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Mall Mania in India – Changing Consumer Shopping Habits
Mall Mania in India – Changing Consumer
Shopping Habits
A dissertation submitted to The University of Nottingham for the degree of Ma in
Management
Kanika Taneja Business School, University of Nottingham
September, 2007
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ACKNOWLEDGMENT I deeply thank God and my family for showing me the way, no matter how difficult the time was. For his aspiring and invaluable guidance, I wish to express my heartfelt gratitude to my Supervisor, Dr. Andrew Smith, without whose support this dissertation could not have been successfully realized. My sincere gratitude to the interviewees and all respondents for their invaluable time, acknowledging that, this study would not have been possible without their assistance and support. Finally, special thanks to all my friends for their constant support and encouragement, and making this year in Nottingham memorable.
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Abstract
For the current generation of consumers, the meaning of shopping has changed.
It is not just a mere necessity, as it was earlier, but much more than that. The
factors that affect store choice and draw customers to the shopping centre
include space, ambience, and convenience and moreover an array of choice
under one roof. The growth of integrated shopping malls, retail chains and
multi-brand outlets is evidence of consumer behaviour being favourable to the
growing organized segment of the business. Space, ambience and convenience
are beginning to play an important role in drawing customers. Malls, which are
now anchored by large outlets such as Westside and Lifestyle and are resided by
a lot of Indian and international brands, are also being seen as image benchmarks
for communities.
Thus, this dissertation aims at studying the changing shopping trends of
consumers in the Indian economy. For doing this, semi structured interviews
from the Indian retailers as well as consumers have been used as a tool. Various
factors on which the Indian consumers base their choice of going to the shopping
mall or the unorganized markets have been analyzed in this research.
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Table of contents
ACKNOWLEDGEMENT Page 1
Abstract Page 2
List of Tables and Figures Page 7
Chapter One Introduction Page 8
1.1 Background of the Study............................................................8
1.2 Research Objectives ..................................................................10
1.3 Chapter Summary ……….........................................................11
Chapter Two Literature Review Page 15
2.1 Introduction................................................................................15
2.2 Definition of Shopping .............................................................15
2.3 Types of Shoppers..................................................................... 18
2.4 Consumer Buying Behaviour ..................................................21
2.5 Organization of the Retail Industry ........................................25
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2.6 Types of Retail Formats .............................................................26
2.7 Shopping Malls ...........................................................................30
2.8 Determinants for Choice of Shopping Malls………...............31
2.8.1 Number of Stores and the Tenant Mix………..........34
2.8.2 Location of the Shopping Mall ..................................37
2.8.3 Shopping Experience………………...........................38
2.8.4 Shopping Mall Image...................................................40
2.9 Conclusion………………………………………………............41
Chapter Three Methodology Page 42
3.1 Introduction..................................................................................42
3.2 Research Objectives.....................................................................43
3.3 Qualitative vs. Quantitative Research ......................................44
3.4 Data Collection………….............................................................46
3.4.1 Secondary and Primary Data.......................................46
3.4.2 Interviews ......................................................................48
3.4.2.1 Interview Sample............................................50
3.5 Research Procedure .....................................................................52
Chapter Four The Indian Scenario Page 55
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4.1 Introduction ………………………………................................55
4.2 Past Trends of Shopping in India .............................................56
4.3 Conclusion ……………………………………………………...58
Chapter Five Findings and Analysis Page 60
5.1 Retailers’ Perspective ..................................................................60
5.2Consumers’ Perspective ………...................................................68
Chapter Six Discussion Page 80
6.1 Introduction ...................................................................................80
6.2 Choice Variables for Shopping Malls…….................................81
6.2.1 Anchor Stores ………………………………………….81
6.2.2 Location…………………………………………………83
6.2.3 Shopping Experience ………………………………....84
6.2.4 Image …………………………………………………...85
6.2.5 Price Sensitivity ………………………………………..86
6.3 Interdependence of the Retail and Real Estate Industry..........88
Chapter Seven Conclusion Page 89
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7.1 Introduction...................................................................................89
7.2 Recommendations........................................................................90
7.2.1 Recommendations for the Government…………….90
7.2.2 Recommendations for the Developers………………92
7.2.3 Recommendations for the Retailers………………….93
7.3 Limitations…..................................................................................93
7.4 Conclusion …..................................................................................95
References Page 96
Appendices Page 130
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List of Tables and Figures
Table 1 - Motives of Shopping By Tauber (1972) ......................................17
Table 2 – Store Based Retail Formats……………………………………..29
Table 3 – Profile of Retailers Interviewed………………………………..51
Table 4 – Retailers’ Perspective…………………………………………...60
Figure 1 - Framework to Understand Shopping Behaviour……………22
Figure 2 – A Two Dimensional Matrix of Consumer Buying..................24
Figure 3 – Process of Format Selection………………………....................27
Figure 4 – Store Choice Model for Evolving Markets...............................32
Figure 5 – Experience Realms and Shopper Preferences..........................39
Figure 6 – Shopping Malls Choice Variables…………………………….87
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Chapter One Introduction
1.1 Background of the Study
The real estate market in India continues to be on its buoyant growth trend. The
entry of global players and international equity management firms into the sector
points to the abundance of enthusiasm and confidence that the investors have
towards the potential and prospects of the sector in the years to come. The
demand for commercial space for organized retailing is expected to reach 200
million sq. ft. by 2010 (Times Property, July 13, 2007). The retail sector in India,
which is dominated by small and unorganized entrepreneurs consisting of
standalone stores, boutiques and kirana stores, is radically changing its face.
There has been a massive development of new retail formats such as malls,
hypermarkets, supermarkets and lifestyle stores. The organised sector represents
a mere 2 per cent share of this market (Business Today, 1999). It is very low as
compared to other developed economies of the world (Sinha and Banerjee,
2004). However, as the spending power in the economy is growing fast, this
development has gained importance not only in the metropolitan cities but also
in the Tier II and III towns. These upcoming formats are giving
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consumers a lot to spend on, especially with existing players such as Pantaloon,
Shopper’s Stop and the Tata and RPG Group Scaling up fast and the new players
such as Birlas and Sunil Mittal investing a lot in the retail market (Hindustan
Times, New Delhi, July 22, 2007). With this transition taking place, the shopping
behaviour of consumers is likely to change as these formats were not in existence
in the country until recently.
In these circumstances, in which these new retail formats are growing at a rapid
pace in India, there remains a need among Indian businesses to understand the
changing behaviour of consumers towards shopping in these organized retail
outlets. Also, due to the limited success of these outlets, it is necessary for
retailers to be aware of shoppers’ motivations and to understand ways of
attracting the consumers (Sinha and Banerjee, 2004). Till date, there has been
very limited research on the shopping habits of consumers in the less developed
economies of the world, India being one of them. In this research paper, I
attempt to fill these gaps, thereby investigating the shopping behaviour of the
Indian consumers, particularly with the new retail formats emerging. This study
would concentrate on the behaviour the consumer exhibits while visiting or
making purchases in the newly opened malls. It would explore the purpose and
motive behind the Indian consumers’ visit to these newly established shopping
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malls, the values they derive from the shopping trip and their shopping
bahaviour in terms of impulse purchases, time and money spent at the shopping
mall, etc. A final objective is to establish a baseline for examining changing
behaviour in future as developments continue (Millan and Howard, 2007).
1.2 Research Objectives
There have been many motivations for me to choose this topic for my
dissertation. Firstly, there have been massive changes in the demographic factors
of the Indian consumer. Some of the factors include income and consumption
growth, increasing literacy levels, changes in family structure and women’s role
in the family, growing role of children as influencers, gradual acceptance of
frozen goods as a viable alternative to fresh produce and the growing influence
of TV. These factors have been a driving force of organized retailing in India
which has further driven the growth of the real estate industry with more and
more demand for retail space within malls.
The second motivator behind my choice of topic was that it would help me in my
future career. As my father is into the business of real estate within India, I plan
to join him after the completion of this course. Also I have always been interested
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in the marketing perspective of it. Therefore, this research would be helpful for
me as it would give a clear idea about the consumers in malls.
To carry out this research the research questions that have been formulated by
me are-
• What is the impact of the development in real estate industry on the
organization of the retail industry in India?
• How are the consumers’ shopping habits changing with upcoming retail
formats, specifically malls?
• What are the determinants of consumers when choosing between a
shopping mall and the unorganized market?
1.3 Chapter Summary
In this section, a description of the organization of the whole study is provided,
also describing briefly the content of each chapter of the dissertation. The
structure of the dissertation is as follows.
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Chapter 1 will introduce the research area of the study. It will be an overview of
the purpose and the background of the whole essay. It describes the dissertation
contexts, followed by the brief description of developments taking place in the
Indian real estate Industry and the dissertation’s research objectives.
Chapter 2 is Literature Review, which sets the academic tone for the research. It
contains the review and a comprehensive discussion of the rich and diverse
literature available in the area of consumer shopping behaviour. It is divided into
various sections, which include the motives of shopping, the types of shoppers,
the various types of the available retail formats, specifically the description of
shopping malls, consumer’s buying behaviour and their choice determinants for
choosing a shopping mall.
Chapter 3 is the chapter describing the Research Methodology which identifies
the research questions. It explains the objectives and procedures of carrying out
the research. The framework utilized in this study is described and the basis for
its use is provided. A detailed description of all the research techniques that have
been used for data collection and analysis in order to conduct the study has been
provided in this chapter.
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Chapter 4 is the description of the Indian Scenario in context to the retail
industry which gives an overview of the past trends of growth over the years in
the Indian retail and real estate industry from several perspectives and their
interdependency. It also discusses the consumer shopping behaviour in the
country prior to the development of shopping malls.
Chapter 5 is the Findings and Analysis chapter which reports the findings of the
interviews and discusses reasons for the changes in consumer shopping habits
and provides the results from two main perspectives – the consumers’
perspective and the retailers’ perspective.
Chapter 6 which is the Discussion reports the results of the in-depth qualitative
interviews and discusses them against the current literature. The additional
findings have also been analyzed in this chapter, also giving a framework which
consumers follow while choosing between a shopping mall and the unorganized
market.
Chapter 7 is the Conclusion which summarizes the key findings of the entire
research. It draws together all the key elements of the findings and proposes an
overall conclusion to the research conducted. It also provides some future
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recommendations for the shopping mall developers and the retailers in India.
The limitations of the research will also be provided in this chapter.
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Chapter Two Literature Review
2.1 Introduction
Rowley and Slack (2004) describe literature review as “a summary of a subject field
that supports the identification of specific research questions”. McCraken (1998)
specifies that a literature review offers “deconstruction” of the existing literature
by establishing a survey of the ground and assessing the categories and
relationships that must be investigated, an approach I would attempt to
undertake in this research. The aim of this chapter is to examine and present a
comprehensive analysis of existing literature on the research topic.
2.2 Definition of Shopping
According to Dholakia (1999), the rationale for shopping is making physical
visits to a shopping site. It is considered as a household task as well as a form of
recreation, relaxation and entertainment. As per the definition of Lunt and
Livingstone (1992), going out to shop is a conspicuous moment in consumption
(Dholakia, 1999). Most researchers, who have studied shopping behaviour,
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consider shopping a gendered activity. In their studies, South and Spitze (1994)
and Flam and Axelrod (1990), have revealed that shopping is a women’s activity
and they were the ones responsible for household shopping. Many other
consumer research studies about shopping have also had a greater part their
respondents as women (Dholakia, 1999).
Shopping is also considered by Oakley (1974), to having the most positive
attribute of being a leisure activity along with work (Dholakia, 1999). Howard
(2007) also believes shopping to be a leisure pursuit and with the rapid
development of shopping centers, both retailers and developers are trying to
make it more of a pleasure activity. Of the many studies done in an attempt to
identify motives of shopping, the one by Tauber (1972) is a prime one. He
identified eleven motives of shopping in a market based economy apart from the
acquirement of products and services and classified them as role playing and
social experience outside home (Howard, 2007).
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Table 1. Motives of Shopping By Tauber (1972)
Source- Howard (2007)
Social reasons are important, as Lunt and Livingstone (1992) describe shopping
as a spectacle in which the person who is shopping is both a spectator and a
performer (Dholakia, 1999). However, most of these motives that have been
mentioned in the table can be described as pleasure or leisure related. Many
studies that have followed Tauber’s (1972) study have made an attempt to
generate some evidence from reality to confirm these motives. A lot of consumer
behaviour researches have investigated and found insights into the personal and
situational experiences of shopping and its emotional and behavioural effects
(Howard, 2007).
Many other studies have also explored into the motives behind shopping. Babin
et al. (1994) explained that the purpose of shopping can be utilitarian that is
shopping for goods and non utilitarian or hedonic outcomes (Howard, 2007).
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These two broad motives being product and experiential have been related to
emotions while shopping and to the outcomes of shopping by Dawson et al.
(1990) (Millan and Howard, 2007). Another research on the key determinants
and motivations of shopping behaviour by Dholakia (1999) has explored and
empirically tested three reasons behind going for shopping as ‘interactions with
family’, ‘utilitarian’ and ‘shopping as pleasure’.
2.3 Types of Shoppers
There are many types of shopping behaviours and shopper types (Dholakia, 1999).
Broadly, shoppers are divided into two categories based on their objectives
which are markedly different. Utilitarian shoppers are those according to whom
shopping is a form of work or a task which is to be accomplished (Babin et al.,
1994; Batra and Ahtola, 1991), until they make a purchase. The other category
constitutes of hedonistic shoppers who give importance to enjoyment and
excitement they experience during the shopping trip. These kinds of shoppers
consider shopping as a leisure activity and derive pleasure from it, along with
the purchase of products (Rook, 1987). Previous researches have also stated that
majority of shoppers combine both utilitarian and experiential values during
their shopping activities (Nicholls et al., 2000) (Nichols et al., 2002). According
to Babin et al. (1994), developed market economies have consumers with high
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levels of hedonic shopping values; however, these values are less noticeable in
less developed countries (Millan and Howard, 2007).
CWHB’s (2002) survey on Where People Shop covering 12 countries of Europe
has identified six types of shoppers on the basis of demographic, attitude and
behavioural characteristics. These can be segmented as pleasure seeking
shoppers, principled shoppers, discerning food shoppers, independent shoppers,
enthusiastic shoppers and negative shoppers. Apart from considering food
shopping as essential, pleasure seeking shoppers enjoy the leisure oriented side
of shopping and mostly shop for designer clothes or stop by at a coffee shop or
snack bar. Principled Shoppers who are mostly older women, are governed by
strong moral principles where shopping is concerned. In terms of food, they buy
organic, natural and non factory framed food and in terms of clothes, they prefer
to shop for fashion brands. Discerning food shoppers constitutes of the
population which buys food in markets and local shops around the
neighbourhood instead of going to the supermarkets. The younger population
with children, a part of the independent shoppers category, shop for clothes
more often than food and they do not prefer to be assisted while shopping,
especially for clothes. The enthusiastic shoppers are most likely to shop in streets
rather than going to shopping centers and are influenced by the offers that are
given in the various retail outlets. The last group of shoppers, known as the
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negative shoppers has the highest ratio of males who have a negative perception
of shopping and they cannot spend good time in a shopping area.
Consumer Centre (2007) also classifies shoppers into six kinds of shopping
personalities. The window shopper visits the shopping mall for leisure, usually
walks around in the mall with a friend enjoying the whole atmosphere, without
an intention to buy. The second type is the bargain hunter who prefers to shop at
discount stores and mostly buys when the retail outlets offer sales. The power
shopper does not visit the shopping centers that often, but are very organized
when they are shopping. They carry a shopping list with them, buy only what
they need and know where to get it. The shopaholics have been further divided
into two segments, one being the consumers who enjoy the whole shopping
experience, and the other being the compulsive spenders. The second kinds of
shopaholics are people with low self esteem and get pleasure out of spending
money, which is not a healthy thing to happen. Their urge to shop returns back
every few days. The shopping phobic people are the ones who just hate the
experience of shopping in a shopping centre and cannot find anything positive
out of going out to shop. They would rather sit at home and shop online. The
indecisive shoppers find it very difficult to decide what to buy. They run around
each store just to evaluate the price and quality of one product, which they don’t
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end up buying at all. Lastly, the shopping misers are somewhat similar to the
shopping phobics, who just have to take out faults from everything they see in
the shopping centers including the parking lots, prices of the merchandise, the
return policy of the outlets, etc.
In reference to mall shopping behaviour, Bloch et al. (1994) has classified
shoppers into four segments. They are enthusiasts, raditionalists, grazers and
minimalists. Researches like Bellenger and Korgaonkar (1980) and Lesser and
Hughes (1986) have also emphasized on recreational shoppers (Dholakia, 1999).
2.4 Consumer Buying Behaviour
The traditional shopping choice behaviour of consumers was related to need
recognition, when the consumer comes to know that he wants to purchase a
product. Once the need has been recognized, then he moves on to search for
information about the product and evaluates the alternatives available to him
before finally makes a decision to purchase the product. He might visit certain
outlets stocking that product, consult his friends, buying guides or store
employees about it. Even after making the purchase, he might reevaluate it
(Taylor and Cosenza, 2002).
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Shopping behaviour of consumers is different in different countries. The reasons
of this varying shopping behaviour are the diverse cultures and the changing
economies of the various countries (Millan and Howard, 2007). A study of the
various kinds of shopping behaviours, therefore needs to be done, covering the
various shopping contexts. Dholakia (1999) has provided a framework to
understand the shopping behaviour of consumers.
Figure 1.- Framework to Understand Shopping Behaviour
Source – Dholakia (1999)
Solomon (2002) and Stern (1962) have recognized four types of purchase
behaviours namely, planned, unplanned, impulse and compulsive buying
behaviour. Planned buying behaviour involves information search about the
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product to be bought, evaluation of alternatives and then rational decision
making. This is time consuming. Unplanned buying behaviour does not involve
this kind of an initial planning. It arises when the consumer is unfamiliar with
the store layout, has a shortage of time or just remembers to buy the product
when he sees it on the store shelf (Shoham and Brencic, 2003; Hausman, 2000).
Impulse buying behaviour occurs when a consumer finds a product on the store
shelf and is unable to resist the urge of buying it. It accounts for a large quantity
of products sold that are bought every year and also covers a wide range of
product categories. It has been portrayed by many researchers as a signal of
immaturity, irrationality and risk and an absence of behavioural control (Levy,
1976 and Solnick et al., 1980) (Hausman, 2000). Repetitive and excessive
shopping by consumers due to anxiety, boredom and tension is referred to as
compulsive buying behaviour (Solomon, 2002). According to O’Guinn and
Faber (1991), compulsive buying has been defined as a ‘chronic, repetitive purchasing
that becomes a primary response to negative events or feelings’. Such consumers are
characterized by depression, obsession, tend to fantasize and have lower levels of
self esteem (Shoham and Brencic, 2003).
Wilson (1998) represented consumer buying for social, recreational and
therapeutic reasons in the form of a matrix.
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Figure 2 – A Two Dimensional Matrix of Consumer Buying
Source – Wilson (1998)
Many other factors may also affect purchase decisions. A person is likely to be
influenced in making his/ her purchase decisions if he/ she is accompanied by
another individual while making a shopping trip. A study by Nicholls et al.
(1994) also found that a person will tend to shop more and spend more money
when going out with someone. Other situational factors can also have an impact
on shopping behaviour and purchase decisions. They include task definition,
antecedent states, social and physical surroundings and temporal perspectives.
For example, scarcity of time, any pre-existing affects, choice of the retail outlet
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and store attribute salience, variety of merchandise available in the store and
even store fragrance have an effect on buying behaviour (Nichols et al., 2002).
Shopping frequency is also a significant concept while studying consumer
shopping behaviour. It is defined as the number of incidences when a product is
purchased by someone in person. The shopping frequency is subjective to the
time and effort that is put by a person and his/ her gender and shopping
responsibility for the household. It is also determined by the shopping context
(Dholakia, 1999).
2.5 Organization of the Retail Industry
According to Dixon (2005), for the development of cities and towns, the retail
industry has a very important contribution to make (Howard, 2007). The retail
industry these days is not just about selling products in the shops. With a lot of
development taking place in the retail industry, the retailer, along with that,
needs to survey the consumers in the markets, identify and understand their
needs, provide them with more choice and experience offering competitive
prices. Apart from that, he is also required to maintain a relationship with the
consumers in order to retain them for long
(http://www.etretailbiz.com/dec2002/specialfeat.html).
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Unorganized retailing is defined as having outlets or stores run locally by the
owner or caretaker of a shop that lacks enough technical and accounting
standardization. Both the supply chain and sourcing are done locally to meet
local needs (Sathyaraj, 2006).
Organized retail stores have been defined as stores characterized by large
professionally managed format stores providing goods and services that appeal to
customers, in an ambience that is conducive for shopping and agreeable to customers
(Tata, 2007).
2.6 Types of Retail Formats
Reynolds et al. (2007) defined a retail format as a physical representation in the
form of firm’s activities which relates to the business model developed by the
retailers and their business strategy. It is a kind of a retail mix followed by a
group of retailers, which they can present to the customers and where an
interaction with the shoppers can be made. It is an assortment of variables such
as the merchandise, price, ease of payment and the whole, shopping experience
that is offered to the customers, through which the business context and strategy
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can be conveyed. To convince the target audiences and to compete with other
players in the market, the retailer needs to represent himself with an appropriate
retail format. While deciding on the retail formats, the retailers ought to assess
certain factors such as drivers of growth, the customers’ profile and their
expectations, the competitors and the challenges faced from them. The process of
format selection by the retailer is represented in the figure below (Sinha, 2004).
Figure 3 – Process of Format Selection
Source- Sinha (2004)
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With continued development of the retail industry, newer retail formats are
emerging everyday. Many researchers have tried to explain as to why this
occurrence of new retail formats takes place. These explanations have given
credit to demanding consumers, competitive retailers and manufacturers. Some
studies have proposed the idea that value oriented consumers demand for new
formats and in a response to these demands; the retailers are driven to develop
these. The retailers’ perspective suggests that as a result of expense control and
operational efficiencies, the competitive retailers are pushed towards bringing
new formats. Other researchers explain this phenomenon with the help of
globalization of the manufacturing base. Rousey and Morgansky (1996) has
suggested that whoever may be responsible for the emergence of newer retail
formats, but in the end the consumer is gaining as he is being provided with a
variety to chose from (Rousey and Morgansky, 1996).
The most common types of retail formats are listed in the table below.
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Table 2 – Store Based Retail Formats
Source – Sinha (2004)
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With a diverse range of retail formats available, consumers tend to get confused.
Consumer try to stick to certain retail formats, however, their preferences change
with the development of newer retail formats. Although patronage patterns
occur, they are specific to certain product categories like food and clothing. Shifts
are bound to take place in other product categories. With the increase in the
number of retail formats from which the consumers can make choices, the
retailer should try to understand the market and consumer shopping habits from
a dynamic rather than a static perspective (Rousey and Morgansky, 1996).
2.7 Shopping Malls
A shopping mall is typically, a shopping complex connected by walkways. It provides
shopping as well as entertainment options to the target consumers. It generally, contains
one anchor store, which consumes twenty five percent of its retail space. In addition a
mall contains specialty stores for clothes, accessories, home needs, books, as well as food
court, multiplexes and entertainment zones (Sankar, 2005).
According to Nicholls et al. (2002), a shopping mall is a place where a wide mix
of retail outlets are situated under one roof, and is usually anchored by one or
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more stores like departmental stores, which also helps to attract consumer traffic
to that place. Shopping malls have grown larger over the years and have
expanded to include service outlets and entertainment providers (Ooi and Sim,
2007). They are advertised as both shopping and recreation centers. An added
advantage of the shopping mall is that all merchandise, entertainment such as a
theatre or amusement park, food, services and atmosphere in the mall are all
available under one roof and it is environmentally protected. This advantage also
acts as a crowd puller. Moreover, the consumer can shop without the tensions of
any traffic congestions or parking problems, security issues or crime districts
(Bloch et al., 1994; Roulac, 1994; Erkip, 2003) (Ooi and Sim, 2007; Nicholls et al.,
2002). The collection of shops in the shopping mall is managed together and is
taken as one single unit (Prendergast et al., 1998).
2.8 Determinants for Choice of Shopping Mall
In the views of Sinha and Banerjee (2004), store choice behaviour of a consumer
is considered a cognitive procedure. It is believed to be a process of information
processing as the brand choice or any purchase decision is considered. It is very
similar to the decision of making a brand choice except the fact that store choice
is influenced by the location factor, which does not need to be considered when
making a selection of brands (Fotheringham, 1988; Meyer and Eagle, 1982).
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According to a study conducted by Kenhove et al. (1999), the choice of store by
the consumer was differentiated by the nature of the task that had to be executed
by him. The different tasks that were described by the respondents included
urgent purchases, large quantity purchases, difficult job, regular purchases and
getting ideas (Sinha and Banerjee, 2004).
Figure 4 – Store Choice Model for Evolving Markets
Source – Sinha (2004)
Store choice decision is also driven by other tangible and intangible
characteristics provided by the store. They include the store size, format, distance
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from home and environment of the store. Mattson (1982) found that store choice
can also be influenced by situational factors such as time constraints and gift
versus self shopping, further which can be classified as the competitive setting,
the individual’s situational set and the shopping occasion. However, if store
choice is evaluated by the nature of situational factors, then these factors need to
be studied for each shopping visit of the consumers to the various stores, also
looking into the costs incurred and the benefits made by them during the
shopping task (Sinha and Banerjee, 2004).
Many other researches are also based on the store choice behaviour of consumers
and have given various different viewpoints about the factors on which it
depends. Oppewal and Timmermans (1997) consider the major determinants of
store choice behaviour to be external factors such as retail floor space, distance,
parking facilities, etc (Zhu et al., 2006). Malhotra (1983) suggests that shoppers
choose a particular store if the perceived value of visiting that store is the same
as the threshold value attached to it by the shopper. The threshold value is also
allotted on the basis of the image associated with that store. Dodge and Summer
(1986) found that store choice is a function of variables like socio economic
background, the personality and the past purchase experiences of the consumers.
Lumpkin et al. (1985) who conducted a study to compare the behaviour of
young and elderly shoppers found that instead of basing their store choice on
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price and distance from residence, the elderly shoppers chose a store which was
high on entertainment value (Sinha and Banerjee, 2004).
Various factors, both spatial and non spatial, have also been discussed in
literature about what attracts shoppers towards a shopping mall (Ooi and Sim,
2007). Although a lot of differences have been noticed among the different age
groups while studying their preferences of the shopping malls (Anderson et al.,
2003), general shoppers of all age groups are attracted to innovation and
uniqueness (Wang et al., 2000) (Wilhelm and Mottner, 2005). Attractiveness of
the shopping mall also determines the rent that the various retailers have to pay
in order to open an outlet in the mall (Sirmans and Guidry, 1993; Gatzlaff et al.,
1994; Hardin and Wolverton, 2000). The major factors which affect the
attractiveness of a shopping mall have been discussed below.
2.8.1 Number of Stores and the Tenant Mix
Wilhelm and Mottner (2005) have considered the number of retail outlets in a
shopping mall as one of the factors that helps shoppers decide which mall to
choose. While studying mall preferences of teenagers, Baker and Haytko (2000)
have said that not only the number but the variety of different stores is also a
decisive aspect for them. The assortment of stores and services, known as the
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retail mix, as well as less repetition of stores are also key factors for a number of
shoppers (Wang et al., 2000; Anderson et al., 2003). Therefore, the tenant mix is
also an important construct.
The range of tenants in the shopping mall can include departmental stores,
supermarkets, apparel stores, and entertainment and leisure facilities (Abratt et
al., 1985; McGoldrick and Thompson, 1992). The anchor tenants are also a
major part of the tenant mix as they help to generate a lot of shopper traffic to the
mall. Miceli et al. (1998) said that apart from considering the profit of a store, the
mall management (who is the deciding authority of the assortment of outlets)
should also take into consideration its consumer drawing power to the mall, as
more consumers would also lead to the profit generation for other stores in the
mall as well. To ensure the success of a shopping mall, one or more anchor
tenants should be selected by the management so that they initially attract
customers, which can be charged lower rent (Ooi and Sim, 2007). According to
Brown (1992, 1993 and 1994), the anchor store for a shopping mall in the central
city is more likely to be a departmental store, whereas for a mall in the suburbs,
the anchor store would be a supermarket. He also suggested that the layout of
the mall should be such that the anchor stores should be placed at the both ends
of the mall, service outlets on the side malls closer to the exits and entrances of
the mall and outlets like pet shops and dry cleaners should be positioned away
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from the food stores (Prendergast et al., 1998). Moreover, if a large number of
similar stores are clustered together, this would bring agglomeration benefits
and thus more customers would be drawn towards the shopping mall
(Hotelling, 1929; Miceli et al., 1998). Also, with smaller shopping malls coming
up, tenants like restaurants and fast food outlets, clothing stores, retail service
providers and institutional tenants such as banks and post officers are gaining
more importance (Prendergast et al., 1998).
As the tenant mix is a very important factor, the decision of correct assortment of
tenants should be the starting point for any shopping mall. Apart from being a
crowd puller, it also affects the image of the shopping mall, its patronage and
rentals (Kirkup and Rafiq, 1994; Gerbich, 1998). It also influences the length of
stay of customers in the mall and their level of excitement (Wakefield and Baker,
1998). However, the definition of what should be called the ideal tenant mix
would keep developing over time. It has also become difficult for the mall
management to find the appropriate tenants for the malls, reasons being large
number and competition between shopping malls, upcoming newer retailing
formats and the downturn in economies (Kirkup and Rafiq, 1994; Prendergast et
al., 1998).
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2.8.2 Location of the Shopping Mall
Location is an important aspect of marketing and a good location can be a source
of competitive advantage for the retail outlet (Dickinson, 1981; Vigoda, 1981).
Some researchers have even shown that, while good business practices may not
compensate for poor location, good location may compensate for poor business practices
(Achabal et al., 1982; Craig et al., 1984; Ghosh and Craig, 1983; Simkin et al.,
1985; Wehrly, 1967) (Prendergast et al., 1998).
Various theories and formal models have been provided in the literature to help
retailers and developers to decide the location of outlets or shopping malls. One
of them is the traditional hierarchical model of retail development by Brown
(1991). It compares and finds out the relationship between a major metropolitan
area and its neighbourhood communities and regional communities. Another
research by Clarkson et al. (1996) has also categorized retail location theory into
four areas. These are the central place theory, spatial interaction theory, land
value theory and the principle of minimum differentiation (Prendergast et al.,
1998). The Law of Retail Gravitation Model by Reilly (1931) and Huff (1964),
tested that the magnetism of a shopping mall decreases with distance and
increases with increase in its physical size. The gravity and potential models also
recommend that while choosing between shopping malls, the customers try to
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find a balance between the utility, which is measured by the size of the shopping
mall, and the cost, which is measured by distance. Shoppers patronize a
shopping mall by finding out the correct balance between these two attributes
(Ooi and Sim, 2007).
In relation to the location of the shopping mall, accessibility and visibility are the
two determinants which need to be noted (Simmons, 1992; Ownbey et al., 1994;
Forgey et al., 1995). The size, quality and design characteristics should also be
favourable as these impact the accessibility and visibility factors (Brown, 1999).
2.8.3 Shopping Experience
The prime advantage of an experience product is the experience that the shopper
goes through by purchasing that product or service. Consumers derive value
from purchasing these goods or services because of their unique qualities and are
ready to pay a little extra for them. Mall developers have also tried to cope up in
the experience economy by providing the consumers with good store ambience
as well as entertaining and amusing experiences apart from shopping. They have
added movie theatres or keep organizing live performances for the consumers in
which they can get engaged and enjoy their experience while shopping in the
mall. An example is the various entertainment activities, like theme park and an
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ice skating rink along with a huge variety of stores that are provided in the Mall
of America (Wilhelm and Mottner, 2005; Sinha and Banerjee, 2004).
According to the findings of Wilhelm and Mottner (2005), the age group of
teenagers also preferred going to a shopping mall whose atmosphere was
friendly and made them feel welcomed. They wanted a mall which provided
cool stores, entertainment options, attractive designing and a good place to
spend time with friends, on the whole a good shopping experience.
Figure 5 – Experience Realms and Shopper Preferences
Source - Wilhelm and Mottner (2005)
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Consumers these days are becoming very variety seeking and searching for
novel and unique experiences (Berry et al., 2002). They see malls as a source and
venue for recreation (Wilhelm and Mottner, 2005). Thus the overall shopping
experience which includes shopping, leisure as well as entertainment is a key
determinant of mall attractiveness.
2.8.4 Shopping Mall Image
The authors of “Shopping and the Fear of Others” have found out that
shopping malls have an important role to play in the formation of the social
identity of the shoppers as they are connected to particular societal groups
(Arnould, 2000). Shopping mall image has been defined by Houston and Nevin
(1980) as the total of consumers’ perceptions of a shopping mall based on functional and
emotional attributes. The image of the shopping mall is also related to the
frequency of customer visits to that mall and is important for customers when
choosing between different shopping malls. Shopping mall developers should
expend resources towards the communication of the right image of the shopping
mall and this communication should be driven towards improving its image and
thus frequency of visits. The image is also subject to the presence of anchor stores
and other physical characteristics (Ooi and Sim, 2007; Hunter, 2006).
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2.9 Conclusion
After discussion of the factors influencing choice of shopping malls, it is worth
mentioning that the effect of some of these factors like retail floor space, number
of shops and distance weaken over time, whereas the effects of other factors like
anchor stores, tourism site strengthen over time (Zhu et al., 2006). A healthy
assortment of all these factors increases the attractiveness of the shopping mall.
However, studying individual choice decisions would not help us to understand
the behaviour of the market as a whole (Millan and Howard, 2007).
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Chapter Three Research Methodology
3.1 Introduction
Many attempts have been made to provide a formal definition of the research
activity. Neuman (2000) defines research as “research is a collection of methods
people use systematically to produce knowledge”. Research has also been defined as
an organized and deliberate effort to collect new information or to utilize existing
knowledge for a new purpose, seeking to answer worthwhile and fundamental
questions, by employing valid and reliable techniques. In addition, research
involves the use of more appropriate tests to justify the methods employed, and
provides logical and objective data collection where conclusions can be drawn.
Ultimately, it contributes to the gaining of new knowledge and a better
appreciation for the issues involved by the researcher (Gill and Johnson, 1997;
Punch, 2001).
Every piece of research has its own aims. Keeping in mind those aims, the
research objectives and the method to accomplish these objectives should be
derived. It is necessary for the researcher to know the suitability and the
limitations of choosing the appropriate method so as to be able to take necessary
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precautions for increased validity, reliability and generalizibility of the research
(Miles and Huberman, 1994).
The use of appropriate methodology is very essential as it is an important part of
a research investigation. A well-defined methodology is a crucial step in
activities that require concrete results as the process of achieving the result can
both be studied and verified. In this chapter, the methodology employed in
carrying out the study will be discussed. In doing so I would discuss the research
objectives and the use of different forms of qualitative research methods which
helped me to carry out this research successfully.
3.2 Research Objectives
In order to conduct this research, the research questions that have been formed
are-
• What impact does the development in real estate industry have on the
organization of the retail industry in India?
• How are the consumers’ shopping habits changing with upcoming retail
formats, specifically malls?
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• What are the determinants of consumers when choosing between a
shopping mall and the unorganized market?
To answer these research questions I would look into the past trends in the
Indian real estate and the Indian retail industries. With the help of the data that I
have collected, I would compare the past trend with the present trends with
respect the gradual movement in the consumer shopping habits in the country
and the factors leading to it. With the continuing drift in their shopping habits,
the future prospects of organized retailing in India would also been discussed.
3.3 Qualitative vs. Quantitative Research
Qualitative and quantitative research methods are two major approaches
employed by researchers. These two methods are distinct from each other.
Qualitative research seeks to describe and decode the meaning of naturally
occurring phenomena in the social world through interpretative approaches
(Van Maanen, 1983, cited in Easterby-Smith, Thorpe and Lowe, 2002), and
thereby provides “well-substantiated conceptual insights that reveal how broad
concepts and theories operate in particular cases” (Gephart, 2004). In other words,
qualitative research focuses on the nature of reality constructed from societal
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members’ ‘concepts-in-use’ (Schutz, 1973). Due to the direct access to the social
behaviours of humans, qualitative researchers are able to collect information “in
a detailed and complete form” (Sarantakos, 2005), and are allowed to examine
social phenomena in depth and offer insightful depictions. In brief, qualitative
research enables the researchers to see the world through others’ eyes
(Goodyear, 1990) and to understand individuals’ attitudes, perceptions, beliefs,
views and feelings (Hakim, 1994). On the other hand, quantitative research
“emphasizes measurement and analysis of causal relations among variables” (Denzin
and Lincoln, 2000) and tests general propositions using the hypothetical-
deductive model (Gephart, 2004). Quantitative research “imposes scientific
meanings on members to explain a singular, presumed-to-be true reality” (Gephart,
2004).
“Qualitative research thus has an inherently literary and humanistic focus, whereas
quantitative research is grounded in mathematical and statistical knowledge”. The
former uses richly descriptive words, talk, and texts as meaningful
representations of concepts; the latter, in contrast, seeks significant
representations of concepts through coding, counting, and quantifying
phenomena (Gephart, 2004). The choice of research methods is not always an
either-or question, rather a careful evaluation of the suitability for research
purpose and the type of questions posed. In effect, both of research methods can
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be used in a single piece of work to deal with different types of research
questions. However, qualitative research methods have been used by me in
order to conduct this research because qualitative research can provide ‘in-depth’
understandings of research subjects in comparison with quantitative research
(Easterby-Smith et al., 2002; Silverman, 2000). Quantitative research methods
were also analyzed while choosing a method of research for this study, however
the behaviour of consumers cannot be quantified and thus it would be difficult to
analyze. Thus qualitative research methods have been used.
3.4 Data Collection
Both primary and secondary data were used in order to conduct this research.
3.4.1 Secondary and Primary Data
Secondary data is very important in research because this can help the researcher
to avoid duplication on research that has already been conducted. This saves the
researcher’s time and cost in conducting repetitive work. By conducting
secondary research prior to primary research, the researcher can assess the
availability of information and use it as a basis to design the methods to collect
the primary data (Parsuraman, 1986). In addition this can only enable a
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researcher to develop a hypothesis or assumptions about the topic. Secondary
research also has the benefit of being carried out in privacy without anyone
knowing about it (Wright and Crimp, 2000). This is a cheap and impersonal form
of research compared to primary research as this can be done at the researcher’s
own convenience, either at home or at the university. The data sought from
secondary forms of research are historical as they are from the past, thus
meaning that comparisons can be made by comparing the past and current
situations (Saunder et al., 2000).
This research was carried out by using news paper articles, internet reports, and
academic journals from sites such as Mintel, Science Direct and Emerald Insight,
textbooks, industry reports, etc. Data from academic journals and textbooks was
particularly useful in reviewing the existing literature on consumer buying
behaviour and their choice determinants for shopping malls. However, one of
the major drawbacks of this method of research is that sometimes the
information gathered may not directly fit into your research area and some data
can also be out of date and not valid at the present moment (Kemp, 2002). The
information gathered from the sources can have an impact on the level of bias
and in addition may not be very accurate. Some research reports about
companies or retailers can be confidential and thus not published and difficult to
obtain (Saunders et al., 2002).
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The second type of research method carried out was primary research. Saunder
et al. (2003) has defined primary research as “Data collected specifically for the
research project undertaken”. The three main types of primary research that can be
used are observation, interviews and surveys. For the purpose of this research I
have used interviews as a form of primary research.
3.4.2 Interviews
Interviewing has been one of the most widely used research approaches among a
variety of qualitative methods (Have, 2004; King, 2004).
Interviews can be used conducting various techniques such as telephone
interviews, face to face interviews and focus group interviews. Interviews are a
very common and flexible form of gathering qualitative data and according to
Parsuraman (1991) this is an effective form of conducting exploratory research,
which can allow opinion of those with expertise in areas related to the subject
matter under investigation to be examined.
In social research there are four main types of interviewing techniques. Firstly,
fully structured interviews are where the situation is fully controlled by the
questionnaire in terms of questions and potential answers (Crouch and
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Housden, 1996). Secondly, semi structured interviews are where open ended
questions are used and the interview’s job is to probe for more depth answers.
Thirdly, unstructured interviews are where neither the interviewer nor the
interviewee has set questions. Instead, a topic guide forms the basis of the
interview, and the interviewee is encouraged to explore his/ her thoughts on the
topic of research. Finally, in the in depth interviews, the respondent is
encouraged to go deeper and deeper into their levels of thinking to develop into
the subject area (Crouch and Housden, 1996).
A semi-structured format has been adopted for this research, which means open-
ended questions are used across all interviews and some questions are prepared
in advance. This type of interview can help the researcher focus on research
topics. On the one hand, it makes the most of the value of time spent with the
interviewees (McCraken, 1988), on the other, it ensures that the interview
questions cover all research topics more fully, and facilitates the comparability
between interviews (Karantinou and Hogg, 2001; Selltiz, Jahoda, Deutsch, and
Cook, 1964). This type of interviewing provides the researchers with the
opportunity to explore answers, where the researchers want their interviewees to
build up on the responses. It has been sought that open ended questions are
designed to encourage the interviewees to offer extensive and developmental
answers and can be used to reveal the interviewees attitudes or obtain facts
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(Grummit, 1980). Additionally, it also gets the interview to gain unpredictable
viewpoints from the interviewees. Thus this method of analysis has been used
for this research paper.
3.4.2.1 Interview Sample
For conducting the interviews, two different sample populations were chosen.
The first sample consisted of retailers who had already opened their outlets in
the shopping malls of Delhi and NCR. For conducting these interviews,
purposeful sampling was used. Purposeful sampling selects information rich
cases for in depth study (Mugo, 2007). This could be a help as most of these
retailers already had their outlets in the unorganized markets before opening
shop in the shopping malls. Thus, they could give their views on the consumers’
shopping habits in the malls and how was it different from the outlets in the
markets. Qualitative research typically uses a relatively small sample yet focuses
in depth on it (Patton, 1990). Therefore, a sample size of 15 respondents was
chosen for taking the interviews of retailers.
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Table 3 – Profile of Retailers Interviewed
RETAILER BUSINESS E – MAIL
Dockers Men’s Apparel [email protected]
Royal Sporting House Sports Wear &
Accessories
[email protected]
Shringis Women’s Western
Wear
[email protected]
Satya Paul Women’s Ethnic Wear [email protected]
VIP Travel Accessories [email protected]
Stupid Cupid Women’s Accessories [email protected]
First Impression Women’s Traditional
Wear
[email protected]
Nextt 2000 Women’s Western
Wear
[email protected]
Abhinetri Women’s Ethnic Wear [email protected]
Timex – The Time
Factory
Watches [email protected]
Bose Music Systems [email protected]
Roop Vatika Women’s Ethnic Wear
& Accessories
[email protected]
OSHO [email protected]
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For choosing the second sample, a simple random sampling technique was used.
A simple random sample is obtained by choosing elementary units in search a
way that each unit in the population has an equal chance of being selected. A
simple random sample is free from sampling bias (Mugo, 2007). This sample
consisted of consumers living in India, who have seen a drastic change in the
organization of the retail scenario in India and are familiar with it. Random
people were chosen from family, friends and employees who are a part of the
consumer group and are a witness to this transition. To get a wider view, the
respondents that were chosen belonged to diverse age groups and income levels.
The sample size for this was 20.
3.5 Research Procedure
In order to perform a successful research, it is very important to have a well
defined procedure of carrying it out. To start this research I started reading a
literature that was relevant to my area of study, which took a very long time.
Reading that, I formulated the literature review which consisted mostly of
consumer buying behaviour and their choice determinants for choosing a
shopping mall. After a careful examination of the literature, questionnaires were
formulated for conducting the interviews from the retailers who had opened
their outlets in the malls and the Indian consumers.
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For conducting the research, 6 major malls in the parts of West Delhi, South
Delhi and NCR were visited. Conducting the interviews from the retailers was
not a very easy task to do. Even though I approached them in their non peak sale
time of the day, they seemed to be busy and disagreed to give the interviews.
Furthermore, most of the retailers who agreed to be interviewed by me were
reluctant of giving recorded ones. However, I got hold of 15 retailers from
different malls and conducted their interviews and writing down their responses
side by side. For the interviews of the consumers, approaching them was quite
easy as most of them were familiar with my area of study. Face to face interviews
with some and telephonic interviews with the others helped me complete my
field research.
Gaining trust was a crucial part of the whole process of conducting the interview
because if the researcher is not trusted the interviewee may not refuse to give the
interview but may desire and act such that the interview gets over as quickly as
possible with enough detail to satisfy the researcher that she is getting something
of value but without saying anything that touches the core of what is actually
being believed and cared about in the research (Jones, 1985 quoted in Easterby-
Smith, 2002). Thus the purpose of the interview and the study was explained
clearly to each interviewee before taking the interview.
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The data that was collected was then analyzed and results were evaluated. Some
recommendations for the future were then suggested for the real estate
developers and the retailers.
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Chapter four The Indian Scenario
4.1 Introduction
The key areas on which the real estate industry in India is focused are residential
and commercial. The commercial area is majorly dependent on the retail
industry. India has been ranked fifth of the thirty emerging retail markets of the
world by the global real estate consulting group Knight Frank (Real trends: The
boom continues, 2006). There is a transition taking place from the conventional
unorganized retail sector to an organized one, for example, the big super markets
are replacing the small neighborhood kiranawalas
(http://www.etretailbiz.com/dec2002/specialfeat.html). This organized retail
sector in India now boasts of having preferences of almost all consumers which
include apparel and accessories, appliances, electronics, cosmetics and toiletries,
home and office products, travel and leisure products and much more (Retail
Sector in India, 2007). The organized retail segment which is currently only 2
percent of the retail industry is estimated to grow at a rate of 20 percent by 2010.
This development in the retail industry is leading to a boom in the real estate
sector. In a report by Merrill Lynch, the real estate trends of the country
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indicated the growth in the number of malls in the major cites from 40 to about
250 by the end of this decade (Real trends: The boom continues, 2006). Not only
are these shopping malls becoming familiar in the larger cities, but this boom is
also racing its way to the Tier II cities or the smaller cities.
4.2 Past Trends of Shopping in India
Earlier, the retail industry in India could be labeled as highly unorganized
comprising of large, medium and small grocery stores and drug stores
(Organized Retail Industry in India, 2006). The concept of shopping in India
was led by the general stores that supplied everything from groceries to
stationery, and small shops in localities that stocked limited varieties of products.
Before the evolution of organized retailing and with limited brands available in
the market, the people only used to buy what was offered to them. The existence
of consumer culture was very limited and there were no defined ‘shopping areas’
(Tata, 2007). Since then, the idea of retail merchandising and consumer shopping
has changed by leaps and bounds (India Retail: Global Brands and Chains Set
Sights, 2007). Modern retail formats came into existence such as malls and
supermarkets. Many companies also started to set up exclusive showrooms and
other larger retail formats such as Westside, Shoppers Stop, etc. Most of these
organized retailing formats are mainly concentrated in the metropolitan cities;
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however they are getting diversified into smaller cities and towns (Organized
Retail Industry in India, 2006). The introduction of these larger and more
diverse formats provided the consumers with more options to shop from and
novel experiences for the Indian population.
However, the traditional forms of retailing which provided a great amount of
personalized service to the shoppers, made them vary about shifting from their
usual methods of shopping. “The traditional consumer, initially overawed by the new
look and used to equating glitzy with expensive, refrained from entering the store” (Tata,
2007). Also, the new formats were perceived to be having not enough added
values for most of the customer segments. One of the obstacles that came in the
way of the success of these formats was the perception of consumers about the
price of the merchandise that was offered. They thought that the products they
purchased at malls were far more expensive than the ones they shopped from the
unorganized markets, however, providing no extra value
(http://www.etretailbiz.com/dec2002/specialfeat.html). Another key challenge
faced by the developers to make their shopping centers a success is the scarcity
of anchor retailers which are considered a key source of crowd pulling. The
number of anchor retailers in India is limited. With huge number shopping mall
developments that are currently taking place and are projected for the future,
there is a shortage of the alternatives available for selection of anchor stores. This
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creates a lack of ability for the developer to form a unique and characteristic
positioning of the shopping center in the minds of the consumers (Images
Report 2005 on shopping centre development in India – II, 2005). Stringent
trade laws and government regulations, further added to this difficulty. Thus,
these shopping centers received only moderate success in the Indian market in
their introduction phase. Looking at this, many of the retail chains held back
their expansions into the organized segment (Sinha and Banerjee, 2004).
However, liberalization has changed all this. There was an effort made by the
organized retailers as well as the consumers to make this new found trend a
success.
4.3 Conclusion
With consumer demographics becoming more and more favorable to the
organized segment of the retail industry and the increase in the availability of
retail space and a skilled workforce, there has been a complimenting growth in
retail chains, multi brand outlets and integrated shopping malls. A variety of
newer retail formats are being introduced. Enormous networks of stores are
getting scattered on the Indian landscape, starting with larger cities and then
moving on to smaller towns as well (India Retail : Global Brands and Chains
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Set Sights, 2007). The infrastructure and supply chain mechanisms of malls are
getting organized and spreading across the country. This brought about a
revolution in shopping in terms of the consumer buying behaviour. The
introduction of these larger and more diverse formats is providing the
consumers with more options to shop from and novel experiences for the Indian
population. This changing retail environment is leading to a change in shopper
expectations and factors effecting store choice (Sinha and Banerjee, 2004).
According to the research on store choice behaviour in an evolving market by
Sinha and Banerjee (2004), both the consumers and retailers are in the testing
phase as to what will be the factors effecting store choice behaviour in the Indian
context. It is being currently evaluated by a few big players such as Pantaloon
Retail, Food World, Spencers, Shoppers Stop, Lifestyle, Subhiksha and a number
of other smaller entrepreneurs (India Retail : Global Brands and Chains Set
Sights, 2007).
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Chapter Five Findings and Analysis
In this chapter, the findings of all the semi structured interviews have been
stated. Also, the analysis and investigation of the data that is collected has been
carried out. The interviews have been broken down into themes aiming to carry
out a comprehensive in-depth analysis. This part has been broken down into two
sections – the retailer’s point of view and the customers’ perspectives.
5.1 Retailers’ Perspective
The interviews that had been taken from the retailers who had already opened
their retail outlets in the malls have been analyzed in the following section. The
responses by the retailers have been listed in a table format question by question
and then analyzed later using points that have been listed in the literature about
choice determinants of mall.
Table 4 – Retailers’ Perspective
QUESTION ANALYSIS OF RESPONSES
Q1. How long has it been
since you have opened the
shop in this mall?
All the retailers who were interviewed had opened
their outlets in the malls since a period of less than
2 years except one, for whom it had been two and a
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half years.
Q2. Why did you choose to
open your outlet in the
mall other than the
unorganized market?
Different retailers gave different responses to this
question. The most common reasoning that was
given by them was the upcoming trend of mall
shopping and the changing customer preferences.
As all their needs get fulfilled under one roof and
they get the required quality, price and
environment, they are attracted more towards the
malls. Another reason for the customers getting
fascinated to the malls is the hot and rainy weather
conditions in India. Other responses included
bigger retail space which is not available in the
congested unorganized markets, and also for the
separation of the commercial establishments from
the residential areas.
Q3. Do you have another
retail outlet other than in
this mall?
All retailers who were interviewed had their
outlets in unorganized markets of different areas as
well as other malls except two retailers who only
had outlets in malls and one who only had another
outlet in the unorganized market area.
Q4. Do you reach the
targeted sales level in this
There was a mixed response of this question. Seven
of the interviewed retailers were happy with the
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outlet or as much as the
other outlets?
amount of sales level that they were getting in their
mall outlet as their target was being achieved. Out
of them, one women’s ethnic wear retailer was
achieving the best sales level in that outlet out of
all others. The reasoning that was given by them
was that the customers were attracted by their
brand name. However, the other retailers were not
achieving as much sales as they did in the
unorganized market outlets. Different explanations
were given for it. They said that the outlets in the
markets were very old and well known to the
customers. Other reasons were mall specific such
as not much foot fall in the mall and absence of a
cinema due to which fewer customers are attracted
towards the mall.
Q5. What do you do to
attract customers to your
outlet?
A variety of promotional tools were being used by
the retailers to get the customers’ attention towards
their outlets in the malls. End of season sales was
the most common form of the promotional
schemes being used. Customer databases were
maintained by most of the retailers and different
schemes were provided to them by different
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retailers. These included informing the clients
regularly about change of stock and in store
promotions, coupon schemes, etc. Some of the
bigger country wide known brands were also
advertised in magazines, newspapers as well as
television. Word of mouth and brand loyalty were
also used as other modes of promotions.
Q6. What do you think can
be done to attract
customers to a mall? What
do you think of anchor
stores?
Attraction of customers is the most important for
the success of malls. According to the responses
provided by various retailers, location, having a
good mix of brands within the mall, having an
ambassador for promoting the mall or the various
branded outlets present in it, timely promotions
using banners and posters, economical prices of
merchandise, provision of regular weekend and
monthly schemes to keep the customers loyal,
organization of events and programs within the
mall, positive behaviour of the staff, cleanliness,
promotion of the mall as a whole instead of the
different retail outlets present in the mall are the
various methods of pulling the customers towards
the mall. One of the retailers also held a fashion
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show within the mall to promote their outlet.
Positive responses were also provided by majority
of the interviewees about having an anchor store in
the mall as it is a positive point to have such an
outlet in the mall and has advantages like “it is a
great help in attracting customers” and they visit the
other shops as well, it increases “walk – ins” into a
mall. One of the retailers also believed that “the
crème customers”, who have the buying capacity are
attracted towards the anchor stores. However, one
of the retailers differed in his views about having
the anchor store in the mall. According to him,
“although the anchor store attracts customers towards
the mall, but the other brands suffer due to it”.
Q7. What do you think of
consumers’ perception of
mall shopping?
Majority of the retailers say that a major part of the
customer base still perceives that the merchandise
in the mall is highly priced. According to one of the
retailers, “50 percent of the consumers think that
products in the malls are expensive and so they just
hang out in the mall and go. For shopping they go to the
markets which they perceive to be cheaper”. However,
some of them also believe that the mindset of the
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consumers is changing and they are getting more
convinced about the prices. Also, the prices of
branded products are found to be similar in the
malls as well as the unorganized markets. The
customers also tend to receive many benefits if
they come to the malls for shopping which
compensates for the high price factor. These
include better infrastructure, comfort of one stop
shopping, good experience and ambience,
protection from the harsh Indian weather
conditions, etc.
Q8. What benefits do
consumers obtain from
coming to a mall rather
than the unorganized
market? What effect do
these benefits have on
sales?
Several facilities are made available to the
consumers when they visit a mall. Firstly, “they can
shop for so many things at one place, they can eat and
hang out and entertainment places like PVR are
available, all this can be done along with shopping”.
Other than this, comfort, security, parking
facilities, air conditioned environment, neat and
clean atmosphere and easier commuting are the
other benefits that a customer can get when he/
she comes to a mall. Unlike the markets, this also
saves time and the customers also get rid of traffic
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jams. All these factors affect sales because “this is
why people come to malls” and “any mall having all
this attracts customers”. “If people don’t have to shop
then also they can come to just hang around with
friends. This sometimes affects sales as some people end
up purchasing goods.” According to another retailer,
“When people come to a mall, they are mentally
prepared to spend money.”
Q9. If you have to open a
new outlet, would you
choose to open it in the
upcoming malls?
Few of the respondents have mentioned various
criteria for this decision, the major being location of
the mall or the market, foot fall of the mall,
consumer preferences for the mall and government
policy. However, a good number of the retailers
would prefer to open their next outlet in the
upcoming malls of the country as “markets are doing
better currently but in the future malls would be the
only thing” and “the coming time will see an end of the
markets”. “It will take time for the malls to develop and
grow; patience is required to get sales in the malls
however the future prospects are bright”. Two of the
retailers also had tie ups with two of the biggest
mall developers of the country; this was one of the
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reasons that they opened their outlets in the malls,
and would plan any further expansions within the
malls developed by those companies.
It can be analyzed from the responses that the introduction of the so called “mall
mania” has not been there in India for a long time. It is a novice situation for the
retailers as well as the consumers. Therefore, it is going to take a little while for
both the parties to get along with this rapid development taking place in the
country. The government is also encouraging this growth that is taking place in
the retail as well as the real estate industry of the country. Various steps are
being taken by it in the different parts of the country to make this development a
success. For example, in the capital city of New Delhi, the government started
sealing activity of the retail outlets that had been opened in the residential areas
in order to discourage the growth of unorganized markets, due to which the
retailers had to buy retail space in malls for expansion; in Mumbai as well, the
freeing up of much needed real estate has been responsible for the development
of the city in terms of retail space. Accessibility of real estate at affordable prices
has been made easier partly due to easier availability of finance and bank loans.
The investors are also motivated towards this development as they get a higher
return of 14 percent on the mall business as compared to 11 and 6 percent in the
office segment and the residential segment, respectively (Bist, 2004). All these
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economic activities along with the gradually changing consumer preferences are
responsible for the ongoing boom in the mall activity in India.
5.2 Consumers’ Perspective
To get the Indian consumers’ viewpoint on the upcoming trend of shopping in
the malls, interviews that were taken from the consumers have to be analyzed.
The respondents’ views have been generalized as the views of the consumer
population in India. These interviews have been analyzed in the following
section taking one question at a time and quoting consumer responses.
The current preferences of consumers between the shopping malls and the
unorganized markets were asked. On the one hand, majority of the consumers’
preferences had now shifted from unorganized markets to shopping malls as
development is taking place in diverse parts of the country including smaller
lesser developed cities and in different areas within a city. Many respondents
have also stated various criteria for choosing between the malls and the locality
markets which have been stated in the following quotes listed below.
“The choice between unorganized and malls depends upon a number of other factors such
as mood, type of shops etc.”
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“Price is the factor associated with the choice. For items priced equally in the malls I
would prefer the malls or else the markets.”
“It depends on the weather if it is really hot I would like to shop in a mall. It also depends
on when I am looking to buy and what is my budget. If I am looking for something
special then maybe I will prefer a mall but if I am looking for something which is
available every where I would buy for the place which is nearest.”
“Depends on the purpose, if I have time to spare and want to spend an entire day
shopping, eating, watching a flick then mall would be the preferred choice because it
would be convenient, if only shopping for a particular item or grabbing a bite then local
markets will be more convenient”
On the other hand, few of the respondents also preferred the unorganized
markets over malls as they did not think that malls that have currently been
opened in India can offer everything that a consumer needs and also a majority
of the population stayed away from the malls due to high prices of the products.
This mixed response indicates that the consumers in India are changing and are
overall beginning to prefer the malls instead of the markets. Probably, it is
dependent on the income group the consumers belong to. A higher income
group consumer would indicate a higher preference for malls and vice versa.
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“I would prefer unorganized local markets because shopping malls which Cater to all the
needs of a customer or provide all popular brands under one roof are yet to come to
India.”
“Shopping malls provide many facilities under one roof but lack in providing goods at a
cheap price. This makes Local markets more famous among the Common Man as they
provide largely the same goods at a competitive price.”
A very mixed response was obtained when the consumers were questioned
about the frequency of their mall visits for the purpose of shopping. Few of the
respondents visited only the mall whenever they would move out with the
intention of shopping. Others visited a mixture of both, which must be
dependent on various factors. From the responses it can be analyzed that the
customers who initially visited only the unorganized markets with the shopping
motive in mind has also started to consider the malls for specific product
categories or brands. This again indicates a gradual change in the consumer
preference for malls.
“In a week I go around 3 to 4 times for shopping and all the time in malls.”
“Once in a fortnight I go out for shopping. And alternatively I go to malls and markets.”
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“At least once a week in the unorganized market and once a month in malls.”
“I go out for shopping five to six times a month - 80% to local markets and rest of the
time to malls”
“Around 4 times monthly, and twice to malls.”
There is also a difference in the kind of merchandise that a consumer buys from
the mall and that he/ she buys from the unorganized markets. The Indian
consumer has been very used to picking up products form the local markets
which is proximity of their homes. Although, they are getting used to visiting the
mall for their shopping needs, they still shop for their daily needs from the
market itself. The respondents have also stated various advantages and
disadvantages that they have associated with the visit to the malls.
“Branded items are bought from malls and day to day items from markets.”
“Malls: because they are comfortable, you get everything under one roof, air-conditioned
environment and non-tiring. Unorganized Markets: they too tiring, messy at times but
they are good for getting little things which you normally don’t get in the malls.”
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“Malls are visited at all times but most purchases are done from local markets which offer
a wider variety of branded goods.”
“In shopping malls everything is organized and a person does not have to face the terrible
heat of Delhi.”
“Malls have a comfortable environment with a good parking facility and all brands are
available under one roof. And unorganized markets are visited for fulfilling the daily
requirements.”
“Unorganized local markets provide all essential goods in a confined small area whereas
malls only house a few selected brand stores.”
“Local Markets are more accessible, better priced & have a large variety.”
Almost all of the consumers associated leisure activities with malls. For many
consumers, malls have become a destination where they can hang out and
socialize with friends in coffee shops like Barista and Cafe Coffee Day. An
entertainment factor has also been associated with shopping in the malls as many
consumers have started to view shopping as an enjoyable pastime. All their
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purposes of shopping, entertainment, socializing with friends and eating out
could be fulfilled by a single visit to the malls. It can be inferred from the
respondents’ views that some of the visitors who come to a mall can be
categorized as serious shoppers who are attracted by the convenience of buying a
wide variety of products under one roof. However, most of them are still
overawed by the whole experience that they go through when they visit a
shopping mall which includes gazing at luxurious branded products, cooling off
in air conditioned comfort and enjoying an ambience that was never experienced
while shopping in the markets but was “only seen in Hollywood movies” (Bist,
2004). Also, it has been seen that shoppers these days are also combining the
shopping and leisure activities. They can do this by visiting the mall where they
can get an environment where they are able to carry out their leisure activities
along with shopping.
“Oh yes, because apart from shopping, there are road shows, movies, trivia contests,
lucky draw and all of the same can be associated to leisure.”
“I go to malls four to five times a week for a coffee, shopping is just as per the needs.”
“Malls are visited once in a month, they are not as accessible as local markets so going to
a mall is more of an outing than fulfilling the purpose of shopping.”
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“Yes malls are good for catching up with friends.”
“Malls because of convenience of parking, everything is organized, combines leisure with
shopping and better ambience.”
“Yes, malls are mostly associated with entertainment and food.”
Considering the location factor, majority of the respondents did not care about
the proximity of the shopping malls from their homes. The reason for this
probably would be that there are only a few shopping malls currently and all the
consumers want to experience this new way of shopping, therefore, they do not
mind even if they have to travel a long distance to visit the shopping mall
occasionally. However, few of the interviewees associated their decision of their
shopping destination with respect to its proximity from their home.
“Yes because it is very near to my house, I can go there anytime when I feel like, even
alone.”
“As long as I get what I want in terms of the brands and variety, I don’t mind shopping
anywhere. However malls would be more convenient, if they are closer and have similar
variety.”“If I have decided on the shop and know what exactly to buy, then I would
consider proximity as a major factor that would affect my decision. Apart from this
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variety can also affect my decision making, for example due to availability of space, the
shop in the mall would be bigger and would store more variety of the product, then in that
case the mall shop would be a better option.”
“Proximity can be related to time, if I have some extra time then I prefer going to the
mall, otherwise local shopping would be just fine.”
In general consumers’ perception, there exists a pricing difference between
merchandise in the mall and that in the unorganized markets. The products
available in the malls are considered to be more expensive than those available in
the markets. However, from the responses that were obtained, it was evident that
the consumers’ outlook is completely changing and they are becoming more
spend thrift. In addition, this difference in pricing does not seem to be affecting
their shopping decisions. This is also a change that can be seen in the consumer
population as a whole, as compared to a few years earlier.
“Well I don’t think that there is any price difference and if it is then that’s something a
consumer wont mind spending for the leisure a consumer gets in the mall.”
“Generally, for some goods it is assumed that malls are expensive. But I buy mostly
branded goods from malls, and they have the same process all over. So doesn’t really make
a difference.”
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“I think it’s a misconception that malls are more expensive that local markets. If the same
shop is present in both the market types then pricing would be the same. It so happens
that generally there are better quality shops present in the malls which can shoot up a
price of a product, so its generally perceived that malls are more expensive, but if you put
the same shops in local markets then the price would be just as expensive.”
After going through the literature, a question that was formulated for the
interviewees enquiring them if going to the shopping mall has an effect on their
image or status in the society. Almost all of the respondents denied this fact.
They did not find any relation between image and visiting the shopping mall.
Any image was not assumed to be associated with the shopping malls and the
image factor was immaterial if they bought the products from the markets or the
shopping malls.
“No, shopping is all about buying stuff I like, where I find it is immaterial.”
“Shopping in the mall does not influence the status because status is related to the shop
that you are shopping in, whether it be in the mall or market.”
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“As long as what you shop appeals to you and you have the confidence to carry it out it
does not matter where you have bought it. However, shopping malls are characterized by
branded stores.”
According to the findings of my research, the shopping experience is a very
important factor for the consumers. In their views, shopping experience includes
variety of stores within a mall and the collection within the stores, the gentry that
comes to the mall; time that is saved by coming to the mall and getting
everything under the same roof is the biggest advantage. They are also
considered to be easier and more sophisticated.
“Shopping experience to me means actually buying stuff that I like irrespective of the fact
whether it is in a mall or a local market but malls are definitely a better and more
convenient place to shop in.”
“Shopping experience is very important for me because if I am not satisfied from a place
then I might not go there again.”
“It is a very important criterion because not always do we go with a motive to shop.
Sometimes it is for fun, or just time pass. In those cases shopping malls are a better
option.”
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“As an experience malls would be rated higher because of the sheer variety of shops, and
convenience of a multiplex, kids’ corner, eateries, all under one roof.”
When asked about their future shopping preferences, all of the respondents
chose mall shopping over the unorganized market shopping where one could
find all the brands, entertainment as well as food joints. The markets would only
be selected by them in case whatever they needed would not be available in the
malls. It has also been viewed that with a rapid growth in the real estate
industry, the malls will eventually take over all forms of markets. However, this
possibility is not visible in the near future as the unorganized retail sector in
India is almost 97 percent. Also, this trend has not even been seen in developed
countries where malls have now lost the importance that they used to hold in the
past.
“If there is growth in the mall industry then it will eventually take over all forms of
unorganized market.”
“Malls are preferable. But there is no bargaining in malls and you at times don’t get
minute and little things, which you get from markets. So, both hold their own
importance.”
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Chapter Six Discussion
6.1 Introduction
From the analysis above, it can be inferred that there is a slow and steady change
that is taking place and the preferences of the Indian consumers are shifting from
shopping in the unorganized markets to shopping in the newly developed malls.
The vast Indian consumers’ population is varied among diverse income
segments. According to secondary data, there exists a significant difference in the
shopping patterns of consumers across these income segments and there are no
uniform trends in their buying behaviour. Researchers who have done their
research on the organized retailing sector of India have also said that organized
retailing has made headway in the upper class. However, even in this segment,
items such as milk, fruits, vegetables and a significant portion of ‘through-the-
month’ purchases seem to be done at traditional outlets. The middle income class
prefers shopping for processed food and personal care in supermarkets and fall
back on traditional outlets for bulk shopping. For them, organized retail outlets
seem to be associated with branded items/special purchases. Organized retailing
does not seem to have made an impact on the lower class, except for ‘curiosity’
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shopping (Chandrasekhar, 2001). This fact can also be supported by the findings
of my study as it was conducted on consumers who belonged to varied income
groups.
On the whole this study has found out that a large number of consumers have
started choosing the malls over the unorganized markets for the purpose of
shopping which is also associated with leisure. The attributes of the malls, which
attract the consumers towards it and are responsible for this change of choice of
the consumers, have been represented in the form of a decision tree. In this
chapter, the analysis has been done by comparing the findings with what has
been said in the literature. A few extra points that came up in the findings have
also been analyzed and this fills the gap in the studies that have been conducted.
The significance of the various mall attributes has also been discussed below.
6.2 Choice Variables for Shopping Malls
6.2.1 Anchor Stores
As stated in the literature, the anchor tenants are an important part of the tenant
mix as they help to generate a lot of shopper traffic to the mall. It has also been
said that the mall management (who is the deciding authority of the assortment
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of outlets) should also take into consideration its consumer drawing power to the
mall, as more consumers would also lead to the profit generation for other stores
in the mall as well. All retailers have agreed to this fact that anchor stores are a
major factor responsible for pulling crowd towards a mall. There are a variety of
anchor retailers in India. They include US and European chains like McDonald's,
Lacoste, Pizza Hut, Benetton, Subway, Marks & Spencer and Mango. This has
also led to the emergence of Indian chains such as Pantaloon, Globus, Shoppers
Stop, Giant, Lifestyle and Big Bazaar that can act as anchor stores in a mall. Other
branded outlets like Tommy Hilfiger, Swatch, Arrow, Louis Vuitton and Nike
are also considered as effect anchors in the Indian malls which are effective in
attracting customers towards a mall (Chadrasekhar, 2001).
However, one of the retailers also contradicted this fact from his personal
experience of having an outlet in the mall, with a very valid point. The
departmental stores in India, which act as anchor outlets, carry a variety of
branded merchandise other than non branded ones. If the same brands also have
their exclusive outlets in the mall, the anchor stores tend to cannibalize the sales
of the individual outlets as most of the crowd is attracted towards them.
Although this is a convincing argument, but majority of the retailers have
supported the literature that successful anchor stores are a key to increasing foot
fall in a mall.
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6.2.2 Location
Literature has stated that location is an important aspect of marketing and a
good location can be a source of competitive advantage for the retail outlet. Also,
according to a survey conducted by global property consultancy firm Cushman
& Wakefield, not all mall operators are likely to benefit equally. The report also
informs that "Only the ones in favorable locations and having the right format
and suitable strategies are likely to remain long-term players" (Chandrasekhar,
2001). However, in the Indian context, the factor of location of a shopping mall
does not seem to affecting the consumers’ visits to these malls. As it has been
discussed above that there are only a few shopping malls that have come up in
the country and the consumers are finding it to be a very novel experience to
visit a shopping mall for shopping. They are still overawed by this new method
of shopping, therefore they even travel long distances to capture the advantage
of getting everything under one roof. However, their daily needs are still fulfilled
by the unorganized markets that are situated close to their homes.
With the speedy development in the number of shopping malls in the country,
soon there would be a shopping mall in every area. The consumers would then
prefer to visit the malls that are closer to their homes, for their daily needs as
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well. Thus, location has still been considered a significant factor while choosing a
shopping mall.
6.2.3 Shopping experience
The literature has been backed up by the findings that consumers derive value
from purchasing goods or services because of their unique qualities. Mall
developers have also tried to cope up in the experience economy by providing
the consumers with good store ambience as well as entertaining and amusing
experiences apart from shopping. They have added movie theatres or keep
organizing live performances for the consumers in which they can get engaged
and enjoy their experience while shopping in the mall. Consumers these days are
becoming very variety seeking and searching for novel and unique experiences.
The shoppers in the Indian market also tend to look at visits to stores and malls
as an enjoyable experience, an outing for the family, receiving value for money
while shopping and also as an entertainment available there. The players in the
retail industry who are competing with one another, are trying to come up to the
expectations of shoppers giving the shoppers a great international shopping
experience, a wonderful ambience and something or the other, for everyone in
the family (Retail Industry: Changing Trends, 2007). Thus the overall shopping
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experience which includes shopping, leisure as well as entertainment is a key
determinant of mall attractiveness.
6.2.4 Image
As stated in the literature, the authors of “Shopping and the Fear of Others”
have found out that shopping malls have an important role to play in the
formation of the social identity of the shoppers as they are connected to
particular societal groups (Arnould, 2000). Self image is also exceptionally
important for Indians, however, they do not tend to attach self image with
shopping in a shopping mall. This factor has been falsified in the findings
because India has not yet reached that stage of development that it tends to
associate image with a shopping mall. The unorganized market in India still has
a very significant proportion; therefore, all consumers have to visit the
unorganized markets for the fulfillment of some or the other needs. It does not
affect his/ her personality or status. Thus image has not been considered a
substantial factor in the Indian context, when the consumer chooses between a
shopping mall and the unorganized market for making purchases.
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6.2.5 Price Sensitivity
Not much has been said about price sensitivity of consumers in the existing
literature. This is due to the fact that almost all studies that have been conducted
are directed towards the developed countries of the world, where the income
level of the consumers is quite high as compared to India and they do not mind
spending on expensive branded products. However, looking at the Indian
context, about which much has not been said, a large part of the population
belongs to the middle income group who cannot afford these luxurious brands.
Therefore, this was one of the additional major aspects that came up in the
research.
Although, from secondary data it has been found that the income level and the
purchasing power of the Indian consumers is increasing, majority of the retailers
are still in the perception that the most of the consumer population is still price
sensitive. Even though a market for high end luxurious brands exists in the
country, a major chunk of the population does not buy these brands. However
with globalization taking place throughout the world, the consumers are getting
the hang of the branded products and their demands are changing with growing
income levels. From the consumers’ perspective, it has also been seen that a high
price level in the malls does not stop them from purchasing what they want. On
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the whole, there has been seen a slight positive change in the consumer spending
habits with respect to the price. Thus, it can be concluded that the consumers
shopping habits are changing slowly but surely.
Figure 5 – Shopping Malls Choice Variables
LOCATION EXPERIENCE PRICE LEVEL
ENTERTAINMENT ENVIRONMENT ANCHOR STORES
CINEMA
EVENTS
AMENITIES
FACILITIES
MALL CHOICE VARIABLES
STORES
VARIETY
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6.3 Interdependence of the Retail and Real Estate Industry
The present time has seen a boom in the Indian economy, especially in the retail
and the real estate sectors. The prospects of both these have been found to be
mutually dependent on each other and the factors that are driving growth in
these two sectors are low share of organized retailing in the economy, falling real
estate prices, increase in the disposable income and customer aspirations as well
as increase in the expenditure for luxury products by consumers.
The retail industry is one of the largest industries of the modern days, especially
in India. It has emerged as one of the most dynamic and fast growing industries
in the economy with several players entering the market. Unlike traditional
retailing, the contemporary retail sector is mirrored by shopping centers,
multiplex malls and huge complexes that offer shopping, entertainment and
food, all under one roof. The concept of shopping in India is also in its alteration
phase in terms of the buying behaviour of the consumers and the retail formats.
This has also led to the growth in the real estate sector, with large investments by
national and global players taking place with a motive of developing the
infrastructure and construction of the retailing business (Retail Sector in India,
2007).
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Chapter Seven Conclusion and Recommendations
7.1 Introduction
The revolutionary development in the Indian real estate and retail industries is
driven by large expectations, keen interest by the Indian and international
companies who are eager to invest and the operation of large scale development
of shopping malls that is taking place throughout the country. The Indian and
international brands are using these retail malls as a medium to spread
themselves throughout the Indian cities in these high profile brand formats
(India Retail : Global Brands and Chains Set Sights, 2007). They get the
required image for their brand, the environment and the clientele that they want
in a shopping mall which is difficult to achieve if they open an outlet in the
unorganized market.
The most important activity for mall owners is to attract the maximum number
of people and to convert them into buyers. As discussed in the previous chapter,
a mix of attributes such as variety of stores in the mall, the location of the
shopping mall, the shopping experience offered to the consumers in the
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shopping mall and the correct pricing of the available merchandise would make
a shopping mall successful in the Indian retail environment. Apart from these, a
seven point strategy for a successful mall in India has been recommended by a
well known property consultant firm of India. Location, product mix, right-
footfall, right pricing, strong infrastructural support, circulation and differential
pricing are the factors which will be sought and appreciated by the customers
and would lead to the success of the mall (Retail Industry: Changing Trends,
2007). If these attributes are present in the shopping malls of India, they would
further push the consumers, who are already in the transitional phase of shifting
their preferences from the unorganized markets, towards shopping in these
malls.
7.2 Recommendations
In this section, recommendations for the government, the shopping mall
developers and the retailers have been suggested to further this development
that is taking place in the real estate and the retail industries of India which will
also drive the changes in the shopping habits of the consumers.
7.2.1 Recommendations for the Government
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The government should open up the retail sector by further liberalizing foreign
investment norms. This will not only favor development in the retail sector in
terms of design concept, construction quality and providing modern amenities
but will also help in creating a consumer-friendly environment. The government
should allow FDI in select specialty retail areas like electronics, building
equipments, furniture, sports goods and stationery. Such reforms in FDI will
induce a number of global chains to set up shops in India without posing any
threat to Indian retailers dealing in multiple brands.
“FDI in retail trade can not only organize a significant part of the largely unorganized
domestic retailing, but also invite established global retail brands into the Indian market,
thereby creating greater outlets for outsourcing and marketing Indian products.”
- Recommendations from Economic Survey of 2004-05.
(Organized Retail Industry in India, 2006)
FSI norms should also be liberalized by the government for designated retail
projects in order to reduce the project cost and encourage builders as wells as
retailers to undertake new projects. The government, in order to boost retail
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91
sector growth should accord industry status and ease labour laws. Apart from
this, the local government authorities of each state must provide the necessary
infrastructure such as roads, public transport and communication facilities
without which the most modern and expensive malls would not achieve their
goal. Providing the necessary infrastructure will certainly will provide the
required boost for the development of the local economy, employment and a
promising business climate (Retail Industry: Changing Trends, 2007).
7.2.2 Recommendations for the Developers
The developers of the malls have to realize that they have to create a entire
shopping destination for the shoppers which has a mix of retail outlets, eating
joints, entertainment places which offers them the whole shopping experience.
The promoters should take the help of retail experts to create a balanced tenant
mix so that the shoppers are able to get everything they want under one roof,
which will solve their purpose of coming to the shopping mall.
The developers should try to create a specific image of the shopping malls by the
process of segmentation and creation of a particular shopping environment. For
example, the high end luxurious brands and the brands for price sensitive
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92
consumers should not be put under one roof. This will help them capture
audience belonging to different customer segments. Apart from this, the
developers can also promote their shopping malls as specialized shopping
destinations. For example, there can be specialized malls where a consumer can
go to buy specific products, like a mall for jewellery, or a mall for furniture, etc.
7.2.3 Recommendations for the Retailers
The organized retailers can be suggested to target the untapped middle income
group population of India. Although, it may not be so easy to change the
mindsets of these consumers might not be an easy task, it can be a means of
attracting the global retail giants that want to enter into the Indian economy.
Another recommendation for the retailers would be that they should build
relationships with their existing customer segments. The retailers should be well
versed with the consumer preferences and they should also offer them additional
services apart from the products. For developing loyal customers, the employees
of the retail organizations would play an important role. Therefore, the must hire
the right kind of employees and train them.
7.3 Limitations
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Every piece of research has its own set of limitations which can arise during the
course of conducting it. This research faced the following limitations -
• Penaloza (1994) suggests that the researcher should be careful enough to
avoid any kind of bias with the research subjectivity. This is mainly
because of the reason that researchers working in their own culture tend
to avoid keeping a critical distance from their work as they may hold a set
of assumptions about their own culture (McCracken, 1998) hence
influence the interpretation of data analysis (Kapur, 2006). This research is
based on analyzing an Indian perspective and I, being an Indian, had
awareness of a lot of facts which might have influenced the results at some
point of time.
• The sample size of the population being tested should be large enough to
increase its validity. However, the findings and analysis are based on
semi-structured interviews taken from fifteen retailers and twenty
consumers which can be unrepresentative of the population. The rest of
the information has been collected from secondary sources, reducing the
validity of the data collected. It was very difficult to get interviews from
the retailers. Hence, gathering empirical evidence for the research faced
certain restrictions.
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• This research mainly relies on secondary sources such as the research of
other people; hence it was difficult to come to strong recommendations.
7.4 Conclusion
It can be concluded from the research that the consumer markets in India have
potential for the future development of the retail industry as the market is
growing, government policies are becoming liberal and the technological
developments in the country are favourable for operations in India. Due to these
promising factors, more and more retail investors have been encouraged to
invest into the Indian market which has further impelled investments in the real
estate industry.
However, the success of malls in the long run in the Indian market would
involve attraction of diverse consumer segments towards the malls which
includes diverse income groups, nuclear families, working women, etc. The
provision of wide choice and the comfort of being able to shop everything under
one roof would attract all these groups of buyers.
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APPENDICES
APPENDIX 1
Factors Leading to Change in Consumer Shopping Habits
India has undergone certain fundamental changes in it political, economic and
social structure over the years. Each of these factors has brought about changes
in the way people perceive, select and finally purchase products. In this section,
the PEST (Political, Economic, Social and Technological) factors that are affecting
the organization of the retail industry and are responsible for the change in the
shopping habits of the Indian consumers have been discussed.
Political Factors
Earlier, the foreign mall operators were not allowed to enter and operate in the
Indian market as foreign companies and could not own real estate in India. The
foreign brands like Nike, Reebok and McDonalds still operate in the country
through their subsidiaries or franchises
(http://www.atimes.com/atimes/South_Asia/FG24Df01.html). However, the
government is changing the FDI norms and making them more liberal so that it
is easier for the foreign players to enter the Indian market. Currently,
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Government allows 100% FDI in cash-and-carry retail through the automatic
route and 51% in single branded products (Indian Organized Retail Industry
(2005-2007) Pub Time: 2006/03
http://www.the-infoshop.com/study/rnc36720-retail-industry-india.html).
Most of the foreign players that are entering the market are setting up their
outlets in shopping malls and are providing the consumers with international
shopping experiences. Moreover, the government of the states like Delhi and
National Capital Region (NCR) is also permitting the use of land for commercial
purposes, thus increasing the availability of land for retail space
(http://www.indianground.com/retail/retail-sector-in-india.aspx).
Economic Factors
Also, according to Jeff Immelt, Chief Executive, GE, “We believe that India is a
rising star at the beginning of a growth cycle, with consumer spending
increasing at a strong rate, and people seeking and demanding a better quality of
life. India is going to be one of the fastest-growing regions of the future. All
conditions are right to invest in India.”
(http://www.icmr.icfai.org/casestudies/catalogue/Marketing/MKTG114.htm)
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There has been an immense amount of economic development in the country
which has led to the growth of the retail industry. The high and middle income
population is growing at a pace of over 10% per annum and the disposable
income of these households is also increasing, With strong GDP performance, the
rising income levels and growing purchasing power of people, consumer
spending has grown at an average of 11.5% annually over the past decade
leading to enormous growth potential and future prospects for the organized
retailers (http://www.indiainbusiness.nic.in/india-profile/ser-retail.htm). Thus,
there has been a significant amount of growth in the retail industry and there is
still a lot of scope in the coming years due to factors such as the presence of a
vast market, higher disposable income and consumer spending as well as
increasing awareness of the consumers about new products and their quality
(http://www.icmr.icfai.org/casestudies/catalogue/Marketing/MKTG114.htm).
With the increase in the disposable incomes, the malls, which were earlier,
perceived to be carrying highly priced merchandise has now come into the reach
of a wider group of consumers.
Social Factors
The increasing demand which is the driving force of organized retailing in India
is also because of a few major changes in the demographics of the consumers. As
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stated in the Chesterton Meghra findings in the Images Report 2005 on shopping
centre development in India, the increase in the spending power of India’s
middle class which forms 20-25 percent of the total population is the major
driving factor of demand. With increased purchasing power and changing
lifestyle of people, the upper class is expected to double itself in the coming three
year period. Other major demographic factors which are responsible for this
development are income and consumption growth, increasing literacy levels,
changes in the family structure and the role of women in the society and the
growing role of children as influencers
(http://www.etretailbiz.com/dec2002/specialfeat.html). Besides that, the
majority of the population is under the age of 40
(http://www.expresstextile.com/20051115/apparelbiz02.shtml) and there is also
an increase in the young working population. The traditional consumers which
constituted of joint families are being replaced by new consumer segments which
include nuclear families, single and working women, collegians with allowances
and increase in the number of working couples with hefty pay packets, who
actively support the new concept. All this has led to a positive impact on the
development and success of the new retail formats
(http://www.tata.com/trent/articles/20030305_spurring_super_shopping.htm).
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Besides these, few other social factors also contribute to this revolution in the
Indian retail scenario and the consumer mindset. With increase in the number of
working women, very little time is available to them for leisure activities,
shopping being one of them, and there is increasing pressure on time. Therefore,
they are looking for the convenience of one stop shopping, and speed and
efficiency in the processing through which they can utilize their time in a better
manner. Consumers these days have also started paying attention to better
quality, hygiene as well as customer service. These changes in consumer
behaviour also compliment the development of the retailing industry
(http://www.afferguson.com/bulletin/ret-pri.htm).
Technological Factors
Developments in the technological factors have provided a new dimension to the
retail sector and the changing consumer shopping routine. It is technology that
differentiates organized retailing from the unorganized
(http://www.indianmba.com/Occasional_Papers/OP129/op129.html). The
introduction of point of sale equipment, bar codes and huge storage capacity for
billing and payment database has not only facilitated the management of large
set-ups with ease but it also allows operations to be recorded in a structured and
systematic way, enabling detailed analysis of the huge volume of sales and
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transactions. As retail is becoming more and more organized huge investments
have to be planned for supply chain infrastructure. With this, information
sharing becomes important across the whole chain. Additionally, IT solutions are
required for inventory planning, elimination of wastes, mapping consumer
behaviour and trends, planning of merchandise sourcing, management of multi-
format stores and improved store experience.
With improvement in technology, consumers are being facilitataed as the
managers can now lay more emphasis on consumer needs. Flexibility in the
mode of payment and cashless transactions has helped in driving sales. Another
step which retailers are taking towards consumer satisfaction is by the means of
relationship marketing and improving delivery systems as well as enhancing
their response to customer demands
(http://icfaiuniversitypress.org/books/RetailIndustryChangeingTrends_ovw.as
p). Through this they are trying to retain their old customers by laying more
emphasis on customer preferences and contentment. They maintain a track of
loyal customers as they are now aware that it is cheaper to retain an existing
customer than to acquire a new one. Customers are being provided a lot of
convenience in terms of methods of payment and membership cards providing
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offers and discounts for frequent customers
(http://www.etretailbiz.com/dec2002/specialfeat.html).
All these technological developments along with improved infrastructure and
better facilities like parking places, air conditioned atmosphere, elevators and
escalators, etc that are made available to the customers in a shopping mall, play a
significant role in pulling the customers towards the mall, making mall shopping
a success and thereby improving realty prospects in any area
(http://www.indianrealtynews.com/indian-states/).
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APPENDIX II
QUESTIONNAIRE FOR INTERVIEW OF THE RETAILERS IN THE
MALL
1. How long has it been since you have opened the shop in this mall?
2. Why did you choose to open your outlet in the mall other than the
unorganized market?
3. Do you have another retail outlet other than in this mall?
4. Do you reach the targeted sales level in this outlet or as much as the other
outlets?
5. What do you do to attract customers to your outlet?
6. What do you think can be done to attract customers to a mall? What do
you think of anchor stores?
7. What do you think of consumers’ perception of mall shopping?
8. What benefits do consumers obtain from coming to a mall rather than the
unorganized market? What effect do these benefits have on sales?
9. If you have to open a new outlet, would you choose to open it in the
upcoming malls?
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APPENDIX III
INTERVIEW QUESTIONNAIRES FOR CONSUMERS
1. Given the choice of shopping malls and unorganized local markets in
India, where do you go for shopping?
2. How frequently do you go for shopping and out of that how many times
do you go to malls?
3. Why do you shop in malls/ unorganized market?
4. Do you associate leisure activities with the shopping malls?
5. Do you go to malls for shopping, entertainment, eating out or socializing?
6. What all do you shop in malls and what all from the market?
7. Given a choice to going to the same shop in the mall and the unorganized
market, where would you go and what factors would effect your decision?
8. Does proximity to the mall affect your shopping decision?
9. Do you find a pricing difference in malls and unorganized market and
does it affect your shopping habits?
10. How important is the whole shopping experience, and how do you rate
the shopping experience in malls and in the unorganized markets?
11. Do you associate image with shopping in the shopping mall? Does it
influence your personality/ status?
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12. Eventually with the constant growth in the number of malls, where would
you prefer to shop?