Consumer Preferences for Emerging Retail Formats in Punjab

Abstract

The Indian retail sector is going through a transformation and the emerging market is witnessing a significant change in its growth pattern. Both existing and new players are experimenting with new retail formats. These emerging retail formats provide wide variety to customers and offer an ideal shopping experience with an amalgamation of product, entertainment and service, all under a single roof. Changing tastes and preferences of consumers’ are leading to radical transformation in lifestyles and spending patterns and this in turn is giving rise to spurt in new business opportunities. Consumer dynamics in India is also changing and the retailers need to understand the changing dynamics and its impact on shopping behavior and formulate their strategies accordingly to deliver the expected value to the consumers. The present study is a comprehensive study of both the consumers and retailers perspective. Consumers’ perspective covers all the important aspects of retailing. Firstly, it covers the six types of emerging retail formats - malls, speciality stores, super/hyper markets, convenience stores, departmental stores and discount stores. The study also does an in-depth analysis of product and store attributes influencing consumers’ choice for these retail formats including the impact of demographic factors on buying behavior. Furthermore, it also attempts to study the preference of diverse retail formats for purchasing different categories of convenience goods and shopping goods. It also tries to uncover the purpose of visiting emerging retail formats and prospects of organized retail in India.

In retailers’ perspective, the present study examines the important marketing strategies and suggests these strategies to retailers for better retail management. Based upon all this analysis, a framework of consumers’ and retailers’ perspective for emerging retail formats has been designed to cover consumers’ preferences for emerging retail formats. Two self structured questionnaires have been used to gather data from 500 consumers and 62 retailers of Punjab. The study uses a five point Likert scale for assessing data from consumers and retailers. Descriptive statistics, ANOVA, factor analysis and regression analysis has been used to identify the consumers’ preferences for emerging retail formats and analyzing the retail marketing strategies adopted by these formats. Results of the study depict that choice of emerging retail format is influenced by consumer demographics and by product and store attributes. Type of product category also influence consumer’s buying from different retail formats for shopping and convenience goods. The results highlight that young consumers and high tax payers prefer to shop more at malls and specialty stores. On the other hand, older consumers and no tax payers prefer to purchase from convenience store, discount stores and department stores.

Product attributes and store attributes are the important drivers influencing consumers’ to visit these emerging retail formats. The results reveal that the trends toward emerging retail formats are changing and consumers prefer these retail formats due to certain product attributes like improved quality and variety of brands. Store attributes which enhance the shopping experience of consumers are: good parking facility and trained sales personnel. Moreover consumers’ are more inclined towards specialty stores for buying shopping goods and convenience stores are preferred for buying various convenience goods. Regarding the purpose of visiting emerging retail formats, consumers prefer to go there not only for shopping purpose, but also for entertainment and relishing food at food courts.

The findings further support that the marketing strategies of retailers’ are an important tool for improving the value of retail business and for enhancing the sales of retail outlet. Retention strategies and promotional strategies are preferred to the traditional strategies like pricing and competitive strategies. The study also throws light on format-wise-preferences of marketing strategies and the results explain that the emerging retail formats like malls, speciality stores and hyper/supermarkets opt more for retention strategies, image improvement strategies and competitive strategies. On the other hand convenience stores, discount stores and departmental stores focus more upon promotional and pricing strategies.