate Hypothesis:

There is significant difference between occupations with respect to sufficiency of

infrastructure facilities.

145

Table 5.7

ANOVA for significant difference between occupation with respect to sufficiency of

infrastructure facilities

Note: Different alphabets between the mean age group of customers denotes

significant at 5% level using Duncan multiple range test.

The sufficiency about the availability of infrastructure facilities was put forward to

the customers with pursuing different occupation and their opinion is summarized in the

above table.

From the above table 5.7. it is understood that since the p value is less than 0.01,

the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that

there is significant difference between occupation of the customers with respect to

sufficiency of infrastructure facilities.

Based on Duncan Multiple Range test, there is a significant difference between

private employee (2.61) and Government employee (2.92) with respect to sufficiency of

infrastructure facilities. There is also a significant difference between private employee

Occupation

Mean SD F value P value

Business 2.87bc

0.34

3.725 0.003 **

Professional 2.76abc

0.44

Government employee 2.92c 0.28

Private employee 2.61a 0.62

Self-employed 2.67ab

0.48

Home maker 2.83bc

0.44

146

(2.61) and business (2.87), and private employee (2.61) and home-maker (2.83). There is

also a significant difference between private employee (2.61) and professional (2.76).

But there is no significant difference between private employee (2.61) and self-

employed (2.67). There is also no significant difference between professional (2.76) and

home-maker (2.83). There is also no significant difference between professional and

business (2.87) and Government employee (2.92).

Null Hypothesis:

There is no significant difference between occupations with respect to retail

employee service satisfaction leading to repeated purchases.

Alternate Hypothesis:

There is significant difference between occupations with respect to retail

employee service satisfaction leading to repeated purchases.

Table 5.8

ANOVA for significant difference between occupation withrespect to retail employee

service satisfaction leading torepeated purchases

Note: Different alphabets between the mean age group of customers denotes

significant at 5% level using Duncan multiple range test.

Occupation Mean SD F value P value

Business

2.45a 0.72

2.865 0.015 *

Professional

2.30ab

0.73

Government employee

2.19ab

0.92

Private employee

2.06a 0.65

Self-employed

2.27ab

0.68

Home maker

2.50b 0.74

147

The opinion about the service rendered by the employees of the retail outlet is

put forward to the customers pursuing different occupation and their opinion is

summarized in the above table.

From the above table 5.8 it is understood that since the p value is less than 0.05,

the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that

there is significant difference between occupations with respect to employee service

satisfaction leading to repeated purchases.

Based on Duncan Multiple Range test, there is a significant difference between

private employee (2.06) and Home-maker (2.50) with respect to employee service

satisfaction leading to repeated purchases. There is also a significant difference between

private employee (2.06) and business (2.45).

However there is no significant difference between Government employee (2.19),

self-employed (2.27) and professional (2.30). . There is also no significant difference

between business (2.45) and home-maker (2.50).

Null Hypothesis:

There is no significant difference between occupations with respect to getting

different ranges of products under one roof.

Alternate Hypothesis:

There is significant difference between occupations with respect to getting

different ranges of products under one roof.

148

Table 5.9

ANOVA for significant difference between occupation with respect to getting different

ranges of products under one roof.

Note: Different alphabets between the mean age group of customers denotes

significant at 5% level using Duncan multiple range test.

The opinion about getting different ranges of products under one roof was put

forward to the customers pursuing different occupation and their opinion is summarized

in the above table.

From the above table 5.9 it is understood that since the p value is less than 0.05,

the null hypothesis is rejected at 5% level of significance. Hence, it is concluded that

there is significant difference between occupations with respect to getting different

ranges of products under one roof.

Based on Duncan Multiple Range test, there is a significant difference between

private employee (1.97) and Home-maker (2.40). There is also a significant difference

between private employee and business (2.38). However, there is also significant

difference between private employee and professional (2.30). There is also a significant

difference between private employee and self-employed (2.27).There is also a significant

Occupation Mean SD F value P value

Business 2.38b 0.81

2.513 0.030 *

Professional 2.12ab

0.78

Government employee 2.17ab

0.94

Private employee 1.97a 0.72

Self-employed 2.11ab

0.79

Home maker 2.40b 0.77

149

difference between private employee and Government employee (2.19) with respect to

getting different ranges of products under one roof.

Null Hypothesis:

There is no significant difference between income with respect to opinion about

taking good care of the customers and goods.

Alternate Hypothesis:

There is significant difference between income with respect to opinion about

taking good care of the customers and goods.

Table 5.10

ANOVA for significant difference between income with

respect to opinion about taking good care of the customers and goods.

Income Mean SD F value P value

Below 30,000 2.87b 0.39

5.735 0.001 **

30,001 – 60,000 2.70b 0.54

60,001 – 1,00,000 2.75b 0.55

Above 1,00,000 2.44a 0.72

Note: Different alphabets between the mean age group of customers

denotes significant at 5% level using Duncan multiple range test.

The opinion about taking good care of the customers and goods was put forward

to the customers of different income groups and their opinion is summarized in the above

table.

From the above table 5.10. it is understood that since the p value is less than 0.01,

the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that

150

there is significant difference between income with respect to opinion about taking good

care of the customers and goods.

Based on Duncan Multiple Range test, there is a significant difference between the

customers in the income group above Rs. 1,00,000/- (2.44) and below Rs.30,000/- (2.87).

There is also a significant difference between customers in the income above

Rs.1,00,000/- and those earnings between Rs.60,001/- to Rs.1,00,000/- (2.75). There is

also a significant difference between customers earning above Rs.1,00,000/- and those

earnings between Rs.30,001 to Rs.60,000/- (2.70).

But there is no significant difference between customers in the income group

of below Rs.30,000/-, those income group of between Rs.30,001/- to Rs.60,000/- and

those in the income group of Rs.60,001 to Rs.1,00,000/- about taking good care of the

customers and goods.

Null Hypothesis:

There is no significant difference between retail outlets generally preferred for

shopping with respect to sufficiency of infrastructure facilities.

Alternate Hypothesis:

There is significant difference between retail outlets generally preferred for

shopping with respect to sufficiency of infrastructure facilities.

151

Table 5.11

ANOVA for significant difference between retail outlets generally preferred for

shopping with respect to sufficiency of infrastructure facilities.

Retail outlets generally

prefer for shopping Mean SD F value P value

Departmental Stores 2.66b 0.56

15.777 0.000 **

Chain Stores 2.77bc

0.42

Discount Stores 2.96c 0.20

Shopping Malls 2.17a 0.39

Note: Different alphabets between the mean age group of customers

denotes significant at 5% level using Duncan multiple range test.

The opinion about the customers for the retail outlets preferred for shopping with

respect to sufficiency of infrastructure facilities was analyzed in the above table.

From the above table 5.11 it is understood that since the p value is less than 0.01,

the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that

there is significant difference between the retail outlets generally preferred for shopping

with respect to sufficiency of infrastructure facilities.

Based on Duncan Multiple Range test, there is a significant difference between

Shopping Malls (2.17) and Discount Stores (2.96). There is also a significant difference

between Shopping Malls and Chain Stores (2.77). There is a significant difference

between Departmental Stores (2.66) and Discount stores (2.96). There is also a

significant difference between Shopping Malls and Departmental Stores and Shopping

Malls and Chain Stores.

152

However, there is no significant difference between Departmental Stores and

Chain Stores and Chain Stores and Discount Stores with respect to retail outlets preferred

for shopping.

Null Hypothesis:

There is no significant difference between purchase decision-makers with respect

to retail outlets employee service satisfaction leading to repeated purchases.

Alternate Hypothesis:

There is significant difference between purchase decision-makers with respect to

retail outlets employee service satisfaction leading to repeated purchases.

Table 5.12

ANOVA for significant difference between purchase decision-makers with respect to

retail outlets employee service satisfaction leading to repeated purchases.

Purchase decision

makers Mean SD F value P value

Husband 2.71c 0.46

21.054 0.000 **

Wife 2.12b 0.78

Children 2.00b

0.00

All members 1.33a 0.52

Note: Different alphabets between the mean age group of customers

denotes significant at 5% level using Duncan multiple range test.

The opinion of purchase decision-makers with respect to employee service

satisfaction of retail outlets is analyzed in the above table.

From the above table 5.12. it is understood that since the p value is less than 0.01,

the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that

153

there is a significant difference between purchase decision-makers with respect to retail

outlets employee service satisfaction leading to repeated purchases.

Based on Duncan Multiple Range test, there is a significant difference between

purchase decision made by All members of the family (1.33) and purchase decision made

by Husband (2.71) with respect to retail outlets employee service satisfaction thereby

leading to repeated purchases. There is also a significant difference between purchase

decision made by All members of the family and those purchase decision made by

Children (2.00). There is also a significant difference between purchase decision made

by All members of the family and Wife (2.12). There is also a significant difference

between purchase decision made by Children and purchase decision made by Husband.

There is also a significant difference made by wife and those made by husband with

respect to retail outlets employee service satisfaction thereby leading to repeated

purchases.

However, there is no significant difference between purchase decision made by

children and wife.

Null Hypothesis:

There is no significant difference between purchase decision-makers with respect

to getting different ranges of products under one roof.

Alternate Hypothesis:

There is significant difference between purchase decision-makers with respect to

getting different ranges of products under one roof.

154

Table 5.13

ANOVA for significant difference between purchase decision-maker with respect to

getting different ranges of products under one roof.

Purchase decision

makers Mean SD F value P value

Husband 2.71c

0.46

38.986 0.000 **

Wife 2.03b 0.79

Children 1.00a

0.00

All members 1.33a

0.52

Note: Different alphabets between the mean age group of customers

denotes significant at 5% level using Duncan multiple range test.

The opinion of purchase decision-makers with respect to getting different ranges of

products under one roof is analyzed in the above table.

From the above table 5.13 it is understood that since the p value is less than 0.01,

the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that

there is a significant difference between purchase decision-makers with respect to getting

different ranges of products under one roof.

Based on Duncan Multiple Range test, there is a significant difference between

purchase decision made by Children (1.00) and purchase decision made by Husband

(2.71) with respect to getting different ranges of products under one roof. There is also a

significant difference between purchase decision made by All members of the family

(1.33) and husband. There is also a significant difference between purchase decision

made by All members of the family and Wife (2.03). There is also a significant

155

difference between purchase decision made by wife and purchase decision made by

husband with respect to getting different ranges of products under one roof.

However, there is no significant difference between purchase decision made by

children and all members of the family with respect to getting different ranges of

products under one roof.

Null Hypothesis:

There is no significant difference between purchase decision-makers with respect

to opinion about taking good care of customers and goods.

Alternate Hypothesis:

There is significant difference between purchase decision-makers with respect to

opinion about taking good care of customers and goods.

Table 5.14

ANOVA for significant difference between purchase decision-maker with respect to

opinion about taking good care of customers and goods.

Purchase decision

makers Mean SD F value P value

Husband 2.60ab

0.53

5.374 0.001 **

Wife 2.80bc

0.53

Children 3.00bc

0.00

All members 2.33a 0.82

Note: Different alphabets between the mean age group of customers

denotes significant at 5% level using Duncan multiple range test.

The opinion of purchase decision-makers with respect to taking good care of

customers and goods is analyzed in the above table.

156

From the above table 5.14 it is understood that since the p value is less than 0.01,

the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that

there is a significant difference between purchase decision-makers with respect to

opinion about taking good care of customers and goods.

Based on Duncan Multiple Range test, there is a significant difference between

purchase decision made by All members of the family (2.33) and those made by Children

(3.00) with respect to opinion about taking good care of customers and goods. There is

also a significant difference between purchase decision made by All members of the

family and Wife (2.80). There is also a significant difference between purchase decision

made by husband and purchase decision made by children with respect to opinion about

taking good care of customers and goods. There is also a significant difference between

purchase decision made by wife and those made by children with respect to opinion about

taking good care of customers and goods.

However, there is no significant difference between purchase decision made by all

members of the family and husband. There is no significant difference between purchase

decision made by husband and wife.

There is no significant difference between purchase decision made by wife and

children with respect to opinion about taking good care of customers and goods.

157

5.5. CHI-SQUARE TEST

Chi-square test is based on the chi-square distribution. It is use for comparing a

sample variance to a theoretical population variance. These tests can be applied in any

type of distribution and they are easy to compute.

HYPOTHESIS-III

Null Hypothesis:

There is no association between type of goods purchased from retail outlets and

educational qualification of customers.

Alternate Hypothesis:

There is association between type of goods purchased from retail outlets and

educational qualification of customers.

Table 5.15

Chi-square test for association between type of goods purchased from retail outlets and

educational qualification of customers.

Note: 1. The value within ( ) refers to Row Percentage.

Type of

Branded

goods

purchased

from retail

outlets

Educational Qualification

Total

Chi-

square

Value

P Value

Upto

HSc Graduate Professional Others

Manufacture

r brands

29

(19.1%)

[36.7%]

59

(38.8%)

[50.0%]

56

(36.8%)

[71.8%]

8

(5.3%)

[32.0%]

152

25.607 0.000 **

Private

brands

47

(35.3%)

[59.5%]

56

(40.9%)

[47.5%]

19

(13.9%)

[24.4%]

15

(10.9%)

[60.0%]

137

Not brand

conscious

3

(27.3%)

[3.8%]

3

(27.3%)

[2.5%]

3

(27.3%)

[3.8%]

2

(18.2%)

[8.0%]

11

Total

79 118 78 25 300

158

2. The value within [ ] refers to Column Percentage.

3. ** denotes significant at 1% level

4. * denotes significant at 5% level

From the above table 5.15 it is understood that since the p value is less than 0.01,

the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that

there is a significant association between type of goods purchased from retail outlets and

educational qualification of customers.

Among those who have up to HSC 59.5% have purchased private brands, 36.7%

purchased manufacturer brands and 3.8% among them say they are not brand conscious.

Among the Graduates 50% purchased manufacturer brands, 47.5% purchased

private brands and 2.5% among them say they are not brand conscious.

Among the Professionals 71.8% purchased manufacturer brands, 24.4 %

purchased private brands and 3.8% among them say they are not brand conscious.

Among others 60% purchased private brands, 32.0% purchased manufacturer

brands, while 8% among them say they are not brand conscious.

While analyzing the relationship, it can be seen from the above table that a

majority of the customers who have opted for manufacturer brands are graduates

(38.8%), a majority of the customers who have opted for private brands (40.9%) are also

graduates. A majority of the customers who are not brand conscious are equally

distributed among Professional, Graduate and up to HSC.

159

Null Hypothesis:

There is no association between retail outlets preferred for shopping and age

group of consumers.

Alternate Hypothesis:

There is association between retail outlets preferred for shopping and age group of

consumers.

Table 5.16

Chi-square test for association between retail outlets preferred for shopping and age

group of consumers.

Retail outlets

prefer for

shopping

Age group in years Total

Chi-

square

Value

P Value

Below 20 20-40 Above 40

Depart mental

Store

13

(9.5%)

[39.4%]

79

(57.7%)

[41.1%]

45

(32.8%)

[60.0%]

137

36.927 0.000 **

Chain Store 17

(29.8%)

[51.5%]

31

(54.4%)

[16.1%]

9

(15.8%)

[12.0%]

57

Discount Store 2

(2.1%)

[6.1%]

74

(78.7%)

[38.5%]

18

(19.1%)

[24.0%]

94

Shopping Malls 1

(8.3%)

[3.0%]

8

(66.7%)

[4.2%]

3

(25.0%)

[4.0%]

12

Total 33 192 75 300

Note: 1. The value within ( ) refers to Row Percentage.

2. The value within [ ] refers to Column Percentage.

3. ** denotes significant at 1% level

4. * denotes significant at 5% level

From the above table 5.16 it is understood that since the p value is less than

0.01, the null hypothesis is rejected at 1% level of significance. Hence, it is concluded

160

that there is a significant association between retail outlets preferred for shopping and age

group of customers.

In the customers below 20 years of age, 51.5% prefer Chain Stores, 39.4% prefer

Departmental Stores, 6.1% prefer Discount Stores and 3% prefer Shopping Malls.

Among the customers in the age group of 20 to 40 years, 41.1% prefer

Departmental Stores, 38.5% prefer Discount Stores, 16.1% prefer Chain Stores and 4.2%

prefer Shopping Malls.

Among the customers who are aged above 40 years, 60% prefer Departmental

Stores, 24% prefer Discount Stores, 12% prefer Chain Stores and 4% prefer Shopping

Malls.

While analyzing the relationship, it can be seen from the above table that a

majority of the customers (57.7%) who have opted for Departmental Stores are

represented in the age group 20 to 40 years. A majority of the customers (78.7%) who

have opted for Discount Stores are represented in the age group 20 to 40 years prefer

Chain Stores. A majority of the customers (54.4%) who have opted for Chain Stores are

represented again in the age group 20 to 40 years. A majority of the customers (66.7%)

who have opted for Shopping Malls are represented in the age group 20 to 40 years.

Null Hypothesis:

There is no association between credit cards used for payment and age group of

customers.

161

Alternate Hypothesis:

There is association between credit cards used for payment and age group of

customers.

Table 5.17

Chi-square test for association between credit cards used for payment and age group of

customers.

Credit cards

used for

payment

Age group in years Total

Chi-

square

Value

P Value

Below 20 20-40 Above 40

Visa 7

(10.6%)

[21.2%]

45

(68.2%)

[23.4%]

14

(21.2%)

[18.7%]

66

31.975

0.000 **

Master Card 3

(7.7%)

[9.1%]

13

(33.3%)

[6.8%]

23

(59.0%)

[30.7%]

39

American

Express

2

(7.1%)

[6.1%]

19

(67.9%)

[9.9%]

7

(25.0%)

[9.3%]

28

ICICI 15

(13.5%)

[45.5%]

80

(72.1%)

[41.7%]

16

(14.4%)

[21.3%]

111

SBI 6

(10.7%)

[18.2%]

35

(62.5%)

[18.2%]

15

(26.8%)

[20.0%]

56

Total 33 192 75 300

Note: 1. The value within ( ) refers to Row Percentage.

2. The value within [ ] refers to Column Percentage.

3. ** denotes significant at 1% level

4. * denotes significant at 5% level

From the above table 5.17 it is understood that since the p value is less than 0.01,

the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that

there is a significant association between credit cards used for payment and age group of

customers.

162

Among those customers who are below 20 years of age 45.5% use ICICI Cards.

21.2% among them use Visa Cards, 18.2% among them use SBI Cards. 9.1% among

them use Master Cards and 6.1% among them use American Express Cards.

Among the customers age group 20 to 40 years, 41.7% use ICICI Cards, 23.4%

among them use Visa Cards, 18.2% among them use SBI Cards, 9.9% among them use

American Express Cards and 6.8% among them use Master Cards.

Among the customers above 40 years of age, 30.7% use Master Cards, 21.3%

among them use ICICI Cards, 20% among them use SBI Cards, 18.7% among them use

Visa Cards and 9.3% among them use American Express Cards.

While analyzing the relationship, it can be seen from the above table that the

customers (68.2%) who have opted for Visa Cards are represented in the age group of 20

to 40 years. A majority of the customers (59%) who have preferred Master Cards are in

the age group above 40 years. Customers (67.9%) who have preferred American Express

Cards are represented in the age group of 20 to 40 years. ICICI Cards are used a majority

of the customers in the age group of 20 to 40 years. SBI Cards are used a majority of the

customers (62.5%) in the age group of 20 to 40 years.

The reason for preferring a particular card in relation to others may be mainly due

to the service facility offered by the concerned banks.

163

Null Hypothesis:

There is no association between having witnessed the presence of cold-storage

facilities in retail outlets and family monthly income.

Alternate Hypothesis:

There is association between having witnessed the presence of cold-storage

facilities in retail outlets and family monthly income.

Table 5.18

Chi-square test for association between having witnessed the presence of cold-storage

facilities in retail outlets and family monthly income.

Note: 1. The value within ( ) refers to Row Percentage.

2. The value within [ ] refers to Column Percentage.

3. ** denotes significant at 1% level

Witnessed

the

presence of

cold

storage

facilities in

retail

outlets

Family Monthly Income

Total

Chi-

square

Value

P Value Below

30000

30001-

60000

60001-

100000

Above

100000

Yes 79

(37.1%)

[84.0%]

74

(34.7%)

[75.5%]

42

(19.7%)

[55.3%]

18

(8.5%)

[56.3%]

213

24.635 0.000 **

No 9

(23.1%)

[9.6%]

7

(17.9%)

[7.1%]

17

(43.6%)

[22.4%]

6

(

15.4%)

[18.8%]

39

Busy in

shopping

6

(12.5%)

[6.4%]

17

(35.4%)

[17.3%]

17

(35.4%)

[22.4%]

8

(16.7%)

[25.0%]

48

Total

94

98

76

32

300

164

4. * denotes significant at 5% level

From the above table 5.18 it is understood that since the p value is less than 0.01,

the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that

there is a significant association between having witnessed the presence of cold storage

facilities in retail outlets and family monthly income.

84% of the customers earning below Rs.30,000/- a month say „Yes‟ for having

witnessed the presence of cold storage facilities in retail outlets. While 9.6% among

them say „No‟, 6.4% among them say they are „Busy in shopping‟.

Among those customers in the income group of Rs.30,001 to Rs.60,000/- 75.5%

say „Yes‟ for having witnessed the presence of cold storage facilities in retail outlets.

While 17.3% among them say they are „Busy in shopping‟, 7.1% among them say „No‟.

Among those customers in the income group of Rs.60,001/- to Rs.1,00,000/-,

53.5% say „Yes‟ for having witnessed the presence of cold storage facilities in retail

outlets. While 22.4% among them say „No‟, 22.4% among them say they are „Busy in

shopping‟.

Among those customers who are earning above Rs.1,00,000/- per month,

56.3% say „Yes‟ for having witnessed the presence of cold storage facilities in retail

outlets. While 25% among them say they are „Busy in shopping‟, 18.8% say „No‟.

While analyzing the relationship from the above table, it can be seen that a

majority of the customers(37.1%) in the income below Rs.30,000/- say „Yes‟ for having

witnessed the presence of cold storage facilities. A majority of the customers (43.6%) in

165

the income group Rs.60,001/- to Rs.1,00,000/- say „No‟ for having witnessed the

presence of cold storage facilities. Customers (35.4%) in the income group Rs.30,001 to

Rs.60,000/- and the customers (35.4%) in the income group Rs.60,001/- to Rs.1,00,000/-

say they are „Busy in shopping‟.

Null Hypothesis:

There is no association between inconveniences encountered while shopping and

age group of customers.

Alternate Hypothesis:

There is association between inconveniences encountered while shopping and age

group of customers.

Table 5.19

Chi-square test for association between inconveniences encountered while shopping

and age group of customers.

Inconveniences

encountered while

shopping

Age group in years

Total

Chi-

square

Value

P Value

Below

20 20-40 Above 40

Traffic on the

roads

19

(15.0%)

[57.6%]

69

(55.3%)

[35.9%]

39

(30.7%)

[52.0%]

127

22.967 0.001 **

Parking of the

vehicles

11

(10.6%)

[33.3%]

65

(62.5%)

[33.9%]

28

(26.9%)

[37.3%]

104

Waiting periods in

billing and cash

payments

2

(4.7%)

[6.1%]

40

(93.0%)

[20.8%]

1

(2.3%)

[1.3%]

43

Lack of moving

space inside the

shops

1

(3.8%)

[3.0%]

18

(69.2%)

[9.4%]

7

(26.9%)

[9.3%]

26

Total

33 192 75 300

166

Note: 1. The value within ( ) refers to Row Percentage.

2. The value within [ ] refers to Column Percentage.

3. ** denotes significant at 1% level

4. * denotes significant at 5% level

From the above table 5.19 it is understood that since the p value is less than 0.01,

the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that

there is a significant association between inconveniences encountered while shopping and

age group of customers.

Among those customers who are age below 20 years, 57.6% feel traffic on the

roads as a source of inconvenience encountered while shopping. While 33.3% among

them feel parking of the vehicles, 6.1% among them feel waiting periods in billing and

cash payments as a source of inconvenience. 3% of the customers feel lack of moving

space inside the shops as a source of inconvenience.

Among the customers in the age group of 20 to 40 years, 35.9% feel traffic on

the roads as a source of inconvenience encountered while shopping. While 33.9%

among them feel parking of the vehicles as a source of inconvenience, 20.8% among

them feel waiting periods in billing and cash payments as a source of inconvenience.

9.4% among them feel lack of moving space inside the shops as a source of

inconvenience.

Among the customers aged above 40 years, 52% feel traffic on the roads as a

source of inconvenience. While 37.3% among them feel parking of the vehicles as a

source of inconvenience, 9.3% among them feel lack of moving space inside the shops as

167

a source of inconvenience. 1.3% among them feel waiting periods in billing and cash

payments as a source of inconvenience.

While analyzing the relationship, it can be seen from the above table that

among the customers who have spotted traffic on the roads such as inconvenience

(54.3%) are in the age group 20 to 40 years. Among the customers (62.5%) who have

mentioned parking of the vehicles as a major source of inconvenience belong to the age

group 20 to 40 years. Among the customers (93%) who have mentioned waiting periods

in billing and cash payments as a source inconvenience belong to the age group 20 to 40

years. Among the customers (69.2%) who have mentioned lack of moving space inside

the shops as a major source of inconvenience belong to the age group 20 to 40 years.

Null Hypothesis:

There is no association between welcoming MRP on the products and marital

status.

Alternate Hypothesis:

There is association between welcoming MRP on the products and marital status.

168

Table 5.20

Chi-square test for association between welcoming MRP on the products and marital

status.

Welcome

MRP

Products

Marital Status Total Chi

Square

Value

P Value

Married

Unmarried

Welcome 133

(70.7%)

[57.8%]

55

(29.3%)

[78.6%]

188

14.094 0.001 **

Reject 50

(79.4%)

[21.7%)

13

(20.6%)

[18.6%]

63

No idea 47

(95.9%)

[20.4%]

2

(4.1%)

[2.9%]

49

Total

230 70 300

Note: 1. The value within ( ) refers to Row Percentage.

2. The value within [ ] refers to Column Percentage.

3. ** denotes significant at 1% level

4. * denotes significant at 5% level

From the above table 5.20 it is understood that since the p value is less than 0.01,

the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that

there is a significant association between welcoming MRP on the products and marital

status.

Among the married customers, 57.8% welcome MRP on the products, while

21.7% reject it. 20.4% of the married customers say they have no idea about MRP.

Among the unmarried customers, 78.6% welcome MRP on the products, while

18.6% reject it. 2.9% among unmarried customers say they have no idea about MRP.

While analyzing the relationship, it can be seen from the above table that among

the customers (70.7%) who welcome MRP, married customers are the highest. Among

the customers (79.4%) who have rejected MRP, married customers are the highest.

169

Among the customers (95.9%) who said they have no idea about MRP on the products

married customers are the highest.

Null Hypothesis:

There is no association between opinion about FDI entry into retail business and

family monthly income.

Alternate Hypothesis:

There is association between opinion about FDI entry into retail business and family

monthly income.

Table 5.21

Chi-square test for association between opinion about FDI entry into retail business

and family monthly income.

Note: 1. The value within ( ) refers to Row Percentage.

2. The value within [ ] refers to Column Percentage.

Opinion about

FDI entry into

retail business

Family Monthly Income

Tota

l

Chi-

square

Value

P Value

Below

30000

30001-

60000

60001-

100000

Above

100000

The existing

businesses will

improve very

well

19

(34.5%)

[20.2%]

16

(29.1%)

[16.3%]

11

(20.0%)

[14.5%]

9

(16.4%)

[28.1%]

55

27.871 0.001 **

The existing

businesses will

not improve

49

(32.2%)

[52.1%]

51

(33.6%)

[52.0%]

46

(30.3%)

[60.5%]

6

(3.9%)

[18.8%]

152

We will wait

and see

4

(13.3%)

[5.3%]

8

(26.7%)

[8.2%]

9

(30.0%)

[11.8%]

9

(30.0%)

[28.1%]

30

No idea 22

(34.9%)

[23.4%]

23

(36.5%)

[23.5%]

10

(15.9%)

[13.2%]

8

(12.7%)

[25.0%]

63

Total

94 98 76 32 300

170

3. ** denotes significant at 1% level

4. * denotes significant at 5% level

From the above table 5.21 it is understood that since the p value is less than 0.01,

the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that

there is a significant association between opinion about FDI entry into retail business and

family monthly income.

Among those customers in the income group below Rs.30,000/-, 52.1% are of the

opinion that as a result of FDI entry into retail business, the existing businesses will not

improve, while 23.4% among them say they have no idea. While 20.2% customers in the

above group say that the existing businesses will improve very well, 5.3% among them

say we will wait and see.

Among those customers in the income group between Rs.30,001/- to Rs.60,000/-,

52% are of the opinion that as a result of FDI entry into retail business, the existing

businesses will not improve, while 23.5% among them say they have no idea. While

16.3% are of the opinion that the existing businesses will improve very well, 8.2% among

them say we will wait and see.

Among those customers in the income group between Rs.60,001/- to Rs.1,00,000/-,

60.5% are of the opinion that as a result of FDI entry into retail business, the existing

businesses will not improve, while 14.5% are of the opinion that the existing businesses

will improve very well. While 13.2% among them say they have no idea, while 11.8%

among them say we will wait and see.

171

Among those customers in the income group above Rs.1,00,000/-28.1% are of the

opinion that as a result of FDI entry into retail business, the existing businesses will

improve very well, while 28.1% among them also say we will wait and see. While 25%

among the above customers say they have no idea, 18.8% among them are of the opinion

that the existing businesses will not improve.

While analyzing the relationship, it can be seen from the above table a majority of

the customers (34.5%) who have mentioned that the existing business will improve very

well belong to the income group below Rs.30,000/-. Among the customers (33.6%)

who have mentioned that the existing businesses will not improve belong to the income

group between Rs.30,001/- to Rs.60,000/-. Among the customers (30%) who mentioned

that we will and see belong to the income group between Rs.60,001/- to Rs.1,00,000/-

.and above Rs.1,00,000/-. Among the customers (36.5%) who mentioned they have no

idea about FDI entry into retail business belong to the income group between

Rs.30,001/- to Rs.60,000/-.

.Null Hypothesis:

There is no association between modern practices of shopping and age group of

customers.

Alternate Hypothesis:

There is association between modern practices of shopping and age group of

customers.

172

Table 5.22

Chi-square test for association between modern practices of shopping and age group of

customers.

Modern practices of

shopping

Age group in years

Total

Chi-

square

Value

P Value

Below 20 20-40 Above

40

Online cash

payments

16

(22.2%)

[48.5%]

42

(58.3%)

[21.9%]

14

(19.4%)

[18.7%]

72

38.494 0.000 **

Online product

selection

9

(13.0%)

[27.3%]

44

(63.8%)

[22.9%]

16

(23.2%)

[21.3%]

69

Automatic product

vending machines

2

(4.1%)

[6.1%]

26

(53.1%)

[13.5%]

21

(42.9%)

[28.0%]

49

Door-delivery,

billing and collection

4

(4.8%)

[12.1%]

68

(81.9%)

[35.4%]

11

(13.3%)

[14.7%]

83

Informing the

customers about

product availability

through email/SMS

2

(7.4%)

[6.1%]

12

(44.4%)

[6.3%]

13

(48.1%)

[17.3%]

27

Total

33 192 75 300

Note: 1. The value within ( ) refers to Row Percentage.

2. The value within [ ] refers to Column Percentage.

3. ** denotes significant at 1% level

4. * denotes significant at 5% level

From the above table 5.22 it is understood that since the p value is less than 0.01, the

null hypothesis is rejected at 1% level of significance. Hence, it is concluded that there is

a significant association between modern practices of shopping and age group of

customers.

Among the customers who are below 20 years of age, 48.5% welcome on-line cash

payments, while 37.3% among them welcome on-line product selection. 12.1% among

them welcome door delivery, billing and collection, while 6.1% among them welcome

173

automatic product vending machines, 6.1% of the customers in the above age group

welcome informing the customers about product availability through email/SMS.

Among the customers in the age group 20 to 40 years, 35.4% welcome door

delivery, billing and collection, while 22.9% among them welcome on-line product

selection. While 21.9% among them welcome on-line cash payments, 13.5% customers

in the above age group welcome automatic product vending machines. 6.3% of the

customers in the above age group welcome informing the customers about product

availability through email/SMS.

Among the customers in the age group above 40 years, 28% welcome automatic

product vending machines, while 21.3% among them welcome on-line product selection.

18.7% belonging to the above age group welcome on-line cash payments, while 17.3%

are for informing the customers about product availability through email/SMS. 14.7% of

the customers in the above age group welcome door delivery, billing and collection.

While analyzing the relationship, it can be seen from the above table that among

the customers (58.3%) who have opted for on-line cash payments a majority belong to

the age group 20 to 40 years. Among the customers (63.8%) who have opted for on-line

product selection a majority of them are in the age group 20 to 40 years. Among the

customers (53.1%) who have opted for automatic product vending machines a majority of

them are in the age group 20 to 40 years. Among the customers (81.9%) who have opted

for door delivery, billing and collection, a majority of them are in the age group 20 to 40

years. Among those (48.1%) who have opted for informing the customers about product

availability through email/SMS belong to the age group above 40 years.

174

Null Hypothesis:

There is no association between impact on purchases as a result of introduction

of VAT system and family monthly income.

Alternate Hypothesis:

There is association between impact on purchases as a result of introduction of

VAT system and family monthly income.

Table 5.23

Chi-square test for association between impact on purchases as a result of VAT system

and family monthly income.

Note: 1. The value within ( ) refers to Row Percentage.

2. The value within [ ] refers to Column Percentage.

3. ** denotes significant at 1% level

4. * denotes significant at 5% level

From the above table 5.23 it is understood that since the p value is less than 0.01, the

null hypothesis is rejected at 1% level of significance. Hence, it is concluded that there is

VAT system

impact on

purchases

Family Monthly Income

Total

Chi-

square

Value

P Value

Below

30000

30001-

60000

60001-

100000

Above

100000

Not much 38

(37.6%)

[40.4%]

33

(32.7%)

[33.7%]

25

(24.8%)

[32.9%]

5

(5.0%)

[15.6%]

101

31.396 0.000 **

Very much 54

(32.7%)

[57.4%]

53

(32.1%)

[54.1%]

43

(26.1%)

[56.6%]

15

(9.1%)

[46.9%]

165

We have to wait

and see

2

(5.9%)

[2.1%]

12

(35.3%)

[12.2%]

8

(23.5%)

[10.5%]

12

(35.3%)

[37.5%]

34

Total

94 98 76 32 300

175

a significant association between impact on purchases as a result of introduction of VAT

system and family monthly income.

Among those customers in the income group below Rs.30,000/-, 57.4% say that the

impact will be „Very much‟ as a result of introduction of VAT system, while 40.4% of

the customers in the above group say that the impact on purchases „will not be much‟.

2.1% of the customers belonging to the above group say „we have to wait and see‟ about

the impact on purchases as a result of introduction of VAT System.

Among those customers in the income group Rs.30,001/- to Rs.60,000/-, 54.1% say

that the impact will be „Very much‟ as a result of introduction of VAT system, while

33.7% of the customers in the above group say that the impact on purchases „will not be

much‟. 12.2% of the customers belonging to the above group say „we have to wait and

see‟ about the impact on purchases as a result of introduction of VAT System.

Among those customers in the income group Rs.60,001/- to Rs.1,00,000/-, 56.6%

say that the impact will be „Very much‟ as a result of introduction of VAT system, while

32.9% of the customers in the above group say that the impact on purchases „will not be

much‟. 10.5% of the customers belonging to the above group say „we have to wait and

see‟ about the impact on purchases as a result of introduction of VAT System.

Among those customers in the income group above Rs.1,00,000/-, 46.9% say

that the impact will be „Very much‟ as a result of introduction of VAT system, while

37.5% of the customers in the above group say that „we have to wait and see‟ 15.6% of

176

the customers belonging to the above age group say that the impact on purchases „will

not be much‟ as a result of introduction of VAT System.

While analyzing the relationship, it can be seen from the above table that among

the customers (37.6%) who feel the impact of VAT system on purchases “will not be

much” belong to the income group below Rs.30,000/-. Among the customers (32.7%)

who feel the impact of VAT system on purchases will be “Very much” belong to the

income group below Rs.30,000/-. Among the customers (35.3%) who answered “we

have to wait and see” for the impact of VAT system on purchases are equally distributed

in the income group Rs.30,001/- to Rs.60,000/- and above Rs.1,00,000/-.

Null Hypothesis:

There is no association between safety measures necessary for a retail unit and

family monthly income.

Alternate Hypothesis:

There is association between safety measures necessary for a retail unit and

family monthly income.

177

Table 5.24

Chi-square test for association between safety measures necessary for a retail unit and

Family monthly income

Note: 1. The value within ( ) refers to Row Percentage.

2. The value within [ ] refers to Column Percentage.

3. ** denotes significant at 1% level

4. * denotes significant at 5% level

From the above table 5.24. it is understood that since the p value is less than 0.01,

the null hypothesis is rejected at 1% level of significance. Hence, it is concluded that

there is a significant association between safety measures necessary for a retail unit and

family monthly income.

Safety

measures

necessary for

a retail unit

Family Monthly Income

Total

Chi-

square

Value

P Value

Below

30000

30000-

60000

60000-

100000

Above

100000

Having fire

fighting

devices at

strategic

locations

68

(36.2%)

[72.3%]

59

(31.4%)

[60.2%]

46

(24.5%)

[60.5%]

15

(8.0%)

[46.9%]

188

25.522 0.002 **

Frequently

mopping and

inspecting wet

floors

4

(8.3%)

[4.3%]

17

(35.4%)

[17.3%]

14

(29.2%)

[18.4%]

13

(27.1%)

[40.6%]

48

Having no-slip

floors

13

(32.5%)

[13.8%]

13

(32.5%)

[13.3%]

11

(27.5%)

[14.5%]

3

(7.5%)

[9.4%]

40

Keeping

records that

proper

maintenance

has been done

9

(37.5%)

[9.6%]

9

(37.5%)

[9.2%]

5

(20.8%)

[6.6%]

1

(4.2%)

[3.1%]

24

Total

94 98 76 32 300

178

Among those customers in the income group below Rs.30,000/-, 72.3% are for

having fire fighting devices, while 13.8% among them are for having no-slip floors, 9.6%

of the customers belonging to the above income group are for keeping records that proper

maintenance has been done. While 4.3% among them are for frequently mopping and

inspecting wet floors.

Among those customers in the income group between Rs.30,001/- to Rs.60,000/-,

60.2% are for having fire fighting devices, while 17.3% among them are for frequently

mopping and inspecting wet floors. 13.3% among the above customers, are for having

no-slip floors, while 9.2% among them are for keeping records that proper maintenance

has been done.

Among those customers in the income group between Rs.60,001/- to Rs.1,00,000/-

, 60.5% are for having fire fighting devices, while 18.4% among the above income group

are for frequently mopping and inspecting wet floors. 14.5% among the customers in

the above income group, are for having no-slip floors, while 6.6% among them are for

keeping records that proper maintenance has been done.

Among those customers belonging to the income group above Rs.1,00,000/-,

46.9% are for having fire fighting devices, while 40.6% among the above income group

are for frequently mopping and inspecting wet floors. 9.4% among the customers in the

above income group, are for having no-slip floors, while 3.1% among them are for

keeping records that proper maintenance has been done.

179

While analyzing the relationship, it can be seen from the above table that a

majority of the customers (36.2%) who have opted for having fire fighting devices at a

strategic location are in the income group below Rs.30,000/-. Among the customers

(35.4%) who have opted for frequently mopping and inspecting wet floors are in the

income group Rs.30,001/- to Rs.60,000/-. Among the customers (32.5%) who have

opted for having no-slip floors are equally distributed in the income groups below

Rs.30,000/- and in the income group between Rs.30,001 to Rs.60,000/-. Among the

customers (37.5%) who have opted for keeping records that proper maintenance has been

done are equally distributed in the income group below Rs.30,000/- and in the income

group between Rs.30,001/- to Rs.60,000/-.

5.6. CORRELATION

Correlation is a statistical measure of establishing qualitative relationship between

two or more variables. Through correlation, it is possible to indicate the direction of

relationship between variables.

Dependent variable

Opinion about taking good care of customers and goods.

Y

Independent variables 1. Sufficiency of Infrastructural facilities (X1)

2. Employees service satisfaction leading to repeated

purchases (X2)

Getting ranges of products under one roof (X3)

Multiple R Value 0.245

R Square Value 0.060

F Value 3.113

P Value 0.006

180

From the above showing the coefficient of correlation between sufficiency of

infrastructure facilities, employees service satisfaction, getting ranges of products under

one roof and opinion about taking good care of customers and goods.

Sufficiency of

infrastructure

facilities

Making

repeated

purchases

Getting ranges

of products

under one roof

Opinion about

good care of

customers and

goods

Sufficiency of

infrastructure

facilities

1.000 0.197 ** 0.317 ** 0.128 **

Making

repeated

purchases

- 1.000 0.919 ** 0.033 **

Getting ranges

of products

under one roof

- - 1.000 (-) 0.033

Opinion about

good care of

customers and

goods

- - - 1.000

From the above table, we can point out the following relationships between the

independent of the dependent variables.

There is a positive correlation between getting the ranges of products under one

roof and making repeated purchases. When the customers get different ranges of

products required by the different members of their family under one roof, automatically

they will be tempted to make repeated purchases.

The infrastructure facilities like rail/road connectivity have a great influence on the

sales of the retail outlets. When these facilities are fully sufficient they lead to a direct

increase in sales. The above table points out a positive relationship between

181

infrastructure facilities and employees service satisfaction leading to repeated purchases.

In both the above cases, the customers have a strong preference for taking good care of

customers and goods.

There is negative correlation between the opinion about taking good care of

customers and getting ranges of products under one roof. This statement shows that by

the mere presence of different ranges of goods without taking care of the customers

preferences is of no use.

5.7. REGRESSION

Regression is a statistical method of establishing quantitative relationship between

two variables. In simple regressions two variables are used. One variable (independent)

is the cause of the behaviour of another one (dependent). When there are more than two

independent variables, the analysis concerning relationship is known as multiple

correlation and the equation describing such relationship is called as multiple regression

equation.

Regression analysis is concerned with the derivation of an appropriate

mathematical expression for finding values of a dependent variable on the basis of

independent variable. It is thus designed to examine the relationship of a variable Y to a

set of other variables X1, X2, X3….Xn.

The most commonly used linear equation is Y = b1 X1 + b2 X2 +………+ bn Xn + bo .

182

Here Y is the dependent variable, which is to be found. X1, X2….and Xn are the

known variables with which predictions are to be made and b1, b2 ….. bn are coefficient of

the variables.

In this study, the Dependent variable is taking good care of customers and goods,

Independent variables are sufficiency of infrastructural facilities, employees service

satisfaction leading to repeated purchases and getting ranges of products for all the family

members under one roof. The analysis regarding them is discussed as follows:-

Dependent variable Opinion about taking good care of

customers and goods. Y

Independent variables 1. Sufficiency of Infrastructural

facilities (X1)

2. Employees service satisfaction

leading to repeated purchases (X2)

3. Getting ranges of products under

one roof (X3)

Multiple R Value 0.252

R Square Value 0.063

F Value 6.664

P Value 0.000 **

Table showing multiple regression analysis

Variables Unstandardised

coefficient SE of B

Standardised

coefficient t value P value

X1 0.235 0.069 0.209 3.411 0.001 **

X2 0.385 0.107 0.529 3.593 0.000 **

X3 0.392 0.102 0.586 3.846 0.000 **

Constant 2.069 0.199 - 10.387 0.000 **

The multiple correlation coefficient is 0.252 and its measures the degree of

relationship between the actual values and the predicted values of taking good care of

183

customers and goods. Because the predicted values are obtained as a linear combination

of sufficiency of infrastructure facilities (X1), employees service satisfaction leading to

repeated purchases (X2) and getting ranges of products under one roof (X3), the

coefficient value of 0.252 indicates that the relationship between taking good care of

customers and goods and the three independent variables is quite strong and positive.

The Coefficient of Determination R-square measures the goodness-of-fit of the

estimated Sample Regression Plane (SRP) in terms of the proportion of the variations in

the dependent variables explained by the fitted sample regression equation. Thus the

value of R Square is 0.063 simply means that about 6.3% of the variation in taking good

care of the customers and goods is explained by the estimated SRP that uses sufficiency

of infrastructure facilities, employees service satisfaction leading to repeated purchases

and getting ranges of products under one roof as the independent variables and R square

value is significant at 1% level.

The multiple regression equation is Y = 2.069 + 0.235 X1 + 0.385 X2 + 0.392 X3.

Here, the coefficient of X1 is 0.235. It represents the partial effect of sufficiency

of infrastructure facilities on taking good care of customers and goods, holding

employees service satisfaction and getting ranges of products under one roof as constant.

The estimated positive sign implies that such effect is positive that taking good care of

customers and goods would increase by 0.235 for every unit increase in sufficiency of

infrastructure facilities and this coefficient value is significant at 1% level.

184

The coefficient of . X2 is 0.385. It represents the partial effect of employees

service satisfaction on taking good care of customers and goods, holding sufficiency of

infrastructure facilities and getting ranges of products under roof as constant. The

estimated positive sign implies that such effect is positive that taking good care of

customers and goods would increase by 0.385 for every unit increase in employees

service satisfaction and this coefficient value is significant at 1% level.

The coefficient of X3. is 0.392. It represents the partial effect of getting ranges of

products under one roof on taking good care of customers and goods, holding sufficiency

of infrastructure facilities and employees service satisfaction as constant. The estimated

positive sign implies that such effect is positive that taking good care of customers and

goods would increase by 0.392 for every unit increase in getting ranges of products under

one roof and this coefficient value is significant at 1% level.

185

CHAPTER-VI

FINDINGS, SUGGESTIONS & CONCLUSIONS:

6.1 INTRODUCTION

Based upon the observations made for the various sectors of the retail segment,

we can confidentially say that the conditions are becoming favourable for the growth of

retail industry. The retail arena is very different and the opportunities are incredible. This

chapter is divided into three areas viz. findings, suggestions and conclusions. Under the

findings, the observations made through descriptive and inferential analysis are listed out.

Under suggestions, the ways for removing the present bottlenecks in the sector is

highlighted. Under the conclusions part the future trends of the sector are brought to

limelight.

6.2. FINDINGS

The finding of the study summarizes the conclusions that were arrived at through

data analysis. This is divided into two sections viz.

Section-1: Findings of the study from the descriptive analysis and

Section-2: Findings of the study from the inferential analysis

Section-1

Findings of the study from the descriptive analysis

For the purposes of the study a sample of 300 customers were taken up for

analysis. Among them male customers constituted a majority of the population

surveyed.

186

The sample was divided into three groups viz. young (below 20 years), middle

aged (between 20 to 40 years) and seniors (above 40 years). Among them

customers in the age group 20 to 40 years represented the majority of the sample.

Married customers were more in number than unmarried customers.

In order to study the relation between education and modern retail the customers

are divided into four groups viz. Upto HSC, Graduate, Professional and others.

Among this break-up of customers, Graduates formed a majority of the sample.

Occupation and retailing practices are inter-related. With this in view the sample

customers were divided into six group‟s viz. Business, Professional, Government

employee, Private employee, Self-employed and Home maker. Among them

Private employees represented the bulk of the sample.

The income earned by the customers has got a direct relation with respect to

money spending retail outlets. Taking this into consideration, the customers were

divided into four groups. Viz. Below Rs.30,000/-, between Rs.30,001/- to

Rs.60,000/-, between Rs.60,001 to Rs.1,00,000/- and above Rs.1,00,000/- as

monthly income. Among this population, customers earning Rs.30,001/- to

Rs.60,000/- formed a majority of the sample.

Considering the types of goods that are generally purchased from a retail unit, the

types of goods were divided into manufacturer brands, private brands and those

who do not purchase the above two types were brought under the heading as not

187

brand conscious. Manufacturer brands were purchased by a majority of the

sample customers.

Shopping is for the convenience of the customers. Their exists different types of

retail stores with different features. The customers can select any one of them

according to the convenience. For the purpose of this study retail outlets were

generally divided into four types viz. Department Stores, Chain Stores, Discount

Stores and Shopping Malls. Departmental Stores were preferred for shopping by a

majority of the sample customers.

Money spend in a retail outlet by the customers were taken up for analysis and it

was divided into four categories viz. below Rs.1,000/-Rs.1,001/- to Rs.5,000/-,

Rs.5,001/- to Rs.10,000/- and above Rs.10,000/-. Customers who spend on an

average of Rs.5,001/- to Rs.10,000/- constituted a majority of the sample.

With the improvements in banking, different forms of payments emerged. For

analyzing them the payments made by customers were classified as follows:- viz.

Cash only, Personal cheques, Credit cards and Debit cards. Among the various

forms of payment made Credit cards were the most popular among the sample

customers.

Among the various credit cards are generally used by the customers the following

were taken up for the study viz. Visa, Master Card, American Express, ICICI and

SBI. Among the different cards used by the customers ICICI cards are used by a

large number of customers.

188

Now-a-days shopping is made with all the members of the family. To find out

purchase decision-maker among them, the members of the family is classified into

Husband, Wife, Children and All the members of the family. In this study, Wife

constituted the chief purchase decision-maker among the family members of the

sample customers.

Cold storage facilities extend the life of the product in the retail outlets. When the

customers were asked about the presence of the cold storage facilities their

answers were grouped into three categories viz. Yes, No and Busy in shopping. A

majority of the customers replied in positive and said they witnessed the presence

of the cold storage facilities in the retail outlets while shopping.

The availability of infrastructure facilities forms the nucleus of the retail sector.

When the customers were asked their opinion about this it was divided into three

categories viz. Insufficient, Partly sufficient and Fully sufficient. A majority of

the customers replied that the infrastructure facilities like rail-road connectivity

were fully sufficient in their locality.

Employee service satisfaction pulls the customers to the retail outlets to make

repeated purchases. The customers were asked about the employee service

satisfaction through the following questions viz. not always satisfactory,

sometimes satisfactory, always satisfactory. A majority of the customers have

expressed that the employee service satisfaction were always satisfactory.

189

Now-a-days customers could not spare much time for shopping. They would like

to get all the products for the family members under one roof. The above

question was put forward to the sample customers as:- Not always, Sometimes

and Always. A majority of the customers were convinced and replied that they

always get different range of products for the family members under one roof.

Among the inconveniences encountered by customers, Traffic on the roads

formed a major source of inconvenience for a majority of the customers.

Government has introduced MRP to ensure uniformity in pricing. This was

welcomed by a majority of the sample customers.

Customers were asked to give suggestion for improving store security. A majority

of the customers suggested for having bright lighting in parking lots.

Foreign Direct Investment in retail has resulted in drastic changes in the retail

sector world-wide. When the opinion of the customers was asked about the

proposed entry of FDI, a majority replied that the existing businesses will

improve as a result of the proposed entry of FDI into retail.

On the area of modern practices to be introduced in the retail. Most of the

customers expressed a favourable reply for door delivery, billing and collection.

190

Customers were also asked as to how retailers can improve their profitability, for

which majority of them suggested that the improving employee performance

retailers can improve profitability.

About the impact in purchases after the introduction of VAT system in our

country, a majority of the customers opined that we have to wait and see.

Having fire fighting devices at strategic locations in a retail outlets formed the

majority of the suggestions expressed by the customers relating to the safety

measures necessary for a retail outlet.

“The problems of the retail sector can be brought to the notice of the concerned

Minister if retail is given an industry status”. This was the opinion expressed by a

majority of the sample customers about the demand for industry status to the retail

sector.

For retail business to succeed utmost care has to be taken to the quality of the

products as well as the needs of the customers. When the customer‟s opinion was

asked for the above statement most of them replied in the positive and asserted

that both the customers and the quality products formed the core of the retail

sector.

191

Section-2

Findings of the study from the inferential analysis

Customers below 20 years of age are of the opinion that the infrastructure

facilities are like rail/road connectivity‟s are fully sufficient in their locality.

Customers in the age group of 20 to 40 years have expressed maximum

satisfaction with respect to the services rendered by the employees of the retail

outlets which leads them to make repeated purchases.

Customers in the age group of 20 to 40 years have expressed the opinion that

they are getting different ranges of products which are required by their family

members under one roof.

“Retail merchandising consists of two factors: Customers and goods. If you

take good care in buying of the product it will not be return by the customer.

If you take good care of your customer they do come back”. The above

statement was fully endorsed by the customers who belong to the category of

„Others‟ under the educational qualification prescribed for the study.

Customers serving as Government employees say that the infrastructure

facilities are fully sufficient in their locality.

Among the sample customers classified under occupation, home-makers have

expressed that they are fully satisfied with the services of employees of the

retail outlets.

192

Among the sample customers classified under occupation, home-makers have

expressed that they are getting different ranges of products under one roof in

the retail outlets visited by them.

In reply to the customer‟s opinion about a statement “Retail merchandising

consists of two factors: Customers and goods. If you take good care in buying

of the product it will not be return by the customer. If you take good care of

your customer they do come back”. Sample customers in the income group

below Rs.30,000/- have fully agreed with the above statement.

Discount stores are preferred for shopping by the sample customers with

respect to sufficiency of infrastructure facilities.

Among the purchase decision-makers, Husbands are satisfied with the

services of the employees of the retail outlets.

Among the purchase decision-makers, Husbands have expressed the opinion

that they are getting different ranges of products under one roof.

Professionals represent a majority of the customers who have opted for

manufacturer brands. Among those customers who have opted for Private

brands are graduates.

Customers in the age group above 40 years prefer Departmental Stores since

the requirements are fully met in the above format. Customers in the age

group 20 to 40 years prefer Discount Stores since they are getting the products

193

at a lesser price. The age group of 20 to 40 years form the majority in

choosing in all the four modern formats taken up for study.

A majority of the customers who have preferred ICICI Cards are in the age

group 20 to 40 years.

Customers in the income group below Rs.30,000/- form the majority for

having witnessed the presence of cold storage facilities.

A majority of the customers in the age group below 20 years have spotted

traffic on the roads as a major source of inconvenience. Customers in the age

group 20 to 40 years are clever enough to point out all the major four

inconveniences encountered by them.

Married customers are very much careful and cautious about the price label on

the products. Among the customers surveyed, they welcome MRP which

ensures uniformity in prices.

Foreign inflow of funds will increase and lead to sufficient increase in

infrastructure facilities. Entry of Foreign Direct Investment will definitely

improve the existing businesses was the opinion suggested by the customers

in the income group Rs.60,001/- to Rs.1,00,000/-.

Customers seek convenience while shopping. The study in its questionnaire

enquired about some selected modern practices among the customers. The

194

study reveals expectation of convenience from all quarters of customers, but a

majority of them belong to the age group of 20 to 40 years.

Value Added Tax aims to bring about uniformity in tax system through out

the country. When the question of the impact of the newly introduced VAT

system on the purchases, customers belonging to every income group felt that

the impact was very much.

Safety measures become absolutely necessary when the number of customers

visiting retail outlets is on the rise. The opinion for safety measures is more or

less evenly distributed among the different income group, those belonging to

the income group below Rs.30,000/- and between Rs.30,001/- to Rs.60,000/-

have evinced greater interest in the safety measures.

There is positive correlation between infrastructure facilities and taking good

care of customers and goods.

Regression analysis shows that taking good care of customers and goods

would increase by 0.392 for every unit increase in getting ranges of products

under one roof and this coefficient value is significant at 1% level.

The following are the suggestions that can be considered for useful implementation

by the retail units on the basis of the extensive research conducted:-

Customer Focus.

Ability to attract the Critical mass.

Deciding on the Retail Format that will leverage the company‟s competencies.

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Ability to attain expertise in the retailing sector.

Supply Chain Management (Logistical Expertise).

Use of IT.

Ability to attract and retain talent.

Solid Financial backing.

Customer Focus

The most important factor that decides the success of any business is the

Customer focus. Retail companies have to start with the classic marketing rule of STP

(Segmentation, Targeting and positioning). Though this may seem simple and obvious, it

is usually not carried out meticulously. Many companies still operate with the notion of

“every one is our customer; we don‟t stop anyone from buying from us”. The only

problem with this approach would be that the marketing efforts may not be fruitful as

retailers are trying to reach out everyone, but not capable of satisfying anybody. This

however does not mean that the company should ignore the spill-over effect.

The “Indian Factor”

The Indian consumer is no longer termed “price sensitive” but is associated with

one who looks for “value for money” To put it simply, the consumer should feel that his

costs (monetary, time, energy, psychic) are less than the benefits (functional and

emotional) that he receives. Though the benefits that the consumer seeks may differ

across income groups, it also differs across the nature of products (low-involvement vs.

high involvement product).

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The stress is upon the fact that one cannot try and replicate retailing strategies that

worked in the U.S. because the consumers are different, their food, clothing and living

habits are different, their culture is different and more importantly, the retail formats that

these consumers have been exposed to is different.

Talking about values that a consumer derives, according to Dr.Ranjan Das, it is

now becoming clear that the Indian customer wants entertainment in whatever he does,

whether buying or consuming. Entertainment thus has now become his additional

criterion for deciding what to buy and from where to buy. This aspect was well conceived

and implemented in Abirami Mall of Chennai city with superb customer patronage.

CRM

Customer Relationship management is probably the new buzzword that is

catching up with all businesses. Whether hi-tech or not, the retailing format should be

able to understand the needs of the customer and use information available to attract,

serve and retain customers effectively.

Ability to attract the Critical mass

In retailing business there exists a necessary critical mass that helps the company

survive. The critical mass represents the number of customers of a particular retail

organization. The retail company should be able to estimate the critical mass and then put

strategies in the right place in order to attract and retain that critical mass.

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Deciding on the Retail Format that will leverage the company’s competencies

The retail format can be classified in two ways. The first is physical retail format and

the second is the product sector.

Small store, with complex but efficient supply chains

Small supermarkets that run on brand variety and tight inventory control

A mix of food and general merchandise stores

Hyper markets which are located out of the city.

Mid-sized retail propositions within town limits.

Small corner outlets with integrated home delivery.

Huge discount store, apart from the e-tailing format.

The right format for a retail store should be decided depending on the core

competency of the company and the targeted customer segment. While deciding on the

retail format a lot of attention should be given to the store design as well. Product sector

decision involves deciding whether the company should enter into groceries, apparel,

textiles, consumer durables, etc.

Ability to attain expertise in the retailing sector

Organized retailing is still in its nascent stage in our country. Any company

planning to enter in an organized way will have to attain sufficient expertise in setting up

and running retail chains. This expertise can be either bought by hiring consultants to

advise in this front or enter into an alliance or joint venture (as RPG has done) with a

partner who has prior expertise in this area.

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Supply chain Management – (Logistical Expertise)

Supply chain management is one of the key areas of the success for an organized

retailer. Most of the cost savings comes through with efficient supply chain

management. Companies like Walmart have built the biggest empire in retailing just by

concentrating on this aspect. Supply chain management is important to a specialty store

and also to a discount store. By efficiently handling the supply chain, the operating and

wastage costs can be drastically reduced thus increasing the operating margin. The

government should take adequate steps to do away with constraints on processing,

manufacturing, and distribution. As the existing formats make way for the modern ones

and the national footprint of the retailers expands, efficient supply chains will be setup

and consolidation of the logistics function will take place.

Use of IT

Deployment of IT in retail sector has helped to streamline the operations and

minimize the costs. Food world, one of the leading retail companies has benefited

considerably by using IT in its day-to-day operations. IT should be deployed with

considerable care and caution. The IT tool that is selected must be capable of being

scalable and also upgradeable.

Ability to attract, train and retain talent

Retailing necessitates hiring and retaining people who can help to grow the

customer base. Companies should be able to attract good talent and also train them to

operate in the new organized setup. The next step is to retain the bright, talented and

experienced workers. Companies should tie up with Management Institutes to enable its

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employees study related courses and at the same time help these institutes offer

specialization in retailing by helping them design such courses with the valuable field

experience of the retail company.

Solid Financial backing

Since any retail format will involve substantial initial investment and is operating

in a low margin industry, the company should have solid financial backing to help it

survive in the initial period while it gains the critical mass.

The need for industry status

Industry status to retailing is the first basic step needed for reforming the retailing

sector. The following are the benefits of granting industry status to retailing.

Greater Focus on Retailing Development

Granting industry status to retailing implies that retailing would then come under

the purview of a single ministry and would most likely have a nodal agency and an apex

body dedicated solely for the retailing sector. This would ensure that this sector gets the

very badly needed focus in development. Almost everybody connected with the retail

sector keep talking on the changes needed in this sector. But the lack of clear focus has

led to a situation where hardly any action has been possible in this highly potential field.

Fiscal Incentives for Retailing Industry

One of the major problems with Indian retailing has been the fact that the levels

of investment in organized retailing continue to be dismally low. Granting industry status

may facilitate the provision of fiscal incentives to this high potential sector. Incentives for

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investments in cold storage chains, infrastructure and investments in the supply chain can

go a long way in improving the current state of retailing in India.

Availability of Organized Financing

One major benefit from granting industry status would be the easier availability of

organized financing. Banks will find a new option of lending their increased reserves to

this emerging sector.

Establishment of Insurance norms

Insurance to retailers is still perceived to be a risky proposition. The main

problem faced by insurance companies while insuring small retailers has been the

absence of established norms and prior experience. Once the sector gets industry status

most of these problems would be taken care of easily.

Law Amendments

Most of the laws governing Indian retail are pretty archaic. Specifically speaking,

some of the laws that need to be reviewed on priority basis are :-

a. Essential Commodities Act

b. Weights and Measures

c. Agriculture products market Act

d. Prevention of food adulteration Act

e. Shops and Establishment Act

These are just some of the main areas that need attention.

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RECOMMENDATIONS

This section discusses the policy changes that are needed to ensure that Indian

retail significantly improves its productivity. While doing this, we try to identify the

stakeholders in the process of retail change, understand their viewpoint and their

relevance as potential bottlenecks, and finally define how best to address their issues.

Permit FDI in retail

FDI has played a key role in the rapid development of high quality retail in

several other developing countries. Allowing global retailers to invest in this sector

would attract best practice players into India. Several retailers (such as Tesco, Marks &

Spencer and Toys „R‟ Us) have already evinced an interest in building businesses here.

Relax SSI Reservation

The reservation of large sub-segments for the small-scale industry renders the

processing sector, particularly in food and apparel, inefficient. Therefore, the first step

should be to continue to relax restrictions and permit larger, more efficient players to

enter these sectors. It should be emphasized that this will allow small-scale firms to

increase their scale of operations and become more productive and competitive.

Remove distribution constraints

Retailers must be allowed to source directly from the farmers and food grains

should be allowed to be transported freely among the various states of our country.

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Organize market for real estate

Here the objective is to ensure a regular supply of real estate for retail and to

ensure transparency in dealings. There are four major areas of action that retailers should

focus on:

Ensure proper rent laws

Linking rents to market value will ease out businesses surviving on uneconomic

rental rates. Currently, rental laws in our country as well as their implementation are

extremely pro-tenant. Strict enforcement of rental laws will make landowners more

confident in getting their property back.

Make zoning laws more flexible

The government needs to be more flexible with zoning laws and ensure that usage

norms take into account both demand and supply without upsetting the balance both in

urban and suburban areas.

Restructure finances of municipal bodies

The responsibility for providing adequate local infrastructure rests with the local

governments. To improve their finances, these local governments need to enforce

property tax collection to raise funds for infrastructure development.

Increase land supply

City administrators need to bring government owned land into the market

regularly. This will encourage and aid large-scale developments both in the suburbs and

within the cities.

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Simplify the tax structure

The government should ensure the adoption of a uniform sale tax rate across

states, and with time, introduce Value Added Taxation (VAT). It should also eliminate

octroi wherever it is levied. These policies are already being considered, and most states

have agreed to uniform taxation, at least in principle.

Ensure flexibility of labour laws

Permitting flexibility in the use of labour, without doing away with the benefits

accruing to them will permit retailers to better organize operations and improve capacity

utilization. This will include permitting retail businesses to stay open all days of the

week, encouraging use of part time labour, etc. Retailers in the state of Tamil Nadu

(Capital-Chennai) have agreed to these on the face of requests from some well

established retailers.

Better enforcement of tax collection from small retailers

Small retailers will derive several benefits from non-enforcement of labour and

taxation laws. While it will be difficult for the enforcement mechanism to regularly

monitor labour usage and electricity consumption by the millions of small retailers, it

should definitely improve the tax collection mechanism.

Ensure single window clearance for retail chains

State governments should make all licenses and permits available through a

single agency at least at the city level. Providing one-time licenses for multiple stores in

a chain will ease the bureaucratic hurdle experienced by modern retailers.

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`

Eliminating bureaucratic hurdles

The state/local government is a critical stakeholder in retail. Several important

changes in retail environment imply a loss of power for government officials. These

comprise better enforcement of laws among small counter stores, simplification of

legislation and loss of tax revenue from sales and octroi levies. While the legislative

change may be easier to initiate, the behavioural change process will definitely take more

time.

Vendor relations and off take discounts on buying should be discussed and linked

with discounts offered to customers and end users. Vendor partnership is an essential

element in the success of the operations.

Stores management- The way it is done today should be reworked to support the

discount store concept. Manpower deployment at sales assistant level should be different

for different categories of goods. Here assortment of goods will become important based

on the size of the store. Effective category management will have to be incorporated in

retailing.

Display inside the store should be more self-explanatory which will guide the

customer for his buying decision. Price tags should be pasted depending on the

commodity so that they are visible irrespective of category of merchandise.

There are currently very few stores with stock - clearance programmes. They will

have to have the stock clearance of merchandise aged more than “n” Days.

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Another best practice that needs to be present is sharing profits with the customer.

Customer participation in business can be introduced by way of customer loyalty

programme. This action will push the sales and over a period of time.

Innovation in terms of schemes and continuous introduction of best, latest

products and Brands at Customer Participation Price should be offered. The Vendor

could contribute part of this sharing. As off take increases vendor can offer turnover

discount, which will create a win-win situation for all - Vendor, Retailer & Consumer /

Customer.

Our country has major cultural diversity including diverse traditions and

practices, apart from language problems. Retail involves dealing with the local

consumers in a manner appropriate to their culture and traditions, and invariably in the

local languages. Local competitors who have strong hold in their respective markets

have to be reckoned with. Winning over their loyal customers will be necessary to build

a market share in each market.

In a similar way, it would be necessary to build a rapport with the local

authorities. Their support and co-operation is important for successfully entering and

developing business in the new market.

Organized retail is poised to grow at an astronomical pace over next few years. It

becomes crucial for retailers to identify and differentiate themselves on one or more

value-centric attributes that will provide them with long-term competitive advantage.

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Retailers must adopt a phased approach when developing their customer analytics

capabilities.

Retailers need to look beyond the accepted methods of data collection and

analysis. Once retailers have identified the necessary customer data, defined and

implemented appropriate retail technology and analyzed the data for valuable insights,

they can create a competitive advantage that will directly improve both sales and margin.

To win consumer loyalties high quality of goods and services are to be offered.

Retailers must be capable of adapting to new situations in the market by

responding to changes in the environment by having innovative business models. This

will enable them to earn stable profits during different stages of the economy.

With the retail market size, increase in consumption expenditures as well as retail

sales, the opportunities for the retailer and consumer are immense. The sector‟s growth

potential is further reflected by the share of organized retail which forms 4% of the

country‟s retail industry.

Some distinctive trends are likely to emerge on the retail scenario. Domestic

retailers and mall developers will be moving into the smaller towns and cities in order to

respond to the growing consumers markets there and to capture the rising demand for

branded products.

Last but not the least, the market for luxury retail will gain critical mass and this

segment will witness substantial growth in the next few years. However, to enable this

sector to realize its full potential Foreign Direct Investments (FDI) restrictions in retail

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will have to be relaxed further and retail rentals will need to undergo some degree of

rationalization

Personal Shopping Service

One of the key successes of the unorganized kirana stores is the home delivery

system. The very same practice can be successfully implemented in the organized retail

outlets also. This will increase customer loyalty and continued patronage for the store.

Utility/Help Desk

After the introduction of IT system it has become easier to pay dues to the

government in the form of taxes, LIC premium through internet and mobile. But still

some people continue to make payments for the above manually. A help desk manned by

an NGO to collect payments for utilities and water tax would offer tremendous value to

customers. This facility can be extended to ticket bookings also.

Value-Added Range

The immediate example that can be quoted under this category is the „Ready to

Eat‟ range of food products that are now available in some of the supermarkets. Apart

from offering immense convenience to customers, it generates much higher margins.

Darning/Tailoring/Alteration

In spite of readymade apparel having made inroads into most of our wardrobes,

there is still need for tailoring services. This service can be given to the customers

visiting an organized retail store also thereby enhancing its reputation. The actual work

need not be done at the store, thereby reducing the space required to its bare minimum.

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Product Hiring Service

This is done by most Retailers abroad and usually covers cutlery and crockery. A

similar service might find takers who would appreciate the convenience of just hiring

instead of having to purchase such items. Again, this is something that can be actually

offered by a third party, using the store as a connection point.

Service Support for Home Appliances

Several corporate retailers also have an electronic store format in their portfolio

and offer in-house service for electronics and electrical products. Help desks can be

installed in the supermarkets which would act as a collection and delivery points for

anyone wanting to avail of the service. One of the most common requirements of our

customers is the service/repair of the pressure cooker. This work can be undertaken by

the organized retailers also.

Connection Point for Domestic Help

Most hardware stores have a resident plumber, carpenter or electrician. They

sustain each other‟s business by purchasing from that store; the store could also refer

these people if there is any enquiry for work. In today‟s context, where domestic help is

hard to find, the neighborhood store can function as a connection point for the same.

Today there are agencies which offer to find and send such resources. A representative of

such an agency may be deployed at the store.

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Community Message Board

A soft board may be displayed in every store where customers can post simple

personal notes. The messages would be about sale of vehicles, homes for rent, tuition, pet

wanted, old guitar for sale etc.

Jumble Sales

Most of the customers have loads of things which they never use. A monthly

jumble sales organized in association with an NGO would provide yet another

opportunity for customers to get such things out of their homes. A part of the sales

proceeds could be donated to the needy. Customers could register their names to

participate by paying a nominal fee, which would take care of the organizational

expenses if any.

Overview of Basic Retail Concepts to Maximize the Returns

Conventional store owners are masters of Retailing. It is in their blood.

However, what they know is typically word of mouth knowledge which is based on past

experiences. The world and market place to day is changing and changing very fast. In

that context, these shop owners should attend some Retail training Programmes which

teaches the basics of assortment planning, store profitability, etc. Coupled with their

native wisdom, this conceptual knowledge would give them the edge to be more

competitive as also might open their minds to experimenting with some of the ideas from

the training programme.

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Explore Other Formats

Most of the corporate Retail in has adopted existing western models like

supermarkets, hypermarkets, etc. Also, real estate, density of population, lifestyle, etc.

are different and might be served better through differentiated formats. An example is

from the fast-food industry. Some of the pizza chains typically has a dine in restaurant

where one sits down and enjoys meal, while it also has a tele-ordering mechanism as

also a small outlet for takeaways only.

Corporate retail is only now experimenting with online shopping as an extension

of physical stores. But, some different physical formats like a store that sells mainly

damaged goods at steep discount can be experimented.

The implementation of the suggestions by the concerned authorities will go a long way in

improving the retail sector in the days to come.

CONCLUSIONS

After undertaking an in-depth study on the topic “Emerging Trends in Chennai

Retailing”, the following conclusions are arrived at:-

There is huge potential for organized retail.

Retail outlets exist in all shapes and sizes - from a “panwala” to a Shoppers‟ Stop.

However, most of these outlets are basic mom-and-pop stores - the traditional

“kirana” shops in the locality, which are smaller than 500 sq. ft. in area with very

basic offerings, fixed prices, zero use of technology, and little or no ambience.

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The well-known consultancy firm, Technopak has listed ten retail trends in their

recent report entitled Retail Outlook 2007. Technopak says that there is bound

to be an unprecedented investment over the coming five years.

Modern retail will grow but traditional retail will survive – both of them will

co-exist.

Consumption will shift to lifestyle categories - consumers shifting evaluation

from MRP to EMI.

New retail formats will emerge and grow. There will be an investment surge in

forecourt retailing and the country will witness the growth of super-specialty

formats.

Modern retail will witness enhanced private equity infusion.

There will be creation of large retailer brands (private labels). „Own label‟

branding trend will be on the rise, particularly in groceries, home care and

clothing. This will provide better profit margin advantage to retailers

There will be interplay between retailers & suppliers – branded firms will

collaborate with top retailers

New investments will happen in the back-end areas. There will be enhanced focus

on improving the supply chain, storage and display.

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Modern retail will benefit consumers and rural sector. Rural retailing formats

will ensure quality goods, easy accessibility and low rates. Monthly shopping bill

of the consumers will reduce by at least 10%

Consolidation will increase in the retail sector.

In addition to basic infrastructure like parking, real estate etc. would require

additional investments. However, given the nascent stage of the industry, most of

these investments will be in the form of equity.

In recent years, this sector has witnessed a lot of interest from both domestic and

global players, which will lead to increase in the share of modern retail from the

current 4.5 per cent to almost 25 per cent of the total retail market by 2018.

Modern retail will continue to grow since the long term fundamentals of the

Indian economy are still strong. Therefore, the fundamentals still support the

case for modern retail in India and there is no reason to believe that retailers will

not to continue to invest and expand as planned in the coming years.

On the operations front, the players are now starting global retail practices.

However it would take sometime before the players are able to bring their supply

chain infrastructure in line with the world-class standards to maximize benefit.

Besides the retailer would need to do substantial works on the front end of their

business models, which involve implementation of practices and processes for

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efficient customer management techniques and linking them to the merchandize

and supply chain planning systems of the company.

Retailers have realized that it is more important to focus on the basics and get

them right first. Accurate inventory control is the main requirement of an

enterprise retail system. Overall IT expenses in retail are on the rise and some

retailers are now looking beyond basic applications to higher levels of IT

functionalities.

Evidently, retail is one of the hottest industries both in India and in Chennai. The

changing profile of the consumer combined with the fresh interest displayed by

developers and retailers has meant the entry of new formats in the industry.

Retailers and developers are rushing to setup retail cum leisure destinations,

which bundle several options into a single offering to give customers what they

want. Apart from the metros smaller cities too are witnessing intense property

development.

The growing emphasis on retail IT among both the established and the new

players becomes evident from the fact that a large number of retailers are now

indicating increase in their IT budgets.

FDI will also enter retail sector in the very near future.

Current players are maturing, and new entrants are learning from their

experience. As of now major investments are on-hold awaiting a trigger e.g.

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financial success of some of the current icons, FDI permission for the sector,

real estate law reforms, grant of industry status etc. will further boost retailing.

Supply side constraints are showing sign of easing – next 5 years should see

substantial improvement.

Overall, in Indian scenario Retail would be one of the best 5 Business Sectors in

this Decade.

Kirana’s will continue to co-exist, along with organized retailers. They should

focus on value-added services, longer hours, innovative solutions that offer

convenience, etc.

Online transactions should start seeing a boom. People have moved onto the

online booking space with regard to travel and hotel bookings. This comfort level

coupled with stricter authentication measures by credit card companies would

make consumers open to online shopping. This is an excellent opportunity for

retailers to move into the online space.

Several allied and related value offerings are bound to start and some are already

around. Personal shoppers are sites that compare prices and consolidate offers

from various retailers. Similarly retail training institutes, logistics service

providers, housekeeping business etc. would also grow and thrive.

.

Initially, the corporate retail focus was on expansion and then with the downturn

it moved to consolidation, cost control and profitability. A very important

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perspective is not yet on the radar of Indian retail, which are Green retail or eco-

friendly initiatives by retailers.

Similarly, there are innumerable other opportunity areas with regard to green

retail. Corporate retailers would wake up to this potential when they realize that

there is an opportunity to improve profitability by doing such initiatives and

thereby earning carbon credits. A few top of the mind ideas to explore are solar

panels for power generation, electric vehicles for neighbourhood delivery, gas kits

for the delivery trucks and recycling initiatives.

At least in the growing urban markets, the shift towards DIY and space-saving

products would start. Retailers who cater to this niche would stand to gain.

However, DIY cannot be a straight import as understood in the developed

countries. The Indian DIY would have to be structured keeping in mind the Indian

consumers.

All in all, it promises to be a great and exciting journey with tremendous learning

as also hard work.

A few clues can be taken from other emerging markets, where retail industry has

taken shape in the last couples of decades. Study of other emerging markets

shows that it takes 10-12 years for the organized industry to achieve 10 percent to

12 percent market share. Most of the emerging markets like Thailand, Indonesia,

Malaysia, which saw an emergence of organized retail in the 1980s, have now

achieved between 20 percent to 40 percent market shares. However, for India to

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achieve a similar level of penetration, it would have to overcome key roadblocks

like lack of FDI approval, complex taxation and infrastructure bottlenecks.

While some of these hurdles are easy to remove, others are politically sensitive

issues. And might take several years to get addressed. As a result, it is believed

that growth in the organized retailing in India might not be as rapid as seen in

other emerging markets. This would mean that the industry would continue to

remain in an investment stage for longer time compared to other emerging

markets.

A tremendous opportunity exists in the Indian market and organized retail will

prevail as in other parts of the world. It is only a matter of time before that

happens and it is probably closer than what we are imaging. This is the right time

to invest and continue investing in the business. Profits may come in only after 5

or 7 years but that‟s the way this industry operates and unlike some of the other

sectors, this is not a business to make profits from day one. But when it‟s setup,

its solid profits and nothing illusionary.

Indian retailers have been expanding swiftly in the last couple of years. There are

already seven retailers with more than 500 outlets in the country.

Earlier, most modern retail was targeted at upper middle/upper class of

consumers. Toady, more broad-based formats are being planned. Technopark

estimates, that in 2003, modern retail targeted hardly one per cent of the Indian

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population. This has grown to about 7-8 per cent of the population now and is

expected to reach at least 40 – 50 per cent in the next five years.

Table 6.1

The future of organized retailing

2003 (in %) 2008 (in %) 2013 (in 5)

F & G 12.0 17 48

Misc. 22.0 15 13

Apparel 38.0 34 12

CDIT 9.0 9 11

Home

Improvement

2.0 2 8

Furniture 2.0 3 3

Footwear 7.0 9 2

Jewellery &

Watches

5.0 7 2

Pharmacy 3.0 4 1

Total 100 100 100

Source Technopak Research

Modern retail has now also expanded beyond the top 8 – 10 cities. It has now

already spread to almost 60 -70 cities of the country and is expected to reach

about 500 – 600 towns/rural hubs in the coming years.

More consumer goods companies are also now vertically integrating by setting up

their own retail channels. Having accumulated a wealth of consumer knowledge

over the years, they have come to realize that there is no better place to influence

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the consumer than at the point-of-sale. This helps them not only in building brand

loyalty, but also, in gathering valuable consumer data to spot consumer trends.

In recent years, more retailers are looking at partnering with global players.

which helps them reach out to consumers with well-known brands. This helps

Indian retailers in introducing formats which are currently not there in their

portfolio and also allows them access to the best global practices in sourcing,

store operations, merchandising etc.

In the last few years we have also seen some mergers and acquisitions taking

place in the retail sector. Initially, companies looking at entering retail were

acquiring existing regional retailers to get valuable operational understanding of

the sector. Of late, consolidation is also taking place, with retailers seeking

acquisitions as a route for expansion or diversification to newer geographies and

categories.

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Diagram - 6.1

Indian Retail Growth across years

300

0

2,45

0

250

0

200

0

1,70

5

150

0

1,16

1

100

0

78

3

86

0

28

0

41

0

61

5

22

0

500 8

1

8

11

0

2003 2008 2013 2018

Modern Retail Retail GDP

Source: Techno Park Research

The mantra for the retailers, behind this would this be:-

“The customer is the most important visitor on our premises. He is not

dependent on us. We are dependent on him. He is not an interruption in our

work. He is the purpose for it. He is not an outsider in our business. He is part

of it. We are not doing him a favour by serving him. He is doing us a favour by

giving us opportunity to do so”