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Consumer behavior in Organized Retail

Presented by:Rahul Wane

Buying behaviorBuying Behavior is thedecision processes and actsof people involved in buyingand using products.

Main factors affecting Buying Behavior :

1. Personal2. Cultural3. Social

Retailing in India Retailing in India is one of the pillars of its economy and

accounts for 14 to 15 per cent of its GDP.

The Indian retail market is estimated to be US$ 450 billion and one of the top five retail markets in the world by economic value.

India is one of the fastest growing retail markets in the world, with 1.2 billion people.

Indian Retail is broadly divided into 2 categories viz. Unorganized Retail and Organized retail

In the year 2004, ratio of organized-Unorganized retail was 3:97 which is expected to be 9:91 by 2013.

Unorganized Retail includes the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart, etc

On the other hand, organized retail comprises of hypermarkets and retail chains, Shopping malls etc.

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.

Deloitte Says!

Retail Market India The Indian retail industry has experienced growth of 10.6% between 2010 and 2012 and is expected to increase to USD 750-850 billion by 2015. Food and Grocery is the largest category within the retail sector with 60 per cent share followed by Apparel and Mobile segment.

Retail Market India (contd…) Within the organized retail sector, Apparel is the largest segment. “Food and Grocery” and “Mobile and telecom” are the other major contributors to this segment.

Weekly Markets

Villages Fairs

Kiranas

Mom and Pop

Khadi Stores

Ration Shops

Hyper/Super

Department Stores

Shopping malls

Rural Traditional Government Support

Modern

Evolution of Retail Malls in India

Types of consumers in Retail mall

Time Killer

Pleasure Seeker

Focused Fulfillers

Product Groupies

General Browsers

Some of the key players in Organized Retail

The trading environment

Most consumers take as little as 3 seconds to pass the entrance to your business.

The frontage and fascia, the windows and the displays all need to arrest the customers attention.

This is why so much investment is made into new shop fronts because if the business looks exciting, then there is a likelihood that the customer will come in and seek more information about your products and services.

Key factors of consumer motivation Circulation in browsing and self

selection environment.

Customer’s physiques.

To be able to touch and feel the merchandise.

Grasping Customer’s Attention

Factors affecting consumer behavior Greed: Drives a customer to purchase more than what he or she need. A wide

range of options, better products, and lower prices generate the increased desire to purchase.

Fear to loose opportunity: Higher purchase is driven by the fear that current price offer may not be available for long-time and thus the product has to be purchased at once.

Envy or Demonstration Effect: Envy sets in when a customer sees others buying and making the best out of deal.

Price-value Equation: It is believed that Average Indian customer is highly Price-Sensitive and looks for savings in terms of money in their grocery purchase.

Private-Label Brands: In India the concept of Private-Label Brand is in its nascent stage and customers still rely on branded product.

Some key observations Lower income Indians feel alienated in the shiny environment of modern retail

stores.

Lower income Indians move and find lot of comfort in crowds, so they normally hesitate in visiting the stores having broader area coverage.

It is observed during the research that given the right environment and a correct emotional connect with customers, anything is possible , as Big Bazaar did by celebrating “Sabse Sasta Din” , on 26th January and attracted the unexpected crowd.

Customers feel conservative to buy fruits & Vegetable from air-conditioned supermarkets.

Customers looked into Price-Value equation. Most of the retailers report that customers were very much conscious for the value, and they usually compared the value sacrificed & received.

Some key observations (contd…) Retailers often overlook the schemes & offerings expected by the customers

and tried to impose their own offerings upon customers which ultimately cause the dissatisfaction.

Shopkeepers dealing in apparels, accessories, & other items reported that they were able to attract the Customers but conversion rate is not more than 30-40% which is again very alarming and a matter of high concern.

Shopkeepers dealing in food items & Vegetables report that:

Customers for food items always expect hyper discounts & offers.

Where as customers for vegetables still believe in the past notion that vegetables sold in the open market are fresh.

Shopkeepers dealing in jewelry items reported that in case of unbranded jewelry items Indian customers still rely on their traditional jewelry merchant only.

Thank you

References and Bibliography

Zenith international journal of multidisciplinary research vol.2 issue 1, January 2012, issn 2231 5780

Consumer behavior in the Indian retail sector, international institute of learning in management, New Delhi, lc code- 850

Consumer buying behavior based on demography from brain ware school of business Barasat, Kolkata, W.B.

Indian Retail Market Opening more doors, ©2013 Deloitte Touche Tohmatsu India Private Limited. Member of Deloitte Touche Tohmatsu Limited

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