Review of Literature and Advantages of Shopping Malls

Transcription

1 90 Chapter - 3 Review of Literature and Advantages of Shopping Malls 3. Introduction In this chapter, an attempt has been made by the researcher to examine the existing literature on the shopping malls and also to study the advantages of shopping malls to the consumers Review of literature-shopping Behavior and Mall Patronage The retailing sector in India has undergone significant transformation in the past 10 years. Retailing is gradually inching its way towards becoming the next boom industry. Organized retailing is changing the whole concept of shopping in terms of consumer buying behavior. Shopping today is much more than just buying it is an experience itself. The retailing business in India has witnessed huge growth due to emergence of supermarkets as well as centrally air-conditioned malls. Consumers are the major beneficiaries of the retail boom. The Indian consumer is changing rapidly. They now have a choice of wide range of products, quality, variety and prices. Consumers are now showing preference for shopping malls, which enable them to shop variety of products under one roof and offer shopping experience in term of ambiance and entertainment.

2 91 Lather and Kaur (2006) in their papers, studied various malls and established the relationship between the shoppers behaviour and various attributes / indicators of stores in malls. They observed that most of the customers do not look at the pricing alone. They are looking for a sense of belongingness, a brand of quality and innovation they can trust. Small retailers no longer remain the primary source for the basic monthly shopping basket. The consumer normally gets better prices, quality selection and convenience for these purchases at organised retail chains and shopping malls. Their results also suggested that if proper window displays and other proper methods of presentation of merchandising are done, the retailers are able to attract more shoppers. They established that in the past few years, there has been a significant shift in India from individual retail outlets, owned separately and managed distinctively, to professionally managed retail stores. Their findings also supported the positive effect of location on store traffic and sales. They established that the most preferred retail outlets are multi brand outlets and exclusive outlets. Every type of shopper wants to visit the stores, while they may or may not buy but curiosity is there for visiting the malls. The study also examined alternatives to discounts when negative quality inference was likely to occur, and it was found that free gifts were effective in increasing sales and market share. They suggested that for shoppers to have a good mall experience, the retailers should focus on creating a pleasant

3 92 shopping environment by using an optimum blend of variables like temperature, air quality, lighting, scent, noise level and layout amongst others. The desire for more open air structures also emerged as a result of the uniformity associated with enclosed malls, and the yearning for unique shopping places that reflect the characteristics of the locality. For all these reasons, many shoppers now prefer more natural environments where there is daylight and a feeling of contact with the outside world (Coleman, 2006). Gupta (2006) in his research examined the extent to which different promotional frames attached shoppers perception towards product service and made a positive buying decision. His study found that significant difference is found in two groups of discount and non discount category, seasonal sales and non seasonal sales, coupons and non coupons, so far as indicators like general characteristics and physical characteristics. Location convenience is concerned but no significant difference is found in two groups of membership discounts and non memberships discounts. He has further gone to suggest that store retailers must provide a setting that will allow consumers to shop for their needs and wants in the marketplace and they should find ways to tailor their environments to attract customers and increase patronage. Gupta and Kaur (2006), in their paper, examined the extent to which different promotional frames attracted shoppers perceptions towards product service and made a positive buying decision. They stated that retail location of a store and the distance that the customers must travel to shop are basic

4 93 criteria in their store choice decisions. Their analysis stated that customers consider price discounts as an important promotional tool in the malls. They also found that seasonal sales have a positive effect on both patronage and spending. Major promotional tools on the basis of which the customers prefer to visit the stores in the malls are promotional strategies. Stores using advertising, promotions, seasonal sales and private labels on a particular category of products had caused people to perceive the benefit of buying a product at one store to be higher than it is. Mehta (2006) in her study examined the expectations of people of Ludhiana, India, towards overall shopping experience and entertainment towards shopping malls. She found that people don t just buy a product in a mall, they buy an experience. On being asked to rank the features in the mall that would attract the customers, people gave the following ranking in the order of preference: shopping experience, eating joints, entertainment, apparel section, jewellery, music / books section, reasonable prices, decoration items and beauty saloons. She gave certain suggestions to make the mall more appealing to the customers like free parking for the regular customers / heavy purchasers. Such customers may be issued a parking card, which ensures free earmarked parking. Malls with PVR multiplex should offer weekend specials like classics, movies for children, etc. Rajaguru and Matanda (2006) in their paper studied consumers perception of store and product attributes and customer loyalty in Indian context. Store attributes are assessed in the dimensions of store appearance, service quality

5 94 and convenience of store. Product attributes dimensions investigated include product quality, price and availability of new products. In their study, customer loyalty was considered as repeated purchasing behaviour of consumer towards a store. The results suggested that except product price, other store and product attributes have positive effects on customer loyalty. Store attributes such as service quality and convenience of store and product attributes such as product quality, price and availability of new products, show significance towards customer loyalty. Rath (2006) in his article expressed his fear that global retailers will quickly put the kirana shops out of business, leading to millions of job losses. He pointed out that 95% of all retailers in US are single store operations. They may not be as small as Indian Kirana stores, but despite six decades of dominance by large chains these small players had not been wiped out, the reason being the added advantages these types of small retail or kirana stores enjoy: They are local and usually in small blocks that the customers are in Level of convenience in purchasing is very high Personal attention to their customers Investment as per customer needs and good inventory management He further suggested that the move towards FDI shouldn t be opened such wide that no room is left for local kirana stores. He suggested beginning with a 26% FDI approvals and then gradually moving onto 100% in a span of 4 5 years.

6 95 In the past, a large number of antecedents of retail patronage have been identified. These antecedents can be categorized into three groups: (a) product-relevant factors (factors pertaining to product features and attributes e.g., product quality, price), (b) market-relevant factors (factors pertaining to the retailer of concern e.g., service provided by the store), and (c) personal factors (factors pertaining to consumer characteristics e.g., attitudes, motivation to fulfill, demographics such as age, gender, income, etc.). The results of a study conducted by Pan and Zink an (2006) suggested that various predictors (e.g., service, product selection, quality) are strongly related to shoppers retail choice, whereas others (e.g., store attitude, store image) are important antecedents of shopping frequency. In a study conducted by Palou and Chai (2002), it was found that attitudes, personal norms, and behavioural controls had a significant effect on Chinese consumers intentions to adopt e-commerce and to engage in product purchase behavior. A study by Causal and Mohave (2011) found that Indian consumers patronage towards malls is because malls have quality and variety of products under one roof. An understanding of patronage behavior is a critical issue for retail managers because it enables them to identify and target those consumers who are most likely to make a purchase. Reflecting on this managerial need, one research stream focused on explaining retail patronage with respect to various elements (e.g., store, frequency of visits, store choice) (Pan & Zink an, 2005). Relationship between attitudes, personal norms, perceived behavioural controls, and patronage intentions have also been examined by

7 96 researchers. As a general rule, the more favorable the attitudes and subjective norms, the greater is the perceived control, and the stronger is the person s intention to perform the behavior. 3.2.Literature survey According to Piyush Kumar Sinha & Sanjay Kumar Kar (2007) 1, India s retail development is inevitable. Most of the organized retailers in India are harping on quality, service, convenience, satisfaction and assured benefits to lure shoppers into the store. Retailers should create value for the consumer and must decide suitable vehicle to deliver desired consumer value. No doubt, that retail format is one of the vehicles to deliver value proposition and it helps to position the store in the mind of target shoppers. Retailers need to find out what matches consumer requirement and offer better than competition. Retailers certainly need to be innovative in designing the value proposition and deciding the format to deliver that to the consumer. It is not all about deciding the format but all about serving the consumer better, faster and at less cost. Retailers can use their store as an indicator of what they stand for and what value they offer. Retailers have to out think consumer in providing service and value. Now, most of the retailers are concerned about growth in number of stores rather than creating value for consumer. Purohit and Kavita, according to their studies the traditional retailers are not very much clear about the consequences of the modern retailing the traditional 1 Retail in India: Trendy Malls Gradually Replacing Traditional Retail Stores in Big Cities of Maharashtra. ¹Quazi Md. Kamran, ²Pawan Kumar Poddar.

8 97 retailers are netural or undecided, modern retailing will cut the profit margin of the traditional retailers; the modern retailing will lead healthy competition in the market, modern retailing will reduce the sales volume of the traditional retailers and traditional retailers should improve customer care services in the era of modern retailing. Bhardwaj and Makkar (2007) opine that NCR and Mumbai will continue to dominate the Indian retail scene. Both are large and diverse to accommodate a variety of new formats, including one-stop malls, specialty malls, hyper markets and big-box retailing. The researcher is of the view that secondary metros are perceived by retailers as the next retail destinations which throw a strong challenge to Mumbai and NCR Region. Pune, Bangalore, Kolkata, Hyderabad and Ahmadabad all have significant mall development and are likely to account for one-third of India s organized retail sector. Factors such as growing income and rising aspirations are increasing the demand for organized retailing. Retailers have seen a notable shift from a saving to spending mindset of consumers. This is a very important driver for the industry. Both domestic and international retailers as well as the real-estate industry see the Indian market as the greatest untapped market of the globe. (Dawson, 1988) The unorganized retail sector face increased pressure from the organized retailers, super stores. Further as the economy and society has changed, so have retailers and shopping habits of consumers also altered enormously. Another study conducted by Morganosky (1997), on the structural changes in the retail markets and their implications on consumers revealed that due to the emergence of new retail

9 98 formats, competition between retailers of organized and unorganized is tightening with pervasiveness and complexity of consumer cross shopping patterns across various retail channels. 3.3.Advantages of Shopping Malls to the consumers To-day, the Shopping malls have become an essential marketing place and creating a niche in the global arena. Generally, the shopping malls do business in an enclosed building housing a variety of shops or products. From the historical evidences, shopping malls came into existence in the middle ages, though it was not called so. The concept 2 of departmental stores came up in the 19th century with the Industrial Revolution. Consumers wanted a better shopping experience and this demand gave rise to the emergence of shopping malls in India. Originally, 3 the first of the shopping malls was opened in Paris. Then, the trend followed in the other metros over the world, and there was a spree of shopping malls coming up at various places. In this age of mass production and mass consumption, the concept of shopping malls is most modern method of attracting consumers. The concept of shopping was altered completely with the emergence of these shopping malls. 2.``Top 100 Retailers, Stores, August Spector, Robert, ``The retail revolution and its impact on consumer culture, Boston: Harvard Business School, 2005.

10 99 Previously, the shopping was considered to be a mere buying activity. But, today, it has become synonymous with splurging time and money. People simply go about roaming through the shopping mall in order to peep through the window of the shop and often ending up buying something they like. The consumers desire a combination of comfort and suitability which the shopping malls cater to, and so this format of shopping has become so popular all over the world, and especially so in India. The inclusion of amenities like restaurants, multiplexes, and car parks attract more and more crowds to shopping malls, that are considered family hangout zones. Significance of Shopping malls to the community They increase the growth of the organized retail sector. 2. They serve as monumental increment in economic growth. 3. They create employment opportunities in the organized retail sector. 4. They provide good competition and better products & services. 5. The shopping malls have mostly altered the lifestyle of the consumers in India. With the growth in income, changing attitudes, and also the demographic patterns favour the emergence of shopping malls. 6. The shopping malls cause a growth in the Indian organized retail sector by 10% within Bond, Ronald.L., Retail in detail: How to start and Manage a small retail business, 2 nd Edition. PSI Research / The Oasis Press, 2001.

11 Different formats are available in shopping malls depending on the region. 8. The different outlets centers scattered around the country and their aim is to bring shoppers a more convenient and cheaper way to shop. 9. The prices are what mainly attract people to outlet centres as often they sell goods at up to 70% off high street prices. However, some of the stock that is sold such as clothing is often last season s stock and it is different to what is currently being sold in the high street In the recent marketing arena, shopping malls are an easy and convenient addition to society. With the presence of multiple stores in the same location, consumers can buy their material needs and wants without leaving the single overarching structure. 11. Shopping Malls provide a symbol of materialism and are able to generate a wealth of capital simply by displaying itself as a social hub. Many corporation place their retail stores in malls because of the large numbers of people visiting malls on a daily basis. Attractive window displays, customer greetings, and special mall sales all play a part in luring customers into spending money. 12. Shopping Malls often house well-established franchises 6 eliminating competition from small businesses. As malls become larger, they reduce the customers needs and desires for stand-alone stores, causing them to shop at malls where they are likely to purchase items they did not intend and thus spend more money. By bringing together popular franchisee and chains, malls show the consumer what they should want and buy in order to elevate their social status and appearance. 13. Mechanism of free-trades of consumerism in these days, shopping mall is the part of large places which are stored of goods and service together. In the big cities, shopping malls are indicated in the economic internal growth of country. Some people seem to be satisfied that it makes their life much better. 5. Retail Industry: Top Ten Issues , New York ``Global Powers of Retailing, Stores, January 2004, PP

12 Shopping malls 7 can be seen in the part of a big, modern, and recreated building that why shopping malls is to be built in several reasons. Firstly, the shopping mall is the place of competitive trades that mean a lot of merchandises and services to be exchanged, so the results are activated to good economy. Secondly, shopping mall make many ways of life for many people to be comfortable and convenient, for instance, you can get the word ``one stop service that it provides everything you need such as shopping, playing sport, entertainment, food market and education all inside this place. Moreover, this place is also available many jobs for people because several departments to need more employees that the sing of effective income and employment. 15. Shopping malls 8 are the important part of lives of some people in today s era. An essay on shopping mall all the benefits of a shopping mall. The shopping malls are the places that are packed in weekends. The malls of today s world are huge and provide all the products that a man desires as a source of entertainment. During weekends people come with the families for shopping and fun in the shopping malls. There are large in size with hundreds of shops. If one enters a shopping mall, he/she can get each and everything from household properties to eatables in the same mall. These shopping malls 9 attracts huge youngster crowd towards them. Many people just come for window shopping to the shopping malls. These days the malls have become a good source of entertainment for everyone. There are many branded showrooms in the malls. 7. Jawa, Rachana, (2003) ``Retailing in India, `JIM 8M, Jan-March, PP> Madhavan Kutty G., (2005), ``FDI in Retail Sector Boon or Bane, ICFAI Reader, November, PP Rao, Subba, S.R. Dr., ( ), ``FDI and the Retail Sector in India; A Study of

13 Major reasons to visit Shopping malls The following are the major reasons shopping malls have become so advantageous to consumers in recent years Convenience Online stores are available 24 hours a day, seven days a week. This means you can sit back and relax while you spend the day or night browsing online shopping malls. No more sneaking around and buying Christmas and birthday gifts for your kids. They are usually with you when you go shopping in a physical store. Now you can hop online any time you want, even wearing your PJs, and find the perfect gift for your kids. Some online malls feature numerous children's retailers, with a wide variety of toys, games, books, and clothes for kids of all ages. 2. Browsing the Web Instead of Driving around the City Most people today are concerned with gas prices and are looking for ways to save. Many have stopped taking those last minute trips to the local store because they must preserve gas and money. Now anyone can visit the Web and shop at an online shopping mall without ever leaving their home. Online 10. Opportunities and Threats, `The Alternative, Volume V, No. 1 (Oct.-Nov.), PP Majumdar, Aveek, (2008), ``A Model for Customer Loyalty for Retail Stores inside Shopping Malls An Indian Perspective, Journal of Services Research, December, PP

14 103 shopping saves on gas money, and enables you to find unique items without going from store to store during the holidays or other special occasions. 3. Competitive Pricing Shopping malls don't have the overhead expenses of most brick and mortar stores, and they can pass the savings on to the consumer by offering products at or below wholesale prices. 11 Consumers also have the advantage of comparing prices of a particular product at the online mall shopping site. A DVD player for instance may cost $20 less than the usual retail price at certain online stores. It's easy to shop around when you take advantage of online searches and even mall search options. Many online malls carry hundreds of brand names, so you can easily find the one that fits your needs and budget. 4. Wide choice of Products There is wide choice of products in shopping malls. There you can usually find clothing for the entire family, jewelry, home and garden decor products, and even personalized gifts for those very special people in your life. An even wider selection is available at online shopping malls for shoppers who are looking for computers, cell phones and other electronics. 11. Shishiv Kumar, (2006), ``The changing fare of Indian Retailing, The Icfai an Journal of Management Research, April, PP>

15 Relaxed and pleasure buying You may already know what you want when you visit the online shopping mall, but if you're unsure, you can take your time and browse as long as you want without hearing, "The store will be closing in ten minutes!" Shopping websites 12 on the Internet don't close unless the website is down forsome reason, so you never have to feel rushed or pressured to commit to buying an item. 6. More product Information and Reviews Would you like to hear what others have to say about a product before you purchase it? You will find some online stores that let customers give comments or rate an item they have purchased. This helps you make a decision based on the experience of others. If you find that a product or even an entire online store has received numerous bad reviews, it might be a sign to move on to the next product or store. 7. Collectibles or Hard-to-Find Items Are you always searching for collectible coins or comic books? Do you have an antique car and haven't been able to find a certain part for it? Well if you're logged in to an online shopping mall, you can probably find just what you are looking for with the click of a mouse. 12. Subramanian, R. and Rungta S. (2006), ``The Shopping Consumers Survey on Consume Behaviour (In the context of Retail Consumer), May, PP

16 105 As if these seven benefits weren't reason enough to try an online mall, you can even make money or earn cash back and rebates from various retailers by starting your own shopping mall. There are many stay-home moms who work at home operating their own mall and earning an income while shopping. Marketing your own business can be exciting when you're promoting your own mall, and it's now easier than ever to set up an e-commerce system so you can operate an online business. There are also legitimate MLM mall opportunities that enable you to start with very little expense or experience General advantages of Shopping Malls 13. Shopping Malls houses many shops, selling different products to the consumers. Malls are generally associated for exquisite shopping experience they provide to the consumers. But there s more than just shopping to the malls. Malls these days are equipped with start of the art of architecture comprising spacious shops which boasts of selling almost all kind of products of world renowned brands, be it clothing, crockery, toys, electronic equipment, there is no dearth of products in malls. These days malls stock up multitude of products and come up with innovative strategies to sell them to the customers. 13.Vishvas, Radhika and Murugiah, V., (2006), ``FDI in Retailing Challenges and Opportunities, Marketing Mastermind, July, PP

17 106 A mall is basically a building comprising of various stores and outlets that sell their individual products to the customers. Shopping malls are the central point from where varied local and international brands can sell their product to the common man. Malls can be proclaimed as modern day markets which provide for lot more than just products to the customers. Specific Advantages of Malls The whole retail and merchandizing industry depends on the efficient use of supply chain, pricing and range of products. Single elements alone cannot offer the customer a delightful shopping experience. Small Kirana stores cannot offer this experience as many processes are involved, there are high costs of manpower and infrastructure. 2. Large retail formats, owing to their bulk purchases can achieve better economies of scale as compared to a small shop. 3. The shopping malls offer the customers a wider variety of goods, and also provides them with a better display of products. The store design and better display are point of differentiation for the shopping malls. They provide the consumer with a memorable shopping experience. The package offered to the consumer involves environment, service, price and the product. 4. The shopping mall offers the consumer a one stop shop for all his needs. The concept is to be able to satisfy multiple needs of the customer and to provide for all his requirements at one location under one roof. 5. The malls attract people on the basis of their superior - store atmosphere, store activities, shopping experience and better services

18 Threats to Shopping malls in India Crowds of people window shopping and long queues are one of the major problems which keeps people away from the malls. 2. The stores are often out of stock of the goods that the customer is looking for (as they may be in great demand at that particular point of time) and no information is available on when the stock will come again and also on how soon will it be arriving. 3. Coming to the malls to shop for one or two products as and when the need arises is not feasible. The malls seem restricted to that segment of the people who shop once/twice a month to stock up,either to save time or to avail of better prices. 4. The bad physical infrastructure - lack of fast moving roads resulting in traffic jams on the way is something that keeps people restricted to their local shops and kirana stores. However, in India more attention needs to be paid to the customization of the malls to the Indian context and to the needs of the local clientele. Just as when a product is being launched in a new market it needs to be customized to the culture of that particular place and the needs of the people there, similarly the concept of malls when applied to India must be tailor made to adjust to the complexities and diversities of the Indian context. 15. Vishvas, Radhika and Murugiah, V., (2006), ``FDI in Retailing Challenges and Opportunities, Marketing Mastermind, July, PP

19 108 To conclude, in this chapter, an attempt has been made by the researcher to examine the advantages of Shopping Malls to the consumer and the community as a whole. This chapter also deals with importance, and benefits of malls and their impact on consumer behaviour. The shopping mall patronage and the consumer behavior have been examined in the next chapter.