An Output Driven Analytical Construct on the Choice Criteria of Indian Consumers for Organized New Retail Outlets

Consumer in India has always been pretty tricky to double guess. It is a market whose potential and desire to consume has perhaps moved ahead of the marketer’s mental model of it. It continues to be a multitier market. In short, it does appear that the Great Indian Consuming class has arrived, and is waiting to be served. Shopping is emerging as an important activity. Consumers prefer one stop shopping arcades with food courts and gaming Jones. Hence, organized retailing has centered on our retail radar. Interesting developments are taking place in the world of retailing. RAI (Retailers Association of India) is the voice of the Indian organized and modern retailers.

RAI represents the modern retail Industry of India. Technopak survey shows that the Indian consumer is willing to shop at a place where his time is valued, where he knows that the store genuinely wants his money, and is willing to work for it.

1. To examine the association between consumer’s perceptions as regards organized new retail outlets (ONRO) and select variables.

2. To identify the factors that influence consumer’s perceptions as regards new retail outlets.

3. To ascertain the significance of consumer perception factors.

4. To suggest measures for improving the proper functioning of new organized retail outlets.

In recent times, a new set of players have entered in to the retail party. The field of groceries and consumer durables is dominated by organized new retail outlets like Reliance Fresh, BIG BAZZAR, Pantaloons, The World, and The Grains etc. Hence data for the purpose of the study was collected from consumers who patronize these new retail outlets.

While brand choice is devoid of any geography, the choice of a store is very much influenced by location (Fotheringham, 1998 andMeyer and Eagle, 1982). It is as much an information processing behaviour as any other purchase decision. In a study of store choice behaviour among audio equipment shoppers, Dash, Schiffman and Berenson (1976) found that the level of pre- purchase information regarding the brand determined the type of store chosen. Shoppers who had higher level of pre-purchase information generally shopped at the specialty store, whereas shoppers with low pre-purchase information bought at departmental stores. This is mainly attributed to customers adopting a risk reduction policy with regards to their impending purchase.Leszczyc, Sinha, and Timmermans (2000) have shown that store choice is a dynamic decision and can be conceptualized as a problem of deciding when and where to shop. The first decision is the traditional store location choice problem. The second is the shopping trip incidence problem relating to the timing of shopping trips. The two decision processes are correlated. Store choice is dependent on the timing of shopping trips as consumers may go to a local store for short 'fill-in' trips and go to a more distant grocery store for regular shopping trips (Kahn and Schmittlein, 1989). Both decisions are influenced by shopper characteristics and consumption patterns (Leszczyc and Timmermans, 1979; Kim and Park, 1997).

Given the limited amount of information available on the choice criteria of Indian consumers for organized new retail outlets (ONRO), the researcher have decided to design an exploratory study to identify major preferences among shoppers in India. This involved a field survey conducted across different stores in Bhubaneswar. Respondents were approached at the shop after they had finished shopping and were leaving the store. It was felt that shop intercept (exit interviews) would capture the recency effect and an interview away from the shop might bring only "visualized perception" and not the real experience. The Study is based on primary data. The primary data was collected by issuing questionnaires to 750 consumers in Bhubaneswar during April-October 2013. The perceptions of the consumers with regards ONRO were analyzed by applying appropriate stasticial analysis like Chi- Square test and factor analysis. The hypothesis that consumer’s perceptions as regards organized new retail outlets (ONRO) are positively correlated with the independent variables like education and income group of consumers.

Association between perceptions of consumers with regards organized new retail outlets and independent variables like education and income groups of consumers.

Table shows that there is significant association between perceptions of consumers with regards organized new retail outlets and independent variables like education and income group of consumers.

Factor analysis has been applied to investigate the underlying structure of the variables that influence consumer behavior with respect to organized new retail outlets (ONRO). KMO measure of sampling adequacy is 0.676 and Bartlett’s test shows a significance of 0.000. Therefore factor analysis can be applied to 15 variables measuring perception of consumers with regards to the organized new retail outlets (ONRO). The anti image metrics of variables measuring perception of consumers with regards to the organized new retail outlets was calculated and it is observed that all measures of sampling adequacy (MSA) being more than 0.5, all the 15 variables can be subjected to factor analysis. Grouping of variables.

The Principal Component Method of factor analysis method and varimax rotation method has been used to group the 15 variables measuring perception of consumers with regards to the organized new retail outlets.

Table No 2 gives the results of factor analysis. The five factors have accounted for a total variance of 61.27%.

Tables 2, 3,4 and 5 shows that Principal Component Method of Factor Analysis and the Varimax Rotation Method have been used to group the 15 variables into 5 factors. The most dominant factor is ‘product features’ and it includes 3 variables viz, quality of the products, reasonable price of the products and availability of all brands of the product and it explains 14.23% of the variance. The next factor is “Extended Marketing Mix”, which comprises of 4 variables viz, availability of products in all sizes, convenient package, good after sales service and facility for physical inspection before purchase. This explains 12.58% of the variance. The third factor is ‘Pragmatic Consumption’ consisting of 3 variables viz, on time of delivery, satisfaction with money spent in ONRO and comparatively lower prices. This explains 12.11% of variance. The fourth factor is ‘Customer Relationship’ comprising of 3 variables viz, purchase of all requirements from ONRO, regular customer of ONRO and good customer relationship at ONRO. This factor explains 11.90% of the variance. The list factor being ‘Sales Offers’ includes attractive terms of sales and lot of offers and complimentary products in ONRO. This explains 10.45% of the variance.

Chi- Square test was used to test the association between consumer perception factors with regards ONRO and independent variables like age and occupation groups of consumers, frequency of purchase, total value of purchase and factors influencing purchase.

Table shows that there is significant  association between perception of consumers with regards  to ONRO and independent variables like age and occupation of consumers. There is also significant association between consumer perception factors with regards to ONRO and independent variables like frequency of purchase, total value of  purchases  and  factors influencing purchase. This shows that out of the five consumer perception factors, four are significant. Hence the ONRO should concentrate and improve them.

Pragmatism and Functionality are the hallmark of the modern consumption. Hence ONRO must provide:

 Real value for money product/ services to the consumers.

 Availability of all sizes of products

 Good after sales service

 Facility for physical inspection of products

 On time home delivery

 Competitive prices

 Good customer relationship and loyalty

 Attractive terms of sale and offers