An Empirical Study on the Demographic Profile of Shoppers at the Local Retailer

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1 An Empirical Study on the Demographic Profile of Shoppers at the Local Retailer Dr. VandanaTandon- Khanna, Shipra Bhatia, Charmi Shah ABSTRACT In spite of the rapid mushrooming of malls and other modern store formats, the urban Indian shopper continues to patronize the local retailer for at least part of his requirements.this study is an attempt to analyze the demographic attributes of such persistent local retailer patrons.the demographic variables that were considered for this study were age, education, employment, marital status and income. Additionally, ownership of car was considered as it emerged as a significant factor in the selection of the local retailer as a shopping destination. The survey comprised 168 respondents and was limited to only the women shoppers in the western suburbs of Mumbai. The survey instrument was the questionnaire which was administered through personal interviews with the respondents who were selected randomly. The data analysis was carried out using Excel-based statistical tools. INTRODUCTION Amazon is destroying the local retail business and the newspaper business without local retail there won t be any newspapers left, says Ben T. Smith, CEO of Wanderful Media, a company incorporated by a powerful group of 42 newspaper publishers in USA. They have created FindnSave.comin an attempt to salvage the rapidly decreasing advertising revenues from newspaper ads due to more and more shoppers shifting to online options for their news. A similar paradigm is fast becoming a reality for small local retailers in India, too, with an increasing proportion of the population especially in urban centres opting for online shopping or mall shopping in order to have access to a greater variety of products and enhance the overall shopping experience. However, the urban Indian shopper continues to patronize the local retailer for at least part of his requirements. The quantum of shopping and the reasons for the store preference may differ. This study is an attempt to analyze the demographic attributes of such persistent local retailer patrons. LITERATURE REVIEW The choice of store is accepted as an information processing behavior like any other purchase decision and thus, accepted as a cognitive process. Store choice behavior of shoppers has been found to share many similarities with brand choice (Fotheringham, 1998; Meyer and Eagle.1982), the only difference being in the importance of the spatial dimension. While brand choice is devoid of any geography, the choice of a store is very much influenced by location. Storechoicehasbeenfounddependentonsocio-economicbackgroundofconsumers,theirpersonality andpastpurchaseexperience(dodgeandsummer,1969).itcanbeunderstoodthatstoreimage isderivedoutofbothfunctional andpsychologicalfactorsofthe store.

2 Store format choice is influenced by demographic factors (Zeithamal,1985). Consumer shopping behavior very often is defined by the average size of the shopping basket and the frequency of store visits. The degree to which a consumer shops at a particular store is relative to competitive outlets. The store patronage involves the consumer s choice for a particular retail store. Store patronage is identified in Bitner s (1992) model as approach-avoidance behavior. Bitner proposes that perceptions of the environment or environmental dimensions lead to certain beliefs or emotions about the environment, which then determine whether a consumer will approach (i.e. patronize) or avoid a particular setting. Shopping orientation, to which, information sources and personal characteristics are antecedents determines the importance of store attributes; which in turn impact the store patronage Various studies have tried to prove that shopping orientation impacts the patronage in comparison to store attributes or vice-versa. Morganosky, M A and Cude, B J. (2000) in their study have attempted to profile online grocery shoppers in USA. A majority of the online users were younger than 55 years of age, female, and reported annual incomes of $70,000 or more and reported convenience and saving time as their primary reasons for buying groceries online. But 15 percent cited physical or other constraint issues that made it difficult for them to shop at grocery stores, as reasons for their online shopping preference. Of the respondents, only 19 percent bought all of their groceries online. Though the internet user characteristics resemble those of the average American consumer, it has been found that the web is largely popular for information search and particular product categories while the actual e-commerce transactions have not experienced the expected growth. The literature review did not reveal any earlier studies on this specific subject. However, the above data is collated from other general studies indirectly relevant to this topic. RESEARCH OBJECTIVE The primary objective of this study was to identify significant demographic features in order to profile a typical shopper at the local retailer in urban India. PROPOSED HYPOTHESES 1) The average age of shoppers at the local retailer is greater than 30 years. 2) The proportion of shoppers at the local retailer who do not own a car is greater than 40%. 3) The preference for the local retailer as the store choice was independent of marital status. 4) More than 40% of the shoppers had an annual family income of less than Rs 3 lakhs. RESEARCH METHODOLOGY At the outset, a thorough review of the literature already available as research papers and articles was carried out. Internet-based resources and electronic databases such as EBSCO were utilized for this purpose. The variables to be considered for the study were shortlisted. The variables are listed below. Demographic variables- Age, marital status, family type and size, Education, Employment, Income, Mother Tongue and car ownership.

3 Independent variables- Frequency of visits, average basket value, monthly spend, duration of shopping trip and company while shopping. After the initial secondary data search, a primary survey was undertaken. The survey comprised 168 respondents and was limited to only the women shoppers in the western suburbs of Mumbai. The survey instrument was the questionnaire. A probabilistic sampling technique was preferred in order to minimize bias in sample selection. Respondents were selected randomly. The questionnaire was administered through personal interviews. The data collected through the survey was analyzed using inferential statistical tests of means, proportion and dependency such as the t test, p test and Chi Squared. This paper records findings only on some of the variables shortlisted earlier. DATA ANALYSIS Major findings A sizable majority (nearly 70%) of the shoppers at the local retailers belonged to the lower income categories. In fact, the number of patrons reduced progressively as the annual family income increased. Annual Family Income < Rs 3 lakhs > Rs 20 lakhs Rs lakhs Rs 3-5 lakhs Rs 5-10 lakhs The marital status, too, was found to have a significant influence on the preference of the local retailer as the choice of store. Greater than 70% of the shoppers were married while the proportion of the unmarried shoppers was less than 30%. Marital Status Married Unmarried

4 Greater than 40% of all the shoppers at the local retailer were found to be graduates but almost an equal proportion had not even graduated and had been educated only till the under graduate level. (blank) 1% Education Levels Under Graduate 40% Graduate 42% Professional 1% Post Graduate 16% Car ownership was found to be significant not directly as an influence in the store choice decision but this factor did impact the average basket value per visit to the local retailer. The quantum of purchase per visit by a car owner was higher as compared with that by a non-owner Car Ownership No Yes (blank)

5 Hypotheses testing 1)H o: The average age of shoppers at the local retailer is less than or equal to 30 years. H a: The average age of shoppers at the local retailer is greater than 30 years. Using the t test for statistical analysis, Ho: µ 30 t-test: Paired Two Sample for Means Ha: µ > 30 Age A2 Mean Variance Observations Hypothesized Mean Difference - Df t Stat 2.30 P(T<=t) one-tail 0.01 t Critical one-tail 1.68 P(T<=t) two-tail 0.03 t Critical two-tail 2.02 Since the t Stat value 2.30 is greater than the t Critical value 1.68, we fail to accept the Null Hypothesis. We accept the hypothesis thatthe average age of shoppers at the local retailer is greater than 30 years

6 2)H o : The proportion of shoppers at the local retailer who do not own a car is less than 40% H a : The proportion of shoppers at the local retailer who do not own a car is greater than 40%. Using the Z test for statistical analysis, Ho:p 40% Ha: p>40% Tails n X p' p q Confidence Right tail Test % alpha Probability Z-critical (sqrt(p.q/n) (p' - p) Z observed 5% 95% Since the Zobserved value (2.8) is greater than the Zcritical value (1.645), we fail to accept the Null Hypothesis. We accept the hypothesis that the proportion of shoppers at the local retailer who do not own a car is greater than 40%.

7 3)H o 1: The average basket valueat the local retailer is the same across marital status. H a 1: The average basket valueat the local retailer is not the same across marital status H o 2: The average basket valueat the local retailer is the same across Education levels. H a 2: The average basket valueat the local retailer is not the same across Education levels Using a Two-way ANOVA without replication test for statistical analysis, Anova: Two-Factor Without Replication SUMMARY Count Sum Average Variance Married , , ,203, Unmarried , , ,672, Graduate , , , Post Graduate , , , Professional , , ,125, Under Graduate , , ,005, ANOVA Source of Variation SS df MS F P- value F crit Rows 18,273, ,273, Columns 12,700, ,233, Error 37,925, ,641, Total 68,900, In the rows, F observed value (1.45) is less than the F critical value (10.13) and in the columns, F observed< F critical i.e. 0.33< Therefore, we accept the Null Hypothesis in both the cases. We accept the hypothesis that the average basket value at the local retailer is the same across marital status and Education levels.

8 4) H o : Less than 40% of the shoppers have an annual family income of less than Rs 3 lakhs. H a : More than 40% of the shoppers have an annual family income of less than Rs 3 lakhs. Using the Z test for statistical analysis, Ho:p 40% Ha: p>40% Tails n X p' p q Confidence Right tail Test % alpha Probability Z-critical (sqrt(p.q/n) (p' - p) Z observed 5% 95% Since the Zobserved value (1.7) is greater than the Zcritical value (1.645), we fail to accept the Null Hypothesis. We accept the hypothesis that more than 40% of the shoppers have an annual family income of less than Rs 3 lakhs.

9 CONCLUSIONS The mushrooming of malls and swanky stand-alone stores might have adversely affected the overall number of local retailers but business continues to flourish for those who have managed to survive this change in the business environment. The local retailer continues to be the preferred choice for a section of the population that is characterized by the following demographic characteristics: Age: Greater than 30 years Education: Graduation or lower Marital Status: Married Annual Family Income: Up to Rs 5 lakhs The identification of factors for their preference as well as the reasons for the comparatively lower preference of the local retailer as a shopping destination by the other demographic categories would merit additional research and analysis. References 1) Sharma J.P., University of Rajasthan and Sarabhai Samar, Amity University; Factors Impacting Store Patronage and Format Choice in Utilitarian Retail Buying 2) Alba, J.W. andhutchinson J.W DimensionsofConsumer expertise. Journalof ConsumerResearch,13March, ) Dodge,Robert H and Summer, Harry H(1969)."Choosing Between Retail Stores," Journal of Retailing, Vol 45,No Fall,pp ) Fotheringham, Stewart A(1988). "Consumer Store Choice and Choice Set Definition,"MarketingScience,Vol7, No 3,Summer,pp ) Tang,Christopher S; Bell, David R and Ho, Teck-Hua (2001)."Store Choice and Shopping Behavior: How Price Format Works, "California Management Review,Vol3,No2, Winter,pp ) Cherukuri, Jayasankaraprasad (2010). Effect of Situational Factors on Store Format Choice Behavior in Food and Grocery Retailing in India Multiple Discriminant Analysis, IBSU Scientific Journal 4(2), ) Bitner,M.J., Faranda,W., Hubbert, A.R. and Zeithamal, V.A Customer contributions and roles in service delivers. International Journal of Service Industry Management,8(3)193, ) Bitner,M.J.(1992).Servicescapes:The impact of physical surroundings on customers and employees. Journal of Marketing,56(April), ) Baker,J.,Grewal,D.andPorasuraman,A.1994.The influence of store environment on quality inferences and store image. Journal of the Academy of Marketing Science,22(4), ) Fenwick, I Shopping habits in grocery chains. Journal of Retailing, 50(4), ) Tauber, E. 1972, Why Do People Shop, Journal of Marketing, Vol. 36,pp ) 12) Grewal,D.Krishnan, R,Baker,J.and Borin,N.1998.The effects of store name, brand name and price discounts and customer evaluation and purchase intentions. Journal of Retailing,74(3), 331.