Customer Shopping Behavior

CUSTOMER SHOPPING BEHAVIOR Unorganized Retail vs. Organized Retail Sector in Mumbai, India Pankil Chugh 204 Jai Awatramani 402 Himmat Sandhu 416 Shikhar Tyagi 423 Aliasgar Navagharwala 425

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MBA(Tech.) – Class of 2004-09, NMIMS, Mumbai, India

Chronology Indian Retail Scenario Objective of the survey Questionnaire Findings Recommendations and learnings

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Indian Retail Scenario 12 million retailers Dominated by dukandars Total retail market size in India in 2008:

USD 353 bn Annual growth rate (2008): 12% Present share of organized sector: 7% Expected investment in modern retailing: USD 25-30 bn in next 4 years

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Organized Sector in India Modern format Chain stores Types Specialty stores Discount stores Hypermarkets Supermarkets Convenience stores Department stores Malls

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Classification of Indian Customers

5 Source: Future Group Research, Published in book “It happened in India” by

Emerging trends in consumers’ income and consumption pattern Growing prosperity

Increase in sizable disposable income Place is no more important Higher proportionate rural expenditure Young population with higher purchasing

power

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STAGES Need Recognition Information Search

Evaluation

Choice

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THE BUYING PROCESS

SELECTING A RETAILER

SELECTING MERCHANDISE

Evaluation of Alternatives Multiattribute Attitude Model  Customers see a retailer or a product as a collection of attributes or characteristics  Designed to predict a customer’s evaluation of a product or retailer based on:  Performance on several attributes  Importance of those attributes to the customers  Attributes and importance weights are chosen as criteria  Alternatives compared against the criteria

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Importance Weights

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Research Design and Methodology

Exploratory research conducted in Mumbai Focuses on customer shopping behavior in

Indian scenario among different formats, i.e. organized and unorganized

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QUESTIONNAIRE

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Objective behind the questionnaire

To identify the various factors that affect the

choice of format viz. Organized/ Unorganized Retail. The perceptions and the attitude towards both the formats. The type of goods customers prefer to purchase from each format. Findings that can help the organized and the unorganized retail gain its key strength and weaknesses. Sample Size: 40 15

Customer Attributes affecting choice of format

SEX

Age Group

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Organized Unorganize d Retail

Number of Members in Family

Occupation

Location

Other factors checked

We believe this is a big factor that affects the usage of formats, in urban areas, SEZ’s the out of city crowd is completely unaware of the local market, the local language(Chennai) and the local behavior(general bargaining rates), thus they may choose to shop from Organized Retail coming as a big convenience to them

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Some Customer would shop some particular items from Organized Retail while some items from unorganized retail thus using both the options

Which are the possible shops?

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What do you shop, how often and from where?

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What do you shop, how often and from where? Items which are purchased on a daily basis

will be preferred on basis of closeness to the store(organized/unorganized) For items which customer prefer to purchase once in a week, have a higher probability in going in for organized retail. What is the frequency of purchase eatable items of customers going to each of the formats as they contribute highest to the sales

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Reasons for preference to each of the formats: May be it’s a Customer perceptions or facts 11.) Why do you prefer to go for Organized Retail formats?

12.) Why do you prefer to go for Organized Retail formats?

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Comparing Organized/Unorganized Retailing on various attributes that decide the choice of format 13.) Kindly rate the below of an organized retail and unorganized retail based upon your preference

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Any other comments from the customer and

Comments given by customers bring points Lets us know if customer is which are never dissatisfied with the current covered within the state of things survey and thus bring

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Organized Retail An Analysis of Consumer Preferences

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A Few Big Players are Dominating the Market

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Types of Purchases Made in Organized Retail M F F

M M

W

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D

Dail y

W

Weekl y

F

Fortnigh tly

M

Monthly of Rarer

Top 10 Reasons Why Consumers Prefer Organized Retail

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Consumer Rating on Various Criteria

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Customers Want Further Improvement

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To Sum it Up

Consumers prefer organized retail outlets for FMCG products that are bought in large quantities and for a larger duration of time. They also perceive it as a “family outing” and are drawn towards it due to its convenience, variety and special offers.

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Unorganized Retail An Analysis of Consumer Preferences

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What Do Consumers Buy from Unorganized Retail W M F

M F M

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D

Dail y

W

Weekl y

F

Fortnigh tly

M

Monthly of Rarer

Top 10 Reasons Why Customers Prefer Unorganized Retail

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Consumer Ratings for Various Criteria

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Aspects That Put Consumers off

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In a Nutshell… Consumers prefer unorganized retail outlets for items that have low shelf life and are consumed on a daily basis (such as vegetables). Logistical convenience and a sense of personalization are key drivers for consumers to continue shopping at unorganized retail outlets.

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Comparison

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Organized Vs Unorganized Organized Retail

Unorganized Retail

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Organized Vs Unorganized Organized Retail

Unorganized Retail

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RECOMMENDATIONS

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Unorganized Retail Needs to be clean and a bit organized Requires Planning Increase the number of brands Staff needs to be trained Good Quality Replenishment of stock Warranty scheme

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Organized Retail Need more Fresh products Home delivery Quality can be improved - freshness Online shopping Require more counters on weekends

Tendency to shop for unnecessary thing just because you like the offer.

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LEARNING

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Consumer Behavior Attitude development and change Intention to buy

Experiential involvement Emotional response

Store choice v/s Brand Choice Information Print Ads Friends

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How does the retail consumer think?

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