Volume-4, Issue-2, April-2014, ISSN No.
: 2250-0758
International Journal of Engineering and Management Research
Consumer Behavior towards Retail Outlets in India - Literature Review
Shailesh Pandey1, Dr. Vipin Chand Rai2
1
Research Scholar, RDVV, Jabalpur, INDIA
2
Jabalpur College of Computer & Communication, Jabalpur, INDIA
ABSTRACT
Indian retailing is at all time growth today. The
industry is flooded with footfalls of foreign retail giants; in
this situation the discussion is open on the survival of kirana
stores (unorganized retailers) in India. Retailing in India is
one of the pillars of its economy and accounts for 14 to 15
percent of its GDP. The customer taste is also changing
according to the change in whole retailing environment. Wal
Mart entering in Indian market is still talk of the town in the
country. The government of India has allowed 51% FDI in
multi brand retailing. India is one of the fastest growing retail
markets in the world, with 1.24 billion people .the main focus
of the research will be highlighting the tools which can help
Kirana stores to provide a better retail mix for attracting
more customers and their securing their long time existence.
Keywords: Organized Retailing, Unorganized Retailing,
FDI in Retailing, Retail Mix, Consumer Behavior.
I. INTRODUCTION
The Indian retail experience has gone beyond the
traditional brick–and-mortar store and includes numerous
touch points such as online stores, social networks, call
centers, etc. Changing economic dynamics, diverse choices
in products and services, numerous shopping formats and
unparalleled access to information has empowered
customers to expect more from their retail experience.
The recent economic downturn has taught
discipline to the customers. In today’s rapidly changing
and digitally connected world, customers are more value-
conscious while making purchase decisions.
India’s retail market is expected to touch a
whopping Rs 47 trillion (us$ 782.23 billion) by 2016–17,
expanding at a compounded annual growth rate (CAGR)
of 15 per cent, according to a study by a leading industrial
body. The total organized retail supply in 2013 stood at
approximately 4.7 million square feet (sq ft), witnessing a
strong year-on-year (y-o-y) growth of about 78 per cent
over the total mall supply of 2.5 million sq ft in 2012.
Available at: www.ijemr.net
Page Number: 228-231
The foreign direct investment (FDI) inflows in
single-brand retail trading during the period April 2000–
january 2014 stood at us$ 98.66 million, as per data
released by department of industrial policy and promotion
(DIPP).
As of 2013, India's retailing industry was
essentially owner manned small shops. In 2010, larger
format convenience stores and supermarkets accounted for
about 4 percent of the industry, and these were present
only in large urban centers. India's retail and logistics
industry employs about 40 million Indians (3.3% of Indian
population.
On 7 December 2012, the federal government of
India allowed 51% FDI in multi-brand retail in India. The
government managed to get the approval of multi-brand
retail in the parliament despite heavy uproar from the
opposition (the NDA and leftist parties).[which?] Some
states will allow foreign supermarkets like Wal-Mart,
Tesco and Carrefour to open while other states will not.
II. LITERATURE REVIEW
Rama Venkatachalam and Arwah
Madan(2012) in their have highlighted on level of prices ,
quality of fresh groceries & availability of exotic fruits and
vegetables, display & cleanliness and hygiene, home
delivery & credit facility provided by both the organized
and unorganized retailer. Change in customer preference
has been noticed while shopping fresh grocery from
unorganized or organized retailers. The author has also
mentioned that organized retailing is doing the right things
to sustain, survive and grow.
According to Ms. Monika Talreja and Dr.
Dhiraj Jain (2013) both modern and traditional retailers
will co-exist in India for some time to come, as both of
them have their own competitive advantages. The Kirana
stores have a low- cost structure, location advantage, and
customer familiarity whereas organized retail offers a
mixture of product width and depth and a better shopping
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experience. Organized retailing is becoming a destination
shop for buying fresh fruit and vegetable.
Naganathan Venkatesh (2013) in his paper has
mentioned overall forecast from different researches have
stated that retail growth will grow 15 to 20 percent over
the next five years, based on strong fundamentals of
macroeconomic conditions of india and its younger
population rising disposable incomes and rapid
urbanization. Key success factor for foreign retail investors
are the younger population of india’s who are under the
age of 25, a huge potential market is waiting to explore
and the internet accessibility is also a key factor where
from rural to urban city everyone has the easy access to the
internet. As many as 121 million Indians have internet
access, and more than half of them access the web via their
mobile phones.
Sanjay Manocha and Anoop Pandey (2012) has
discussed modern retailing is not threat to independent
mom and pop stores as most of the consumers said that
they never stopped visiting Kirana store. Organized
retailing is beneficial for India because it’s not alarming to
create conflict with unorganized stores but reshaping
unorganized stores into nascent organized stores. The
author has also discussed the growth of modern retailing in
india which is not at a very fast pace.
Lakshmi Narayana k, Ajata Shathru Samal
and P Nagaraja rao (2013) in their study unorganized
retailers in the vicinity of organized retailers are heavily
affected in terms of profit and volume. The factors which
are attracting the customers towards unorganized retailers
are location convenience, goodwill, credit facility,
bargaining, loose items, convenient timings, and home
delivery.
Mitul Deliya, Bhavesh Parmar and Dr. K. K.
Patel (2012) has focused in their study titled impact of
organized retailers on unorganized retailers, the finding
suggest that there is a decrease in no. Of footfalls of the
customer visiting unorganized retail due to emergence of
more organized retailers .another finding of the paper
suggest that majority of middle class is buying from
unorganized retailers.
Swapna Pradhan in her book “retailing
management text & cases” this book will provide a wide
picture of Indian retailing and global perspective. The
book through light on a complete knowledge on retailing
from its evolution to the current market situation and
emerging formats of retailing and its worldwide growth.
The types of retailers and location strategies and its
importance also give complete retail knowledge.
According to Deloitte (global powers of
retailing 2013) a robust retail strategy must include: a
strong vision of the experience the customer desires across
all channels, a nimble operating model that can adapt as
the retail environment changes, a deep understanding of
how to support the vision through inventive digital
solutions and retail technologies, such as playbooks to
operationalise the Omni-channel strategy.
According to Dr. Seema S. Shenoy, Dr.
Sequeira and Dr. Devaraj, K. (2013) India as a business
opportunity for global retailers. The development of Indian
retail has been discussed in the paper. The organized sector
current situation has been also concluded as growing at a
frenzied pace. From a simple activity of selling in small
markets to a more sophisticated task of bidding on-line,
retailing has showcased several successful forms and
facets. India has been discussed as a young nation having
60% population within 35 years and a huge market.
Sivaraman P. (2010) in his paper has the impact
of organized retailing on unorganized retailing has been
focused. According to the author there are few important
factors which are measured by customers while shopping
from any retail outlet like assortment of the products shop
proximity , brand choices, price, store ambience, credit
availability, store image, and complements.
M. Hameedunissa (2013) in his paper consumer
psychology towards supermarkets has focused how
people’s thoughts, beliefs and perception influence
consumer behavior. The role of consumers psychology has
been discussed in this paper that how it affects a consumer
towards buying from any outlet.
Indian retail market opening more doors
(Deloitte report) organized retail, which constitutes 8 per
cent of the total retail market, will grow much faster than
traditional retail. It is expected to gain a higher share in the
growing pie of the retail market in India. Various estimates
put the share of organized retail as 20 per cent by 2020.
According to R.K. Srivastava (2013) retail in
India and retail in South Africa has been compared in the
study. The finding suggests that branding of the retail store
is actively followed in South Africa but in India retailers
perceives it as a part of business. Security system on
purchase & prevention of theft is good in South Africa
than Indian system and it has to be developed as a prime
concern. The segmentation strategy for both the countries
retailers are somewhat matching which are on the basis of
income and age.
According to PWC report (2012) the driving
forces for Indian retail industry are, higher incomes driving
the purchase of essential and non-essential products,
evolving consumption patterns of Indian customers, new
technology and lifestyle trends creating replacement
demand increase in rural income as well as urbanization
,increase in easy access to credit and consumer awareness
,growth of modern trade format across urban, tier i, tier ii
and tier iii cities and towns and rapid urbanization and
growing trend towards nuclear families
According to Manish Jain, Shilpa Raghuwansh,
Anamika Hardia and Abhiruchi Arora availability and
variety, service, ambience/show of the store, discounts and
price, quality of goods and promotion are the major factors
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which are considered and preferred by customers while
choosing a organized retailer for shopping.
Cherukuri Jayasankaraprasad ( 2010) has
studied the multiple discriminant analysis for the various
existing retail formats considering physical surroundings
(ambience, store design and visual merchandising), task
definition (regular purchase, purchase in large quantities
and getting ideas / knowing new products), perceived risk
(time, financial, and physical), temporal aspects (time
spent and convenient timing hours), and social interactions
and experiences have significant affect on supermarket and
hypermarket store format choice decisions.
Dr. Sangeeta Mohanty (2012) in their study
drivers of retail shopping has focused more on consumer
attitude towards big bazaar and shopping malls, has also
studied the age wise preference to the said stores. The
study is also putting some light on store choice behavior
based on product offered and locational conveniences on
gender basis.
R. Sathya and Dr. S. Sheela Rani (2012) have
done their research on private labels (retailer’s own brand).
Grocery and food retailers are able to popularize their
private labels brands, which have attracted consumers and
have created keen interest in making purchase decision of
these brands. Private label brand is emerging due to the
growth of organized retailers.
Karthikeyan Sundarraj (2011) has done a study
of apparel consumers on wide range of their choices on
apparel buying. Social responsibility and green fashion has
also taken into consideration while studying.
Anuja Shukla, Ankur Shukla (2013) the authors
have focused on shifting preference of customer from
traditional retail to emerging new retail formats. Value of
customer to be treated as a king can be seen today because
of the competition. The shopping experience of increasing
due to increase in the share of organized retailing.
Nisha Rathore in her paper has shown a retailing
growth from Kirana stores to supermarkets. She has also
mentioned that how the shift has taken place from kirana
to supermarkets emergence. The study has been done for
studying consumer behavior for both Kirana stores and
emerging retail formats. Unorganized retailers near
organized retailers have been adversely affected in terms
of their volume of business and profit. Unorganized retail
has maintained employment levels perhaps because of
competitive response.
Gupta and Tandon have highlighted the
preference of consumer towards unorganized and
organized retailing. In relationship study of researcher
majority of the customer of all age prefer kirana stores on
weekly and monthly basis but the younger generation have
started prefers organized retailers. So it can be taken from
the paper that age has a significant role towards store
preference.
III. CONCLUSION
The Indian organized sector is emerging, in this
situation it is important for small retailers to keep the
below mention point in their mind and draft a new strategy
for their long time survival.
1. Level of prices,
2. Quality of fresh groceries & availability of exotic fruits
and vegetables,
3. Display & cleanliness and hygiene,
4. Home delivery & credit facility,
5. Variety
6. Service
7. Ambience
Some of the finding are younger generation have
started preferring organized retailers, grocery and food
retailers are able to popularize their private labels brands,
key success factor for foreign retail investors are the
younger population of India’s who are under the age of 25,
a huge potential market is waiting to explore and the
internet accessibility is also a key factor where from rural
to urban city everyone has the easy access to the internet
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