Mall Mania in India – Changing Consumer Shopping Habits Mall Mania in India – Changing Consumer Shopping Habits A dissertation submitted to The University of Nottingham for the degree of Ma in Management Kanika Taneja Business School, University of Nottingham September, 2007 Mall Mania in India – Changing Consumer Shopping Habits ACKNOWLEDGMENT I deeply thank God and my family for showing me the way, no matter how difficult the time was. For his aspiring and invaluable guidance, I wish to express my heartfelt gratitude to my Supervisor, Dr.
Andrew Smith, without whose support this dissertation could not have been successfully realized. My sincere gratitude to the interviewees and all respondents for their invaluable time, acknowledging that, this study would not have been possible without their assistance and support. Finally, special thanks to all my friends for their constant support and encouragement, and making this year in Nottingham memorable. 1 Mall Mania in India – Changing Consumer Shopping Habits Abstract For the current generation of consumers, the meaning of shopping has changed. It is not just a mere necessity, as it was earlier, but much more than that.
The factors that affect store choice and draw customers to the shopping centre include space, ambience, and convenience and moreover an array of choice under one roof. The growth of integrated shopping malls, retail chains and multi-brand outlets is evidence of consumer behaviour being favourable to the growing organized segment of the business. Space, ambience and convenience are beginning to play an important role in drawing customers. Malls, which are now anchored by large outlets such as Westside and Lifestyle and are resided by a lot of Indian and international brands, are also being seen as image benchmarks for communities.
Thus, this dissertation aims at studying the changing shopping trends of consumers in the Indian economy. For doing this, semi structured interviews from the Indian retailers as well as consumers have been used as a tool. Various factors on which the Indian consumers base their choice of going to the shopping mall or the unorganized markets have been analyzed in this research. 2 Mall Mania in India – Changing Consumer Shopping Habits Table of contents ACKNOWLEDGEMENT Page 1 Abstract Page 2 List of Tables and Figures Page 7 Chapter One Page 8 Introduction 1. Background of the Study…………………………………………………… 8 1. 2 Research Objectives ………………………………………………………… 10 1. 3 Chapter Summary ………………………………………………………… 11 Chapter Two Literature Review Page 15 2. 1 Introduction…………………………………………………………………….. 15 2. 2 Definition of Shopping ……………………………………………………. 15 2. 3 Types of Shoppers…………………………………………………………… 18 2. Consumer Buying Behaviour ………………………………………….. 21 2. 5 Organization of the Retail Industry …………………………………. 25 3 Mall Mania in India – Changing Consumer Shopping Habits 2. 6 Types of Retail Formats ……………………………………………………. 26 2. 7 Shopping Malls ………………………………………………………………… 30 2. 8 Determinants for Choice of Shopping Malls…………………… 31 2. 8. 1 Number of Stores and the Tenant Mix………………. 34 2. 8. 2 Location of the Shopping Mall ……………………………. 7 2. 8. 3 Shopping Experience……………………………………… 38 2. 8. 4 Shopping Mall Image…………………………………………… 40 2. 9 Conclusion………………………………………………………… 41 Chapter Three Methodology Page 42 3. 1 Introduction………………………………………………………………………. 42 3. 2 Research Objectives…………………………………………………………… 43 3. 3 Qualitative vs. Quantitative Research ……………………………….. 44 3. 4 Data Collection………………………………………………………………. 6 3. 4. 1 Secondary and Primary Data………………………………… 46 3. 4. 2 Interviews ……………………………………………………………. 48 3. 4. 2. 1 Interview Sample…………………………………….. 50 3. 5 Research Procedure …………………………………………………………… 52 Chapter Four The Indian Scenario Page 55 4 Mall Mania in India – Changing Consumer Shopping Habits 4. 1 Introduction ………………………………………………………….. 55 4. 2 Past Trends of Shopping in India ……………………………………… 6 4. 3 Conclusion ……………………………………………………… 58 Chapter Five Findings and Analysis Page 60 5. 1 Retailers’ Perspective ………………………………………………………… 60 5. 2Consumers’ Perspective …………………………………………………… 68 Chapter Six Discussion Page 80 6. 1 Introduction ……………………………………………………………………….. 80 6. 2 Choice Variables for Shopping Malls………………………………… 81 6. 2. 1 Anchor Stores …………………………………………. 81 6. 2. 2 Location…………………………………………………83 6. 2. Shopping Experience …………………………………. 84 6. 2. 4 Image …………………………………………………… 85 6. 2. 5 Price Sensitivity ……………………………………….. 86 6. 3 Interdependence of the Retail and Real Estate Industry………. 88 Chapter Seven Conclusion Page 89 5 Mall Mania in India – Changing Consumer Shopping Habits 7. 1 Introduction……………………………………………………………………….. 89 7. 2 Recommendations……………………………………………………………… 90 7. 2. 1 Recommendations for the Government……………. 90 7. 2. 2 Recommendations for the Developers………………92 7. . 3 Recommendations for the Retailers…………………. 93 7. 3 Limitations…………………………………………………………………………. 93 7. 4 Conclusion …………………………………………………………………………. 95 References Page 96 Appendices Page 130 6 Mall Mania in India – Changing Consumer Shopping Habits List of Tables and Figures Table 1 – Motives of Shopping By Tauber (1972) ……………………………….. 17 Table 2 – Store Based Retail Formats…………………………………….. 29 Table 3 – Profile of Retailers Interviewed……………………………….. 1 Table 4 – Retailers’ Perspective…………………………………………… 60 Figure 1 – Framework to Understand Shopping Behaviour……………22 Figure 2 – A Two Dimensional Matrix of Consumer Buying……………… 24 Figure 3 – Process of Format Selection……………………………………….. 27 Figure 4 – Store Choice Model for Evolving Markets…………………………. 32 Figure 5 – Experience Realms and Shopper Preferences…………………….. 39 Figure 6 – Shopping Malls Choice Variables……………………………. 87 7 Mall Mania in India – Changing Consumer Shopping Habits Chapter One Introduction 1. 1 Background of the Study
The real estate market in India continues to be on its buoyant growth trend. The entry of global players and international equity management firms into the sector points to the abundance of enthusiasm and confidence that the investors have towards the potential and prospects of the sector in the years to come. The demand for commercial space for organized retailing is expected to reach 200 million sq. ft. by 2010 (Times Property, July 13, 2007). The retail sector in India, which is dominated by small and unorganized entrepreneurs consisting of standalone stores, boutiques and kirana stores, is radically changing its face.
There has been a massive development of new retail formats such as malls, hypermarkets, supermarkets and lifestyle stores. The organised sector represents a mere 2 per cent share of this market (Business Today, 1999). It is very low as compared to other developed economies of the world (Sinha and Banerjee, 2004). However, as the spending power in the economy is growing fast, this development has gained importance not only in the metropolitan cities but also in the Tier II and III towns. These upcoming formats are giving Mall Mania in India – Changing Consumer Shopping Habits consumers a lot to spend on, especially with existing players such as Pantaloon, Shopper’s Stop and the Tata and RPG Group Scaling up fast and the new players such as Birlas and Sunil Mittal investing a lot in the retail market (Hindustan Times, New Delhi, July 22, 2007). With this transition taking place, the shopping behaviour of consumers is likely to change as these formats were not in existence in the country until recently.
In these circumstances, in which these new retail formats are growing at a rapid pace in India, there remains a need among Indian businesses to understand the changing behaviour of consumers towards shopping in these organized retail outlets. Also, due to the limited success of these outlets, it is necessary for retailers to be aware of shoppers’ motivations and to understand ways of attracting the consumers (Sinha and Banerjee, 2004). Till date, there has been very limited research on the shopping habits of consumers in the less developed economies of the world, India being one of them. In this research paper, I ttempt to fill these gaps, thereby investigating the shopping behaviour of the Indian consumers, particularly with the new retail formats emerging. This study would concentrate on the behaviour the consumer exhibits while visiting or making purchases in the newly opened malls. It would explore the purpose and motive behind the Indian consumers’ visit to these newly established shopping 9 Mall Mania in India – Changing Consumer Shopping Habits malls, the values they derive from the shopping trip and their shopping bahaviour in terms of impulse purchases, time and money spent at the shopping mall, etc.
A final objective is to establish a baseline for examining changing behaviour in future as developments continue (Millan and Howard, 2007). 1. 2 Research Objectives There have been many motivations for me to choose this topic for my dissertation. Firstly, there have been massive changes in the demographic factors of the Indian consumer. Some of the factors include income and consumption growth, increasing literacy levels, changes in family structure and women’s role in the family, growing role of children as influencers, gradual acceptance of frozen goods as a viable alternative to fresh produce and the growing influence of TV.
These factors have been a driving force of organized retailing in India which has further driven the growth of the real estate industry with more and more demand for retail space within malls. The second motivator behind my choice of topic was that it would help me in my future career. As my father is into the business of real estate within India, I plan to join him after the completion of this course. Also I have always been interested 10 Mall Mania in India – Changing Consumer Shopping Habits in the marketing perspective of it.
Therefore, this research would be helpful for me as it would give a clear idea about the consumers in malls. To carry out this research the research questions that have been formulated by me are- • What is the impact of the development in real estate industry on the organization of the retail industry in India? • How are the consumers’ shopping habits changing with upcoming retail formats, specifically malls? • What are the determinants of consumers when choosing between a shopping mall and the unorganized market? 1. 3 Chapter Summary
In this section, a description of the organization of the whole study is provided, also describing briefly the content of each chapter of the dissertation. The structure of the dissertation is as follows. 11 Mall Mania in India – Changing Consumer Shopping Habits Chapter 1 will introduce the research area of the study. It will be an overview of the purpose and the background of the whole essay. It describes the dissertation contexts, followed by the brief description of developments taking place in the Indian real estate Industry and the dissertation’s research objectives.
Chapter 2 is Literature Review, which sets the academic tone for the research. It contains the review and a comprehensive discussion of the rich and diverse literature available in the area of consumer shopping behaviour. It is divided into various sections, which include the motives of shopping, the types of shoppers, the various types of the available retail formats, specifically the description of shopping malls, consumer’s buying behaviour and their choice determinants for choosing a shopping mall. Chapter 3 is the chapter describing the Research Methodology which identifies the research questions.
It explains the objectives and procedures of carrying out the research. The framework utilized in this study is described and the basis for its use is provided. A detailed description of all the research techniques that have been used for data collection and analysis in order to conduct the study has been provided in this chapter. 12 Mall Mania in India – Changing Consumer Shopping Habits Chapter 4 is the description of the Indian Scenario in context to the retail industry which gives an overview of the past trends of growth over the years in the Indian retail and real estate industry from several perspectives and their interdependency.
It also discusses the consumer shopping behaviour in the country prior to the development of shopping malls. Chapter 5 is the Findings and Analysis chapter which reports the findings of the interviews and discusses reasons for the changes in consumer shopping habits and provides the results from two main perspectives – the consumers’ perspective and the retailers’ perspective. Chapter 6 which is the Discussion reports the results of the in-depth qualitative interviews and discusses them against the current literature.
The additional findings have also been analyzed in this chapter, also giving a framework which consumers follow while choosing between a shopping mall and the unorganized market. Chapter 7 is the Conclusion which summarizes the key findings of the entire research. It draws together all the key elements of the findings and proposes an overall conclusion to the research conducted. It also provides some future 13 Mall Mania in India – Changing Consumer Shopping Habits recommendations for the shopping mall developers and the retailers in India.
The limitations of the research will also be provided in this chapter. 14 Mall Mania in India – Changing Consumer Shopping Habits Chapter Two Literature Review 2. 1 Introduction Rowley and Slack (2004) describe literature review as “a summary of a subject field that supports the identification of specific research questions”. McCraken (1998) specifies that a literature review offers “deconstruction” of the existing literature by establishing a survey of the ground and assessing the categories and relationships that must be investigated, an approach I would attempt to undertake in this research.
The aim of this chapter is to examine and present a comprehensive analysis of existing literature on the research topic. 2. 2 Definition of Shopping According to Dholakia (1999), the rationale for shopping is making physical visits to a shopping site. It is considered as a household task as well as a form of recreation, relaxation and entertainment. As per the definition of Lunt and Livingstone (1992), going out to shop is a conspicuous moment in consumption (Dholakia, 1999). Most researchers, who have studied shopping behaviour, 15
Mall Mania in India – Changing Consumer Shopping Habits consider shopping a gendered activity. In their studies, South and Spitze (1994) and Flam and Axelrod (1990), have revealed that shopping is a women’s activity and they were the ones responsible for household shopping. Many other consumer research studies about shopping have also had a greater part their respondents as women (Dholakia, 1999). Shopping is also considered by Oakley (1974), to having the most positive attribute of being a leisure activity along with work (Dholakia, 1999).
Howard (2007) also believes shopping to be a leisure pursuit and with the rapid development of shopping centers, both retailers and developers are trying to make it more of a pleasure activity. Of the many studies done in an attempt to identify motives of shopping, the one by Tauber (1972) is a prime one. He identified eleven motives of shopping in a market based economy apart from the acquirement of products and services and classified them as role playing and social experience outside home (Howard, 2007). 16
Mall Mania in India – Changing Consumer Shopping Habits Table 1. Motives of Shopping By Tauber (1972) Source- Howard (2007) Social reasons are important, as Lunt and Livingstone (1992) describe shopping as a spectacle in which the person who is shopping is both a spectator and a performer (Dholakia, 1999). However, most of these motives that have been mentioned in the table can be described as pleasure or leisure related. Many studies that have followed Tauber’s (1972) study have made an attempt to generate some evidence from reality to confirm these motives.
A lot of consumer behaviour researches have investigated and found insights into the personal and situational experiences of shopping and its emotional and behavioural effects (Howard, 2007). Many other studies have also explored into the motives behind shopping. Babin et al. (1994) explained that the purpose of shopping can be utilitarian that is shopping for goods and non utilitarian or hedonic outcomes (Howard, 2007). 17 Mall Mania in India – Changing Consumer Shopping Habits These two broad motives being product and experiential have been related to emotions while shopping and to the outcomes of shopping by Dawson et al. 1990) (Millan and Howard, 2007). Another research on the key determinants and motivations of shopping behaviour by Dholakia (1999) has explored and empirically tested three reasons behind going for shopping as ‘interactions with family’, ‘utilitarian’ and ‘shopping as pleasure’. 2. 3 Types of Shoppers There are many types of shopping behaviours and shopper types (Dholakia, 1999). Broadly, shoppers are divided into two categories based on their objectives which are markedly different. Utilitarian shoppers are those according to whom shopping is a form of work or a task which is to be accomplished (Babin et al. 1994; Batra and Ahtola, 1991), until they make a purchase. The other category constitutes of hedonistic shoppers who give importance to enjoyment and excitement they experience during the shopping trip. These kinds of shoppers consider shopping as a leisure activity and derive pleasure from it, along with the purchase of products (Rook, 1987). Previous researches have also stated that majority of shoppers combine both utilitarian and experiential values during their shopping activities (Nicholls et al. , 2000) (Nichols et al. , 2002). According to Babin et al. 1994), developed market economies have consumers with high 18 Mall Mania in India – Changing Consumer Shopping Habits levels of hedonic shopping values; however, these values are less noticeable in less developed countries (Millan and Howard, 2007). CWHB’s (2002) survey on Where People Shop covering 12 countries of Europe has identified six types of shoppers on the basis of demographic, attitude and behavioural characteristics. These can be segmented as pleasure seeking shoppers, principled shoppers, discerning food shoppers, independent shoppers, enthusiastic shoppers and negative shoppers.
Apart from considering food shopping as essential, pleasure seeking shoppers enjoy the leisure oriented side of shopping and mostly shop for designer clothes or stop by at a coffee shop or snack bar. Principled Shoppers who are mostly older women, are governed by strong moral principles where shopping is concerned. In terms of food, they buy organic, natural and non factory framed food and in terms of clothes, they prefer to shop for fashion brands. Discerning food shoppers constitutes of the population which buys food in markets and local shops around the neighbourhood instead of going to the supermarkets.
The younger population with children, a part of the independent shoppers category, shop for clothes more often than food and they do not prefer to be assisted while shopping, especially for clothes. The enthusiastic shoppers are most likely to shop in streets rather than going to shopping centers and are influenced by the offers that are given in the various retail outlets. The last group of shoppers, known as the 19 Mall Mania in India – Changing Consumer Shopping Habits negative shoppers has the highest ratio of males who have a negative perception of shopping and they cannot spend good time in a shopping area.
Consumer Centre (2007) also classifies shoppers into six kinds of shopping personalities. The window shopper visits the shopping mall for leisure, usually walks around in the mall with a friend enjoying the whole atmosphere, without an intention to buy. The second type is the bargain hunter who prefers to shop at discount stores and mostly buys when the retail outlets offer sales. The power shopper does not visit the shopping centers that often, but are very organized when they are shopping. They carry a shopping list with them, buy only what they need and know where to get it.
The shopaholics have been further divided into two segments, one being the consumers who enjoy the whole shopping experience, and the other being the compulsive spenders. The second kinds of shopaholics are people with low self esteem and get pleasure out of spending money, which is not a healthy thing to happen. Their urge to shop returns back every few days. The shopping phobic people are the ones who just hate the experience of shopping in a shopping centre and cannot find anything positive out of going out to shop. They would rather sit at home and shop online.
The indecisive shoppers find it very difficult to decide what to buy. They run around each store just to evaluate the price and quality of one product, which they don’t 20 Mall Mania in India – Changing Consumer Shopping Habits end up buying at all. Lastly, the shopping misers are somewhat similar to the shopping phobics, who just have to take out faults from everything they see in the shopping centers including the parking lots, prices of the merchandise, the return policy of the outlets, etc. In reference to mall shopping behaviour, Bloch et al. (1994) has classified shoppers into four segments.
They are enthusiasts, raditionalists, grazers and minimalists. Researches like Bellenger and Korgaonkar (1980) and Lesser and Hughes (1986) have also emphasized on recreational shoppers (Dholakia, 1999). 2. 4 Consumer Buying Behaviour The traditional shopping choice behaviour of consumers was related to need recognition, when the consumer comes to know that he wants to purchase a product. Once the need has been recognized, then he moves on to search for information about the product and evaluates the alternatives available to him before finally makes a decision to purchase the product.
He might visit certain outlets stocking that product, consult his friends, buying guides or store employees about it. Even after making the purchase, he might reevaluate it (Taylor and Cosenza, 2002). 21 Mall Mania in India – Changing Consumer Shopping Habits Shopping behaviour of consumers is different in different countries. The reasons of this varying shopping behaviour are the diverse cultures and the changing economies of the various countries (Millan and Howard, 2007). A study of the various kinds of shopping behaviours, therefore needs to be done, covering the various shopping contexts.
Dholakia (1999) has provided a framework to understand the shopping behaviour of consumers. Figure 1. – Framework to Understand Shopping Behaviour Source – Dholakia (1999) Solomon (2002) and Stern (1962) have recognized four types of purchase behaviours namely, planned, unplanned, impulse and compulsive buying behaviour. Planned buying behaviour involves information search about the 22 Mall Mania in India – Changing Consumer Shopping Habits product to be bought, evaluation of alternatives and then rational decision making. This is time consuming.
Unplanned buying behaviour does not involve this kind of an initial planning. It arises when the consumer is unfamiliar with the store layout, has a shortage of time or just remembers to buy the product when he sees it on the store shelf (Shoham and Brencic, 2003; Hausman, 2000). Impulse buying behaviour occurs when a consumer finds a product on the store shelf and is unable to resist the urge of buying it. It accounts for a large quantity of products sold that are bought every year and also covers a wide range of product categories.
It has been portrayed by many researchers as a signal of immaturity, irrationality and risk and an absence of behavioural control (Levy, 1976 and Solnick et al. , 1980) (Hausman, 2000). Repetitive and excessive shopping by consumers due to anxiety, boredom and tension is referred to as compulsive buying behaviour (Solomon, 2002). According to O’Guinn and Faber (1991), compulsive buying has been defined as a ‘chronic, repetitive purchasing that becomes a primary response to negative events or feelings’. Such consumers are characterized by depression, obsession, tend to fantasize and have lower levels of self esteem (Shoham and Brencic, 2003).
Wilson (1998) represented consumer buying for social, recreational and therapeutic reasons in the form of a matrix. 23 Mall Mania in India – Changing Consumer Shopping Habits Figure 2 – A Two Dimensional Matrix of Consumer Buying Source – Wilson (1998) Many other factors may also affect purchase decisions. A person is likely to be influenced in making his/ her purchase decisions if he/ she is accompanied by another individual while making a shopping trip. A study by Nicholls et al. (1994) also found that a person will tend to shop more and spend more money when going out with someone.
Other situational factors can also have an impact on shopping behaviour and purchase decisions. They include task definition, antecedent states, social and physical surroundings and temporal perspectives. For example, scarcity of time, any pre-existing affects, choice of the retail outlet 24 Mall Mania in India – Changing Consumer Shopping Habits and store attribute salience, variety of merchandise available in the store and even store fragrance have an effect on buying behaviour (Nichols et al. , 2002). Shopping frequency is also a significant concept while studying consumer shopping behaviour.
It is defined as the number of incidences when a product is purchased by someone in person. The shopping frequency is subjective to the time and effort that is put by a person and his/ her gender and shopping responsibility for the household. It is also determined by the shopping context (Dholakia, 1999). 2. 5 Organization of the Retail Industry According to Dixon (2005), for the development of cities and towns, the retail industry has a very important contribution to make (Howard, 2007). The retail industry these days is not just about selling products in the shops.
With a lot of development taking place in the retail industry, the retailer, along with that, needs to survey the consumers in the markets, identify and understand their needs, provide them with more choice and experience offering competitive prices. Apart from that, he is also required to maintain a relationship with the consumers in order to retain them (http://www. etretailbiz. com/dec2002/specialfeat. html). 25 for long Mall Mania in India – Changing Consumer Shopping Habits Unorganized retailing is defined as having outlets or stores run locally by the owner or caretaker of a shop that lacks enough technical and accounting tandardization. Both the supply chain and sourcing are done locally to meet local needs (Sathyaraj, 2006). Organized retail stores have been defined as stores characterized by large professionally managed format stores providing goods and services that appeal to customers, in an ambience that is conducive for shopping and agreeable to customers (Tata, 2007). 2. 6 Types of Retail Formats Reynolds et al. (2007) defined a retail format as a physical representation in the form of firm’s activities which relates to the business model developed by the retailers and their business strategy.
It is a kind of a retail mix followed by a group of retailers, which they can present to the customers and where an interaction with the shoppers can be made. It is an assortment of variables such as the merchandise, price, ease of payment and the whole, shopping experience that is offered to the customers, through which the business context and strategy 26 Mall Mania in India – Changing Consumer Shopping Habits can be conveyed. To convince the target audiences and to compete with other players in the market, the retailer needs to represent himself with an appropriate retail format.
While deciding on the retail formats, the retailers ought to assess certain factors such as drivers of growth, the customers’ profile and their expectations, the competitors and the challenges faced from them. The process of format selection by the retailer is represented in the figure below (Sinha, 2004). Figure 3 – Process of Format Selection Source- Sinha (2004) 27 Mall Mania in India – Changing Consumer Shopping Habits With continued development of the retail industry, newer retail formats are emerging everyday. Many researchers have tried to explain as to why this occurrence of new retail formats takes place.
These explanations have given credit to demanding consumers, competitive retailers and manufacturers. Some studies have proposed the idea that value oriented consumers demand for new formats and in a response to these demands; the retailers are driven to develop these. The retailers’ perspective suggests that as a result of expense control and operational efficiencies, the competitive retailers are pushed towards bringing new formats. Other researchers explain this phenomenon with the help of globalization of the manufacturing base.
Rousey and Morgansky (1996) has suggested that whoever may be responsible for the emergence of newer retail formats, but in the end the consumer is gaining as he is being provided with a variety to chose from (Rousey and Morgansky, 1996). The most common types of retail formats are listed in the table below. 28 Mall Mania in India – Changing Consumer Shopping Habits Table 2 – Store Based Retail Formats Source – Sinha (2004) 29 Mall Mania in India – Changing Consumer Shopping Habits With a diverse range of retail formats available, consumers tend to get confused.
Consumer try to stick to certain retail formats, however, their preferences change with the development of newer retail formats. Although patronage patterns occur, they are specific to certain product categories like food and clothing. Shifts are bound to take place in other product categories. With the increase in the number of retail formats from which the consumers can make choices, the retailer should try to understand the market and consumer shopping habits from a dynamic rather than a static perspective (Rousey and Morgansky, 1996). 2. 7 Shopping Malls
A shopping mall is typically, a shopping complex connected by walkways. It provides shopping as well as entertainment options to the target consumers. It generally, contains one anchor store, which consumes twenty five percent of its retail space. In addition a mall contains specialty stores for clothes, accessories, home needs, books, as well as food court, multiplexes and entertainment zones (Sankar, 2005). According to Nicholls et al. (2002), a shopping mall is a place where a wide mix of retail outlets are situated under one roof, and is usually anchored by one or 30
Mall Mania in India – Changing Consumer Shopping Habits more stores like departmental stores, which also helps to attract consumer traffic to that place. Shopping malls have grown larger over the years and have expanded to include service outlets and entertainment providers (Ooi and Sim, 2007). They are advertised as both shopping and recreation centers. An added advantage of the shopping mall is that all merchandise, entertainment such as a theatre or amusement park, food, services and atmosphere in the mall are all available under one roof and it is environmentally protected.
This advantage also acts as a crowd puller. Moreover, the consumer can shop without the tensions of any traffic congestions or parking problems, security issues or crime districts (Bloch et al. , 1994; Roulac, 1994; Erkip, 2003) (Ooi and Sim, 2007; Nicholls et al. , 2002). The collection of shops in the shopping mall is managed together and is taken as one single unit (Prendergast et al. , 1998). 2. 8 Determinants for Choice of Shopping Mall In the views of Sinha and Banerjee (2004), store choice behaviour of a consumer is considered a cognitive procedure.
It is believed to be a process of information processing as the brand choice or any purchase decision is considered. It is very similar to the decision of making a brand choice except the fact that store choice is influenced by the location factor, which does not need to be considered when making a selection of brands (Fotheringham, 1988; Meyer and Eagle, 1982). 31 Mall Mania in India – Changing Consumer Shopping Habits According to a study conducted by Kenhove et al. (1999), the choice of store by the consumer was differentiated by the nature of the task that had to be executed by him.
The different tasks that were described by the respondents included urgent purchases, large quantity purchases, difficult job, regular purchases and getting ideas (Sinha and Banerjee, 2004). Figure 4 – Store Choice Model for Evolving Markets Source – Sinha (2004) Store choice decision is also driven by other tangible and intangible characteristics provided by the store. They include the store size, format, distance 32 Mall Mania in India – Changing Consumer Shopping Habits from home and environment of the store.
Mattson (1982) found that store choice can also be influenced by situational factors such as time constraints and gift versus self shopping, further which can be classified as the competitive setting, the individual’s situational set and the shopping occasion. However, if store choice is evaluated by the nature of situational factors, then these factors need to be studied for each shopping visit of the consumers to the various stores, also looking into the costs incurred and the benefits made by them during the shopping task (Sinha and Banerjee, 2004).
Many other researches are also based on the store choice behaviour of consumers and have given various different viewpoints about the factors on which it depends. Oppewal and Timmermans (1997) consider the major determinants of store choice behaviour to be external factors such as retail floor space, distance, parking facilities, etc (Zhu et al. , 2006). Malhotra (1983) suggests that shoppers choose a particular store if the perceived value of visiting that store is the same as the threshold value attached to it by the shopper.
The threshold value is also allotted on the basis of the image associated with that store. Dodge and Summer (1986) found that store choice is a function of variables like socio economic background, the personality and the past purchase experiences of the consumers. Lumpkin et al. (1985) who conducted a study to compare the behaviour of young and elderly shoppers found that instead of basing their store choice on 33 Mall Mania in India – Changing Consumer Shopping Habits price and distance from residence, the elderly shoppers chose a store which was high on entertainment value (Sinha and Banerjee, 2004).
Various factors, both spatial and non spatial, have also been discussed in literature about what attracts shoppers towards a shopping mall (Ooi and Sim, 2007). Although a lot of differences have been noticed among the different age groups while studying their preferences of the shopping malls (Anderson et al. , 2003), general shoppers of all age groups are attracted to innovation and uniqueness (Wang et al. , 2000) (Wilhelm and Mottner, 2005). Attractiveness of the shopping mall also determines the rent that the various retailers have to pay in order to open an outlet in the mall (Sirmans and Guidry, 1993; Gatzlaff et al. 1994; Hardin and Wolverton, 2000). The major factors which affect the attractiveness of a shopping mall have been discussed below. 2. 8. 1 Number of Stores and the Tenant Mix Wilhelm and Mottner (2005) have considered the number of retail outlets in a shopping mall as one of the factors that helps shoppers decide which mall to choose. While studying mall preferences of teenagers, Baker and Haytko (2000) have said that not only the number but the variety of different stores is also a decisive aspect for them. The assortment of stores and services, known as the 34
Mall Mania in India – Changing Consumer Shopping Habits retail mix, as well as less repetition of stores are also key factors for a number of shoppers (Wang et al. , 2000; Anderson et al. , 2003). Therefore, the tenant mix is also an important construct. The range of tenants in the shopping mall can include departmental stores, supermarkets, apparel stores, and entertainment and leisure facilities (Abratt et al. , 1985; McGoldrick and Thompson, 1992). The anchor tenants are also a major part of the tenant mix as they help to generate a lot of shopper traffic to the mall.
Miceli et al. (1998) said that apart from considering the profit of a store, the mall management (who is the deciding authority of the assortment of outlets) should also take into consideration its consumer drawing power to the mall, as more consumers would also lead to the profit generation for other stores in the mall as well. To ensure the success of a shopping mall, one or more anchor tenants should be selected by the management so that they initially attract customers, which can be charged lower rent (Ooi and Sim, 2007).
According to Brown (1992, 1993 and 1994), the anchor store for a shopping mall in the central city is more likely to be a departmental store, whereas for a mall in the suburbs, the anchor store would be a supermarket. He also suggested that the layout of the mall should be such that the anchor stores should be placed at the both ends of the mall, service outlets on the side malls closer to the exits and entrances of the mall and outlets like pet shops and dry cleaners should be positioned away 35 Mall Mania in India – Changing Consumer Shopping Habits rom the food stores (Prendergast et al. , 1998). Moreover, if a large number of similar stores are clustered together, this would bring agglomeration benefits and thus more customers would be drawn towards the shopping mall (Hotelling, 1929; Miceli et al. , 1998). Also, with smaller shopping malls coming up, tenants like restaurants and fast food outlets, clothing stores, retail service providers and institutional tenants such as banks and post officers are gaining more importance (Prendergast et al. , 1998).
As the tenant mix is a very important factor, the decision of correct assortment of tenants should be the starting point for any shopping mall. Apart from being a crowd puller, it also affects the image of the shopping mall, its patronage and rentals (Kirkup and Rafiq, 1994; Gerbich, 1998). It also influences the length of stay of customers in the mall and their level of excitement (Wakefield and Baker, 1998). However, the definition of what should be called the ideal tenant mix would keep developing over time.
It has also become difficult for the mall management to find the appropriate tenants for the malls, reasons being large number and competition between shopping malls, upcoming newer retailing formats and the downturn in economies (Kirkup and Rafiq, 1994; Prendergast et al. , 1998). 36 Mall Mania in India – Changing Consumer Shopping Habits 2. 8. 2 Location of the Shopping Mall Location is an important aspect of marketing and a good location can be a source of competitive advantage for the retail outlet (Dickinson, 1981; Vigoda, 1981).
Some researchers have even shown that, while good business practices may not compensate for poor location, good location may compensate for poor business practices (Achabal et al. , 1982; Craig et al. , 1984; Ghosh and Craig, 1983; Simkin et al. , 1985; Wehrly, 1967) (Prendergast et al. , 1998). Various theories and formal models have been provided in the literature to help retailers and developers to decide the location of outlets or shopping malls. One of them is the traditional hierarchical model of retail development by Brown (1991).
It compares and finds out the relationship between a major metropolitan area and its neighbourhood communities and regional communities. Another research by Clarkson et al. (1996) has also categorized retail location theory into four areas. These are the central place theory, spatial interaction theory, land value theory and the principle of minimum differentiation (Prendergast et al. , 1998). The Law of Retail Gravitation Model by Reilly (1931) and Huff (1964), tested that the magnetism of a shopping mall decreases with distance and increases with increase in its physical size.
The gravity and potential models also recommend that while choosing between shopping malls, the customers try to 37 Mall Mania in India – Changing Consumer Shopping Habits find a balance between the utility, which is measured by the size of the shopping mall, and the cost, which is measured by distance. Shoppers patronize a shopping mall by finding out the correct balance between these two attributes (Ooi and Sim, 2007). In relation to the location of the shopping mall, accessibility and visibility are the two determinants which need to be noted (Simmons, 1992; Ownbey et al. , 1994; Forgey et al. , 1995).
The size, quality and design characteristics should also be favourable as these impact the accessibility and visibility factors (Brown, 1999). 2. 8. 3 Shopping Experience The prime advantage of an experience product is the experience that the shopper goes through by purchasing that product or service. Consumers derive value from purchasing these goods or services because of their unique qualities and are ready to pay a little extra for them. Mall developers have also tried to cope up in the experience economy by providing the consumers with good store ambience as well as entertaining and amusing experiences apart from shopping.
They have added movie theatres or keep organizing live performances for the consumers in which they can get engaged and enjoy their experience while shopping in the mall. An example is the various entertainment activities, like theme park and an 38 Mall Mania in India – Changing Consumer Shopping Habits ice skating rink along with a huge variety of stores that are provided in the Mall of America (Wilhelm and Mottner, 2005; Sinha and Banerjee, 2004). According to the findings of Wilhelm and Mottner (2005), the age group of teenagers also preferred going to a shopping mall whose atmosphere was friendly and made them feel welcomed.
They wanted a mall which provided cool stores, entertainment options, attractive designing and a good place to spend time with friends, on the whole a good shopping experience. Figure 5 – Experience Realms and Shopper Preferences Source – Wilhelm and Mottner (2005) 39 Mall Mania in India – Changing Consumer Shopping Habits Consumers these days are becoming very variety seeking and searching for novel and unique experiences (Berry et al. , 2002). They see malls as a source and venue for recreation (Wilhelm and Mottner, 2005).
Thus the overall shopping experience which includes shopping, leisure as well as entertainment is a key determinant of mall attractiveness. 2. 8. 4 Shopping Mall Image The authors of “Shopping and the Fear of Others” have found out that shopping malls have an important role to play in the formation of the social identity of the shoppers as they are connected to particular societal groups (Arnould, 2000). Shopping mall image has been defined by Houston and Nevin (1980) as the total of consumers’ perceptions of a shopping mall based on functional and emotional attributes.
The image of the shopping mall is also related to the frequency of customer visits to that mall and is important for customers when choosing between different shopping malls. Shopping mall developers should expend resources towards the communication of the right image of the shopping mall and this communication should be driven towards improving its image and thus frequency of visits. The image is also subject to the presence of anchor stores and other physical characteristics (Ooi and Sim, 2007; Hunter, 2006). 40 Mall Mania in India – Changing Consumer Shopping Habits . 9 Conclusion After discussion of the factors influencing choice of shopping malls, it is worth mentioning that the effect of some of these factors like retail floor space, number of shops and distance weaken over time, whereas the effects of other factors like anchor stores, tourism site strengthen over time (Zhu et al. , 2006). A healthy assortment of all these factors increases the attractiveness of the shopping mall. However, studying individual choice decisions would not help us to understand the behaviour of the market as a whole (Millan and Howard, 2007). 1 Mall Mania in India – Changing Consumer Shopping Habits Chapter Three Research Methodology 3. 1 Introduction Many attempts have been made to provide a formal definition of the research activity. Neuman (2000) defines research as “research is a collection of methods people use systematically to produce knowledge”. Research has also been defined as an organized and deliberate effort to collect new information or to utilize existing knowledge for a new purpose, seeking to answer worthwhile and fundamental questions, by employing valid and reliable techniques.
In addition, research involves the use of more appropriate tests to justify the methods employed, and provides logical and objective data collection where conclusions can be drawn. Ultimately, it contributes to the gaining of new knowledge and a better appreciation for the issues involved by the researcher (Gill and Johnson, 1997; Punch, 2001). Every piece of research has its own aims. Keeping in mind those aims, the research objectives and the method to accomplish these objectives should be derived.
It is necessary for the researcher to know the suitability and the limitations of choosing the appropriate method so as to be able to take necessary 42 Mall Mania in India – Changing Consumer Shopping Habits precautions for increased validity, reliability and generalizibility of the research (Miles and Huberman, 1994). The use of appropriate methodology is very essential as it is an important part of a research investigation. A well-defined methodology is a crucial step in activities that require concrete results as the process of achieving the result can both be studied and verified.
In this chapter, the methodology employed in carrying out the study will be discussed. In doing so I would discuss the research objectives and the use of different forms of qualitative research methods which helped me to carry out this research successfully. 3. 2 Research Objectives In order to conduct this research, the research questions that have been formed are- • What impact does the development in real estate industry have on the organization of the retail industry in India? • How are the consumers’ shopping habits changing with upcoming retail formats, specifically malls? 43 Mall Mania in India – Changing Consumer Shopping Habits What are the determinants of consumers when choosing between a shopping mall and the unorganized market? To answer these research questions I would look into the past trends in the Indian real estate and the Indian retail industries. With the help of the data that I have collected, I would compare the past trend with the present trends with respect the gradual movement in the consumer shopping habits in the country and the factors leading to it. With the continuing drift in their shopping habits, the future prospects of organized retailing in India would also been discussed. 3. 3 Qualitative vs. Quantitative Research
Qualitative and quantitative research methods are two major approaches employed by researchers. These two methods are distinct from each other. Qualitative research seeks to describe and decode the meaning of naturally occurring phenomena in the social world through interpretative approaches (Van Maanen, 1983, cited in Easterby-Smith, Thorpe and Lowe, 2002), and thereby provides “well-substantiated conceptual insights that reveal how broad concepts and theories operate in particular cases” (Gephart, 2004). In other words, qualitative research focuses on the nature of reality constructed from societal 4 Mall Mania in India – Changing Consumer Shopping Habits members’ ‘concepts-in-use’ (Schutz, 1973). Due to the direct access to the social behaviours of humans, qualitative researchers are able to collect information “in a detailed and complete form” (Sarantakos, 2005), and are allowed to examine social phenomena in depth and offer insightful depictions. In brief, qualitative research enables the researchers to see the world through others’ eyes (Goodyear, 1990) and to understand individuals’ attitudes, perceptions, beliefs, views and feelings (Hakim, 1994).
On the other hand, quantitative research “emphasizes measurement and analysis of causal relations among variables” (Denzin and Lincoln, 2000) and tests general propositions using the hypotheticaldeductive model (Gephart, 2004). Quantitative research “imposes scientific meanings on members to explain a singular, presumed-to-be true reality” (Gephart, 2004). “Qualitative research thus has an inherently literary and humanistic focus, whereas quantitative research is grounded in mathematical and statistical knowledge”.
The former uses richly descriptive words, talk, and texts as meaningful representations of concepts; the latter, in contrast, seeks significant representations of concepts through coding, counting, and quantifying phenomena (Gephart, 2004). The choice of research methods is not always an either-or question, rather a careful evaluation of the suitability for research purpose and the type of questions posed. In effect, both of research methods can 45 Mall Mania in India – Changing Consumer Shopping Habits be used in a single piece of work to deal with different types of research questions.
However, qualitative research methods have been used by me in order to conduct this research because qualitative research can provide ‘in-depth’ understandings of research subjects in comparison with quantitative research (Easterby-Smith et al. , 2002; Silverman, 2000). Quantitative research methods were also analyzed while choosing a method of research for this study, however the behaviour of consumers cannot be quantified and thus it would be difficult to analyze. Thus qualitative research methods have been used. 3. 4 Data Collection Both primary and secondary data were used in order to conduct this research. . 4. 1 Secondary and Primary Data Secondary data is very important in research because this can help the researcher to avoid duplication on research that has already been conducted. This saves the researcher’s time and cost in conducting repetitive work. By conducting secondary research prior to primary research, the researcher can assess the availability of information and use it as a basis to design the methods to collect the primary data (Parsuraman, 1986). In addition this can only enable a 46 Mall Mania in India – Changing Consumer Shopping Habits esearcher to develop a hypothesis or assumptions about the topic. Secondary research also has the benefit of being carried out in privacy without anyone knowing about it (Wright and Crimp, 2000). This is a cheap and impersonal form of research compared to primary research as this can be done at the researcher’s own convenience, either at home or at the university. The data sought from secondary forms of research are historical as they are from the past, thus meaning that comparisons can be made by comparing the past and current situations (Saunder et al. , 2000).
This research was carried out by using news paper articles, internet reports, and academic journals from sites such as Mintel, Science Direct and Emerald Insight, textbooks, industry reports, etc. Data from academic journals and textbooks was particularly useful in reviewing the existing literature on consumer buying behaviour and their choice determinants for shopping malls. However, one of the major drawbacks of this method of research is that sometimes the information gathered may not directly fit into your research area and some data can also be out of date and not valid at the present moment (Kemp, 2002).
The information gathered from the sources can have an impact on the level of bias and in addition may not be very accurate. Some research reports about companies or retailers can be confidential and thus not published and difficult to obtain (Saunders et al. , 2002). 47 Mall Mania in India – Changing Consumer Shopping Habits The second type of research method carried out was primary research. Saunder et al. (2003) has defined primary research as “Data collected specifically for the research project undertaken”.
The three main types of primary research that can be used are observation, interviews and surveys. For the purpose of this research I have used interviews as a form of primary research. 3. 4. 2 Interviews Interviewing has been one of the most widely used research approaches among a variety of qualitative methods (Have, 2004; King, 2004). Interviews can be used conducting various techniques such as telephone interviews, face to face interviews and focus group interviews.
Interviews are a very common and flexible form of gathering qualitative data and according to Parsuraman (1991) this is an effective form of conducting exploratory research, which can allow opinion of those with expertise in areas related to the subject matter under investigation to be examined. In social research there are four main types of interviewing techniques. Firstly, fully structured interviews are where the situation is fully controlled by the questionnaire in terms of questions and potential answers (Crouch and 48 Mall Mania in India – Changing Consumer Shopping Habits
Housden, 1996). Secondly, semi structured interviews are where open ended questions are used and the interview’s job is to probe for more depth answers. Thirdly, unstructured interviews are where neither the interviewer nor the interviewee has set questions. Instead, a topic guide forms the basis of the interview, and the interviewee is encouraged to explore his/ her thoughts on the topic of research. Finally, in the in depth interviews, the respondent is encouraged to go deeper and deeper into their levels of thinking to develop into the subject area (Crouch and Housden, 1996).
A semi-structured format has been adopted for this research, which means openended questions are used across all interviews and some questions are prepared in advance. This type of interview can help the researcher focus on research topics. On the one hand, it makes the most of the value of time spent with the interviewees (McCraken, 1988), on the other, it ensures that the interview questions cover all research topics more fully, and facilitates the comparability between interviews (Karantinou and Hogg, 2001; Selltiz, Jahoda, Deutsch, and Cook, 1964).
This type of interviewing provides the researchers with the opportunity to explore answers, where the researchers want their interviewees to build up on the responses. It has been sought that open ended questions are designed to encourage the interviewees to offer extensive and developmental answers and can be used to reveal the interviewees attitudes or obtain facts 49 Mall Mania in India – Changing Consumer Shopping Habits (Grummit, 1980). Additionally, it also gets the interview to gain unpredictable viewpoints from the interviewees.
Thus this method of analysis has been used for this research paper. 3. 4. 2. 1 Interview Sample For conducting the interviews, two different sample populations were chosen. The first sample consisted of retailers who had already opened their outlets in the shopping malls of Delhi and NCR. For conducting these interviews, purposeful sampling was used. Purposeful sampling selects information rich cases for in depth study (Mugo, 2007). This could be a help as most of these retailers already had their outlets in the unorganized markets before opening shop in the shopping malls.
Thus, they could give their views on the consumers’ shopping habits in the malls and how was it different from the outlets in the markets. Qualitative research typically uses a relatively small sample yet focuses in depth on it (Patton, 1990). Therefore, a sample size of 15 respondents was chosen for taking the interviews of retailers. 50 Mall Mania in India – Changing Consumer Shopping Habits Table 3 – Profile of Retailers Interviewed RETAILER BUSINESS Dockers Men’s Apparel Royal Sporting House Sports E – MAIL [email protected] co. in Wear & [email protected] om Accessories Shringis Women’s Western [email protected] com Wear Satya Paul Women’s Ethnic Wear [email protected] net VIP Travel Accessories [email protected] com Stupid Cupid Women’s Accessories [email protected] com First Impression Women’s Traditional [email protected] com Wear Nextt 2000 Women’s Western [email protected] com Wear Abhinetri Women’s Ethnic Wear [email protected] com Timex – The Time Watches [email protected] co. in Factory Bose Music Systems [email protected] com Roop Vatika Women’s Ethnic Wear [email protected] om & Accessories OSHO [email protected] com 51 Mall Mania in India – Changing Consumer Shopping Habits For choosing the second sample, a simple random sampling technique was used. A simple random sample is obtained by choosing elementary units in search a way that each unit in the population has an equal chance of being selected. A simple random sample is free from sampling bias (Mugo, 2007). This sample consisted of consumers living in India, who have seen a drastic change in the organization of the retail scenario in India and are familiar with it.
Random people were chosen from family, friends and employees who are a part of the consumer group and are a witness to this transition. To get a wider view, the respondents that were chosen belonged to diverse age groups and income levels. The sample size for this was 20. 3. 5 Research Procedure In order to perform a successful research, it is very important to have a well defined procedure of carrying it out. To start this research I started reading a literature that was relevant to my area of study, which took a very long time.
Reading that, I formulated the literature review which consisted mostly of consumer buying behaviour and their choice determinants for choosing a shopping mall. After a careful examination of the literature, questionnaires were formulated for conducting the interviews from the retailers who had opened their outlets in the malls and the Indian consumers. 52 Mall Mania in India – Changing Consumer Shopping Habits For conducting the research, 6 major malls in the parts of West Delhi, South Delhi and NCR were visited.
Conducting the interviews from the retailers was not a very easy task to do. Even though I approached them in their non peak sale time of the day, they seemed to be busy and disagreed to give the interviews. Furthermore, most of the retailers who agreed to be interviewed by me were reluctant of giving recorded ones. However, I got hold of 15 retailers from different malls and conducted their interviews and writing down their responses side by side. For the interviews of the consumers, approaching them was quite easy as most of them were familiar with my area of study.
Face to face interviews with some and telephonic interviews with the others helped me complete my field research. Gaining trust was a crucial part of the whole process of conducting the interview because if the researcher is not trusted the interviewee may not refuse to give the interview but may desire and act such that the interview gets over as quickly as possible with enough detail to satisfy the researcher that she is getting something of value but without saying anything that touches the core of what is actually being believed and cared about in the research (Jones, 1985 quoted in Easterby-
Smith, 2002). Thus the purpose of the interview and the study was explained clearly to each interviewee before taking the interview. 53 Mall Mania in India – Changing Consumer Shopping Habits The data that was collected was then analyzed and results were evaluated. Some recommendations for the future were then suggested for the real estate developers