Shoppers Stop
Shoppers Stop
Shoppers Stop
Submitted In the partial fulfilment for the Award of Degree of Master of Business Administration
CERTIFICATE
This is to certified that Krishn Murari Nagar of MBA fourth semester of Poornima School Of Management , Jaipur, has completed his project report on the topic on the Impact of Store environment on Generation Y consumers impulse buying: A study of Shoppers stop under the supervision of MS. Preeti Tak and MS. Nidhi TAK, Faculty member, DMS- PCE. To best of my knowledge the report is original and has not been copied or submitted anywhere else. It is an independent work done by him.
Declaration
Hereby I declare that the project report entitled Impact of Store environment on Generation Y consumers impulse buying: A study of Shoppers stop submitted for the degree of Master of Business Administration, is my original work and the project report has not formed the basis for the award of any diploma, degree, associate ship, fellowship or similar other titles. It has not been submitted to any other university or institution for the award of any degree or diploma.
Preface
This research report has been prepared to satisfy the requirements of the final semester of the 2-year MBA program at Poornima School Of Management, Jaipur under Rajasthan Technical University course of study. The main area of the research topic presented is the Impact of Store environment on Generation Y consumers impulse buying: A study of Shoppers stop Retailers are fully aware of the power of impulse buying in enhancing their revenues. The topic has received substantial attention in the marketing literature, yet little is known about how the store environment influences unplanned purchases. To that end, this field study examined the role of environmentally-induced stimulation in influencing impulse buying. In addition, we investigated the impact of two social factors (perceived crowding and employee friendliness) on unplanned purchases. The results of this study indicate that perceived overstimulation (higher than desired) has a positive impact on impulse buying. Moreover, the two social factors jointly influence consumers unplanned purchases. These findings have several important implications to retail outlets and service operations. I thank everyone who participated and were involved during the research and report writing of this project.
ACKNOWLEDGEMENT
Every task that is undertaken should be started by offering prayers to the Almighty and taking blessings from the elders. In addition, following the completion of the task, it should end by acknowledging those who extended their time, efforts, and assistance towards the completion of this research report. I would like to give heartily thanks to Rajasthan Technical University, Kota who have given us an opportunity to learn something practical apart from books by including the in plant this a research work in our MBA Programme. I express my gratitude to Faculty Guide Miss Preeti Tak and Miss Nidhi Tak who has supported me to complete this report. I give my sincere token of thanks to all my faculties, relatives and friends who have gathered me the wisdom of knowledge. This work is dedicated to my parents who have supported me throughout my study.
EXECUTIVE SUMMARY
Retailing is the final step in the distribution of merchandise- the last link in the supply chain connecting the bulk producers of commodities to the final consumers. One undergoing this process is referred to as Retailer. Retailing includes diverse products such as apparel, footwear, consumer durables, financial services and leisure. However in India retail trade remains in the backward state but at the same time is poised to expect a rapid growth in tandem with the economic growth. Indias $350-400 bn retail market $7.5 bn organized retail is growing about 25-30% annually against economic growth of around 8% a year. With this onset many players are entering the market with various products and strategies to cash upon this development in retail sector, thereby increasing competition. Similarly there are various retail formats coming up to grab the opportunity in the retail sector. One of the most prominent retail formats coming up is Shopping Malls which can be defined an arrangement of retail stores and providing the right mix of shopping, food courts and entertainment and parking facilities. The retail space is shared by anchor stores and other retailers (tenants), who will pay the developers of the mall-rent or lease payment for putting up the shop within the mall premises. Sarang Panchal, Executive Director Customized Research ACNielsen South Asia says, With increase in the sheer numbers of malls and modern format stores shopping has almost become a national pastime in our country especially in the cities. Strong economic growth along with booming young adult populations with unprecedented levels of disposable incomes has made people more conscious of the latest trends and fashions.
TABLE OF CONTENTS
S. No. 1 2 3 Content Introduction Introduction to the Industry Introduction to the Organization Page No. 1-8 9-45 46-51
4 5 6 7 8 9 10 11 12
Review of Literature Research Methodology Facts and Findings Analysis and Interpretation SWOT analysis Conclusion Recommendation and Suggestions Appendix Bibliography
INTRODUCTION
Store environment
Store environment is one of the biggest issues to judge the retailer; retailer certainly realizes that store environment could affect consumer purchasing decision and the total shopping experience. The management of the physical environment is considered as an important element in contributing to a retailers financial success and a valuable shopping experience for consumers (Hines T. and Bruce M. 1993). Atmospherics as the concept was first introduced by Kotler P. (1973), where a stores atmosphere is defined as the effort to design buying environments to produce specific emotional effects in the buyer that enhance purchase probability. In store environmental stimuli are positively related to the level of pleasure experience in the store. (Tai and Fung, 1997) The ambient factors are related to the background character of the environment that tends to influence consumers at a subconscious level. The elements which are most considerable are including temperature, lighting, colour, music, smell etc. These Ambient conditions are normally noticeable to consumers. Undesirable ambient conditions can cause dissatisfaction if the attention for the consumer is heightened (www.shvoong.com) Here the store environment is not including customer services and other intangible factors. But the interior, exterior, window display, indoor visual merchandise, and the tools that will help any wouldbe store design to be successful are all in the range of this research and it will be analysed by both aesthetic and functional critical point of view.
Physical environment of fashion retail store is also containing social factors which are related to sustainability, such as energy using efficiency in the store that is especially becoming more concerned in Nordic countries. Hence, the sustainable approach in retailing store design should always be applied in design processing.
Impulse buying
An impulse purchase or impulse buy is an unplanned decision to buy a product or service, made just before a purchase. One who tends to make such purchases is referred to as an impulse purchaser or impulse buyer. Research findings suggest that emotions and feelings play a decisive role in purchasing, triggered by seeing the product or upon exposure to a well crafted promotional message.
Marketers and retailers tend to exploit these impulses which are tied to the basic want for instant gratification. For example, a shopper in a supermarket might not specifically be shopping for confectionary. However, candy, gum, mints and chocolate are prominently displayed at the checkout aisles to trigger impulse buyers to buy what they might not have otherwise considered. Alternatively, impulse buying can occur when a potential consumer spots something related to a product that stirs a particular passion in them, such as seeing a certain country's flag on the cover of a certain DVD. Sale items are displayed in much the same fashion. Impulse buying can also extend to so-called "big ticket" items such as automobiles and home appliances. Automobiles in particular are as much an emotional purchase as a rational one. This in turn leads auto dealers all over the world to market their products in a rapid-fire, almost carnival-like manner designed to appeal to emotion over reason.
Impulse buying disrupts the normal decision making models in consumers' brains. The logical sequence of the consumers' actions is replaced with an irrational moment of self gratification. Impulse items appeal to the emotional side of consumers. Some items bought on impulse are not considered functional or necessary in the consumers' lives. Preventing impulse buying involves techniques such as setting budgets before shopping and taking time out before the purchase is made.[4]
A study published in the June 2008 issue of the Journal of Consumer Research suggests that consumers are more susceptible to making impulsive purchases for one brand over another if they are distracted while shopping. In the study, Central Michigan University Psychology professor Bryan Gibson surveyed college students by measuring their preference for a variety of soft drinks, including Coke and Pepsi. Results of Gibson's study found that implicit attitudes, or those that people may not be conscious of and able to verbally express, predicted product choice only when participants were presented with a cognitive task, suggesting that implicit product attitudes may play a greater role in product choice when the consumer is distracted or making an impulse purchase.
Y generation consumers
Generation Y, also known as the Millennial Generation (or Millennials), Generation Next, Net Generation, Echo Boomers, describes the demographic cohort following Generation X. As there are no precise dates for when the Millennial generation starts and ends, commentators have used birth dates ranging somewhere from the mid1970s to the early 2000s. Members of this generation are called Echo Boomers, due to the significant increase in birth rates through the 1980s and into the 1990s, and because many of them are children of baby boomers. The 20th century trend toward
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smaller families in developed countries continued, however, so the relative impact of the "baby boom echo" was generally less pronounced than the original boom.
Characteristics of the generation vary by region, depending on social and economic conditions. However, it is generally marked by an increased use and familiarity with communications, media, and digital technologies. In most parts of the world its upbringing was marked by an increase in a neoliberal approach to politics and economics. The effects of this environment are disputed. The term Generation Y first appeared in an August 1993 Ad Age editorial to describe teenagers of the day, which they defined, at that time, as separate from Generation X, and then aged 12 or younger (born after 1981), as well as the teenagers of the upcoming ten years. Since then, the company has sometimes used 1982 as the starting birth year for this generation. "Generation Y" alludes to a succession from "Generation X."
The name "Echo Boomers" refers to the size of the generation and its relation to the Baby boomer generation.
Authors William Strauss and Neil Howe have been very influential in defining American generations in their book Generations: The History of America's Future, 1584 to 2069 (1991). Their generational theory is frequently cited in books and articles on the subject. Howe and Strauss maintain that they use the term Millennials in place of Generation Y because the members of the generation themselves coined the term, not wanting to be associated with Generation X. Almost a decade later, they followed their large study of the history of American demographics with a book devoted to the new generation, titled Millennials Rising: The Next Great Generation
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(2000).[21][22] In both books, William Strauss and Neil Howe use 1982 and 2001 as the start and end years of the generation, respectively. They believe that the coming of age of year 2000 high school graduates sharply contrasts with those born before them and after them due to the attention they received from the media and what influenced them politically.
According to the authors' 1997 book, The Fourth Turning, modern history repeats itself every four generations; approximately 80100 years. The authors of the book mention that the four-cycles always come in the same order. The first one, the High cycle, occurs when a new order or human expansion is developed, replacing the older one. The next cycle is called the Awakening. More spiritual than the previous, this is a time of rebellion against the already established order. The third cycle is known as the Unravelling, when elements of individualism and fragmentation take over society, developing a troubled era which leads directly to the Fourth Turning, an era of crisis dominating society during which a redefinition of its very structure, goals, and purposes is established. Each cycle has its archetypes, the four having the following one defined as: Prophet, Nomad, Hero, and Artist. According to the aforementioned book, Millennial belong to the Hero category, featuring a deep trust in authority and institutions; being somewhat conventional, but still powerful. They grew up during an Unravelling cycle with more protections than the previous generation (Gen X). They are heavily dependent on team work, and thus, when they come of age, turn into the heroic team-working young people of a Crisis. In their middle years, they become the energetic, decisive, and strong leaders of a High cycle; and in old age, they become the criticized powerful elders of an Awakening cycle. Another previous generation that belongs to this category is The Greatest Generation (19161924).
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One author, Elwood Carlson, locates the American generation, which he calls "New Boomers," between 1983 and 2001, because of the upswing in births after 1983, finishing with the "political and social challenges" that occurred after the terrorist acts of September 11, 2001, and the "persistent economic difficulties" of the time.
In Australia, there is much debate over the dates of Generation Y - that is, when "Gen Y" began, and the "cut-off" period. It is generally accepted, however, that the first "Gen Y" members were born in 1982. Though some sources use the date range 1982-1995 for the generation, many, including the Australian Bureau of Statistics, use 1982-2000. In Canada, 1982 is generally thought to be the starting birth year for Generation Y, ending in the mid-1990s or 2000, sometimes even as late as 2004.
Like members of Generation X, who are heavily influenced by the advent of MTV, early members of Generation Y are also sometimes called the MTV Generation. This term can also be a catch phrase for youth of the late 20th century, depending on the context.
Fred Bonner believes that much of the commentary on the Millennial Generation may be partially accurate, but overly general and that many of the traits they describe apply primarily to "white, affluent teenagers who accomplish great things as they grow up in the suburbs, who confront anxiety when applying to super-selective colleges, and who multitask with ease as their helicopter parents hover reassuringly above them." Other socio-economic groups often do not display the same attributes commonly attributed to Generation Y. During class discussions, he has listened to black and Hispanic students describe how some or all of the so-called seven core
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traits did not apply to them. They often say the "special" trait, in particular, is unrecognizable. "It's not that many diverse parents don't want to treat their kids as special," he says, "but they often don't have the social and cultural capital, the time and resources, to do that." The Generation most marketers are talking about is Generation Y also known, more picturesquely, as the Generation of the Millennium. Most commonly, Generation Y is defined as including those born between 1980 and 1995. At present, Generation Y consists of approximately 63 million persons, which makes them the second largest demographic group in the US. However, by 2020, as the Baby Boomers (born in the two decades after World War II) start to pass away, Generation Y will take over as the largest adult generational grouping in the United States.
formative values and common experiences shaping Generation Ys beliefs and attitudes, and how the interplay between them translates into purchasing behaviour.
The last few years witnessed immense growth by this sector, the key drivers being changing consumer profile and demographics, increase in the number of international brands available in the Indian market, economic implications of the Government increasing urbanization, credit availability, improvement in the infrastructure, increasing investments in technology and real estate building a world class shopping environment for the consumers. In order to keep pace with the increasing demand, there has been a hectic activity in terms of entry of international labels, expansion plans, and focus on technology, operations and processes. This has lead to more complex relationships involving suppliers, third party distributors and retailers, which can be dealt with the help of an efficient supply chain. A proper supply chain will help meet the competition head-on, manage stock availability; supplier relations, new value-added services, cost cutting and most importantly reduce the wastage levels in fresh produce. Large Indian players like Reliance, Ambanis, K Rahejas, Bharti AirTel, ITC and many others are making significant investments in this sector leading to emergence of big retailers who can bargain with suppliers to reap economies of scale. Hence, discounting is becoming an accepted practice. Proper infrastructure is a pre-requisite in retailing, which would help to modernize India and facilitate rapid economic growth. This would help in efficient delivery of goods and value-added services to the consumer making a higher contribution to the GDP. International retailers see India as the last retailing frontier left as the Chinas retail sector is becoming saturated. However, the Indian Government restrictions on the FDI are creating ripples among the international players like Walmart, Tesco and many other retail giants struggling to enter Indian markets. As of now the
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Government has allowed only 51 per cent FDI in the sector to one-brand shops like Nike, Reebok etc. However, other international players are taking alternative routes to enter the Indian retail market indirectly via strategic licensing agreement, franchisee agreement and cash and carry wholesale trading (since 100 per cent FDI is allowed in wholesale trading).
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Segment analysis
The structure of Indian retail is developing rapidly with shopping malls becoming increasingly common in the large cities and development plans being projected. However, the traditional formats like hawkers, grocers and tobacconist shops
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continue to co-exist with the modern formats of retailing. Modern retailing has helped the companies to increase the consumption of their products for example: Indian consumers would normally consume the rice sold at the nearby kiranas viz. Kolam for daily use. With the introduction of organized retail, it has been noticed that the sale of Basmati rice has gone up by four times than it was a few years back; as a superior quality rice (Basmati) is now available at almost the same price as the normal rice at a local kirana. Thus, the way a product is displayed and promoted influences its sales. If the consumption continues to grow this way it can be said that the local market would go through a metamorphoses of a change and the local stores would soon become the things of the past or restricted to last minute unplanned buying. Food and grocery retail The food business in India is largely unorganized adding up to barely Rs.400 billion, with other large players adding another 50 per cent to that. The All India food consumption is close to Rs.9,000 billion, with the total urban consumption being around Rs.3,300 billion. This means that aggregate revenues of large food players is currently only 5 per cent of the total Indian market, and around 15-20 per cent of total urban food consumption. Most food is sold in the local wet market, vendors, roadside push cart sellers or tiny kirana stores. According to McKinsey report, the share of an Indian household's spending on food is one of the highest in the world, with 48 per cent of income being spent on food and beverages. Apparel retail The ready-mades and western outfits are growing at 40-45 per cent annually, as the market teems up with international brands and new entrants entering this segment
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creating an Rs.5 billion market for the premium grooming segment. The past few years has seen the sector aligning itself with global trends with retailing companies like Shoppers stop and Crossroads entering the fray to entice the middle class. However, it is estimated that this segment would grow to Rs. 3 billion in the next three years. Gems and Jewellery retail The gems and jewellery market is the key emerging area, accounting for a high proportion of retail spends. India is the largest consumer of gold in the world with an estimated annual consumption of 1000 tonnes, considering actual imports and recycled gold. The market for jewellery is estimated as upwards of Rs. 650 billion. Pharmaceutical retail Corporate Catalyst India A report on Indian Retail Industry The pharma retailing is estimated at about Rs. 300 billion, with 15 per cent of the 51 lakh retail stores in India being chemists. Pharma retailing will follow the trend of becoming more organised and corporatized as is seen in other retailing formats (food, apparel etc). A few corporate who have already forayed into this segment include Dr More pen (with Life spring and soon to be launched Tango), Medicine Shoppe, Apollo pharmacies, 98.4 from Global Health line Pvt Ltd, and the recently launched CRS Health from SAK Industries. In the south, RPG groups Health & Glow is already in this category, though it is not a pure play pharma retailer but more in the health and beauty care business.
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Music Retail The size of the Indian music industry, as per this Images-KSA Study, is estimated at Rs.11 billion of which about 36 percent is consumed by the pirated market and organized music retailing constitutes about 14 percent, equivalent to Rs.1.5 billion. Book retail The book industry is estimated at over Rs. 30 billion out of which organized retail accounts for only 7 per cent (at Rs.2.10 billion). This segment is seen to be emerging with text and curriculum books accounting to about 50 per cent of the total sales. The gifting habit in India is catching on fast with books enjoying a significant share, thus expecting this sector to grow by 15 per cent annually. Consumer durables retail The consumer durables market can be stratified into consumer electronics comprising of TV sets, audio systems, VCD players and others; and appliances like washing machines, microwave ovens, air conditioners (A/Cs). The existing size of this sector stands at an estimated US$ 4.5 Billion with organized retailing being at 5 per cent.
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China- the total sales from retail market in China reached US$755 billion in2005. However organized retailing in China accounts for only 20% of it. Also the fragmentation of China's retail market is so high that top 100 retailers makeup for only 10.5% of the total market. The registered sales of department stores grew by 25.7% and that of convenience stores grew by 36.5% in 2005. The Chinese retail market is expected to reach new highs as the population of strong middle class is expected to double by 2020 and mergers and acquisitions among retailers are3 going in great guns. The WTO restrictions are also expected to have a favourable impact on its retail sector. Key Players Analyzed This section covers the key facts about players currently operating in the China retail industry including Shanghai Bailian Group, Beijing Gome Electric, Carrefour, Wal-Mart Stores, Wuhan Zhongbai Group, and China Paradise Electronics Retail.
Japan- total annual sales for the Japanese retail industry for 2003 amounted to JPY 133,273 billion. Japan had 1.2 million retail establishments in June 2004and there were 42,738 specialty superstores. The year 2002 to 2004 the annuals sales per store increased by 3.8%. The growth was mainly driven by the grocery superstores but the number of superstores specializing in clothes gradually came down. The organized retail sector in Japan couldn't perform at its full efficiency because of collapse of the 'bubble economy' in the early 90s
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Spain- Spain Energy Industry Spain energy consumption is estimated to have reached 165 Million Tons of Oil Equivalent in 2006. Fossil fuels are the major sources for energy in Spain especially Oil (49.5%) & Natural Gas (19.9%). With the Spanish objective of energy security & diversity, and clean energy sources, renewable sources are expected to grow at rapid pace. Key Findings Spain is a net energy importer, with imports accounting for 99% of its total annual oil and natural gas consumption and 50% of its coal consumption key players in Spain energy such as Gas Natural Group, CEPS Group, Repsol YPF,Endesa S.A. and Gamesa.
United State- Retail is the second-largest industry in the U.S.by number of businesses and number of employees. Retail sales in the U.S. (total retail sales include the categories of gasoline,
US Retailing Format
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automobiles, and food service) were up about 3.8% in 2007, to $4.49 trillion(Plunkett Research estimate). The 2007 growth was driven partly by higher gasoline costs as well as by deep price discounting during the Christmas season by mass merchandisers and year-long discounting by automobile dealers. Brazil- Emerging as one of the world's largest retail markets. The sales in the industry have been growing strongly since 2003 and are expected to continue at this momentum only over the next few years as constantly declining inflation rate allows for continued expansion of real incomes (increasing demand for non durable consumer goods) and credit conditions ease (sustaining demand for durable goods). A process of consolidation of the retail industry has been underway but overall, the market remains relatively fragmented, indicating substantial scope for the larger players to grow their market share in future. The top five supermarket chains account for approximately 40% of total sales.. All the market values have been converted to US$ at May 2007 exchange rate where, 1 Brazil Real (BRL) = US$ 0.494 (Approx).
Penetration of Retail
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Proposition
Exclusive showrooms either Complete range available owned or franchised out by a for a given brand, manufacturer certified product quality a specific Greater choice to the
Specialty Stores
Focus
on
comparison
Department Stores
Large stores having a wide One stop shop catering variety organized departments clothing, of into products, to varied/ consumer different needs. such as wares,
house
furniture, appliances, toys, etc. Supermarkets Extremely large self-service One stop shop catering retail outlets to varied consumer needs Discount Stores Stores offering discounts on Low Prices the retail price through
selling high volumes and reaping economies of scale Hyper- mart Larger than a supermarket, Low prices, vast choice
sometimes with a warehouse available including services appearance, generally such as cafeterias
located in quieter parts of the city Convenience stores Small self-service formats Convenient location and
Shopping Malls
An enclosure having different Variety of shops formats of in-store retailers, available to each other. all under one roof.
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Lifestyle International
Lifestyle International Holdings Ltds principal activity is the operation of lifestyle department store and retail outlets. It focuses on high-end department store format.
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As of December 31, 2005, Lifestyle International operated its retailing business through two brand names, SOGO and Jiuguang. The SOGO Department Stores consists of the Company's flagship department store, SOGO CWB, in Causeway Bay, Hong Kong, and the Tsimshatsui store, which features a slightly different format that targets younger group of customers. The Jiuguang Department Store, which is located in Shanghai, has a similar business format as that of the SOGO store. During the year ended December 31, 2005, it launched SOGO CLUB, a lifestyle service center. Some of the Companys subsidiaries include Asia Kinetic Limited, Congenial Company Limited, Eastlord Development Limited, Everwin Worldwide Limited and Fine Shine Limited.
RPG Retail
RPG Enterprises is one of Indias largest business conglomerates, with a turnover of US$ 1.65 billion (Rs 7,472 crore) and assets worth US$ 1.8 billion. Since its inception in 1979, RPG Enterprises has been one of the fastest growing groups in India with more than 20 companies operating successfully in 7 business sectors: Retail, IT & Communications, Entertainment, Power, Transmission, Tyres and Life Sciences.
Shoppers Stop
The foundation of Shoppers Stop was laid on October 27, 1991 by the K. Raheja Corp. group of companies. From its inception, Shoppers Stop has progressed from being a single brand shop to becoming a Fashion & Lifestyle store for the family. Shoppers Stop is the only retailer from India to become a member of the prestigious Intercontinental Group of Departmental Stores (IGDS). The IGDS consists of 29 experienced retailers from all over the world, which include established stores like
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Selfridges (England), Karstadt (Germany), Shanghai No. 1 (China), Matahari (Indonesia), Takashimaya (Japan), C K Tang (Singapore), Manor (Switzerland) and Lamcy Plaza (Dubai). This membership is restricted to one member organization per country/region.
Trent (Tata)
Trent (Tata) was established in 1998, Trent operates some of the nations largest and fastest growing retail store chains. A beginning was made in 1998 with Westside, a lifestyle retail chain, which was followed up in 2004 with Star India Bazaar, a hypermarket with a large assortment of products at the lowest prices. In 2005, it acquired Landmark, Indias largest book and music retailer. In a recently signed deal, Trent has agreed to anchor 12 malls set up by DLF Universal Ltd across the country, at its Westside, Landmark and Star India Bazaar outlets. This amounts to about 27 locations, totalling to about a million square feet of space.
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wholesaler deals only with smaller retailers and not consumer. Metro AG of Germany was the first significant global player to enter India through this route Strategic licensing agreements - Foreign company enters into a licensing agreement with a domestic retailer. Mango, the Spanisn apparel brand has entered India through this route with an agreement with Piramyd, Mumbai, SPAR entered into a similar agreement with Radhakrishna Foodlands Pvt. Ltd
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the market share of organised modern retail is just over 4 per cent of the total retail industry, thereby leaving a huge untapped opportunity. The sector is expected to see an investment of over $30 billion within the next 4-5 years, catapulting modern retail in the country to $175-200 billion by 2016, according to Technopak estimates.
Investment Opportunities
Potential For Investment: The total estimated Investment Opportunity in the retail sector is around US$ 5-6 Billion in the Next five years. Location: with modern retail formats having made their foray into the top cities namely Hyderabad, Coimbatore, Ahmedabad, Mumbai, Pune, Chennai,
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Bangalore, Delhi, Nagpur there exists tremendous potential in two tier towns over the next 5 years. Sectors with High Growth Potential: Certain segments that promise a high growth are Food and Grocery Clothing Furniture and Fixtures Pharmacy Durables, Footwear & Leather, Watch & Jewellery
Fastest Growing Formats: Some of the formats that offer good growth potential are: Speciality and Super Market Hyper Market Discount stores Department Stores Convenience Stores and E-Retailing
Supply Chain Infrastructure: Supply chain infrastructure in terms of cold chain and Logistics. Rural Retail: Retail sector offers opportunities for exploration and investment in rural areas, with Corporates and Entrepreneurs having made a foray in the past. India's largely rural population has caught the eye of retailers looking for new areas of growth. ITC launched the country's first rural mall ' Chaupal Sagar', offering a diverse product range from FMCG to electronics appliance to automobiles, attempting to provide farmers a one-stop destination for all of their needs. There has been yet another initiative by the DCM Sriram Group called the ' Hariyali Bazaar', that has initially started off by providing farm related inputs and services but plans to introduce the complete shopping basket in due course. Other corporate bodies
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include Escorts and Tata Chemicals (with Tata Kisan Sansar) setting up agri-stores to provide products/services targeted at the farmer in order to tap the vast rural market. Wholesale Trading: wholesale trading also holds huge potential for growth. German giant Metro AG and South African Shoprite Holdings have already made headway in this segment by setting up stores selling merchandise on a wholesale basis in Bangalore and Mumbai respectively. These new-format cash-and-carry stores attract large volumes from a sizeable number of retailers who do not have to maintain relationships with multiple suppliers for all their needs. Cheap Consumer Credit
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So far, modern-format retail has scaled up its presence in the metros anda few cities. However, the future will see tier-II and, may be; even tier-III cities attract more retail outlets. Consumer mindset and behaviour is changing in these cities. A growing base of affluent, upwardly mobile consumers have similar needs and desires as their urban counterparts and they are looking for instant gratification. With satellite television, internet and mobile communication available in smaller cities, people are increasingly exposed to how the West lives. Tier-II and tier-III cities present an enormous growth potential over the next five years and arethe future of modern retail in India MAJOR CHALLENGES
1.Amalgamation or Confusion- According to TATA Strategic Management Group, India has a high density retail structure of 1 retail outlet per 90 people and is the 9th largest retail market in the world. But the structure of the retail industry in India is in utter jumble. The parallel operation of convenience stores, supermarkets, hypermarkets and specialty stores in the economy is bewildering. According to the 'Wheel of Retailing Theory', certain loopholes in tone of the forms of marketing can get communicated to other forms also. 2. What to sell- Another bemusement is the category of items to be offered. According to researches, 41 percent of total consumption expenditure goes to the segment of food and groceries and it accounts for 77 percent of total retail sales. So it is obvious that this is the most preferred section of retailers. But unfortunately the foible taste bias for 'wet market' (i.e. fresh food available through hawkers) has marred this prospect also. Therefore supply chain management, storage of fresh perishable foods and persuading the customers that the food is inexpensive despite being fresh are genuine challenges to the newcomers. Diversifying the product base
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to consumer products such as readymade garments, furnitures, mobiles and computers can mitigate the losses, if any from food marketing and also broaden the reach to consumers. 3. Nostalgia- Indian shopping habits are no different. People tend to attach qualities like honesty, fair price, good behaviour etc. to shopkeepers with whom they have been dealing right from childhood. They find no reason to go to a distant megaspore without any genuine reason. This problem is difficult to deal with as it demands a change in long-formed mindset. Organized retail outlets can overcome this problem by employing eligible local peoples who can interact in vernacular language and win the confidence of people. 4. Information Technology- This is a major problem and India must act fast if it wishes to create a smooth field for organized retailing. Digitization of services will make transfer of goods easy and an improvement in supply chain management will definitely play a significant role in attracting more consumers and less consumer grievances. Besides, it will generate easier payments option for customer and easier money movement for the CEOs of these highly diversified malls.
MINOR CHALLENGES 1. Human resource crunch- the concern for insufficient manpower in the industry has been in news for the last few months. This fear is somehow unfounded. The retail industry according to recent reports is growing at a rate of100 percent. Kishore Biyani's Future Group i.e. the Big Bazaar chain of retail outlet alone provides employment to more than 18,000 people and is planning to expand its employment base to 34,000 by June 2008. If we add to this the foray by mega players like Reliance and Bharti-Walmart then the fear can surely turn into a misperception. Retailing mainly deals with hard-selling of space, trade of stocks and building of
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relationships. Since most of the openings are for front line shop people, a graduation will suffice. Nowadays many institutes also provide post-HSC and post-graduate retail-specific courses. 2. Hindrances from government- Some political parties want the government to amend laws and improve curbs so that the mega players can't openly decimate the unorganized retail sector. This is a conclusion based on a myopic outlook and must be amended for a long term strategy. The fear is baseless because of the reasons mentioned above. The mega stores will no doubt provide employment to the less educated masses. Also taking business away especially from small food vendors is more easily said than done. Instead the limiting move will send wrong signals to the investors and will ward off investments when the states need it most. Allowing 51 percent retail FDI in single brand retailing is a welcome move in this direction. It is expected that the government will create further opportunities for the organized retail to come up as home grown investment is always sweeter than foreign investment.
"Right Place, Right choice Location is the most important ingredient for any business that relies on customers, and is typically the prime consideration in a customers store choice. Locations decisions are harder to change because retailers have to either make sustainable investments to buy and develop real estate or commit to long term lease with developers. When formulating decision about where to locate, the retailer must refer to the strategic plan: Investigate alternative trading areas. Determine the type of desirable store location Evaluate alternative specific store sites
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2) MERCHANDISE: The primary goal of the most retailers is to sell the right kind of merchandise and nothing is more central to the strategic thrust of the retailing firm. Merchandising consists of activities involved in acquiring particular goods and services and making them available at a place, time and quantity that enable the retailer to reach its goals. Merchandising is perhaps, the most important function for any retail organization, as it decides what finally goes on shelf of the store.
3) PRICING: Pricing is a crucial strategic variable due to its direct relationship with a firms goal and its interaction with other retailing elements. The importance of pricing decisions is growing because today's customers are looking for good value when they buy merchandise and services. Price is the easiest and quickest variable to change.
4) TARGET AUDIENCE:
"Consumer the prime mover" "Consumer Pull", however, seems to be the most important driving factor behind the sustenance of the industry. The purchasing power of the customers has increased to a great extent, with the influencing the retail industry to a great extent, a variety of other factors also seem to fuel the retailing boom. 5) SCALE OF OPERATIONS: Scale of operations includes all the supply chain activities, which are carried out in the business. It is one of the challenges that the Indian retailers are facing. The cost of business operations is very high in India.
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35
Yardstick
Situation in 06-07
Situation in 08-09
Rs 12,00,000 crore
5%
5.7%
Rs 35,000 crore
Rs 55,000 crore
Share of organized market in theSector Forecasts (after 5 years) aboutsize of organized retail market
3.4%
4.6%
Forecasts about growth rate oforganized retail market Comparison of Retail Industry
Around 30%
Around 40%
The above table clearly shows that the retail market as well as the mind set required for it has experienced a thorough reversal in the last three years. This is just the beginning and Indians are sanguine that the sector will see rosy days in the future. This confidence has helped India acquire the No.1 position among30 most attractive retailing destinations in the world according to the Global Retail Development Index of 2005 (by AT Kearney, India). Among emerging markets, India holds the second position after China in the list of most favoured retail destinations Past Retail Industry in India Before the decade of eighties, India with hundreds of towns and cities was a nation striving for development. The evolution was being witnessed at various levels and
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the people of the nation were learning to play different roles as businessmen and consumers. The foundation for a strong economy were being laid, youth were beckoning new awareness in all spheres. And this brought in an opportunity for retail industry to flourish. First in the metros and major cities later to impact sub urban and rural market as well. Retailing in India at this stage was completely unorganized and it thrived as separate entities operated by small and medium entrepreneurs in their own territories. There was lack of international exposure and only a few Indian companies explored the retail platform on a larger scale. From overseas only companies like Levi's, Pepe, Marks and Spencer etc. had entered targeting upper middle and rich classes of Indians. However as more than 50 %population was formed by lower and lower middle class people, the market was not completely captured. This was later realized by brands like Big Bazaar and Pantaloons who made their products and services accessible to all classes of people and today the success of these brands proves the potential of Indian retail market. A great shift that ushered in the Indian Retail Revolution was the eruption of Malls across all regional markets. Now at its peak, the mall culture actually brought in the organized format for Retailing in India which was absent earlier. To your surprise there was not a single mall in India a decade before and just a few years ago only a handful of them were striving, today there are more than 50 malls across different cities and 2 years from now around 500 malls are predicted to come up.
Present Retail Industry in India: At present the Retail industry in India is accelerating. Though India is still not at an equal pace with other Asian counterparts, Indian is geared to become a major player in the Retail Market. The fact that most of the developed nations are saturated and the developing ones still not prepared, India secures a great position in the international market. Also with a highly diverse
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demography, India provides immense scope for companies brining in different products targeting different consumers. According to the Global Retail Development Index, India is positioned as the foremost destination for Retail investment and business development. The factor that is presently playing a significant role here is the fact that a large section of Indian population is in the age group of 20-34 with a considerably high purchasing power; this has caused the increase in the demand in the urban market resulting in consistent growth in the Retail business. And though the metros and other tier 1 cities continue to sustain Retail growth, the buzz has now shifted from these great cities to lesser known ones. As the spending power is no longer limited to metros, every tier 2 city in the country has good market for almost every product or service. Due to this, tier 2cities like Chandigarh, Coimbatore, Pune, Kolkatta, Ahmedabad, Baroda,Hyderabad, Cochin, Nagpur, Indore, Trivandrum etc. provide a good platform for a brand to enter Indian market. However there are a few precautions for every brand that explores Indian market. As Indian consumers are very curious and have a broad perspective, they respond well to a new product or concept and there are very fair chances ofa brand surviving well, but every Indian consumer be it an urbanite or a small town dweller needs a feeling of value for money. Although labeled as tight-fisted, Indian consumers are great spenders once they realize that they are getting value for their money. Also new product /service concepts from the western world are better adopted first by the urban Indians, the smaller markets respond well to the need based retailing rather than luxury concepts. As the Indian retailing is getting more and more organized various retail formats are emerging to capture the potential of the market. Mega Malls Multiplexes
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Large and small supermarkets Hypermarkets Departmental stores are a few formats which flourishing in the both big and small regional markets .As the major cities have made the present retail scenario pleasant, the future of the Indian Retailing industry lies in the rural regions. Catering to these consumers will bring tremendous business to brands from every sector. However as the market expands companies entering India will have to be more cautious with their strategic plans.
According to a study the size of the Indian Retail market is currently estimated at Rs. 704 crores which accounts for a meagre 3 % of the total retail market. As the market becomes more and more organized the Indian retail industry will gain greater worth. The Retail sector in the small towns and cities will increase by 50 to 60 % pertaining to easy and inexpensive availability of land and demand among consumers. Growth in India Real estate sector is also complementing the Retail sector and thus it becomes a strong feature for the future trend. Over a period of next 4 years there will be a retail space demand of 40 million sq. ft. However with growing real estate sector space constraint will not be there to meet this demand. The growth in the retail sector is also caused by the development of retail specific properties like malls and multiplexes. According to a report, from the year 2003 to 2008 the retail sales are growing at a rate of 8.3% per annum. With this the organized retail which currently has only 3% of the total market share will acquire 15-20 % of the market share by the year 2010.Factors that are playing a role in fuelling the bright future of the Indian Retail are as follows:
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(1) The income of an average Indian is increasing and thus there is a proportional increase in the purchasing power. (2) The infrastructure is improving greatly in all regions is benefiting the market. (3) Indian economy and its policies are also becoming more and more liberal (4) Making way for a wide range of companies to enter Indian market. (5) Indian population has learnt to become a good consumer and all national and international brands are benefiting with this new awareness. (6) Another great factor is the internet revolution, which is allowing foreign brands to understand Indian consumers and influence them before entering the market. Due to the reach of media in the remotest of the markets, consumers are now aware of the global products and it helps brands to build themselves faster in a new region However despite these factors contributing to the growth of Indian retail Industry, there are a few challenges that the industry faces which need to be dealt with in order to realize the complete scope of growth in Indian market. Foreign direct investment is not allowed in retail sector, which can be a concern for many brands. But Franchise agreements circumvent this problem. Along with this regulations and local laws and real estate purchase restrictions bring up challenges. And with Good Planning, Timely Implementation and a media campaign that touches Indian consumers any brand can go far ahead in the Indian Retail Revolution.
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IMPACT OF RETAIL INDUSTRY IN GLOBAL WORLD Organized retailing is spreading and making its presence felt in different parts of the Country. The trend in grocery retailing however, has been slightly different with a Growth concentration in the South. Though there was traditional family owned retail Chains in South India such as Nilgiris as early as 1905, the retail revolution happened With the RPG group starting the Food world chain of food retail outlets in South India With focus on Chennai, Hyderabad and Bangalore markets, preliminarily. The Experiment has reaped rich dividends and the group is now foraying into other Territories as well as. Owing to the success of Food world model of RPG group, several new models such as Trinethra, Subhiksha, Margin Free and others have made their foray into this sector albeit at regional levels. Today the food retail sector in India is about Rupees Ten Lakh Corers (USD 200 billions) of which the organized food retail segment is about 1 per cent and increasing at a pace of over 20% year to year. To be successful in food retailing in India essentially means to draw away shoppers from, the roadside hawkers and Kiranas stores to supermarkets. This transition can be achieved to some extent through pricing, so the success of afoot retailer depends on how best he understands and squeezes his supply chain. The other major factor is that of Convenience shopping which the supermarket has the edge over the traditional Kiranas Stores. On an average a supermarket stocks up to 5000 SKUs against few hundred stocked at an average Kiranas stores. Though with excellent potential, India poses a complex situation for a retailer, as this is a Country where each State is a mini-Country by itself. The demographys of a region Vary quite distinctly from others. In order to appeal to all classes of the society, retail Stores would have to identify with different lifestyles. Hence we may find more of Regional players and it would take enormously long time before nationwide successful Retail
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chains emerge. This is the main reason as to why the successful retail chains in the Countries today operate at regional segments only and are not aiming at nationwide Presence, at least for the time being. In the organized retail industry, the gestation periods are long, institutional funding is Difficult, and there is none or little Government support. But the belief among top Retailer chains in the country is that the industry will see large investments coming once. The current ban on foreign direct investment is lifted. But that could be two-three years Away. Food and grocery retailing is a tough business in India with margins being very Low and consumers not dissatisfied with existing shops where they buy. For example, the next-door grocery shopkeeper is smart and delivers good customer service, though not value.
As of now, while Chennai has about five organized food and grocery retail chains, other big cities such as Delhi, Bangalore, and Mumbai average only two-three such chains. Almost all food retail players have been region specific as far as geographical presence is concerned in the country. To illustrate with examples, the RPG Group's Food World, Nilgiris, Margin Free, Giant,Varkey's and Subhiksha, all of which are more or less spread in the Southern region; Sabka Bazaar has a presence only in and around Delhi; names such as Haiko and Radhakrishna Foodland are Mumbai-centric; while Adani is Ahmedabad-centric. Industry topography in India is such that spreading presence across cities is a tough call. As pointed out by many experts, organized food and grocery retailing chains going national requires significant investments. Retailing within this sector is not just about the front-end, but involves complex supply chain and logistics issues as well. The trend and mindset of the present retailer chains in India can be best understood by studying Food-World as an example, which came in first in the food and grocery retailing sector. The chain has no plans to venture beyond the Southern region just yet. Current plans are to
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focus on the Southern markets and achieve saturation. The intention is that by 2005, they could look at the other regions. Subhiksha, a Chennai based discount chain, too wants to be the principal store of purchase for at least 40 per cent of all consumers living within500-750 meters of the store, that is, within walking distance. This makes the point very clear that the strategy among most existing retail chains of various formats is to completely saturate the markets where they are already established players and then move on to virtually untouched areas where the challenge of sourcing resources and extending their supply chain model to best suit the size and expanse of the market would be a challenging task. Meanwhile, the RPG group plans to take its new formats such as Giant Hypermarkets national over the next three years. Grocery is a large component of this format, but not the only one. To elaborate on the hurdles of going pan-Indian, fundamentally, the way a basic grocery retailing model works is that the high set-up costs in terms of setting up buying/ distribution infrastructure is gradually amortized over a larger number of stores. The back-end costs without distribution centre costs, or what in retail jargon is called retail administration costs, should stabilize at around 2.5 per cent to 3 per cent of sales. There are many problems face by Retail industry in Indian Market. They are following:The format does not suit rural India: While the format suits the urban areas, it does not suit the rural areas in a country like India. Today, in Indian, organized retailing is confined to class A cities, the 23 largest cities. About 82per cent of organized retailing comes from the top six cities and another 12percent from the next four. Thus, the top 10 cities account for 94 per cent of all organized retailing in India. The scattered location of consumers has been the main deterrent to the rapid spread of the idea in the rural areas.
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Purchasing patterns not very conducive: Even in urban centres, the purchasing patterns of the Indian consumers differ from those of westerners. Whereas in the west, the purchases are spread better over the month, in India. Purchases are by and large made in the first week of the month. Theirs perhaps has a correlation to patterns of payment of wages; Purchasing patterns differ also because of the difference in the eating habits of people. Inadequate growth of brands: Inadequate growth of brands is another factor, In India, branding was almost not-existent in convenience products until recently; this has naturally inhibited retailing through sophisticated chains. Supply chain problems: As suppliers are not properly organized in the country, replenishment of stock poses problems for large chains. Source development also poses special problems.
Being family businesses, retailing enterprises have limitation in expansion; Yet another reason for the slow pick up of mega retailing idea in India is that all along retail enterprises have been family concerns. And, family businesses usually have a limitation in expansion, Example of Viveks; The Viveks (Formerly Viveks& Co. ) of Chennai, is an example. For the past several years, it remained rather small because of its family character. During the three decades from 1965 to 1995, it had just three showrooms. It was a family concern and remained for a long time, a single store outfit, managed by the father and assisted by his three sons. Once the father grew old, the sons started managing the business, and because there were three sons engaged in the business, the enterprise went in for three showrooms. In recent years, however, it has emerged as a major chain, as it has shed its family business character, now it is actually the largest consumer durable chain in the country. It has big sales volumes and multiple locations.
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Real estate problems; Real estate is an integral requirement of large scale chain store operation. One needs a large number of stores in each city to achieve optimum scale. Also, big chains have to operate in several cities. Real-estate thus becomes crucial. That is why groups that have been in real estate and hotel businesses are more comfortable in branching off into retailing. For other firms, real estate development is a problem; they do not command property in prime locations. Other Limitation of Retail Industry The organized retail industry in India is faced with stiff competition from the unorganized sector. There is a shortage of quality real estate and infrastructure requirements in our country. Opposition to Foreign Direct Investment from small traders affects retail industry. A very high stamp duty on transfer of property affects the industry. Shortage of retail space in central and downtown locations also hinders the growth of retail industry. Presence of strong Pro-tenancy laws makes it difficult to evict tenants and this is posing problems. Land-use conversion is time consuming and becoming complex. For settling property disputes, it consumes lot of time. Non residents are not allowed to own property except they are of Indian origin. Inadequacies in infrastructure such as lack of high quality road networks, power shortages and insufficient storage spaces
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Shoppers Stop Voucher Since its inception in the year 1991, it has progressed from a single branded shop to an entire fashion and lifestyle store for a family. Today, the Shoppers Stop has become a household name and is known all around India for its highest quality of products and services and most of all to provide a unique shopping experience to the shoppers. With immense amount of credibility and expertise, Shoppers Stop has moved forward to become the highest bench mark of Indian retail industry. By providing Shoppers Stop Voucher to its regular customers, the chain provides a token of concern and loyalty towards the shoppers. Shoppers Stop Gift Voucher Shopping at Shoppers Stop is not all about shopping but it is also an experience that you feel. Similarly a Shoppers Stop Voucher is not all about gifting but they are a symbol of the joys of living. Usually, these vouchers are valid at all the Shoppers Stop outlets, HomeStop, MotherCare, Arcelia, Crossword and Stop &Go for one year from the date of issue. A Shoppers Stop Voucher can prove to be a great gift item for your loved one as through these vouchers, they will be able to purchase whatever they like in the store, while the payments are already been made by you at the time of purchasing the voucher. Some items are usually excluded from being purchased through a Shoppers Stop Voucher which may include mobile phones and accessories, gold coins and jewellery. Send Gift Voucher You have to be careful while sending a Shoppers Stop Voucher to your loved one in India because if it is lost, stolen or misplaced in the way, it is usually not reissued and your money will go wasted. Earlier, the only option you could use to send the Shoppers Stop Voucher to your family in India was through courier, but now with
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the availability of Internet, you can send it right at your family doorstep directly from the company itself. You should also make sure that the person you are sending the Shoppers Stop Voucher utilizes the full voucher as no cash will be refunded or no credit note will be issued if the gift voucher has been only partially utilized. In addition to that, these vouchers cannot be substituted for cash or smaller denominations of gift vouchers. Therefore, you must make sure that the person makes full use of the voucher so that your money does not go wasted. Send Shoppers Stop Gift Voucher A Shoppers Stop Voucher may range from Rs. 50 to Rs. 2000 and even more than that, and with this, your loved ones can purchase anything they want from their nearest Shoppers Stop outlet. There are two types of a Shoppers Stop Voucher, one for the personal gifting and other one for the corporate gifting. Personal gifting vouchers are used when you want to wish a birthday, anniversary or festival to your loved ones, friends or family in India while corporate gifting vouchers are used by corporate houses to reward and gift their employees, dealers and distributors, to gift their clients or as festival offers or sales and marketing promotions. Vision: To be a Global Retailer in India and Maintain No.1 position in the Indian Market in the Department Store Category. Positioning Shoppers Stop is positioned as a family store delivering a complete shopping experience defined by its mission, vision and values. 1991: Shoppers' Stop launches at Andheri Setting up shop in 1991 with its flagship store in Andheri, Mumbai, Shoppers Stop is a member of the K. Raheja Corp. of Companies. Shoppers Stop is the first retail
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venture by the K. Raheja Corp. Promoted by Mr. Chandru L. Raheja, Mr. Ravi C. Raheja and Mr. Neel C. Raheja, the K. Raheja Corp. have been leaders in the construction business for over 48 years. With its wide range of merchandise, exclusive shop-in-shop counters of international brands and world-class customer service, Shoppers Stop brought international standards of shopping to the Indian consumer providing them with aworld class shopping experience. India 2000 & Beyond Expanding its operations to Bangalore, Hyderabad, Jaipur, Delhi, Chennai, Mumbai (Andheri, Bandra, Chembur, Kandivli, Mulund), Pune, Gurgaon and Kolkata, Shoppers Stop is today recognised as Indias premier shopping destination. With a customer entry of about 50,000 customers a day, a national presence with over 6, 00,000 square feet of retail space and stocking over 250 brands of garments and accessories, Shoppers Stop has clearly become a one stop shop for all customers. Customer Profile Shoppers Stops core customers represent a strong SEC A skew. They fall between the age group of 16 years to 35 years, the majority of them being families and young couples with a monthly household income above Rs. 20000 and an annual spend of Rs.15000. A large number of Non - Resident Indians visit the shop for ethnic clothes in the international environment they are accustomed to. Range of merchandise The stores offer a complete range of apparel and lifestyle accessories for the entire family. From apparel brands like Provogue, Color Plus, Arrow, Levis, Scullers, Zodiac to cosmetic brands like Lakme, Chambor, Le Teint Ricci etc., Shoppers Stop caters to every lifestyle need. Shoppers' Stop retails its own line of clothing namely Stop, Life Kashish, Vettorio Fratini and DIY. The merchandise at Shoppers Stop is
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sold at a quality and price assurance backed by its guarantee stamp on every bill. Their motto: We are responsible for the goods we sell. Customer Rewards The First Citizen Shoppers Stops customer loyalty program is called The First Citizen. The program offers its members an opportunity to collect points and avail of innumerable special benefits. Currently, Shoppers Stop has a database of over 2.5 lakh members who contribute to nearly 50% of the total sales of Shoppers Stop. International Affiliations Shoppers Stop is the only retailer from India to become a member of the prestigious Intercontinental Group of Departmental Stores (IGDS). The IGDS consists of 29 experienced retailers from all over the world, which include established stores like Selfridges (England), Karstadt (Germany), Shanghai No. 1 (China), Matahari (Indonesia), Takashimaya (Japan), C K Tang (Singapore), Manor (Switzerland) and Lamcy Plaza (Dubai). This membership is restricted to one member organization per country/region. Acquisitions The Organisation, in 2000, along with ICICI ventures also acquired the reputed bookstore, Crossword, which offers the widest range of books along with CD-ROM, music, stationery and toys. Services like Dial-a-book, Fax-a-book and Email-a-book enable customers to shop from their homes. Crossword currently has 18 Stores. The IT Backbone Realising the role of IT way back in 1991, Shoppers Stop was among the first few retailers to use scanners and barcodes and completely computerise its operations. Today it is one of the few stores in India to have retail ERP in place, which is now being integrated with Oracle Financials and the Arthur Planning System, the best
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retail planning system in the world. With the help of the ERP, they are able to replicate stores, open new stores faster and get information about merchandise and customers online, which reduces the turnaround time in taking quick decision. Supply Chain Management Understanding the importance of distribution and logistics in ensuring that merchandise is available on the shop floors, has led Shoppers Stop to streamline its supply chain. The company has developed process manuals for each part of the logistics chain. These modules include vendor management, purchase order management, stock receiving systems, purchase verification and inventory build up, generation and fixing of price and store tags, despatch of stocks to the retail floor and forwarding of bills for payment. Future Plans Shoppers Stop aims to position itself as a global retailer. The company intends to bring the worlds best retail technology, retail practices and sales to India. Currently, they are adding 4 to 5 new stores every year.
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LITERATURE REVIEW
Store Environment
Retailers are known to design store environments in a manner that will enhance consumers positive feelings, under the assumption that this will lead to desired consumer behaviours, such as a higher willingness to purchase or stay in the store for longer. The importance of store environment in enhancing the shopping experiences of consumers has long been appreciated. A study by Mehrabian and Russell (1974) was one of the first to be based on the stimulus-organic body-response (SOR) theory to construct the M-R environmental psychology model and explore the influence of the buying environment on customer purchases.
Figure 2-1 M-R Environmental Psychology Model (Mehrabian-Russell Model) Source: Mehrabian and Russell (1974)
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The M-R environmental psychology model suggests that, when individuals face the external environment, there are two opposing behaviours: approach and avoidance. This model only applies to normal environments; until Donvan and Rossiter (1982) pioneered the application of the M-R environmental psychology model to the retail industry, it was not appropriate for use as a theoretical structure for such. Doncan and Rossiters 1982 study found that store atmosphere can be represented by the primary emotional states of arousal and pleasure; these are highly important intervening variables in influencing patronage behavior and intention. Also, the pleasure emotion and arousal emotion induced by the environment can cause the customer to remain longer in the store and experience a greater buying impulse; interaction with store employees also increases. Time and money expenditures can increase by an average of 12%. Donovan, Rossiter, Marcooley and Nesdale (1994) further tested the M-R environmental psychology model, measuring the emotional state of customers, and found that the emotional state of pleasure will lead to greater time and money spent by customers. Because scholars have differing views regarding categorization of environments, this study follows Baker et al. (2002) in using three different environment cues as the store environment dimension: (1) Store design cues refers to all aesthetic-related objects; tangible and visible environment components exist in the forefront of the consumers perception; such are the more obvious sources of visual stimulation to the customer, and include internal and external architecture, decorations, color, product arrangement, signs, space arrangement, etc. (2) Store music cues: music is the intangible background condition of the environment; the nonvisual feeling can affect the consumers subconscious. This includes music genre, volume, and environment noisiness. Customers generally do not immediately detect or realize such cues, but the cue of music has a pronounced and deep influence on the emotions and behaviour of people. (3) Store employee cues refers to the level of feeling related to stimulation from employees, including employee appearance, friendliness, number, professional ability ...etc. Though most studies of store environment have not store employee stimulation, consumers often are strongly influenced by store employees when selecting products; customer loyalty and perception of the store are also often dependent on employee ability, amiability, and special characteristics. With regard to the influence of design cues on emotion, Bitner (1986) found that the cleanliness and orderliness of the store environment exerts significant influence on customer appraisal and selection. Orderliness in product arrangement and display allows
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the customer to browse and choose products with less difficulty, while clean and bright stores lead the consumer to develop more positive perceptions. Ward et al. (1992) pointed out that the space arrangement of stores will influence the movement of customers. Bellizzi and Hite (1992) found that the colour of walls, lights, and arrangements have subtle influence on the consciousness and behaviour of customers. Warm colours more easily attract people to shop in the sore, while cold colors in interior design tend to extend shopping time of customers. The study also found that colors in the blue range show greater positive correlation with the satisfaction of customers and sales staff compared to colours in the red range. Mehrabian and Russell (1974) suggest that the influence of the physical environment primarily acts through feelings. As a result, a poor store design will reduce the joys of shopping and lead to degradation of customer buying emotion (Spies, Hesse and Loesch, 1997). Also, past studies suggest that there exists a connection between normal store environments and emotion (Wakefield and Baker, 1998).
One recent comprehensive study on the influence of store environment was conducted by Baker et al (2002). This study shows a significantly positive influence of a store environment on consumer patronage. Three types of store environment cues were studied in their research: ambient, design, and social. Ambient cues refer to the background characteristics of a store, such as temperature, lighting, noise, music, and ambient scent. Design cues include stimuli that exist at the forefront of consumers awareness, such as architecture, color, and materials. Social cues refer to conditions related to the number, type, and behavior of customers and employees, and similar characteristics (Bitner, 1992). Many researchers argue that the influence of store environment on consumer purchase behaviour is mediated by the consumers emotional state. Donovan and Rossiter (1982) were one of the earliest in studying the mediating role of consumer emotion in this context. They suggest that store atmosphere, engendered by the usual myriad of in-store variables, is represented psychologically by consumers in terms of two major emotional states: pleasure and arousal. These two emotional states are significant mediators of shopping behaviours within the store, such as enjoyment of shopping in the store, time spent browsing and exploring the stores offerings, willingness to talk to sales personnel, tendency to spend more money than originally planned, and likelihood of returning to the store. Bitner (1992) argues that the physical environment of the store may elicit cognitive, emotional, and physiological responses which will influence consumers approach or
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avoidance behaviour in the retailing context. Approach behavior may include staying longer in the store, spending more money, and/or buying more merchandise. Bitner also suggests that the strength and direction of the relation between store environment and a consumers response to the environment is moderated by personal and situational factors. Previous studies have shown that personality traits can influence a persons reaction to the physical surroundings (Mehrabian and Russell, 1974; Russell and Snodgrass, 1987). An individuals response to an environment often depends on situational factors as well, such as their plans or purposes for being in the environment (Russell and Snodgrass, 1987). Donovan et al (1994) found that the emotional states of a consumer induced by store environments (e.g., pleasure and arousal) appear to be a strong reason why consumers spend extra time in certain stores, and spend more money than initially intended. Their research also suggests that the contribution of these emotional variables to consumer behaviour is independent of cognitive variables such as individual perceptions of quality and price. However, impulse buying or overspending may result from a desire to alleviate negative emotions as well as from experiencing positive emotions. In other words, people may have various negatively-originated or positively-originated motives for overspending. Donovan et al. (1994) believes that further classification of the relationship between shopping motives and emotional states is needed. Sherman et al (1997) also studied the mediating role of consumer emotions in the influence of store environment on consumer purchase behaviour. Their results suggest that although cognitive factors may largely account for store selection and for most planned purchases within the store, the environment in the store and the emotional state of consumers may be important determinants of certain purchase behaviours, such as impulse buying. Sherman et. al. (1997) recommends that future studies investigate different types of shoppers and their motivations when entering the store and how various consumer groups react to store image and atmosphere. (Stokols, 1972). In addition to ambient, design, and social cues, crowding is another factor that researchers believe to have an influence on consumer shopping behavior. Perceived crowding is a result of physical, social, and personal factors that sensitize the individual to actual or potential problems arising from scarce space .When the number of people, objects, or both, in a limited space restricts or interferes with activities and goal achievement, an individual will perceive the environment to be crowded. Research has shown that the level of in-store crowding perceived by shoppers can affect their patronage
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decisions as well as their satisfaction with overall shopping activity (Eroglu and Machleit, 1990).
Berman and Evans (1995) divide atmospheric stimuli or elements into four categories: the exterior of the store, the general interior, the layout and design variables, and the point- of-purchase and decoration variables. Natalie Mitchell and Harmen Oppewal (2009), study on store environment was administered online (n=861). The results suggested that a premium store atmosphere not only produce higher expectations, but also higher patronage intentions. Merchandise does play a role in patronage intentions in conjunction with atmosphere. Results suggest retailers should consider the salespersons role prior to investing in improving their store atmosphere, to ensure that all components reinforce the desired store experience. Study suggest that customer perceptions of salespeople should be enhanced during visits to stores that have a prestige store ambience compared with a discount store ambience primarily because of superior atmospherics. Krishnamoorthy Gunasekaran Hemalathaa and Kuthalingam Ravichandranb, (2009). Outcome of their study that older generation Y consumers are visiting malls for various motivational reasons.. Various motivational factors have significant association with demographic variables. These motivational are as: - Social shopping, which is seen as the most dominating factor. Second one is Adventure shopping, refers to shopping for stimulation, adventure, and the feeling of being in another world. third one Idea shopping, They go shopping to keep up with trends, to keep up with new fashions, to see what new products are available and to experience new things. forth one is Role shopping ,that reflects the enjoyment that shoppers derive from shopping for others. Fifth important factor is the Value shopping, Value shopping refers to shopping for sales, looking for discounts, and hunting for bargains. The last factor is the Gratification shopping. Gratification shopping, involves shopping for, stress relief, shopping to alleviate a negative mood, and shopping as a special treat to oneself. Velitchka D. Kaltcheva & Barton A.Weitz,(2006) Kaltcheva & Weitz study on creating exciting store environment result find out that due to significant impact of store environment on consumer behavior, retailers devote considerable resources to store design and merchandise presentation activities. For example, Toys R Us spent $35 million to make its
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Times Square New York store the ultimate toy store that is the personification of every kids dream (Prior 2001, p. 46). Some retailers (e.g., The Sharper Image, Bass Pro Shops, Barnes & Noble) attempt to create engaging environments in their stores that encourage shopping. The objective of research is to present and provide empirical support for a theoretical framework that outlines the impact of arousal-inducing features in a store environment on consumer affective responses to the environment and subsequent shopping behaviors in the environment. Kaltcheva & weitz study identify three dimensions of effective response motivational orientation, arousal, and pleasantness, that effect the shopping environment or consumer shopping behaviour positively. The first motivational orientation (e.g., economic, utilitarian) involves consumers engaging in shopping out of necessity to obtain needed products, services, or information with little or no inherent satisfaction derived from the shopping activity itself. We refer to this motivational orientation as the task-oriented motivational orientation. The other motivational orientation (e.g., recreational, hedonic) describes consumers engaging in shopping to derive inherent satisfaction from the shopping activity itself. In this case, the shopping activity is freely chosen, and there is no need to engage in it. Arousal. The arousal construct is used to designate twosome what distinct phenomena in psychology. Objective arousal is defined as the release of energy collected in the tissues, a variable representing the level of nonspecific physiological response. Subjective arousal is defined as the subjective experience of energy mobilization. Objective and subjective arousal are moderately correlated. Pleasantness. Pleasantness is defined as the hedonic valence (pleasant or unpleasant) of the affective response to a stimulus; it is based on the extent to which the stimulus (the object of the affective response) enables people to achieve their salient goals. Stimuli that facilitate goal achievement are experienced as pleasant, whereas stimuli that impede goal achievement are experienced as unpleasant. The first motivational orientation (e.g., economic, utilitarian) involves consumers engaging in shopping out of necessity to obtain needed products, services, or information with little or no inherent satisfaction derived from the shopping activity itself. We refer to this motivational orientation as the task-oriented motivational orientation. The other motivational orientation (e.g., recreational, hedonic) describes consumers engaging in shopping to derive inherent satisfaction from the shopping activity itself. In this case, the shopping activity is freely chosen, and there is no need to engage in it.
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The studies provide consistent support for the proposition that motivational orientation moderates the effect of arousal on pleasantness. This research indicates that the level of excitement retailers should create in their stores depends on the shopping motivation of their customers. Retailers can infer the motivational orientation of their current and prospective customers from the retail offering. It suggests that the retailer should create a high-arousal environment for recreational consumers and a low-arousal environment for task-oriented consumers. A.M. Kent and A.E. Kirby, Studies of retail image find their origins with Martineaus (1958) definition as the way in which the store is defined in the shoppers mind, partly by its functional characteristics and partly by an aura of psychological attributes. The store environment was defined by the spatial and structural arrangement of the store and divided by exterior and interior elements. In Kent & Kirby study, two stores were separately analysed, the research demonstrates the emphasis on merchandise and significance of products and their presentation in the respondents perception of the store. The research provided opportunities to examine store image through its focus on uncovering store image through the respondents photographs and explanation of their meaning in their own words. During the elicitation a detailed and in-depth level of visual and verbal evidence was gathered. It was a rigorous approach since each stage enabled the researchers to cross-reference their analysis with other stages, with the visual and transcribed evidence, and check the validity of their interpretation of the respondents intentions and meanings. The first stage was particularly successful, as respondents were very clear about categorising their photographs into distinct elements and needed very little assistance in finding suitable words to label each one. However, the method does place considerable pressure on the planning the respondents photography, development of photographs and elicitation, and is relatively time intensive. In terms of interpretation, all the respondents were familiar with, and regularly shopped at, each of the two stores. Consequently it could be argued that the physical environment was taken for granted. Never the less the respondents were very clear about detailed aspects of the environment which directly influenced the quality of their shopping visit and where they shopped at other similar stores, they were able to make appropriate comparisons. Eric R. Spangenberg, Ayn R. Crowley( early 1996) & Pamela W. Henderson,
Research conducted through recruitment of 298 students (46% female) from undergraduate business classes at a large university, randomly assigned to one of thirteen conditions. One
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unscented and twelve scented conditions consisting of two neutral and two positive scents diffused at low, moderate or high intensities.
The research showed a significant difference in evaluation of, and behaviours in, a scented store environment vis--vis an unscented store despite no other changes. Scents that are at least neutral were found to produce enhanced perceptions; the specific scent used did not matter as much as the presence of the scent. The subject customers importantly perceived the scented store to be of higher quality in surroundings and merchandise with a heightened awareness in specific products and distinct purchase intentions. Of considerable interest was the finding that subjects in the no scent condition perceived having spent significantly more time in the store than they actually had. Suggesting that the time consumers spend examining merchandise, waiting in lines or waiting for help can be made to feel shorter by introducing an ambient scent. How retail environments affect their users has been reported in the literatures of architecture and design, geography, environmental psychology and marketing (Greenland and McGoldrick 2005). Store patronage is influenced, at least to some degree, by the store environment (Baker, Levy, and Grewal 1992, 1994; Davies and Ward 2002). Sherry (1998) addresses the influence of designed environment on brand equity in general, through the concept of the brandscape, a material and symbolic environment that consumers build with marketplace products, images and messages, that they invest with local meaning, and whose totemic significance largely shapes the adaptation consumers make to the modern world (Sherry 1998, 112). Designers too have developed the concept of brandscape, in which the architecture and design of the building communicate the retail brand identity (Riewoldt 2002; Brauer 2002). Din (2000) consistent communication is the outcome of the design process of both exterior and interior. From a symbolic perspective, buildings take on additional meaning beyond instrumental explanations (Rapoport 1982; Berg and Kreiner 1990) and with rise of consumption, buildings for first time began to be looked on purely as images or marketing objects (Glendinning 2004, 10; see also Carmona et al. 2003). Drawing from the preceding research perspectives of retail image, store environments and design, it appears that the physical environment has been a relatively neglected element in the creation of retail image. Therefore the first research question is to define consumer
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perceptions of the retailers physical environment in the context of retail image, and secondly derived from the design literature, that retail image is communicated through the architecture and design of the building. (Levy and Weitz 1997) Store environment could affect shoppers behaviors in several ways. Certain response of human being to environment may be conditioned or hard-wired in the human brain. For example, for a store layout in a racetrack form, shoppers may follow the path defined by the layout with little thought or emotion aroused by the layout. In the environmental psychology literature, Mehrabian and Russell (1974) showed that in a variety of settings (schools, hospitals, homes, etc.), the emotions affected by the environment can be fully described by three states, pleasure, arousal and dominance (PAD). The majority of studies on emotional response to store environment adopt the PAD paradigm, and provide evidence that shoppers emotional states can be largely represented by the PAD dimensions (Donovan and Rossiter 1982; Bellizzi and Hite 1992; Babin and Darden 1995). These studies also show that the emotional response leads to a variety of behaviours and outcomes, such as how long the shoppers stay and how much money they spend inside a store. Some other studies use other scales that include some emotion measures (Bellizzi et al. 1983; Crowley 1993). However, many of these measures are similar to the measures found in the PAD dimensions. Store environment also influences various stages of shoppers cognitive process inside a store, including attention, perception, categorization and information processing. For example, it has been shown that perceived waiting time varies with the valence of music and consumers categorization of a restaurant as a fast food outlet depends largely on the external appearance of the store (Hui, Chebat and Chebat 1997; Ward, Bitner and Barnes 1992). The influence of store environment on these cognitive stages would subsequently affect evaluations of the store, its merchandise and service, and hence on the shopping behaviours or outcomes (Hui et al. 1997; Ward et al. 1992). Furthermore, store environment may influence these evaluations directly by providing consumers with a peripheral cue or a tangible evidence for assessing the service and merchandise quality of a store, or by transfer of meanings from the environment (Parasuraman, Zeithaml and Berry 1988; Bitner 1992).
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Obermiller and Bitner (1984) found that individuals who view retail products in a pleasant environment evaluate products more positively than subjects who viewed the same products in an emotionally unpleasant environment. Further, Chebat and Michon (2003) argued that consumers perceptions of the store environment influence their perceptions of product quality and consumer behavior. For example, if the consumers perceptions of a shopping mall environment become more favorable, consumers will perceive product quality to be higher which can influence consumers to exhibit greater approach behavior in that environment. Environments influence consumer behavior in a large part because they alter ones feelings (Babin et al., 1994). Mehrabian and Russell (1974) proposed that two basic emotional states mediate in consumer behavior in environmental situations. These emotional responses are pleasure and arousal. Arousal-nonarousal refers to the degree to which a person feels excited, stimulated, alert or active in the situation. Evidence suggests that warm colors, fast tempo and high volume music, and complex environments increase the arousal levels, whereas cool colors, low tempo low volume music and simply environments tend to have the opposite effect on arousal (Holbrook and Anand, 1990; Valdez and Mehrabian, 1994; Wirtz et al., 2000; Berlyne, 1960). Pleasure-displeasure refers to the degree to which the person feels good, joyful, happy, or satisfied in the situation. According to Russells circumplex model, all words of affect can be defined as a combination of degree of pleasure and degree of arousal. For example, excitement is defined as a combination of high pleasure and high arousal, and relaxing as a combination of high pleasure and low arousal. Wirtz and Mattila (2001) argued that even if the service environment is perceived as attractive, a mismatch between the desired and actual arousal levels is expected to lead to low levels of pleasure. For example, when a consumer desires to be in a relaxing or low arousal environment, then increasing arousal levels reduce the effects of pleasure on satisfaction. This is because consumers may seek different levels of arousal depending on their consumption goals.
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Consumers visit shopping malls for a variety of reasons. For example, In Chile, consumers go to malls only when they need to buy something (Nicholls et al., 2000). In Malaysia, people may regard shopping malls as community centers for economic and social activities (Zafar et al., 2007). In the USA, many consumers view shopping malls as an entertainment source (Iksuk et al., 2005). This is does not only happen for purchasing products or services to satisfy wants and needs but also to seek shopping values (Babin et al., 1994). Babin et al., (1994) identified two types of shopping value: utilitarian and hedonic value. Utilitarian shopping value is defined as the task-related and rational performance. Shoppers who focused on purchasing the products in order to achieve the goal or complete the work were called utilitarian shopping value. In contrast, hedonic shopping value is the consumer enjoyable of shopping experience in term of fun, fantasy, and playfulness. Rintamaki et al., (2006) conceptualized the hedonic and utilitarian shopping values in a department store. Briefly, utilitarian value stems from monetary savings and convenience; hedonic value stems from exploration and entertainment.
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Impulse Buying
Impulse buying has been considered a pervasive and distinctive phenomenon in the American lifestyle and has been receiving increasing attention from consumer researchers and theorists (Youn & Faber, 2000, p.179). Despite the negative aspects of the impulse buying behaviour from past research, defining impulsive behaviour as an irrational behaviour (Ainslie, 1975; Levy, 1976; Rook & Fisher, 1995; Solnick, Kannenberg, Eckerman, & Waller, 1980), resulting from a lack of behavioural control (Levy, 1976; Solnick et al., 1980), impulse purchases account for substantial sales across a broad range of product categories (Bellenger at al, 1978; Cobb & Hoyer, 1986; Han, Morgan, Kotsiopulos, & Kang-Park, 1991; Kollat & Willet, 1967; Rook & Fisher, 1995; Weinberg & Gottwald, 1982). A study found that impulse purchases represented between 27% and 62% of all department store purchases (Bellenger et al., 1978). Rook and Hoch (1985) assert that most people have experienced an impulse purchase. Other research findings support this assertion revealing almost 90% of respondents have made grocery purchases on impulse occasionally (Welles, 1986), and between 30% and 50% of all purchases can be classified by the buyers themselves as impulse purchases (Bellenger et al., 1978; Cobb & Hoyer, 1986; Han et al., 1991; Kollat & Willett, 1967). Early studies on impulse buying were more concerned with the definitional issues distinguishing impulse buying from non-impulse buying and attempted to classify the types of impulse buying into one of several sub-categories (Bellenger et al., 1978; Kollat & Willet, 1967; Stern, 1962), rather than to understand impulse buying as a trait of consumer buying behavior. Therefore, this approach generated a theory that ignores the behavioral motivations of impulse buying for a large variety of products and, instead, focuses on a small number of relatively inexpensive products. However, this type of approach did not provide sufficient explanations as to why so many consumers appear to act on their buying impulse so frequently. Therefore, researchers began to re-focus attention on impulse buying behavior and to investigate the behavioral motivations of impulse buying (Cobb & Hoyer, 1986; Hausman, 2000; Piron, 1991; Rook, 1987; Rook & Gardner, 1993; Rook & Fisher, 1995; Weun, Jones, & Betty, 1998). The pervasiveness of impulse buying, even for relatively expensive products, led researchers to look at impulse buying as an inherent individual trait, rather than a response to inexpensive product offerings (Cobb & Hoyer, 1986; Rook, 1987). Recently, researchers
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appear to agree that impulse buying involves a hedonic or affective component (Piron, 1991; Puri, 1996; Rook & Fisher, 1995; Wenn et al, 1998). Todays research suggests that impulse buying behavior is much more complex than previously conceptualized; that this behavior stems from the desire to satisfy multiple needs that underlie many types of buying behavior (Hausman, 2000).
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impulse purchases. One explanation for this phenomenon is that consumers buy products for a variety of non-economic reasons, such as fun, fantasy, and social or emotional pleasure. Some consumers even see shopping as retail therapy, as a way of getting over the stresses of a working day or simply a fun day out (Hausman, 2000) supporting the hedonic modification for impulse buying.
Internal factors
Affect or mood has been identified as a variable that influences impulse purchasing (Gardner & Rook, 1988; Rook, 1987; Rook & Gardner, 1993). Rook and Gardner (1993) found that 85% of their survey respondents indicated a positive mood would be more constructive to impulse buying than a negative mood. Respondents stated that, in a positive mood, they had an unconstrained feeling, the desire to reward themselves, and higher energy levels. Weinberg and Gotwald (1982) found that impulse buyers exhibited greater feelings of delight, enthusiasm, and joy while Donovan and Rossiter (1982) found that pleasure was positively associated with a like hood of overspending. A number of studies in consumer behavior show that impulse buying satisfies hedonic desires (Piron, 1991; Rook, 1987; Thompson, Locander, & Pollio, 1990). Individual consumers' impulse buying behaviour is correlated with their desires to fulfil hedonic needs, such as fun, novelty and surprise (Hirschman, 1980; Holbrook & Hirschman, 1982). In addition, emotional support needs may also be satisfied by the social interaction inherent in
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the shopping experience. For instance, research findings indicate that consumers report feeling uplifted or energized after a shopping experience (Cobb & Hoyer, 1986; Rook, 1987) supporting the recent concept of impulse buying behaviour as a trait motivated by hedonic desire. The hedonic value of shopping reflects potential entertainment and emotional worth of shopping (Babin, Darden, & Griffin, 1994). It has been suggested that shopping without specific intent, may be more significant than acquisition of products and can provide a highly pleasurable shopping experience (Maclinnis & Price, 1987; Sherry, 1990). Since the goal of the shopping experience is to provide satisfaction of hedonic needs, the products purchased during these excursions appear to be chosen without prior planning and represent an impulse buying event.
External factors
Specific situations and retail settings influence both in-store responses and future store choice decisions because of the changing and adoptive nature of expectations, preferences, and behaviour (Hausman, 2000). For instance, the findings of Darden et al.s (1983) study showed that consumers beliefs about the physical attractiveness of a store had a higher correlation with a choice of a store than did merchandise quality, general price level, and selection. This supports the notion that consumers choice of a store is influenced by the store environment, of which visual merchandising plays a vital role. This view is consistent with Bowers (1973) observation that people approaches, avoids, and creates situations in accordance with their desires. Customers avoid or leave retail settings that are stressful or obstructive (Anglin, Morgan, & Stoltman, 1999). The expectation/experience of positive feelings generally leads to approach responses, while avoidance is associated with expectations/experience of negative outcomes (Dovnovan & Rissiter, 1982; Mehrabian & Russel, 1974; Saegert & Winkel, 1990; Troye, 1985). Researchers have suggested that various aspects of retailing environments can influence consumer behavior. Kotler (1973-1974) asserts the significant role of various retailing atmospherics. For instance, music and color have been related to consumer behaviour (Bellizzi & Hite, 1992; Milliman, 1986; Yalch & Spangenberg, 1990) suggesting visual merchandising within the retail settings may influence consumer behavior as well.
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Visual Merchandising
Visual merchandising, or visual presentation, is the means to communicate a store/companys fashion value and quality image to prospective customers. The purpose of visual merchandising is to educate the customer, to enhance the store/companys image, and to encourage multiple sales by showing apparel together with accessories (Frings, 1999, p. 347). Therefore, each store/company tries to build and enhance its image and concept through visual presentations, which appeal to shoppers and ultimately transform them into customers by building brand loyalty and encouraging customers buying behaviours. Visual merchandising is defined as the presentation of a store/brand and its merchandise to the customer through the teamwork of the stores advertising, display, special events, fashion coordination, and merchandising departments in order to sell the goods and services offered by the store/company (Mills, Paul, & Moorman, 1995, p. 2). Visual merchandising ranges from window/exterior displays to interior displays including form displays and floor/wall merchandising as well as promotion signage. It also broadly includes advertising and brand/store logo (Mills et al, 1995). In this study, however, only window display and in-store display comprise of form/mannequin display, floor merchandising and promotional signage were investigated.
predetermination of what they need or buy, and once they get into the store, they are reminded or get an idea of what they may need after looking around the store. In other words, consumers impulse buying behavior is a response made by being confronted with stimuli that provoke a desire that ultimately motivate a consumer to make an unplanned purchase decision upon entering the store. The more the store stimuli, such as visual merchandising, serves as a shopping aid, the more likely the possibility of a desire or need arising and finally creating an impulse purchase (Han, 1987; Han et al., 1991). The importance of window display in relation to consumers buying behavior has received minimal attention in the literature. However, since a consumers choice of a store is influenced by the physical attractiveness of a store (Darden at al., 1983), and the first impressions of the store image is normally created at the faade level, it can be suggested that window display may influence, at least to some degree, consumers choice of a store when they do not set out with a specific purpose of visiting a certain store and purchasing a certain item. The initial step to getting customers to purchase is getting them in the door.
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Crawford and Melewar2003explained retailers must create an environment that minimizes inherent stress and accentuates or at least maintains natural levels of excitement ,while also virtuously motivating impulse purchasing by reducing or eliminating barriers to purchase. In decades, scholars started to transfer the views on the characteristics of different consumers buying trendsEngle, Blackwell and Miniard,2001Beatty and Ferrell,1998 Wood,2005 the influence on impulse buying by different situation or cultureTai and Tam,1997Mattila and Wirtz, 2001Wood,2005.and began to try how to predict the potential of consumers impulse buyingKelly and Smith,2000Omar and Kent,2001 Crawford and Melewar,2003Robert and Jones,2001.
influenced because of chasing fad and get pressure by social members so that they would make herding behaviorsFreidman, 1984Dreman, 1979Barberis and Shleifer,( 2001 Wood2005proposed that retailers should not only care about the purchasing behaviour in retail environment, but also understand consumers society more . Impulse buying would be influenced from discretionary income positively. Due to satisfy individuals social needs, consumer would make more impulse buying which make them feel excited and gratification. Consumers society includes consumers purchasing experience and characteristics of shopping environment. Peck and Childers2006started to address the times of touching with people by people would make more impulse buying, they found customers touch more with salesmen, they would increase the possibility of impulse buying. It explains impulse buying should relate with touch between people by people. A widely adopted definition is proposed by Rook and co-authors (Rook and Hoch, 1985; Rook, 1987; Rook and Fisher, 1995): impulse buying occurs when an individual feels a sudden, often powerful and persistent desire to make an unintended, unreflective, and immediate purchase after being exposed to certain stimuli. The purchase is unintended because it is made while shopping, when the individual is not actively looking for that item, has no pre-shopping plans to purchase the item, and is not engaged in a shopping task, such as looking for a gift, which the item satisfies. Unintended buying arises from a sudden urge to buy a specific item while shopping. Impulse buying is unreflective in that the purchase is made without engaging in a great deal of evaluation. An urge toward action discourages consideration of the potential consequences of the behaviour. Impulse buying is immediate in that the time interval between seeing the item and buying is short, and the decision to buy is made on the spur of the moment. A study by Beatty and Ferrell (1998) suggests that impulse purchasing is closely linked to hedonic consumption and sensory stimulation. Rook (1987) also suggests that consumer impulsivity is a lifestyle trait which can be linked to materialism, sensation seeking, and recreational aspects of shopping. Recreational shoppers, like shoppers motivated by hedonic values, are less likely to have an idea of what they are going to buy when they go shopping, which suggests greater levels of impulse purchasing, and they spend more time shopping per trip on average (Bellenger and Korgaonkar, 1980).
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In their study of buying impulses, Rook and Hoch (1985) found that impulsive shoppers tend to enjoy shopping more than those who are more cautious in their buying styles. Gender differences also exist, as females in the study enjoyed shopping more than males and tended to be more impulsive. This gender difference in consumer impulsivity could partly reflect the fact that men and women typically shop for different kinds of products and have different shopping motivations. Mehrabian and Russell (1974) study on impulse buying Results that store environments have a significant influence on these consumers emotional states, including pleasure and arousal, which in turn influence consumers impulse buying behaviors in the store. It indicates that there is a high level of impulse buying (65%) among the surveyed adult Generation Y consumers. Store environment (in terms of design, ambient, employee, and crowding factors) positively influences pleasure experienced in the store and give shape to impulse buying .But personality traits and situational factors (specifically perceived time pressure) highly influence impulse buying behaviour. Study also indicates that arousal among adult Generation Y consumers is positively affected by the level of crowding in the store. That is, their feelings of alertness and excitement tend to increase in a crowded store environment. Ben Paul (2002) studies on planned and impulse purchases are investigated using six personal care product categories. Data analyzed consisted of 982 product purchases of 502 consumers. Responses for product category and the brand purchased were simply cross tabulated that shows that there are only 76.6 percent of the shoppers who have completely planned purchase, buying the intended product category and the exact brand where the epistemic retail search strategies were assumed to be employed. The remaining 23.4 percent are impulsive purchases. The proportion of completely impulse buying (no intention of buying the category and the brand) is 11.9 percent. Occurrence of impulsive brand choice, where product category was planned but the brand was unplanned, is 5.3 percent. Impulsive product choice (18.1%) encompasses unplanned purchase in a product category regardless of the selected brand. Incidence of impulsive product choice, when the brand chosen was the usual brand, is 6.2 percent. The degree of impulsive buying could influence the navigational search strategies of consumers. Hedonic search strategy may be favoured for impulsive choices. Inside the store as consumers process information during brand comparisons and as they deal with beauty consultants they appear to use epistemic search strategies. This implies
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that marketers and retailers need to design shopping environments that reduce the expected shopping difficulties of their target consumers. It is important to understand that shoppers have varying types and amounts of product and store knowledge, which may affect their navigational search strategies. DENNIS W. ROOK, (1950) Extensive research on impulse buying began in the early 1950s and sought to investigate those purchase decisions that are made after the consumer enters a retail environment.
The term "Impulse buying" refers to a narrower and more specific range of phenomena than "unplanned purchasing" does. More importantly, it identifies a psychologically distinctive type of behaviour that differs dramatically from contemplative modes of consumer choice. Impulse buying is relatively extraordinary and exciting; contemplative buying is more ordinary and tranquil (Weinberg and Gottwald 1982). According to Dennis Rook Buying impulses are often forceful and urgent; contemplative purchasing is less so. Also, impulse buying is a fast experience, not a slow one. It is more likely to involve grabbing a product than choosing one. Impulsive behaviour is more spontaneous than cautious. A buying impulse tends to disrupt the consumer's behaviour stream, while a contemplative purchase is more likely to be a part of one's regular routine. Impulse buying is more emotional than^ rational, and it is more likely to be perceived as "bad" than "good." Finally, the consumer is more likely to feel out-of-control when buying impulsively than when making contemplative purchases. The variety and high levels of excitement that arc attributed to impulse buying distinguish it from more calm and rational consumer decision making. One respondent said the onset of a buying impulse feels "like turning up the excitement volume." It comes on as a surprise and provides novelty and spontaneity. The buying impulse lends to disrupt an individual's ongoing behaviour stream. This may cause it lo be frightening, loo: the extraordinary stimulation can induce feelings of being out-of-control. One respondent said the excitement is "like falling in love with a product. In a research conducted by Cobb and Hoyer (1986), impulse buying was defined as an unplanned purchase and this definition can also be found in the research of Kollat and Willett (1967).
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In another research by Rook (1987) reported that impulse buying usually takes place, when a consumer feels a forceful motivation that turns into a desire to purchase a commodity instantly. Beatty and Ferrell (1998) defined impulse buying as instantaneous purchase having no previous aim or objective to purchase the commodity. Stern (1962) found that products bought on impulse are usually cheap. Shopping lifestyle is defined as the behaviour exhibited by purchaser with regard to the series of personal responses and opinions about purchase of the products as reported by Cobb and Hoyer (1986). They find that shopping life style and impulse buying behaviour are closely related but only in the case of impulse buyers. The study also states that impulse purchasers fell in the middle as of the measurement tools used by the researchers, indicated that purchasers will not pick the first brand they spotted in the shopping mall. In researches conducted by Cha (2001); Han et al., (1991); Ko (1993) it is reported that impulse buying behaviour regarding fashion products are associated with patterns like chaste, repeated emotions as well as fashion-oriented impulse buying behaviours. These facts were also quoted by Park et al.(2006). The definition of fashion involvement basically relates to apparel associated with fashionable outfits. The findings of Han et al. (1991) quoted in response to fashion involvement of consumers, that it might enhance fashionoriented impulse buying behaviours among those who habitually wear fashion outfits. Fairhurst et al. (1989) and Seo et al. (2001) found a direct association among fashion involvement and apparels purchase. Positive emotions are defined as affects and moods, which determine intensity of consumer decision-making reported by Watson and Tellegen (1985). Park (2006) found a positive relationship of positive emotions, fashion involvement and fashion-oriented impulse buying with the overall impulse buying behaviour of the consumers. Ko (1993) reported that positive emotions may result into fashion related impulse purchase. The researches of Beatty and Ferrell (1998); Husman (2000); Rook and Gardner (1993); Youn and Faber, (2000) found that emotions strongly influence buying behaviours, which result into consumer impulse buying. Babin and Babin (2001) found that in stores consumers purchasing intentions and spending can largely be influenced by
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emotions. These emotions may be specific to certain things for example, the features of the items, customer self interest, consumers gauge of evaluating items and the importance they give to their purchasing at a store. Piron (1993) found that the total of nine items, a combination of pre-decision and postdecision stages indicators, resulted into high significant differences and the values of correlations for unplanned purchases done by consumers resulted into higher value as compared to purchases done by consumers on impulse. Their study indicated that out of total questionnaires distributed which were 361, 53 were unplanned purchasers and 145 were impulse buyers (total= 198). (Rook & Fisher, 1995) Impulse buying has been defined as a spontaneous, immediate purchase without pre-shopping intentions either to buy a specific product category or to fulfill a specific buying task (Beatty & Ferrell, 1998). Impulse purchases account for substantial sales across a broad range of product categories (Bellenger et al, 1978; Cobb & Hoyer, 1986; Han et al, 1991; Kollat & Willet, 1967; Rook & Fisher, 1995; Weinberg & Gottwald, 1982). Without having prior information of a new product or intention to purchase a certain item, a consumer is exposed to stimuli, suggesting that a need can be satisfied through the purchase. The store stimuli serves as a type of information aid for those who go to the store without any predetermination of what they need or buy. The more the store stimuli, such as visual merchandising, serves as a shopping aid, the more likely the possibility of a desire or need arising and finally creating an impulse purchase (Han, 1987; Han et al., 1991). Slama and Tashchian (1985) reported that purchase involvement and search behaviour are linked to demographic characteristics of the consumer and their household. They asserted that females are more highly involved and there is greater involvement when there are children at home. Furthermore, they suggest other factors such as marital status, age, education and income of the consumer are closely related to purchase involvement and search. High involvement and the need to plan the shopping activity would support epistemic search strategies. Babin et al. (1994) proposed a scale that identifies shoppers in terms of hedonic and utilitarian (epistemic) shopping values. They defined utilitarian shopping value based on the premise that shopping is task-related and rational and is therefore viewed more as an errand or work. Consumers high on the hedonic shopping value scale find shopping as a
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pleasurable experience. Here, the shopping experience is enjoyable and is viewed as an escape or adventure. For over fifty years, consumer researchers have strived to form a better definition of impulse buying. Early studies on impulse buying stemmed from managerial and retailer interests. Research in this vein placed its emphasis on the taxonomic approach to classifying products into impulse and non-impulse items in order to facilitate marketing strategies such as point-of-purchase advertising, merchandising, or in-store promotions. This approach is limited by a definitional myopia, which simply equates impulse buying to unplanned purchasing (Bellenger, Robertson, and Hirschman 1978; Kollat and Willet 1967; Stern 1962). In response to this definitional problem, researchers began to focus on identifying the internal psychological states underlying consumers impulse buying episodes (e.g., Rook 1987; Rook and Gardner 1993; Rook and Hoch 1985). Impulse buying was redefined as occurring "when a consumer experiences a sudden, often powerful and persistent urge to buying something immediately. The impulse to buy is hedonically complex and may stimulate emotional conflict. Also, impulse buying is prone to occur with diminished regard for its consequences" (Rook 1987, p. 191). In the same vein, Hoch and Lowenstein (1991) explained the impulse buying as a struggle between the psychological forces of desires and willpower. The shift in defining impulse buying has drawn particular attention to systematically investigating factors that may underlie or cause impulse buying. This work includes examinations of the mood-impulse buying relationship (Gardner and Rook 1988; Rook and Gardner 1993); the relationship between affective states, in-store browsing, and impulse buying (Jeon 1990); the holistic processing and self-object meaning-matching in impulsive buying (Burroughs 1996); and the normative influences on impulse buying (Rook and Fisher 1995). Despite considerable efforts devoted to the theoretical framework, little success has been found in relating personality traits to impulse buying. Although several early investigators addressed the relations between personality traits and impulse buying, they failed to find significant results (Cobb and Hoyer 1986; dAntoni and Shenson 1973; Kollat and Willet 1967). The lack of significant findings may have been due to the fact that these studies: 1)
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defined impulse buying as unplanned buying, 2) looked at the relationships of irrelevant personality traits, and/or 3) used inadequate measures for their constructs. Personality Factors Potentially Related to Impulse Buying Several measurement instruments and models of personality exist. One which may have particular value for studying impulse buying is the Multidimensional Personality Questionnaire (MPQ) developed by Tellegen (1982). This instrument was developed in an exploratory manner over a period of 10 years (Tellegen and Waller, in press). Items originally based on personality attributes identified in prior models were developed, tested, refined and revised by empirical testing. The final instrument identified 11 primary personality dimensions (Tellegen 1982). They are wellbeing, social potency, achievement, social closeness, stress reaction, alienation, aggression, control, harm avoidance, traditionalism, and absorption. Among these 11 dimensions are three that seem to have particular relevance for the study of impulse buying. These dimensions are: Lack of Control (or Impulsivity), Stress Reaction, and Absorption. A Lack of Control (or Impulsivity). Control relates to the individuals characteristic mode of monitoring impulse. When dimensionalized, the underlying continuum is conceived of as representing excessive containment of impulse and delay of gratification versus an insufficient modulation of impulse and an inability to delay gratification. Controllers are reflective, cautious, careful, rational, and sensible. They like to plan their activities (Tellegen 1982). On the contrary, impulse-ridden individuals are spontaneous, reckless, and careless; they prefer to "play things by ear." Their decisions are made rapidly and their emotional fluctuations are readily visible. They tend toward immediate gratification of their desires even when such gratification is inconsistent with the reality of their situation or their own ultimate goal. Impulse buying may be one manifestation of this personality trait Brepresenting a lack of control. Preferring planned-out activities seem to be counter to prior definitions of impulse buying. Control would also run counter to Hoch and Loewensteins conceptualization of impulse buying since it should provide people with the ability to maintain high levels of willpower. A generalized lack of control or impulsivity would therefore seem to be a potential contributor to impulse buying behaviours.
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Stress Reaction. Stress reaction represents systematic individual differences in the frequency and intensity of responding to situational cues with negative emotional states (i.e., anxiety, anger, distress, and guilt). This negative emotionality is experienced under daily hassles or everyday life conditions rather than intense pressures such as death or divorce (Bar-Tal, Cohen-Mansfield, and Golander 1998). Stress reaction is characterized by salient themes such as tension, jumpiness, and worry-proneness. Highly stress-reactive people may view their own emotional responses as unwarranted overreactions or even as inexplicable. They acknowledge responding "catastrophically" to the minor mishaps and setbacks that have been referred to as "daily hassles." They feel vulnerable and miserable without reason. They are nervous, sensitive, easily upset, irritable, and troubled by feelings of guilt (Tellegen 1982). This chronic negative emotionality may lead people to engage in behaviours that can provide some relief. At an extreme level, compulsive buying has been hypothesized as serving a mood management function relieving the painful feeling of people who are particularly prone to experiencing negative affective states (Faber and Christenson 1996). Prior research on impulse purchasing has found that a sizable majority of people report feeling "better" following an impulse purchase (Gardner and Rook 1988). Therefore, highly stress-reactive people may be more likely o engage in impulse buying in order to escape from the negative emotional states they more frequently (or more intensely) experience. For highly stress-reactive people, it is speculated that the short-term gratification accompanying impulse buying would enhance their positive self-feelings and mood states. They may have greater difficulties with feeling deprived by not buying or by delay of gratification. For stressreactive people, impulse buying can be viewed as a means of coping with stress. Thus, it is hypothesized that stress reaction would be positively associated with the likelihood of engaging in impulse buying. Absorption: Absorption is a tendency to become immersed in self-involving experiences triggered by engaging external and imaginable stimuli (Tellegen and Waller, in press). Highly absorptive persons are more likely to have unusual and unconventional thinking and to be able to suspend disbelief. More specifically, they: 1) are emotionally responsive to engaging sights and sounds; 2) are readily captured by entrancing stimuli; 3) think in images and synaesthetic and other cross modal experiences; 4) become absorbed in vivid
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and compelling recollections and imaginings; and 5) experience episodes of expanded awareness and altered states. Absorption is an interesting construct for consumer research because it can play a role in how people respond to environmental and sensory cues, including those that influence the purchase and consumption of products. Marketer-created environmental and product factors including colours, smells, sounds, textures, and locations can increase the likelihood of engaging in impulse buying (Eroglu and Machleit 1993; Mitchell 1994). Work in absorption indicates that people may differ on the degree to which they are sensitive to these stimuli. Accordingly, we hypothesize that people with high absorption levels will more easily be caught up in external sensory stimulation, and thus, more likely to engage in impulse buying. Cues That Trigger Impulse Buying Many different factors have been suggested as triggering the impulse to purchase. By and large, triggers are divided into two typesBexternal cues and internal cues (Wansink 1994). External cues are specific triggers associated with buying or shopping. They involve marketer-controlled environmental and sensory factors. Internal cues refer to consumers self-feelings, moods, and emotional states. Recent studies have stated that atmospheric cues in the retail environment (i.e., sights, sounds, and smells) are important triggers that can influence a desire to purchase impulsively (Eroglu and Machleit 1993; Mitchell 1994). Also it has been suggested that marketing innovations such as credit cards, cash machines, instant credit, 24-hour retailing, and telemarketing make it easier than ever before for consumers to buy things on impulse (Rook 1987; Rook and Fisher 1995). Additionally, marketing mix cues such as point-ofpurchase, displays, promotions, and advertisements also can affect the desire to buy something on impulse. Consumers emotions or affective states have been regarded as potent internal triggers for impulse buying. It is speculated that impulsive buyers are more likely to be responsive (or sensitive) to their emotional conditions than non-impulsive buyers (Rook and Gardner 1993). For impulsive buyers, their affective state can stimulate pursuit of the immediate gratification that buying provides. In fact, recent work has proposed that buying impulses
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may be partially motivated by a desire to change or manage emotions or mood states (Gardner and Rook 1988; Rook 1987; Rook and Gardner 1993). Impulse buyers were found to be more likely to buy on impulse in both negative moods and positive moods than non-impulse buyers. The results suggest that impulse buyers are more prone to act when experiencing hedonically charged moods regardless of their direction. Thus, it is expected that both positive and negative affective states are closely ted to the tendency to engage in impulse buying. Impulse buying has been considered a pervasive and distinctive phenomenon in the American lifestyle and has been receiving increasing attention from consumer researchers and theorists (Youn & Faber, 2000, p.179). Despite the negative aspects of the impulse buying behaviour from past research, defining impulsive behaviour as an irrational behaviour (Ainslie, 1975; Levy, 1976; Rook & Fisher, 1995; Solnick, Kannenberg, Eckerman, & Waller, 1980), resulting from a lack of behavioural control (Levy, 1976; Solnick et al., 1980), impulse purchases account for substantial sales across a broad range of product categories (Bellenger at al, 1978; Cobb & Hoyer, 1986; Han, Morgan, Kotsiopulos, & Kang-Park, 1991; Kollat & Willet, 1967; Rook & Fisher, 1995; Weinberg & Gottwald, 1982). A study found that impulse purchases represented between 27% and 62% of all department store purchases (Bellenger et al., 1978). Rook and Hoch (1985) assert that most people have experienced an impulse purchase. Other research findings support this assertion revealing almost 90% of respondents have made grocery purchases on impulse occasionally (Welles, 1986), and between 30% and 50% of all purchases can be classified by the buyers themselves as impulse purchases (Bellenger et al., 1978; Cobb & Hoyer, 1986; Han et al., 1991; Kollat & Willett, 1967). Early studies on impulse buying were more concerned with the definitional issues distinguishing impulse buying from non-impulse buying and attempted to classify the types of impulse buying into one of several sub-categories (Bellenger et al., 1978; Kollat & Willet, 1967; Stern, 1962), rather than to understand impulse buying as a trait of consumer buying behaviour. Therefore, this approach generated a theory that ignores the behavioural motivations of impulse buying for a large variety of products and, instead, focuses on a small number of relatively inexpensive products. However, this type of approach did not provide sufficient explanations as to why so many consumers appear to act on their buying impulse so frequently. Therefore, researchers began to re-focus attention on impulse buying behaviour and to investigate the behavioural motivations of impulse buying
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(Cobb & Hoyer, 1986; Hausman, 2000; Piron, 1991; Rook, 1987; Rook & Gardner, 1993; Rook & Fisher, 1995; Weun, Jones, & Betty, 1998).The pervasiveness of impulse buying, even for relatively expensive products, led researchers to look at impulse buying as an inherent individual trait, rather than a response to inexpensive product offerings (Cobb & Hoyer, 1986; Rook, 1987). Recently, researchers appear to agree that impulse buying involves a hedonic or affective component (Piron, 1991; Puri, 1996; Rook & Fisher, 1995; Wenn et al, 1998). Todays research suggests that impulse buying behavior is much more complex than previously conceptualized; that this behaviour stems from the desire to satisfy multiple needs that underlie many types of buying behaviour (Hausman, 2000).
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Research methodology
Since the study is on retail sector first the detail study of the store is been conducted about its environmental factors and various factors that provoke impulse buying during the mall visit. Based on the topic objectives were set and to arrive at the opinion on objectives a set of 100 questionnaires were designed of 9 questions and response is collected from the customers who are visiting the store. For data collection Random Convenient sampling method was adopted. For this project the area of research is Jaipur city.
Title of project
Impact of Store environment on Generation Y consumers impulse buying: A study of Shoppers stop
Duration of project
It is semester long project study
7. To analyze the awareness of the public towards the store environment of shoppers stop 8. To find out the perception and first choice of the public while taking services in different situations.
SAMPLING METHOD
Since the study is restricted to Retail sector, all the functional Departments of shoppers stop and the respondents are found at the store only so according to the convenience randomly they are being picked so sampling method is used in this study is Random Convenient Sampling. Sample size Sampling Method 100 respondents Convenience
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The study will be primarily focused on Impact of Store environment on Generation Y consumers impulse buying: A study of Shoppers stop Jaipur city. Since Generation Y is diverse, the target sample in this study focused on a segment of this population group: consumers aged 18-30, or adult Generation Y. Surveys will administer using a mall intercept interview method in shoppers stop. The interviewers will students comes under this age group. Considering part of this target population is college students while others may have full-time jobs, the interviews took place both weekends and weekdays to reduce bias. The typical shoppers targeted for the intercept interview were those who appeared to be in the 18-30 age range and had a shopping bag in their hands. The interviewers intercepted the target shoppers and asked about their interest in participating in the survey. These consumers will give a questionnaire that takes about 10 minutes to complete.
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LIMITATIONS OF STUDY
The study might be limited by following factors: 1. The primary data, collected in form of questionnaires and interviews, might have inherent limitations of biasness and casual response. 2. The collection and availability of data is acting as a limit to the study. 3. Authenticity of secondary data. 4. Lack of time availability. 5. The study is focused only on shoppers stop and covers limited information about the topic. 6. The result and analysis based on the customer survey and questionnaire method, thus biasness and manipulations could not be avoided. 7. Small sample size has been taken (only 100). 8. Findings are related to particular areas.
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Response Once a month Twice a month More than two times in a month
No. of respondent 26 56 18
Frequency of shopping
60 50 40 30 20 10 0 Once a month Twice a month More than two times in a month 18
No. of respondent
26
56
Analysis Among 100 respondent 26 visit the retail outlet once in a month while 56 visit the mall twice ain a month and only 18 respondent visit the outlet more than twice in a month. Interpretation Most of the visitor visits the mall twice in a month.
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Are you satisfied with the ambience of the shoppers stop? Yes
Response YES NO
No
No. of respondent 76 24
Analysis Among 100 respondent 76 of them they are satisfied with the ambience of the shoppers store and only 24 are not satisfied with the ambience of the store. Interpretation Most of the consumers of the shoppers stop are satisfied with the store ambience.
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Factors which influence your first impression regarding the store. Give rating.
Factors Colour Schemes/ Themes Flooring /carpeting Ceiling Wallpaper/ advertisement Lighting Music Scents Temperature Cleanliness Others
28 36 54 56 55 57 10 12 35
22 0 0 13 0 6 0 0 0
13 42 5 0 29 3 0 0 46
0 14 36 0 3 9 90 88 0
0 0 10 0 0 0
Element Colour Schemes/ Themes Flooring /carpeting Ceiling Wallpaper/ advertisement Lighting Music Scents Temperature Cleanliness Others
Mean
3.546296 3.095238 3.339623 3.412214 3.623188 3.611111 3.607143 3.052632 3.06383 3.432099
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Analysis
Lighting is the most effective factor that influence first impression in the retail store for a customer as the mean of the lighting is highest among all the factors followed by music and scents.
Interpretation
Proper and colourful lighting system play crucial role as a motivating factor for impulse buying. Generally, what external elements drive you to a store? Multiple Choices Elements Strongly disagree (1) Disagree (2) Neutral (3) Agree (4) Strongly agree (5)
Address and Location Architectural Style of the building Size of the store Colour of the store Display Windows Exterior Signs (SALE Promotion) Design of Doorway Others
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28
30
26
16
10 6
0 0
42 46
19 0
8 0
16
59
83
14
24
53
18
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Display Windows
3.117647
3.325 3
Analysis
The highest mean value is of the display windows i.e.4.638095 followed by address and location and colour of the store and there values are 4.033708, 3.954955 respectively.
Interpretation
Display of the product in the retail store is most important factor that influence impulse buying.
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Are these elements of store layout and design important when you are shopping in a store? (Please rate the options, 1 is the most important, and 5 is the least important) Layout element
Most important(1)
Moderately Important(2) 5 24 22 32 27 24 6
Neutral(3)
Important(4)
Least important(5) 1 1 1 4 4 8 2
Space design/allocation Placement/Grouping of products Display models in store Design of fitting rooms Design of furniture Traffic flow Waiting queue
78 46 65 36 23 16 49
9 5 2 12 22 0 3
7 21 9 9 19 0 16 Mean
1.48
2.041237
Placement/Grouping of products
1.575758
Design of furniture
2.166667
Traffic flow
1.894737
Waiting queue
Analysis
The highest mean value is 2.515789 which is of design of furniture followed by traffic flow design of fitting rooms and, the values are 2.166667and 2.064516 respectively.
Interpretation
Design of the furniture in the retail store is one factor which is also responsible for impulsive buying.
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If you like the store atmospheric, do you want to look around/stay longer?
Response Yes May be No total No. of respondent 59 38 3 100
38% 59%
Analysis Among 100 respondent 59% of them are stay in retail outlet if they found the environment favourable. 38% are in the situation whether they stay of not, it depends on the other factors also may be personal or any other reason and only 3% are not stay in the retail outlet.
Interpretation
It is necessary to create good and favourable environment in the retail store to attract the customers.
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Does the atmospheric encourage you to buy? Response Yes May be No No. of respondent 49 35 16
Analysis
49% consumers are provoked by the ambience and atmospheric factors and 35% are in the middle situation that they may or may not encouraged to purchase by the ambience factors and 16% of the respondent are not supposed to influence by ambience factors.
Interpretation
Most of the mall visitors are go for impulse buying due to the atmospheric and environmental factor of the store.
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What Point-of-purchase (the till/cash desk) variables encourage you to make additional purchase? (Multiple Choices
Response No. of respondent 37 64 89 98 65 56 34 percentage 37 64 89 98 65 56 34
Store cards leaflet Posters/Signs behind the cash desk Product display (e.g. some small accessories) Price display (e.g. Bargain Boxes) In-store Magazines/Catalogue Candy and Sweet Others
14% 20%
15%
22%
Analysis
98% visitors are go for unplanned purchasing because of the price display, 89% are due to product display, 64% encouraged to purchase by the posters/signs behind the cash desk, 56% purchase candy and sweets as they encouraged to purchase, 37% influenced by the store cards leaflets and 34% are encourage to purchase by the some other factors.
Interpretation
Product and price display play important role in the impulse buying of the consumers.
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What human elements in a store definitely effect your shopping experience? Multiple Choices
Response No. of respondent 100 86 86 36 10
Customer Service Employee characteristics (including Uniforms) Busy stores (Crowding) Store fitting room facilities or Return policy Other customers in store
120 100 80 60 40 20 0
100 100 86 86 86 86
36
36 10 10
Customer Service
No. of respondent
percentage
Analysis
Shopping experience of 100% respondents are affected by customer service, 86%, 86%,36%,10% respondents shopping experience affected by the human factors like employee characteristic, busy store(crowding),store fitting room facilities or return policy and other customers in store respectively.
Interpretation
Customer service is most important human factor which affects the customers shopping experience.
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Weakness
Very high prices: They provide international Brands due to which their prices are very high. Less Schemes: They do not offer so much schemes, they offer schemes only on special occasions like Diwali, Independence Day, etc. Less Discounts: They offer less discount in their schemes, they basically offer 10% to 20% discount Competition from standalone stores Late entry into value retailing Store makeover expenditure
Threats
Government Policies Entrance of New Players High attrition Lesser consumer spending Entry of foreign players Unorganized sector Independent stores
Opportunities
Awareness about the brands Quality Youngsters
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Higher disposable income Collaborate Private levels Tier 2 & tier 3 cities Enter new consumer goods segments.
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CONCLUSION
This study indicates that store environments do have a significant influence on adult Generation Y consumers emotional states, which in turn influence their impulse buying behaviour. The results of this study suggest that employee and ambient cues have a significant positive influence on pleasure. This result provides support for promotional activities that attempt to stimulate consumers levels of arousal as a way to enhance their tendency to buy items on impulse. Factors may need to be investigated such as time available for shopping and environmental stimuli. The presence of environmental stimulation variables such as scent and sound may moderate the choice of search strategy. The knowledge of product categories associated or purchased together is valuable in store layout designs and shelving strategies
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Appendix
QUESTIONNAIRE
Impact of Store environment on Generation Y consumers impulse buying: A study of Shoppers stop We are seeking your true reaction on the following scenario that you actually or might encounter in market place. Please response as normally as possible. Your response will be kept confidential and will be used only for academic purposes. Please circle/Mark your response. Thank you Gender: Your age is Male 18 Female 18-25 25-30 31+
1. Frequency of shopping in shoppers stop. (a) Once a month (b) Twice a month (c) More than two times in a month 2. Are you satisfied with the ambience of the shoppers stop? Yes No
3. Factors which influence your first impression regarding the store. Give rating Factors Strongly disagree (1) Disagree (2) Neutral (3) Agree (4) Strongly agree (5)
Colour Schemes/Themes Flooring /carpeting Ceiling Wallpaper/advertisement Lighting Music Scents Temperature Others Cleanliness
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4. Generally, what external elements drive you to a store? Multiple Elements Strongly disagree (1) Disagree (2) Neutral (3) Agree (4)
Address and Location Architectural Style of the building Size of the store Colour of the store Display Windows Exterior Signs (SALE Promotion) Design of Doorway Others 5. Are these elements of store layout and design important when you are shopping in a store? (Please rate the options, 1 is the most important, and 5 is the least important) Layout element Space design/allocation Placement/Grouping of products Display models in store Design of fitting rooms Design of furniture Traffic flow Waiting queue Most important Moderately Important Neutral Important Least important
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6. If you like the store atmospheric, do you want to look around/stay longer? Yes Maybe No 7. Does the atmospheric encourage you to buy? Yes Maybe No
8. What Point-of-purchase (the till/cash desk) variables encourage you to make additional purchase? (Multiple Choices Store cards leaflet In-store Magazines/Catalogue Candy and Sweet
Posters/Signs behind the cash desk Product display (e.g. some small accessories) Price display (e.g. Bargain Boxes)
Others
9. What human elements in a store definitely effect your shopping experience? Multiple Choices Customer Service Busy stores (Crowding) Employee characteristics (including Uniforms) Other customers in store
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