Consumers Inclined Buying Behaviour Towards Organized Retailing.

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1 Consumers Inclined Buying Behaviour Towards Organized Retailing. *Ranjana Thakur, *Leena Devi * Research Scholar, Department of Commerce, Himachal Pradesh University, Shimla. ABSTRACT Retailing in India is gaining attention like never before. The retail sector in India is amid the top five growing sectors of the economy. It has witnessed an infinite change in the last few years with the evolution of organized retail. The industry is flooded with footfalls of foreign retail giants. Organized retailing especially is creating euphoria amongst Indian customers drawing them into malls and trade areas in huge numbers. The current study will be an attempt to study and analyse the buying behaviour of consumers in organized retail outlets. The buying behaviour of consumers has changed recent days. It is influenced by different social, technological, economical and political factors social status, government policies etc. Change in consumption behaviour is due to income of middle age, population in big cities is rising and easier access to credit. This study was conducted with the objective of identifying the various emerging factors which affect the buying behaviour of consumers towards organized retailers. Primary data was collected from 479 respondents across the city of Mumbai. Factor analysis and ANOVA has been applied to identify the factors affecting the buying behaviour of consumers in organized retail stores and demographic factors and its impact on consumers buying behaviour. KEYWORDS: Consumers buying behaviour, Organized Retail, Factor analysis, ANOVA. 1. INTRODUCTION India is one of the fastest growing economies in the world and one of the largest in term of purchasing power parity. It has been called the nation of shopkeepers since centuries. Trading is one of the most significant sectors of the Indian economy. Retailing is the largest private industry in India and second largest employee after agriculture. It has emerged as one of the most appealing investment areas for domestic as well as foreign investors. The word retail is derived from the French term retailier, meaning to cut a piece of or to break bulk. Retailing forms an integral part of the marketing mix. It includes 6 P s (Product, Price, Place, People, Presentation and Promotion). It amplifies first-hand information with the customers. Retailing therefore, facilitates the flow of goods and services from manufactures to the ultimate customers. The retail sector of Indian economy is categorized into two segments such as organized retail sector and unorganized retail sector with the latter holding the larger share of the retail market. At present the organized retail sector is catching up very fast. The impact of the alterations in the format of the retail sector has changed the lifestyle of the Indian consumers drastically. The evident increase in consumerism activity is colossal which has already chipped out a money making recess for the retail sector of Indian economy. With the onset of a globalized economy in India, the Indian consumer's psyche has been changed. People have become aware of the value of money. Nowadays the Indian consumers are well versed with the concepts about quality of products and services. These demands are the visible impacts of the Retail Sector on Indian Economy. Consumer buying behaviour is the study of individuals and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. Consumer behaviour is increasingly a part of strategic planning for the future investment and growth of any industry. 323 Ranjana Thakur, Leena Devi

2 Figure 1 2. REVIEW OF LITERATURE Asare and Ming (2016), in their paper Significant Services that have High Impact on Customer Satisfaction: A Study of Selected Foreign Fashion Stores in Shanghai examined the service quality dimension and satisfaction relationship. They attempted to identify the significant services that have high impact on customer satisfaction. Finding shows that all service dimensions have significant positive correlation with customer satisfaction. Personal interaction and physical aspects were two main factors with high correlation with satisfaction. Further, among the 27 items that measures service quality, 6 were identified to have high impact on customer satisfaction. Out of these six, three falls under the personal interaction dimension vital to customers are more satisfied when store associates are courteous, helpful and inspire confidence. Roy (2016), the study demonstrated shoppers purchase behaviour with respect to FMCG products. It was found in the study that although the retail industry is currently showing an up gradation in various aspects, yet consumers prefer cross format shopping in purchasing consumer goods for the month. It was evident that impulse purchase plays an important role and marketers consciously display their products at POP (Point of Purchase) points so that visual display may lead to such purchase. The results also to some extent implied that format choice decisions are altered when consumers need something urgent to purchase and they are willing to face the constraints of time and convenience. Singh (2015): aimed to study the impulse buying behaviour of consumers in shopping malls with the objectives to identify the factors affecting the impulse buying behaviour and to identify the effects of sales force, display/images, discounts and schemes, family and psychology of customer on purchase decisions. Study reveals that Visual merchandising practices, serving as stimuli that provoke a desire that ultimately motivates a consumer to make an unplanned purchase decision upon entering the store, significantly influence consumers impulse buying behaviours. In-store browsing appears to be positively affected by consumers impulse buying tendency, and in turn, has a positive impact on consumers positive feelings and impulse buying urges. Mahfooz (2014): in his study with the objectives of, to determine the perception of retail service quality and its relationship with satisfaction for customers of hypermarkets in the Kingdom of Saudi Arabia (KSA). Data was collected through self administered questionnaires using convenience sampling technique. The results from exploratory factor analysis indicate that service quality consists of five dimensions (Physical aspects, reliability, personal interaction, problem solving and policy). 324 Ranjana Thakur, Leena Devi

3 The findings also have managerial implications. A good store layout and service material creates a better impression and positive attitude towards a retail store. The retailers should focus on a single dimension with maximum impact, rather to lose focus by channelizing resources towards all of them. Khan et al. (2014): In their paper with the objectives to examine the consumer buying behaviour and to identify the factors involving in purchasing decision in organized retail sector, the study attempted to examine the relationship between those factors with consumer satisfaction and loyalty. The study attempted to contribute to existing literature on retailing sector. In addition, this study reveals that service is another important retail attribute preferred by majority of respondents. The study concludes that quality plays an important factor that helps to attain customer satisfaction. Hence, in order to have an organized retailing sector, it is necessary to focus on service and quality of the product. 3. OBJECTIVES The objectives of the study are: 1. To identify the emerging factors which affect the consumers inclined buying behaviour in organized retail Store. 2. To study the impact of demographic factors on consumers buying behaviour in organized retailing. 4. RESEARCH METHODOLOGY Sampling method has been used to carry out an exhaustive and in depth study of organized retailing industry and its impact on consumers buying behaviour. The empirical results of the study are based on the primary data collected through sample survey of 479 respondents. Multi stage stratified purposive sampling technique was used to draw sample for the study. Mumbai the commercial capital of India was selected purposively for the conduct of the study. Mumbai comprises of four zones namely Navi Mumbai, Island City, Western Suburbs, and Central Suburbs. From each of these zones two main areas were selected purposely to make this study more representative. Primary data is collected through administering a well structured questionnaire consisting of five point scale. The data collected from the respondents were tested for reliability applying Cronbach s Alpha Test. 5. METHOD OF ANALYSIS In order to study the factors which affect the shopping behaviour of consumers in organized retailers, Factor analysis has been applied and to study the impact of demographic factors on consumers buying behaviour in organized retailing, ANOVA and t-test was performed using SPSS DATA ANALYSIS 6.1 Characteristics of the Respondents: Table 1 provides information about the profiles of respondents. The demographic Characteristics of the respondents shows that 52.8% were females; and majority of the respondents (37%) belong to age group of This reveals that young people are more visitors to organized retail stores. The data further revealed that females (52.8%) do more shopping as compare to males (47.2%). The data shows that 45.1% had Bachelors degree and 42.0% of respondents had the annual income up to Rs 5, 00,000 to 10, 00,000. Further the data reveals that 29.2 percent respondents belong to any other class and 27.3 percent are from service class. 325 Ranjana Thakur, Leena Devi

4 Table 1: Characteristics of the respondents Characteristics of the respondents Percentage (%) Age Below Above Education Up to Intermediate 1.5 Undergraduate 25.7 Graduate 45.1 Post Graduate or above 27.8 Gender Male 47.2 Female 52.8 Annual Income Below 2,00, ,00,000-5,00, ,00,000-10,00, Above 10,00, Occupation Service 27.3 Business 14.2 Professional 11.9 Homemaker 17.3 Any Other Instrument reliability As far as the reliability is concern analysis begin with measuring the reliability of the construct. Internal reliability of the scale was examined using Cronbach s Alpha coefficient. Value of the reliability was 0.70 and above as an indicator of good reliability. Table 2 summarises the Cronbach s alpha for overall and individual dimensions. The results indicate that in total the questionnaire is a reliable instrument. Scales for this study were considered to have good reliability with a Cronbach s Alpha Value of.709. Table 2 Reliability Statistics Cronbach s Alpha No. of Items 6.3 Factor Analysis The Principal Component Analysis method was adopted to identify the factors affecting the buying behaviour of consumers in organized retail stores. The appropriateness of analysis was determined by the Kaiser- Meyer-Olkin measure of sampling adequacy and Bartlett s test of Sphericity. Factor loading was used including measurement items for the factor affecting the buying behaviour of consumers in organized retail stores. The present anal ysis has been designed to identif y the Store attributes which affect the buying behaviour of consumers towards organi zed retailers. 326 Ranjana Thakur, Leena Devi

5 Table 3 KMO and Bartlett s Test KMO and Bartlett s Test Kaiser-Meyer-Ol kin Measure Of Sampling Adequacy. 736 Bartlette s Test Of Sphericity Approx. Chi-Square Df 120 Sig Source: Primary Data In analyzing the various factors influencing buying behaviour, the first step is to find out the adequacy of the sample through KMO and Bartlett s Test, the result of which was found to be.736 and Sig.000, indicating that the sample under study was quite accurate. Table 4 Rotated Component Matrix Sr. N. Variables 1. Employees in the store give prompt service to customer. (Kno wledge). 2. Employees in the store are never too busy to respond to customer s request. 3. Employees in the store are always courteous with the customers. 4. I prefer to shop at an organized store because of the high quality facilities i.e. marble floor, air conditioning, big aisles. 5. The store has attractive physical facilities (like trial room, restrooms, and children play area). 327 Ranjana Thakur, Leena Devi Component The physical facilities at the store are visually appealing The layout of the store makes it easy to find what you need. 8. The background music in the store makes the shopping pleasant. 9. The background music in the store is always soothing and helpful in making choice. 10. Payment mode/the store accept all major credit cards. 11. Free home delivery/free customer service The store willingly handles returns and exchange The store offers a wide variety of merchandise. 14. The store offers high quality merchandise Better parking facility I like to shop at organized store because of the refreshment entertainment Facility. Source: Primary Data. Extraction Method: Principal Component Analysis. Rotation Method: Varimax Rotation

6 The next step consisted of grouping different variables under the six identified components through Rotated Component Matrix and calculating their respective communalities. In this case, all the sixteen variables were grouped under different factors each of which has been identified as having different aspects of consumers preferences regarding their buying behaviour. The Rotated Component Matrix indicates that there are six components under which all the variables have been grouped. These factors are Personal interaction, Physical Aspects, Ambience, Customer Delight, Merchandise Mix, Parking and Entertainment Facility 6.4 Impact of Demographic Factors on Consumers Buying Behaviour The results that factors analysis produced were put under further analysis by conducting an analysis of variance (ANOVA) and t-test to study the impact of demographic factors on consumers buying behaviour in organized retailing. Dependent variable consisted of six buying behaviour factors identified by factor analysis. Independent variables included five demographic variables: gender, age, education and annual household income. The output of ANOVA was summarized in table no. 5 and discussed in the following section. Attributes Consumers behaviour Table 5 Variance Analysis: Attributes Based On Demographic Variables of buying Age Education Income Occupation F. Sig. F. Sig. F. Sig. F. Sig. Personal Interaction Physical Aspect Ambience Customer Delight Merchandise Mix Parking and Entertainment facility As discussed above, six factors have been extracted with the help of factor analysis and ANOVA was used to study the impact of demographic factors on consumers buying behaviour in organized retailing. The six factors are summarized here: 1. Personal Interaction: with the factor loading of.802, Employees in the store gi ves pr ompt service to customer. ( Knowledge) emer ged as a key variable i n personal interaction f actor. The analysis shows that personal i nteractions have posit ive relationship and i s highly significant. Other variables which load into this factor are Employees in the store are never too bus y to respond to customer s request (. 797) and Employees in the stor e are always courteous with the customers (. 638). Table 5 reveal s that the si gnifica nce values of F test for age, education, income and occupation are greater than So they do not have significant impact on personal interaction. 2. Physical Aspect: This factor reflects the physical aspects of consumer buying behaviour. I prefer to shop at a organised store because of the high quality facilities i.e. marble floor, air conditioning, big-aisles emerged as key influencing variable in the Physical Aspect Factor (.722 factor loading). Other variables which are load under this factor are the store has attractive physical facilities (like trial room, rest room, and children play area) (.684 factors loading), the physical facilities at the store are visually appealing (.650) and the layout of the store makes it easy to find what you need (.528). Creating a pleasant and stimulating store atmosphere has an impact on the time and money spent in the store; on top of that it also affects shopping enjoyment, passion to speak to employees, spending additional money and on the possibility of returning to the store. The ANOVA results (table 5) show that the significance values of F test for education 328 Ranjana Thakur, Leena Devi

7 and income are greater than So they do not have significant impact on physical aspects. Age and occupation have an impact on physical aspects. 3. Ambience: Current research proved that factor which effect the consumer buying behaviour in organised stores is Ambience. The background music in the store makes the shopping pleasant is the key (. 799 factor loading) variable. Other variable which is loaded in this factor is The background music in the store is always soothing and helpful in making choice (.772). The results of one way ANOVA are shown in table no 5. From the above table it is evident that education and income have no impact on Ambience. There is a significant relationship between age and occupations on Ambience mean score. 4. Customer Delight: payment mode/the store accepts all major credit cards (.721) emerged as key variable in customer delight factor. Other factors which are loaded in this factor are free home delivery/free customer services (.718) and the store willingl y handles returns and exchange (.478). the ANOVA results shows that the significance value of F test for the factor customer delight for age, education, income and occupation are greater than This shows that there is no significant difference between the mean customer delight score of consumer buying behaviour on the basis of different demographic variables. 5. Merchandise Mix: With a factor loading. 702, The store offers a wide variety of merchandise emerged as a key variable in the Merchandise Mix Factor. Other variable is The store offers high qualit y merchandise (. 634). Table 5 revealed that the significance value of F test for age educati on and income are greater than They do not have si gnificant i mpact on merchandis e mix. On the other hand occupation has a significant i mpact on merchandise mix. 6. Parking and Entertainment facility: Better parking facility (.836) has been identified as an important variable in t he Parking and Entertainment facility factor. The other factor which is loaded in this factor is I like to shop at organized store because of the refreshment entertainment Facility (.390). Table 5 revealed that the significance value of F test for age and education are greater than So they do not have significant impact on parking and entertainment facility. There is significant relationship between Income and occupation that influences their visit to organized retail stores. Table 6 Independent Samples Test on the Basis Of Gender Attributes Levene s test for Equality of Variances 1. Persona l Interaction. 2. Physical Aspect. 3. Ambien ce. 4. Custom er Delight. 5. Mercha ndise Mix. 6. Parking and Entertainment facility. t- test for Equality of Means F. Sig. T Df Sig(2- tailed) Equal Variances assumed Equal Variances not assumed Equal Variances assumed Equal Variances not assumed Equal Variances assumed Equal Variances not assumed Equal Variances assumed Equal Variances not assumed Equal Variances assumed Equal Variances assumed Equal Variances assumed Equal Variances assumed Ranjana Thakur, Leena Devi

8 The results of independent t-test is not significant in the case of personal interaction, ambience, customer delight as their significance value is greater than But in the case of physical aspect, merchandise mix, and parking and entertainment facility the significance value of t-test is less than This indicates that there is a significant difference between physical aspects, merchandise mix and parking facility score of consumer buying behaviour on the basis of gender. 7. CONCLUSION The study was carried out in Mumbai. Research results indicate that personal interaction, physical aspects, ambience, customer delight, merchandise mix, parking and entertainment facility are the factors that attract a lot of shopping parties, parents with children towards organized retail stores. The current study also revealed that young customers of the Mumbai city were found to have auspiciously inclined behaviour towards the mall than their older counterparts. Mall managers and marketers should build up new strategies in order to attract more and more older people by employing new technologies, vibrant colour schemes and revolutionary, whereas they should also formulate ways of attracting older people by offering complete family entertainment along with a great shopping experience. One way of getting shoppers to shop longer is to promote major shopping trips and large-scale purchases. Retailers may attract and maintain loyal customers by implementing customer relationship programs. References ern_of_consumers_towards_organized_retailers_in_kerala. 6. Kar, S.S., and Sahoo, S.K Organized Retailing In India: Issues and Challanges. Indian Journal of Marketing, 39(11), Asare, D., and Ming, X Significant Services that have High Impact on Customer Satisfaction: A Study of Selected Foreign Fashion Stores in Shanghai. International Journal of Education and Social Science. 3(2), Roy, A Growth and Development of FMCG Retailing in India: A study based on Consumers Impulse Buying Behaviour. Pacific Business Review International, 8, (7), Ubeja, S. K. A Study of Customer Satisfaction in Shopping Malls: An Empirical Study. Research Journal of Management Sciences. 4(11), Mahfooz, Y Relationship between Service Quality and Customer Satisfaction in Hypermarkets of Saudi Arabia. International Journal of Marketing Studies, 6(4), 10-22, Khan, M. F. A., Rana, D., and Singh, H. An Empirical Study of Organized Retailing Strategies in Developing Customer Loyalty, Changing Purchase Decision and Developing satisfaction in consumer of Indian Sub- Continent. International Journal of Multidisciplinary and current Research, 2(March/April), , Ranjana Thakur, Leena Devi