1. Mall Mania in India - Changing Consumer Shopper Habits

8/8/2019 1. Mall Mania in India - Changing Consumer Shopper Habits

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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 Indias

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?

1. Mall Mania in India - Changing Consumer Shopper Habits

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