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URBAN RETAIL STUDIES CONSUMER ELECTRONICS & DURABLES ORGANIZED RETAIL Parikshit Agarwal | 125 Prashakha Wali | 127 Sahil Avi Kapoor | 136 Shivangini Mukherjee | 142 Shriram S. | 145 Sushant Gupta | 152 By

Consumer Durables - Retail Study

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A detailed urban retail study about the consumer durables market in India

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  • URBAN RETAIL STUDIES

    CONSUMER

    ELECTRONICS

    & DURABLES

    ORGANIZED RETAIL

    Parikshit Agarwal | 125

    Prashakha Wali | 127

    Sahil Avi Kapoor | 136

    Shivangini Mukherjee | 142

    Shriram S. | 145

    Sushant Gupta | 152

    By

  • 1

    TABLE OF CONTENTS

    Retail | What is it? ..................................................................................... 2

    Retail | How is it classified? ..................................................................... 3

    Urban Retail Study | Definitions & Applications ..................................... 4

    Consumer Electronics & Durables | The Industry .................................. 6

    The Study | Executive Summary .............................................................. 8

    The Study | Choice of Stores ................................................................. 12

    The Study | Research Methodology ...................................................... 15

    The Study | Exit Interview ...................................................................... 18

    The Study | Observations ....................................................................... 18

    The Study | Behavioural Analysis.......................................................... 22

    The Study | Key Insights ........................................................................ 24

    The Study | Problems Faced .................................................................. 25

    The Study | Conclusion .......................................................................... 26

    Future Prospects .................................................................................... 28

  • 2

    RETAIL | WHAT IS IT?

    The word retail is believed to have been derived from an old French word, tailler, which

    in its literal sense implies to cut off, clip, pare and divide. Its first recorded use for sale

    in small quantities can be traced back to the 1433.

    Quoting the Oxford Dictionary (2014), the noun retail stands for The sale of goods to

    the public in relatively small quantities for use or consumption rather than for resale.

    Retailers are an integral and the latter most part of any supply chain. A retailer typically

    purchases goods in particularly large quantities from a distributor, from the wholesaler or

    in some cases directly from the manufacturer. The business then makes profit by selling

    the goods to the customer.

    Retailing is not necessarily done through fixed locations or a shop. It could be done door

    to door, by delivery and of course typically through a brick and mortar store or market.

    Since the turn of the millennium, increasing amount of retailing is also being carried out

    online through electronic commerce stores, sometimes referred to as click and mortar

    stores. These stores then deliver the purchases through courier or other quick delivery

    services.

    The term retailer also refers to service providers which service the needs of a

    considerable number of people.

    Shopping mostly implies the act of buying. This could be buying of essential commodities

    such as food, clothes, grocery or even for luxury or large durable purchases such as

    electronics, consumer durables, furnishings or jewelery. Many people even shop for

    entertainment or recreation, which involves window shopping or browsing not necessarily

    with the intent of purchase.

  • 3

    RETAIL | HOW IS IT CLASSIFIED?

    CLASSIFICATION BY PRODUCTS

    Food Products | Require cold storage facilities

    Hard or Durable Products | Goods that last long and provide utility over a period of

    time. Include automobiles, electrical appliances, consumer electronics, furnishings,

    furniture etc.

    Soft or Consumable Products | Clothing, footwear, medicines, cosmetics, stationery

    etc.

    Arts | Bookstores, art galleries, musical instruments, gift shops, handicrafts etc.

    CLASSIFICATION BY MARKETING STRATEGY

    Department Stores | Stores with a large variety of soft as well as hard goods. These

    stores closely resembles a large collection of specialty stores. These stores carry a host

    of categories and a large variety at not very high prices. They offer average customer

    service facilities.

    Discount Stores | Stores that offer a large range of products, but their ultimate selling

    proposition (USP) stays their competitive pricing. Such stores mostly retail either less

    fashion oriented and more utility oriented brands or their own store brands.

    Warehouse Stores | Low cost, high quantity goods

    Specialty Stores | Narrow product line with a deep assortment such as apparel stores,

    footwear stores, bookstores etc.

    Supermarkets | Large, low cost, low margin, high volume stores with self-service

    design.

    Convenience Stores | Smalls stores located inside or near residential areas, open for

    long hours and sell a limited line of high margin goods.

  • 4

    URBAN RETAIL STUDY | DEFINITIONS & APPLICATIONS

    Purchase of a product is a sensory process where the consumers see, feel and choose.

    To understand shoppers behavior, we must observe them in context rather than in

    isolation. Urban Retail Study (URS) uses methods of observational research to gather

    insightful information on in-store behavior of shoppers. Observational research (in social

    sciences) refers to the process of watching people in context of their natural environment

    and carefully recording the manner in which they go about their routine activities. The

    information thus gathered is systematically analyzed to extract the knowledge embodied

    therein.

    Observational research on urban retail shoppers aims at unveiling the factors that affect

    purchase decisions - making it important from strategic point of view. These studies also

    help us determine the effect of in-store promotional initiatives and point-of-purchase

    communication on shoppers.

    Qualitative observational research, like any other research, involves defining a research

    question(s), identifying the correct theoretical framework within which to answer the

    questions, selecting tools and techniques, collecting primary and secondary data,

    analyzing data and of course, compiling and reporting the findings.

    Urban retail scholars discreetly observe shoppers to collect extensive data on customer

    demographics (age, gender, ethnic background), use of lists, influence of co-shoppers or

    companions, instant purchases, thoughtful purchases, number of purchases, attitude

    towards displays or kiosks, brand preferences, average time spent in store, etc.

    This data is analyzed to obtain useful insights on how shoppers manoeuvre around a

    store, where lay the dead spaces within a store, whether or not the store lights and

    furnishings are having the desired impact on the shoppers, how staff behaviour influences

    purchase decisions, and if certain product categories are more susceptible to in-store

    influences than others. Observational research helps marketers identify the activities that

    make real difference to the bottom line.

  • 5

    As retail continues to evolve and shoppers increasingly turn to online or home-delivery

    formats of retailing, traditional retailers must revolutionize the shopping environment to

    make shopping an experience as opposed to an activity. Urban retail study helps the

    traditional retailing industry know what shoppers want from a store. Retailers should use

    these studies to develop the measures which would enhance their business.

  • 6

    CONSUMER ELECTRONICS & DURABLES | INDUSTRY

    Consumer durables are electrical and electronic appliances that yield services and utility

    over a long period of time. These goods include ACs washing machines, refrigerators,

    microwave ovens, television sets and audio video systems. Consumer electronics also

    include laptops, personal computers, digital cameras, MP3 players, cellular phones, GPS

    automotive gadgets and health monitoring gadgets.

    According to the latest figures by India Brand Equity Foundation, India is set to become

    the fifth largest consumer of durables in the world; the market is expected to breach the

    US$ 12.5 billion figure by FY 15 from US$ 7.3 billion in FY 12.

    Source: The India Brand Equity Foundation

    Urban markets account for most of the share (65 per cent) of sector revenues in the

    consumer durables space in India. The urban demand is projected to increase

    exponentially for non-essential products such as LED TVs, laptops and ACs over the next

    decade. Meanwhile, rural markets are expected to witness growth in more essential

    commodities like refrigerators as well as consumer electronic goods in the coming years.

    This can be attributed to the plans of the Government of India to invest heavily in rural

    electrification. Demand growth is also likely to accelerate with the ever rising disposable

    incomes and easy credit access. The Government of India has recently allowed 100 per

    Rural,

    35%

    Urban,

    65%

    India Market Breakup | Durables

    0 10 20 30 40

    FY 15E

    FY12

    FY11

    FY10

    FY09

    FY08

    India Market Size | Durables

    Revenues (US$ Billion)

  • 7

    cent FDI in the electronics hardware-manufacturing industry under the automatic route.

    The excise duty has also reduced to 6 per cent on LED lamps. Further, the recently

    launched Electronic Hardware Technology Park (EHTP) Scheme provides multiple

    benefits, such as duty waivers and tax incentives to companies replacing imports with

    local manufacturing.

  • 8

    THE STUDY | EXECUTIVE SUMMARY

    THE CONSUMER DURABLES MARKET IN INDIA

    Market Size (13) | 295,620,000 units

    Per Capita Consumption (13) | 0.2 units

    CAGR (2013 18) | 1.7%

    TOP 3 COMPANIES (BY RETAIL VOLUME SHARE)

    Samsung | 22.6%

    Nokia | 14.2%

    Micromax Informatics Ltd. | 10.2%

    Source: Euromonitor

    THE POSITIVE INDUSTRY OUTLOOK

    The organized retail market is expected to grow by 18 20% by the end of 2015.

    The growth of the organized retail sector will have a positive impact on the consumer

    durables industry.

    Fuelled by favourable customer demographics and infrastructural development, the

    consumer durables industry is set for sustained growth in the country.

    Organized retail has a streamlined supply chain and facilitated increased demand for

    high end and branded products.

  • 9

    THE CONSUMER DURABLES | CATEGORIES

    Communications

    Equipment

    Includes retail sales only of answer machines, fax machines,

    fixed-line telephones, mobile phone accessories and mobile

    phones.

    Computer Hardware

    and Software

    Includes retail sales only of desktops and laptop computers,

    software, memory sticks, CD packs, hard disks and other data

    storage devices, computer peripherals, PDAs, organizers,

    calculators, and satellite navigation systems.

    Consumer

    Electronics

    Includes CD players, DVD players and recorders, hi-fi systems,

    home theatres, in-car entertainment systems, portable digital

    audios, radios, televisions and video recorders, home use and

    portable games consoles.

    Household

    Appliances

    Includes major domestic appliances (air conditioners,

    dishwashers, dryers, freezers, hobs and extractors, microwave

    ovens, refrigerators, stoves, vacuum cleaners and washing

    machines) plus minor domestic appliances (blenders, coffee

    machines, deep fryers, food processors, grills, hair products,

    hair trimmers, curling tongs, razors, hand-held mixers, irons,

    juicers, kettles, stand mixers, toasters, sunlamps and fans)

    Photographic

    Equipment

    Includes camcorders, cameras, projectors, camera and

    camcorder accessories, binoculars and telescopes.

  • 10

    THE RESEARCH

    METHODOLOGY

    Non participatory

    Unobtrusive

    Exit Interviews

    OBJECTIVES

    Shopper Centric: To understand shopper behavior, interpret the significance of

    shoppers actions and determine how they make purchase decisions.

    SHOPPER SEGMENTATION

    The shoppers observed may be broadly classified into the following age groups:

    20 - 25 years

    25 - 35 years

    35 years or more

    We found that the shopper population comprised of 66% males & 34% females.

    Based on our observations, we segmented the shoppers into three categories:

    1. Tech Nerds: They were people who knew everything about the product. They were

    price conscious & they had already compared prices online before coming up to the

    store. They also knew the technical specifications of each of the products as they had

    already read up the reviews of the product online. They knew the strengths of each

    brand & therefore wanted a demo of each brand. They belonged to the younger

    demographic.

    2. Brand Conscious: They were people who placed utmost importance on the core

    competency of each brand. Apple users vouched for its innovative technology, Sony

  • 11

    for its amazing designs, Micromax for its price & market understanding & so on. They

    mostly relied on reviews by their friends & relatives. They didnt spend a lot of time in

    the store as they concentrated on only one brand. Also, they could switch across

    different price points in the brand, but not across brands.

    3. Product Oriented: These were people who focused most on the utility of the product.

    They learnt about the product mostly through advertisements. They generally

    comprised for a home utility product like a washing machine or a refrigerator. Such

    shoppers spend a lot of time in the stores interacting with the sales persons trying to

    learn more about the product. Since the influencers were kids, they often ended up

    spending more than had in mind when they entered the store.

  • 12

    THE STUDY | CHOICE OF STORES

    Consumer goods like washing machines, motorcars, TV sets, audio -video systems etc.,

    which yield services or utility over time rather than being completely used up at the

    moment of consumption can be termed as the consumer durables. Consumer durables

    are classified into white goods and brown goods. Most consumer goods are durables to

    some degree, and the term is often used in a more restricted sense to denote relatively

    expensive, technologically sophisticated goods _ consumer durables such as the

    examples given above which implies high involvement at the time of purchase.

    IMPORTANT FACTORS FOR BUYING FROM A RETAIL OUTLET

    Relationship with the sales person: We have observed high rate of retention of

    customer in the retail outlets if the sales person has a cordial relationship with the

    customer at the time of purchase.

    Choices of Products: Customers are keen on choosing the retail outlets which

    offer them a variety of brands and different product mixes of each brand. In todays

    world the customers are well informed about the choices they have for a particular

    product, hence providing them with variety of choices would be an ideal way to

    engage customers to shop.

    Financial Transactions: More financial options made available for the consumer,

    more he will get engaged. EMI factor is one of important financial transactions that

    is being followed in most of the retail outlets and has been pretty successful.

    Discounts and other customer offers: Discounts and other offers that can be

    offered to customers would be another major factor which would involve customer

    and thereby the choice of his/her shop preference would be altered.

    Location of the shop: A study has shown that location of a particular shop is a

    major factor in the choice of the customer

    Parking Facilities and other factors such as ambience of the environment and

    other customers in the shopping arena does matter and will affect a customers

    choice of the shops.

  • 13

    RETAIL STORES

    We chose two stores for conducting our research. Both the stores were inside busy

    malls and stocked multi brand consumer durables.

    CROMA RETAIL

    Crom is an Indian retail chain for consumer electronics and durables. Tata

    Groups company Infiniti Retail runs Crom stores in India. Infiniti Retail Ltd is a 100%

    subsidiary of TATA Sons. Presently, there are a total of 101 Crom stores in 25 cities in

    the country. Crom claims offers 6000 products across 8 categories.

  • 14

    RELIANCE DIGITAL

    Reliance Digital is a consumer durables and information technology concept from

    Reliance Retail. It is a subsidiary of Reliance Retail, which is a wholly owned subsidiary

    of Reliance Industries. The first Reliance Digital Store was opened on 24 April 2007 in

    Delhi.]Currently there are around 170 Reliance Digital Stores in around 70 cities in India.

  • 15

    THE STUDY | RESEARCH METHODOLOGY

    We conducted a primary qualitative research into the shoppers behaviour. The methods

    of observations adopted by us were unobtrusive observations research backed by

    tracking sheets. Non participatory observational research and we also conducted exit

    interviews.

    We took prior permission from the shop owner explaining to him the purpose of our study.

    Building a good relationship with the shop owner was very important for our research

    purpose. Our objective was Shopper centric: To understand shopper behaviour, interpret

    the significance of shoppers actions and determine how shoppers make purchase

    decisions.

    One person was stationed at one corner of the shop observing the customers from the

    moment they entered the shop till the time they left and the another person was outside

    to perform the exit interviews the third person was standing in the parking area in front of

    the shop noting down their mannerism before and after they left the shop. Each customer

    was evaluated on a pre-determined basis as decided by the group and notes were made

    on the tracking sheet. At the bottom, some personal remarks were written depending

    upon the behaviour of the customer, like ease and familiarity with the shop, their relations

    with the shopkeeper and whether he/she was a first time shopper or a regular shopper.

    The objective of the observations were to find out if a particular trend of shopper behaviour

    in various retail environments can be located and utilized to Optimize the store setting

    and to customize the store environment for maximum ease.

    SAMPLE DESIGN

    Our sample size was 24. Choice of the customer entering the shop was made on a

    random basis irrespective of any demographic segmentation. We have tried to minimize

    any kind of segmentation bias by taking a representation from all sections of the society

    and of all classes. In the organized sector we got an opportunity to observe all kinds of

    customers from children to adults and both the genders were equally involved in our

  • 16

    sample. The sample consists of all the shoppers walking into the shop between 2:00 PM

    to 6:00 PM on Sunday evening. The accompanying people with the shopper were not

    treated separately but the whole group was treated as one. We as a group stationed

    ourselves to different parts of the shop, one stood near the cash counter, while one stood

    at particular corner and another outside the shop for observing the shoppers behavior.

    The person inside the shop could observe how the customers made choices of the

    products and the brands and the person outside could observe how long it takes for the

    shoppers to decide in entering the shop and what hoardings outside the shop or on what

    banners on outer side of the shop, the customers attention fell before entering as well as

    he/she was the one taking the exit poll. Hence, we as a group could observed inside as

    well as outside behavior of the customers or their group, when they were in groups, as

    they came for shopping.

  • 17

    THE STUDY | EXIT INTERVIEW

    We observed the shoppers during their purchasing & asked them a few questions after

    they were done shopping. Some of the shoppers were a bit reluctant, so we had to rely

    on observation alone. But, the younger shoppers mostly cooperated for a few minutes.

    Based on the answers they gave, we could come up with some insights into shopper

    categories. These are the broad questions we asked.

    Had you decided upon which product to buy before you walked into the store?

    Do you have a brand preference in the product category?

    Did you avail the services of Credit Card payments or EMI schemes on

    payment?

    Did you end up spending more than what you intended before finalizing?

    Is design the most important feature you consider before buying a product?

    Did you know about the technical specifications of the product pre-hand?

    Did you consider the energy rating of the product while purchasing?

    Why did you choose a multi brand store over a company store?

    Have researched online for product reviews & prices?

    Have you considered buying the product online?

    Did the sales person influence your final purchase?

    Did your final purchase coincide with your initial brand fixation?

  • 18

    THE STUDY | OBSERVATIONS

    Two males aged between 25 to 30 years enter the store. They did not carry any

    other shopping bags, etc. Both of them were dressed casually. They did not seem

    to be in any particular hurry. They paused for some time at a counter displaying

    (Samsung) smart phones. They inquired about availability of some more economic

    brands from the sales-rep manning the counter. They spoke to each other and the

    sales rep in their native language (probably Gujarati) but their occasional use of

    English phrases made it easier to follow their conversation. They were probably

    comparing the costs to the features of the smartphones on display. The sales rep

    tried to interest them in a more economical micromax handset but they seem

    unimpressed. One of them frowned. Then they asked to be directed to the counter

    of MP3 players. While examining the display of MP 3 players from Phillips, one of

    the shoppers expressed concern that there was not sufficient number of colored

    variants to choose from. Ultimately they purchased a Phillips GoGEAR MP3 player

    worth Rs.1999 and one of them paid using a credit card. One of them kept using

    the phrase online price, which we presume was because he had found the online

    price to be lesser than the store price. These two shoppers were quite involved in

    their purchase and reasonably well informed about the different brands. They also

    solicited a lot of information from the sales representatives. They had limited

    interaction with the in-store promotions or lightings or fixtures - possibly because

    they were more interested in examining specific products in detail.

    A gentleman in late thirties walked in while speaking on phone. He was dressed in

    a pair of trousers and a half sleeved shirt. He was wearing spectacles. He went

    straight to the billing counter/helpdesk and made some enquiries. Then, he went

    straight to the refrigerator section, guided by a sales rep. He began to examine a

    steel grey double door model of Godrej make. He moved his hand over the front

    door a couple of time to feel the texture - we are not so sure why. He looked around

    and gesture a sales rep to come over. He began to inquire the sales rep about the

    features of the refrigerator. They spoke in their native language but their use of

  • 19

    terms like warranty, capacity, etc. conveyed that they were talking about product

    features. His expression clouded when he heard the price quote for that model but

    ultimately, after much convincing by the sales rep, he decided to go ahead with it.

    The product he eventually purchased was a Godrej Eon refrigerator of 240 L

    capacity worth Rs.24000. He inquired if it was possible to pay the price in

    installments but the store did not support such policy so he paid the amount in full

    using a card. He left his address at the store so that the product may be delivered.

    A woman aged 35 40 entered the store dressed in a saree. She was

    accompanied by a female friend, of the same age. Without consulting or looking

    out for a salesman, she walked straight towards the mobile phone counter. She

    looked extremely uneasy and conscious, and felt extremely awkward when the

    salesman asked her what features she was looking for in a phone. She hurriedly

    dialed a number on her phone, and started reading out the names of the phone

    available to the person on the other side, along with the price. As she referred to

    the person on the phone as beta, it looked like she was talking to her son. The

    son directed her as to what she must look for, after which she repeated those

    features to the salesman. After having kept the phone, she tested the dummy

    phones produced by the salesman, talking with her friend in particularly hushed

    tones. After spending a lot of time choosing, she purchased a Karbonn A6 for Rs.

    3499/-

    A middle aged woman enters the store accompanied by her husband. She asks

    the floor assistant for the directions to the Kitchen Appliance section. They walk up

    to that zone and start browsing through the appliances there. They were very

    particular about the price. The browsing was very general and not product specific.

    They discussed about the specifications and their requirements and necessity.

    After 20 minutes of looking around they left without buying any appliance.

    A man in his 20s walked in the store and went straight to the section which

    displayed the external hard disks and other products like optical mouse, pen drives

  • 20

    etc. During this time he did glance through the laptop section. He did not look brand

    conscious, he was more curious about the price and features of the hard disk. He

    kept picking boxes and reading details on itched decided on one of them and

    directly walked to the payment counter. He then made a quick payment and left

    the store without stopping anywhere.

    A single male shopper around 30 years of age, dressed casually entered the shop

    alone. He headed straight to the mobile section & enquired about a particular

    handset model. He was happy after knowing the discount offer on that particular

    brand & purchased it. He spent some time in the television section before moving

    out.

    A young shopper, around 25 years of age, dressed casually entered the shop into

    with a group of friends. They headed to the tablets section where they

    contemplated whether to purchase a tablet over a mobile or not. He finally bought

    a tablet & also spent some time in the gaming console section.

    A working professional male, roughly 40 years of age entered the store in office

    formals alone. He walked straight to the Samsung mobiles section and asked for

    their two flagship models. He spent some time inquiring about the basic features

    of the product & made a quick purchase after consulting somebody on the phone.

    A young girl possibly a college student entered the store with a couple of friends.

    She specified a price range to the sales person & asked him to show all handsets

    that fall within that range. This particular group was in an exploratory mood &

    stopped at many sections in the shop before finally moving out.

    A housewife dressed in a saree entered the store along with her husband. They

    went straight to the water purifier section. They inquired a lot about the prices &

    features of the purifiers. They finally settled on one. While the husband made the

  • 21

    purchase, the wife spent some time checking out the home appliances section

    A male around 27-28 years of age entered the store alone looking for a trimmer.

    He wanted a value for money deal & spent a lot of time comparing the features &

    prices of the products. He asked the sales person if there were any after sales

    issues in any of the brands & finally settled on a mid-range Panasonic trimmer that

    was available at a discounted price.

  • 22

    THE STUDY | BEHAVIOURAL ANALYSIS

    In order to understand the purchase pattern of a customer, it is very important to get into

    the psyche of the same. There must be certain reasons as to why a customer behaves

    the way he does, while making a purchase in a shop. This would require every transaction

    made at the outlet to be studied in a detailed manner and be treated distinctively.

    To understand shopper mind set, we decided to observe the shopper behaviour while

    they shopped. We had talked to the manager of the shop about the study & convinced

    him that we would pretend as dummy buyers who might ask an occasional question or

    two to replicate authenticity. Apart from this, we also talked to the sales persons about

    shopper behaviour & interviewed some of the patrons later too.

    We tried to form some patterns in the buying behaviour of the shoppers. Most of them

    were first time visitors of the store. Most of the families that visited the store had shopping

    bags with them. Youngsters generally entered the store with a couple of friends & their

    conversion into sales was often less. The consumer durables category generally involved

    well thought of pre meditated purchases. But there were instances when the store offered

    bundle pricing, that the shoppers ended up splurging on impulse purchases.

    PROMINENT BEHAVIOURAL PATTERNS

    Most of the shoppers belonged to the middle class & upper middle class strata of

    society. Since both these multi-brand stores were located in posh localities with

    many other shopping & entertainment options around, such a demographic was

    understandable.

    Most of the shoppers above 35 years of age, be it a single working man/woman or

    a family, came to store in a car. Since, the stores were located in a mall, they had

    ample parking spaces & this was the least of customer hassles.

  • 23

    The shopping in this category fell mostly in the pre-meditated segment. Since,

    these goods often cost a lot, the shopper was more often than not aware of the

    product he wanted to buy. The only impulse purchases were made when the store

    offered some attractive promotional schemes.

    Since, the shoppers were mostly first time buyers, there was a never too much

    conversation between the shopkeeper & the shoppers. The sales persons role

    was more on the lines of an information bank & a facilitator.

    In case the product bought by the shopper was difficult to carry such as television

    set, a washing machine or a refrigerator, the store often arranged for a

    complimentary drop service.

    For the young tech nerds, the displays & POPs played an important role. The

    displays often had the flagship model of the brand being displayed like the S5 for

    Samsung mobiles, the LG OLED television etc. They often ended up checking

    these products out although they did not result in any conversion into sales. But

    when we talked to the shopkeeper later, he said a certain fraction of such shoppers

    returned to the store to finally buy the product after finding more about the product

    & making up their minds. This was helpful in converting some window shoppers

    into potential shoppers.

    There were isolated instances when the shopper asked for a particular product but it was

    out of stock. The shopkeeper made sure that they told everything about the product to

    the shopper & noted their contact details. In case the product was a hot selling one & not

    available anywhere else in the market too, the shopper often returned when contacted.

  • 24

    THE STUDY | KEY INSIGHTS

    Following are the conclusions and the insights that we came up with after visiting the

    store and observing a good number of people:

    Since our focus was completely on consumer durables we found,

    While purchasing durables such as LCD TV and washing machines, consumers

    ask for promotional schemes. They inquire about exchange offers and compare

    the schemes and benefits with different brands.

    Any purchase of refrigerator and air conditioner is governed by durability and

    energy saving characteristics. Potential customers did inquire about the energy

    saver star ratings and checked the capacity or tonnes which would fit to their

    budget.

    Again, in the purchase of air conditioners the customers do look for after sales

    services, which is an important purchasing criteria. Considering the fact that

    these electronics require regular follow ups in terms of servicing, cleaning and

    spare parts replacements, and this factor becomes very important for the buyers.

    Discounts and offers are also made on the membership or registration for

    servicing and follow ups.

    Product price was an important consideration in the purchase of music systems

    and micro wave oven in terms of comparison with other brands and their offers.

    In purchase of cell phones, laptops digital cameras and tablets the technology

    considerations become important.

    While purchasing from organized outlet, consumers prefer availability of all

    brands, after sales service, & display.

    Consumers who are brand conscious, they are generally not switch over the

    brand for the any type of financial or the promotional schemes.

  • 25

    THE STUDY | PROBLEMS FACED

    Most of the customers spoke Gujarati, hence making it difficult to make sense

    of what questions they asked the salespersons, or what they conversed among

    themselves.

    A large portion of the visitors in a multi brand electronics retail store are just

    window shoppers, who walk into the shop for recreation. Hence, a lot of time

    was wasted in identifying genuine customers.

    Staff and management at multi store chains refuse to share any major business

    or customer insights.

    Most customers of this segment usually have done a major part of the selection

    as homework, and thus getting insights as to why they chose what they

    purchase is hard to figure out in an unobtrusive research.

    The malls were heavily crowded and thus, it was somewhat difficult to closely

    monitor customer activities.

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    THE STUDY | CONCLUSION

    FACTORS AFFECTING PURCHASE DECISIONS | DURABLES

    BRAND CONSCIOUSNESS

    Some of the users were heavily influenced the brand positioning & image. Such shoppers

    were willing to compromise on some of the features as well if they really associated well

    with a brand.

    PRODUCT PRICE

    Shoppers who were utility buyers & focused on value for money brand like Micromax were

    very price sensitivity. Such users were not interested in ancillary benefits & wanted their

    overall spends to be minimum.

    TECHNICAL SPECIFICATIONS

    The tech-nerds were the ones who obsessed over such features the most. Features such

    as screen resolution for Television Sets, Capacity & loading mechanism in washing

    machines, megapixel in front & rare cameras were the most sought after ones.

    EASE OF PAYMENT

    There was a segment of aspirational buyers who were stretching their budgets and

    therefore wanted to know more about EMI schemes. They were either young

    professionals who had just started their careers or families who had caved in to the

    demands of their families.

    SALES PERSON

    When families came in for purchase of the home appliances, the sales person became

    an important element in the product selection. His personal insights about a particular

    product finally made a lot of difference as he was often their only source of information of

    the product.

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    ANCILLARY FACILITIES

    Such facilities were the primary reason that shoppers viewed the products at multi brand

    stores & finally purchased them unorganized retail shops. Such facilities included

    applying screen guards, keypad covers, washing machine stands, data for mobile etc.

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    SCOPE FOR FUTURE RESEARCH

    The scope for future study will be to analyze the behavior of the customer and the

    salesman and study of what approach they develop while negotiating and why. The

    components of research can be

    CUSTOMER POINT OF VIEW

    How many shops do a customer actually visit (on an average) before making any

    purchase? (Survey based research)

    Research done before actually coming to a shop? (Survey based research)

    The effect of salesperson's briefing about a product on his customer. For this we

    can have an interview customer before the he goes inside a store. This interview

    shall cover the intended approach of the customer regarding how he wants to

    make a purchase. After the interview, we can have an observational research on

    how the customer actually makes his purchase and to what degree is he/she

    influenced by the salesperson's briefing about the product.

    SALESPERSON POINT OF VIEW

    How does a salesperson project products in front of its customer based on the

    margin involved for him in it?

    How does a salesperson do a visual analysis of the customer he has to handle

    and changes his approach based on his analysis of the customer's approach?

    How does a salesperson determine the negotiation power of the customer and

    thus quotes a price to the customer?

    The influence of the customer's extra knowledge (about any product than the

    salesperson) on the salesperson's approach of selling the product.

    Based on the above research, we can actually analyze the urban retail world from

    a completely new perspective and it can help us establishing new patterns in urban

    retail, which in future might help us in cashing out more sales for our products.