Electronic copy available at: http://ssrn.com/abstract=994238

1

The consumption pattern of Indian Consumers: choice between traditional

and organized Retail

Mridula S. Mishra

Abstract

Organized retail has started to spread its roots in the Indian market since past one decade

and is gradually making mark among all sections of the society. This paper tries to

explore the way organized retail has dramatically changed not only the Indian traditional

retailing structure by also the consumption behavior. The consumption behavior was

examined with the help of a structured questionnaire. The results show that, for

consumers, the shopping mall or variant of organized retail format is the preferred type of

retail store, due to convenience and variety.

1.1 Introduction

The Indian market has seen vast changes in political, economical and social

environment, which has a great impact on consumption. With the Indian as well

as international corporate entering into the Indian retail scenario the market has

been divided between the traditional and the organized sector. The Indian retail

scenario is presently facing the similar situations as the mom and pop stores in

the developing nations faced at the emergence big box retailers. There are

various issues that need to be addressed, like what would be future patterns of

consumption, which formats of retail would be preferred by consumers and will

the rise of organized retail affect the traditional retailers.

This research was developed to overcome this gap. The first part of the paper

deals with a historical analysis of the Indian retailing structure followed by the

review of literature on store image reviewed and finally the last part deals with

Electronic copy available at: http://ssrn.com/abstract=994238

2

the results of empirical studies in Indian metros is discussed. This study was

conducted in the major metros of India, more specifically precisely in Mumbai,

Delhi, Chennai, Hyderabad and some others known for being commercially

active in retail.

This study contributes to the understanding that consumers and retailers in most

cases have different perceptions in relation to store image and shopping habits,

justifying the need for consumer marketing research, which is important in

helping retailers, implement in a real marketing orientation.

The paper examines the choice of format the consumer has when he or she

decides to buy a particular product. The paper also describes the development

of organized retail in the future, focusing on aspects with potential effect on

purchasing behavior among the consumers. The focus is on consumer

expectations. The questions were formulated to capture the overall behavior of

the consumers and with the help of the survey questionnaire the analyses was

done. An attempt has been made to explore the way organized retail has

dramatically changed not only the Indian traditional retailing structure but also

the consumption behavior. To understand the impact and choice of retail format

by the consumers a questionnaire was used, and the results show that, for

consumers, the shopping mall or variant of organized retail format is the

preferred type of retail store, due to convenience and variety.

This study was conducted in seven major cities of India, more precisely in Delhi,

Chennai, Kolkata, Hyderabad, Bhubaneswar and Mumbai, Ahmedabad known

for being commercially active in retail. This section of the research focuses on

consumers expectations from the retailers. Three questions were formulated in

order to capture the overall purpose or objective of this section of the research.

3

1. What are the most favored retail attributes by consumers and how will

they change in future?

2. How are the conventional and organized retailers perceived?

3. What external forces influence the choice of consumers and how can these

forces be accounted for in future?

1.2 Conceptual Framework

This research enquiry begins with a description of a conceptual framework of

purchasing decision behavior. The framework captures purchasing behavior in

general and was used as a guideline in the research and specific aspects of the

framework were emphasized. According to Seth (1981), consumer’s buying

behavior is a function of his requirements, retailer accessibility, and the choice

calculus with which he selects the best retailer. This is illustrated in Figure1.1.

Product or service requirements refer to the buying motives and their associated

purchase criteria. Retailer accessibility is the evoked set of product/supplier

options available to the consumer to satisfy his product requirements (Sheth,

1981). The model indicates that the competitive structure of the retail sector, the

corporate image of the retailer and marketing activities influence the retailer

accessibility.

4

Figure 1.1 Conceptual Framework

Based on the consumers’ requirements and product/retailer accessibility,

competing offers are evaluated by the consumer. Shaw, Dawson and Blair (1992)

found that most consumers buy many products, and they operate in a pressured

work environment with little time available to evaluate, in formal way, detailed

and subtle criteria. They therefore argued that buyers use only a subset of

product requirements (i.e., evaluative criteria) to decide between different

products and retailers when making actual purchasing decision.

Inter-organizational factors: • Size • Type • Location • Management

Intra-organizational factors: • Type of merchandising • Product positioning • Regulatory constraints • Type of decisions

Consumers Product Requirement

Choice Calculus Ideal vs. Actual Retailer /product choice

Retailer Accessibility • Competitive structure • Corporate Image • Relative marketing

effort

• Business Climate • Negotiations • Financial Positions • Market disturbance

5

The framework, briefly described above provided some guidance in framing this

research and making the questionnaire to study the purchasing behavior of

Indian buyers while deciding the format to chose to shop from.

As the economy and society have changed, so retailers have responded and

shopping as an activity has altered enormously (Dawson and Boroadbridge,

1988). Retailing is one of the most dynamic and rapidly changing sectors of

Indian industry bearing little comparison with the business that operated 50

years ago. Multiple retail companies now dominate the sector, to the threat and

decline of small independent business. These independent stores face increased

pressure from the multiple retailers, superstores, small store format (such as

high street stores), petrol forecourts and many are being squeezed out of

existence altogether. Even the wholesale symbol groups have been developing

their own store portfolio. Independents who “enjoyed” over 80 percent of the

market share till early 90’s have seen this market share halve by 1995 to just over

40%.

The decline in the number of small shops has different implications upon its

existing customers depending upon locations and alternative options to shop.

The closure of a local neighborhood shop with a superstore nearby would affect

the residents of a local neighborhood differently compared to the closure of the

only shop in a small locality without a superstore nearby. Various arguments

have been made in support to the only shop in a locality, arguing that they play

an important vital role in the community and work as a support network of the

locality (Smith and Sparks, 1997). However as the MD of Spar said:

“People may have warm feelings towards the ideal of a small shop, but unless

that warm feeling converts to hard cash, we’re all going to be in the nostalgia

business (The Grocer, 1996).”

6

If conventional retailers are to survive, it will be vitally important to understand

what the residents in a particular community want from their retailers. Only

those stores with a clear understanding of their customers wants and the changes

that are occurring within the market place can hope to survive by identifying and

then satisfying some of those needs more effectively than their competitors.

Independent retailers have increasingly been under threat with the growth of

major multiple retailers in the organized retail scene, but independent small

shops operating in local community locations do serve a function whether it be a

social or a community one, or providing a vital service to certain groups of

consumers. This might be through the provision of their total shopping

requirements or via top-up or emergency products. Although independent small

conventional shops comprise the majority of all retail businesses in India, and

have always provided a social as well as economic function to the communities

they serve, their share of retail sales has been eroding in favor of the major

organized retail stores since the mid 1990’s.

1.3 Main Attributes Identified in the Literature

The concept of store image, considered as the way consumers see the store in

their minds, based on tangible and intangible attributes, deserved a great deal of

academic and empirical attention, during the last four decades. The importance

of studying the image is based on the assumption that the store possessing the

most congruent attributes with the image desired by consumer will have better

chance of being selected and patronized (Martineau, 1958, Doyle and Fenwick,

1974-1975, Amirani and Gates, 1993). Therefore, the store image can be used as a

“marketing tool” (Engel et al., 1995), or as a “competition tool” providing useful

7

indications to managers about the most and the least appellative attributes to

consumers, and therefore, the insights for the marketing mix conception.

In spite of the importance and the long history of academic research into store

image the relation between image/attitude and store

patronage/choice/preference is complex and polemic. In fact, even though the

executives relate attitude and patronage, there are few studies that support that

relationship (Monroe and Guiltinan, 1975). The concept of relative attitude

reinforces the complexity of that relationship (Dick and Basu, 1994). The authors

conceptualize consumer loyalty as the relationship between the relative attitude

towards an entity (brand/service/store/vendor) and patronage behavior. Two

dimensions, the degree of attitudinal strength (weak or strong) and the degree of

attitudinal differentiation (existent or not) seem to underlie an individual’s

relative attitude towards an entity. Therefore, a weak but positively

differentiated attitude may be more likely to lead to loyalty than a very positive

but undifferentiated one; however, it is also important to consider the influence

of normative and situational factors.

Besides being relative, the store patronage behavior is also dynamic, and that is

more explicit in buying situations of involvement, risk, evaluation of alternatives

and information search (Monroe and Guiltinan, 1975, Darden and Dorsch,1999).

This dynamism is crucial in order to understand the changes in consumer

behavior.

8

The literature refers to a great diversity of methodologies, to varying temporal

and spatial contexts, and to different store types, which make both

generalizations and typology construction difficult. Contradicting Martineau’s

(1958) emotional and affective perspective of store patronage, empirical

evidences show a number of functional and objective attributes as the most

important, such as price (Doyle and Fenwick, 1974-1975;Bearden, 1977; Arnold et

al., 1983; Hortman et al., 1990; Finn and Louviere, 1996); product quality (Doyle

and Fenwick, 1974-1975; Bearden, 1977; Hortman et al., 1990); assortment

(Stephenson, 1969; Doyle and Fenwick, 1974-1975; Schiffman et al., 1977;

Bearden, 1977; Finn and Louviere, 1996) and location (Stephenson, 1969;

Schiffman et al., 1977; Arnold et al., 1983; Hortman et al., 1990). Concerning

intangible and emotional attributes, the most indicated are the atmosphere and

store characteristics (Martineau, 1958; Stephenson, 1969); sales personnel

(Martineau, 1958; Stephenson, 1969; Schiffman et al., 1977) and advertising

(Martineau, 1958; Stephenson, 1969).

1.4 Store Image and Consumer Shopping Habits: Indian Context

In India, some empirical studies provide important information about consumer

behavior and its responses to the development of organized retail. Economical

and social changes are major contributors for a growing fragmentation of

consumers into multiple segments with different values and buying priorities.

Consumers have become more pragmatic, educated and demanding, learning

how to manage money and time more efficiently. The focus on low prices was

gradually replaced by a value for money perspective. The study developed by

ETIG (Economic Times Intelligence Group, 2002) confirms these tendencies.

Concerning food, the most important attribute mentioned was quality, followed

by price. Indian consumer has different reasons for preferring different store

9

formats, either modern or traditional; Sen (2000) confirms this in the study

undertaken in Indian context. He confirms that in the case of hypermarkets, the

main motives for preferences, in decreasing order are low prices, the possibility

of buying everything in the same place and the general appearance of the store.

Several investigations emphasize the possible coexistence of different store

formats (Chandrasekhar, 2001) and others point out the relationship between the

type of store and the type of products (Sen, 2000; Bhatnagar, 2002). These studies

show that, while specialized and traditional stores are preferred for fresh

products, hypermarkets are preferred for shopping in general, and also for

frozen food, groceries and beverages. The purchase of perishables in

hypermarkets is reduced.

1.5 Traditional Retailers Perceptions About Organized Retail

As already mentioned, organized retail has deeply changed the Indian

commercial structure. However, it is not exclusively responsible, as other

changes (economical, social and cultural ones) have occurred simultaneously.

Concerning the more direct effects of organized retail on different types of

commerce, it is possible to verify that the major impact is felt on traditional retail

and, in particular, on the food sector. The impact of organized retail is also

significant on other types of retail, namely toys, stationery goods and household

appliances; moreover, it is probable that competition gets more intense in other

sectors, such as clothing and furniture.

A French study shows that the impact of organized malls and supermarkets is

especially strong over non-specialized stores; stores that use normalized sales

methods; generalist stores; very small stores operating on their survival limits;

stores located near hypermarkets and with no alternative goods. In India, a study

(Radhakrishnan, 2003) verified that, in the food sector, the most affected stores

10

are precisely the smaller stores (small areas, few employees and low sales

volume) and the isolated stores (stores that do not develop partnerships with

other retailers).

Concerning retailer's perceptions about problems in commerce, studies

developed in India show that the most mentioned motives for crisis are, in the

first place, related to political decisions. Retailers agree that their own

competitive attitude and behavior are among the causes for problems associated

with commerce. However, in their opinion, these are not the major causes. In

terms of the most important competitive factors of organized retailers, traditional

retailers mention lower prices, schedules, products assortment and better

adaptation to consumer shopping habits. Concerning the way they analyze

themselves, they identify the attendance and the close relation with customers as

their main advantages; in terms of their main weakness, they mention the small

dimension.

7.6 The Empirical Study

This study was conducted in seven major cities of India, more precisely in Delhi,

Chennai, Kolkata, Hyderabad, Bhubaneswar and Mumbai, Ahmedabad known

for being commercially active in retail. This section of the research focuses on

consumers expectations from the retailers. Three questions were formulated in

order to capture the overall purpose or objective of this section of the research.

4. What are the most favored retail attributes by consumers and how will

they change in future?

5. How are the conventional and organized retailers perceived?

11

6. What external forces influence the choice of consumers and how can these

forces be accounted for in future?

Before explaining the methodology, two issues need to be discussed: the

commercial structure of India and the concepts of traditional retail and organized

retail to avoid possible ambiguities in terms of terminology.

The Commercial structure of India has faced deep changes over the last few

years, which is greatly related to the development of organized retail. Currently

India boasts to contain 12 million retail outlets together in conventional and

organized formats with major aggregation of organized formats in the cities like

Delhi, Chennai, Kolkata, Hyderabad, Ahmedabad, Bhubaneswar and Mumbai.

Simultaneously, these cities have a large number of grocery stores, a typical

format of traditional food retail.

The concept of conventional retail is used as encompassing small-sized

commerce, i.e., groceries, minimarkets, pure food stores, specialized food and

non-food stores and bazaars. Regarding specialized stores, clothing stores are

considered as specialized ones. As for the concept of organized retail, there is

some confusion, Levy and Weitz define organized retail as a multi-format retail

stores offering low prices, and combines a discount store and super store, while

A.C. Nielsen, gives a different definition, considering the organized retail as a

commercial retailing establishment with a sales surface superior to 2500 square

meter, explored in free-service system and commercializing a great variety of

products. As data provided by Nielsen are widely used in India and in the rest of

the world, it was decided to adopt them. In India, the medium size of malls and

12

hypermarkets is considerably superior, going from 8000 to 120,000 square meter;

one of them is Spencer Plaza amongst the largest in the country.

The review of literature identified a number of studies focusing on buying

behavior of Indian consumers from organized retailers. The reviewed studies

may uncover important dimensions that purchasers use in their purchasing

process and will be used in our study of purchasing criteria and format selection

of consumers.

7.7 Research Sample

The sample was non probabilistic, respecting two main quotas geographic and

demographic. To draw the sample, the seven cites Delhi (Gurgaon, Faridabad

and Noida included), Chennai, Kolkata, Hyderabad, Ahmedabad, Bhubanewar

and Mumbai were considered, which also allowed for the inclusion of not only

the residents of areas inside the cities, but also those living in the extended or

rural areas adjacent to the cites who do their shopping in the city. The sample

was drawn from the seven representative cities and it represented consumers

with different economical, social and geographical characteristics. A form of

quota sampling was done in this case. Each group of volunteer assigned to a

particular city was given 200 questionnaires to complete the survey of their

designated city. A total of 820 questionnaires were completed and validated

from the seven stated cities.

7.8 Design of Questionnaire

The consumers’ questionnaire was designed to assess the consumer behavior and

preferences. The questionnaire was designed to identify the preferred choice of

13

format by the consumer. The questionnaire has three sections; first section

address to the demographic details of the respondent, the second section looks

for the information about the importance of various services that the consumers

seek at the retailers, the third section focuses on the consumer choice of the

format while shopping for different products. The questionnaire contains 2

questions in all. All the questions in the questionnaire are closed ended. Since

one method of putting forth the questions did not solve the purpose of the

research, questions with multiple responses, dichotomous response and discrete

response were used.

The questionnaire was first tested within the academic group of fellow

researchers and faculty for errors and on their valuable suggestions the

questionnaire was modified. The modified questionnaire was tested through a

pilot survey involving respondents in the proposed sampling frame. This

exercise was mainly done to test the degree of understanding the meaning of the

questions, the difficulty in understanding the questions by the respondents if the

meaning of the questions are conveyed correctly and to check the relevance of

the questions with respect to the interest of the respondent. After the pilot survey

the questionnaire was further modified. The final questionnaire is attached in the

appendix A-2.

7.9 Data Collection

The method used for the data collection was a face-to-face interview, using a

structured questionnaire, with closed-ended questions, conducted at the

residence of the respondents and directed to the person responsible for shopping

in the household. The sample was non-probabilistic, respecting two main quotas:

geographic and demographic. To draw the sample, the seven cites Delhi,

Chennai, Mumbai, Kolkata, Ahemdabad, Bhubaneswar and Hypderabad were

14

considered, which also allowed for the inclusion of not only the residents of

areas inside the cities, but also those living in the extended or rural areas adjacent

to the cites who do their shopping in the city. The sample was drawn from the

seven representative cities and it represented consumers with different

economical, social and geographical characteristics. A total of 820 questionnaires

were completed and validated. This survey was done with the help of volunteer

students. The questionnaire takes the respondents through a set of questions

dealing with factors assumed to be important forces in shaping the future retail

market in India, the closed ended questions, with majority of questions seeking

responses in terms of the ranks and choice.

The survey was carried out in December 2003 and January 2004. Information was

collected from a total of seven representative cities of India. The table below

shows the location and actual sample size.

Table 7.1 Number of questionnaire interviews distributed between seven

locations

Sl. No City Sample Size No of respondents

1 Delhi 200 146

2 Chennai 200 137

3 Kolkata 200 102

4 Hyderabad 200 117

5 Ahmedabad 200 111

6 Bhubaneswar 200 78

7 Mumbai 200 129

Total 1400 820

The data was especially collected from the residential areas of the cities. This

criterion of meeting the respondent at their residence was especially included in

15

order to get correct information from the respondent. It is assumed here that the

consumer will take more interest in responding to the questionnaire at home.

The time for approaching the respondents was invariably the morning and

afternoon of the day. This led to an interesting fact that the large percentages of

the respondents are females and elderly. Respondents were interviewed face to

face by student volunteers and the researcher.

A stratification of the sample was done on the basis of the family income. Three

strata were defined (1) Less than 1000 (2) 10000- 20000 and (3) above 20000. The

volunteers were as such not given any instructions about the strata. The only

instruction that was given to the volunteers was to approach a respondent at his

or her home. A total of 820 usable responses were obtained, which represents the

response rate of 58.57%. The high rate of response was due to the personal

interview method adopted. Table 7.2 represents the location and the rate of

response from each city.

Table 7.2 Number of interviews distributed between location and rate of

response

Income Group

Del

hi

Mum

bai

Che

nnai

Hyd

erab

ad

Bhub

anes

war

Ahm

edab

ad

Kol

kata

Tota

l

Less than 10000 per month 49 51 36 41 32 43 26 278

10000-20000 per month 43 50 70 52 20 33 42 310

More than 20000 per month 54 28 31 24 26 35 34 232

Total 146 129 137 117 78 111 102 820

7.10 Analysis for Consumers

16

The questionnaire contained two sections bearing questions on the consumer

behavior, preferences, perceptions, and demographic and geographic

information.

The scales that were used to measure consumer behavior and perceptions were

Numerical rating scale, Nominal scales. Frequencies and mean scores were

calculated

7.10.1 Perceived Importance of the Store Attributes

The respondents were asked to rank the attributes listed in the section two of the

questionnaire. There were no restrictions on the ranking system; the respondent

was allowed to give any rank from 1 to 7 for a particular attribute. There were 23

store attributes listed in the questionnaire, these attributes were studied in order

to gauge the importance of organized sector over the unorganized sector. All the

attributes listed here are specific to the organized sector and the assumption here

is that if the consumers attach much importance to these attributes then their

preferred format is the organized retail stores. In case the respondent felt that a

particular attribute was not of any importance, its presence or absence, did not

make any difference then they were asked to put a zero against it, the blanks

were also considered as zero importance and these cases were taken as

unanswered response.

17

Table 7.3: Perceived Importance of Store Attributes of consumers

Sl. No

Offering No of times an attribute was ranked

Frequency (n=820)

0 1 2 3 4 5 6 7

1. Convenient Parking 820 15 30 55 96 112 192 304 16 2. Better Service 57 0 125 88 158 180 200 12 3. Convenient store

hours 40 131 100 265 88 170 6 20

4. Variety 0 0 0 75 207 152 368 18 5. Convenient

Location 8 9 32 114 91 261 287 18

6. One stop shopping 0 0 30 50 231 165 315 29 7. Quality 0 30 55 96 119 193 317 10 8. Ease of shopping 0 0 42 49 223 242 264 0 9. Cleanliness and

Hygiene 0 0 35 50 205 183 347 0

10. Friendly Staff 0 75 95 263 251 76 60 0 11. Promotions and

offers 11 0 49 49 188 220 290 12

12. Crèche 0 115 92 104 170 187 126 26 13. Entertainment and

gaming zones 12 70 100 82 252 236 52 16

14. Food courts 0 0 0 24 24 100 638 34 15. Attractiveness of

business area 14 96 54 102 54 210 104 186

16. Availability of store brands

12 46 73 142 247 145 85 70

17. Availability of branded goods

0 17 21 34 87 176 226 259

18. Bagging 0 0 0 0 56 204 273 287 19. Parcel Pick up 77 168 240 198 110 7 8 12 20. Home delivery 0 119 92 72 151 150 181 55

18

7.10.2 The choice of consumer store format

A list of twenty-five items was prepared based on the common things consumers

buy at various retail outlets. This list was adopted from the study done by

Farhangmehr (2001) at Barga. The list of items was modified to fit Indian

scenario.

Table 7.4: Consumer Choice of Store Format in percentages

Sl.no Product category Conventional Upscale Food and Drug Combination

Warehouse No response

1 Diary Products 74.4 3.4 5.6 0 0 2 Bread 93.0 2.9 3.9 0.1 0 3 Beverages 8.0 20.5 66.0 5.5 0 4 Frozen Foods 23.5 8.8 67.7 0 0 5 Fruit 84.6 7.7 7.7 0 0 6 Meat 93.7 2.9 3.4 0 0 7 Fish 89.9 4.3 3.9 2.0 0 8 Vegetables 72.2 5.9 22.0 0 0 9 Clothing 22.7 68.5 0 8.8 0 10 Footwear 76.6 19.0 0 4.4 0 11 Sports goods 78.5 21.0 0 0.5 0 12 Toys 46.3 53.7 0 0 0 13 Stationary goods 6.8 75.1 18.0 0 0 14 Grocery 44.5 3.9 45.2 6.3 0 15 Household

Appliances 16.1 75.6 0 8.3 0

16 Kitchen utilities 7.3 87.2 0 5.5 0 17 Furniture or

decoration 44.5 53.0 0 2.4 0

18 Detergents/household 32.4 17.1 50.5 0 0

21. Frequent shopper program

0 82 109 119 120 167 146 77

22. Open Seven days a week

0 32 48 40 60 110 175 355

23. EDLP 0 20 24 35 0 119 70 552

19

cleaning 19 Personal cleaning 14.0 22.0 64.0 0 0 20 Plants and gardening 0 85.7 8.8 0 5.5 21 Tools 0 37.0 4.5 0 58.5 22 Books 30.0 63.4 0 0 6.6 23 Goods related to

music 13.8 86.2 0 0 0

24 Goldsmith/ Jewelry 82.0 18.0 0 0 0 25 Beauty care/perfumes 11.0 76.6 12.4 0 0

7.10.4 Analysis of consumer choice of format

Preferred choice of shopping format for buying various products for Indian

Consumer in percentages

In most households (84.2%), women are mainly responsible for the shopping.

The majority of respondents (50.4%) have a considerably good educational level

(mainly with only 15 years of studies –– (40.7%) over 35 years old. Most

respondents are married (80.23%), belonging to households of more than four

elements (54.3%), with a family income in which several members contribute to

the household income. Given the fact that it was not possible to directly obtain

any data about the income.

Most part of the respondents (62.3%) frequently make their purchases in

supermarkets and malls, although it was also found that there is a high

percentage of consumers that buy in specialized food stores (78.3%), and

groceries/minimarkets (33.1%). These results emphasize the tendency that there

is the coexistence of several retailing formats. Malls and Supermarkets, in the

same way, the kind of commercial space in which, clearly, most people enjoy

purchasing (62.3%), which leads to the conclusion that buying in this type of

store has, in a way, an element of pleasure in it.

20

Shopping in the organized retail outlet is generally done on a regular basis

(around 40% buy once or twice per week), which goes against the decreasing

tendency and the systemization of visiting malls reported by Retail Biz (Sep

2003). This might be related to the fact that organized retail stores in Indian cities

are not far from large resident areas.

In terms of period of the day, the preferred ones are the morning and the

afternoon, that is, the hours chosen by the consumers to buy in malls and

supermarkets match the schedules practiced by the majority of traditional retail

stores. This result may be justified by the fact that a considerable part of the

sample is composed of housewives and retired people.

Regarding goods bought in the different kinds of stores, the results show that

detergents, household and personal cleaning products, groceries, beverages and

dairy products are, clearly goods that consumers buy in supermarkets (66, 66, 61,

63 and 61%, respectively), in detriment of traditional retail stores (21, 19, 23, 21

and 22% respectively). Besides these goods, fruit, frozen foods, toys,

plants/gardening and tools are also purchased with greater regularity in malls

and supermarkets than from traditional retailers, in spite of the small differences.

On the other hand, most of the respondents prefer to buy goldsmith/jewellery

(95%), books (84%), footwear (84%), clothing (82%), furniture/decoration (93%)

and household appliances (78%) in traditional retail stores. Some perishable

goods as meat, fish and vegetables are also purchased more from traditional

retailers (60, 58 and 41%, respectively), than in supermarkets or malls (28, 26 and

35%, respectively). Nevertheless, the difference compared to supermarket,

especially regarding vegetables, is small. The fact that the perishable goods are,

bought from traditional retailers more than they are from organized retailers is

21

an evidence that emphasizes the results of other studies done by various research

agencies. (AT Kearney, Price Waterhouse and KSA Technopak). However, this

study shows that the purchase of some perishable goods (vegetables and mostly

fruits) in hypermarkets is becoming considerable.

Another interesting result is that the consumers' responses suggest is their almost

exclusive preference for traditional retail shops when buying high involvement

goods (e.g. household appliances). On the contrary, the most purchased goods in

malls and supermarkets are essentially convenience products and, consequently,

of low involvement. As it is widely advocated in literature, the involvement and

risk have strong implications in the buying behavior, so it is important for

retailers to know how to influence these variables.

Concerning the motivations that lead people not to buy goods in traditional retail

or only in traditional retail, the two main motives are: first, it is more practical to

buy all the goods at the same time in hypermarkets/supermarkets and, second,

the price in traditional retail shops is higher. That is, convenience and price are

factors that determine why consumers do not buy in traditional retail; and prefer

one kind of store to the other. These results suggest a consumer is more

pragmatic in his choices, and more concerned with the management of his

money and time. Even though the answers refer to motivations why people do

not buy some given products in traditional retail, the results correspond to other

studies, Sen (2000) which highlights low prices and the possibility of buying

everything in the same place as main reasons for consumers to buy in

hypermarkets, malls or supermarkets.

The retailers' and consumers' attitudes match in terms of considering that

hypermarkets offer more advantages than traditional retail regarding prices,

promotions, assortment, novelties and schedules. They also share the opinion

22

that traditional retail offers more advantages than hypermarkets in relation with

the spent on shopping. Nonetheless, there is also a great difference between

retailers and consumers, especially, at the level of perception of the quality of

products, attendance, how easily the consumer can present complaints and how

they will be attended, and payment terms, in both kinds of commerce.

Concerning these specific aspects, traditional retailers have a much more positive

opinion about themselves than consumers have about them. These differences

suggest a certain lack of realism by traditional retailers, which can be detrimental

for their future viability, and, as such, needs to be corrected.

However, the divergence in the perceptions does not imply that the consumers'

opinion about traditional retail is negative. The essential matter is that, in spite of

not having an unfavorable opinion towards traditional retail, the opinion

towards organized retail is much more favorable, which may result in preferring

hypermarkets or malls in detriment of traditional retail. As literature suggests, in

order to understand the consumer behavior in terms of store choice, it is essential

to understand his relative attitude.

7.11 Conclusion

The hypermarket/mall/supermarket is the preferred kind of store by consumers,

even though the consumers buy in several establishments and not exclusively in

the organized retail outlet, which indicates that there is no "single loyalty". While

in organized outlets, consumers buy essentially convenience goods with low

level of risk; in traditional retail, they buy essentially products of more

involvement, which requires a more complex buying behavior. The results also

show that consumers evoke price and convenience for not buying certain goods

in traditional retail, which reveals an attempt to optimize their time and money.

23