Factors Affecting Consumer Buying Behaviour and Consumer Preference towards Organized Retail Outlets in India

Consumer behaviour can be defined as the specific behaviours that consumers show while looking and searching for, buying, using, assessing, and disposing of products or services or both products and services that they expect can satisfy their needs (Fullerton, 2013). As per this definition, consumer behaviours make the consumption related activities of consumers understandable. In this study, different consumer decisions related questions have received the primary focus such as what the consumers buy and when, where they buy and why, how often they buy, when they use a bought product or service, how they evaluate a consumed item or purchased product and what are the impacts of such evaluations on future buying behaviour, and lastly how they dispose of a product or service they have bought and used. The retail sector in India has witnessed some remarkable changes over the past few decades with the introduction of large investment, world-class designs, upgraded customer services, and highly engaging stakeholders. Amidst these changes in the retail market, the experts are debating on the future buying behaviour of Indians. There are millions of pushcarts, kirana, and street vendors that have been still dominating the Indian retail market and there are newly established but rapidly expanding national and multinational hypermarkets, mega-marts, and multiples malls, etc. The retail industry in this country is one of the most dynamic industries and also growing by leaps and bounds with numerous domestic and industrial players showing their interest in this sector. In the most modern concept of marketing management, the prime focus is given on the consumption process of the modern-age buyers. The marketers need to understand the changing trends in the buying behaviours of consumers today in order to sustain in the highly competitive market and reap the opportunities. It is utterly important for the marketers to mark the trends and decide accordingly (Khosla, 2010). It is expected that in the coming five years, the retail sector in India will grow manifold. Increasing disposable income of common people, changing lifestyles, and extremely favourable demography of the country is going to be the major factors behind this change. It is true that Indian consumers have changed diametrically in terms of their impulse buying and shopping behaviour. In this context, the role of consumer buying behaviour and their preferences play a significant role for modern retailers and hence for researchers. In this paper, factors affecting consumer buying behaviour and consumer preference towards organized retail outlets in India are analysed.

scenario ● To understand the Indian retail customers ● To examine and analyse the factors that affect the buying behaviour of consumers towards organized retail outlets in India

In recent times, India has witnessed some rapid changes and increased flow of revenues in the retail sector. This is due to the changing lifestyles and an overwhelming acceptance of the modern forms of retaining. Organized retailing gives an opportunity to the consumers to avail a wide variety of goods of their daily needs and durable goods under the one roof such as hypermarket, departmental stores, supermarket, etc. Todays‘ ecommerce based retailing is also a form of organized retailing. The retail industry in India has been emerging as one of the most fast-paced industries in the country. Several new players have already entered the market and several others are showing interest in it. Almost 10% of GDP and 8% of employment are created by this sector alone (IBEF, 2018). As per the data available, India is the 5th largest retail market in the world.

(Source: IBEF, 2018)

the consumers along with favourable demography and changing lifestyle of the people will provide the necessary impetus to it. Although the retail market will grow by 12% per annum, the growth of modern retailing is almost twice that of the traditional retailing system of the country. The entire retail sector in India is divided into two parts – there are organized retail market contributing almost 93% of the total retail sector of the country and the rest 7% is the unorganized retail market (IBEF, 2018). The B2B ecommerce market is expected to cross the US$ 700 million mark by the end of 2020. The online retail will also increase simultaneously in the coming 5 years. It has grown almost 23% and reached US$17.8 billion mark in 2017. According to the reports of FICCI and IIFT, the B2C business potential is projected to be US$26 billion in the next 5 years of which US$3 billion can be achieved in the coming three years from 16 different products categories (IBEF, 2018). At the same time, India is going to the fastest growing ecommerce market in the world. This sector is also expected to receive enormous investments and rapid increase in the customer base. It is expected that the ecommerce business of this country will reach US$120 billion by 2020. Moreover, the ecommerce of India will register 530 million shoppers every year by 2025 and the gross merchandise value (GMV) are expected to reach US$220 billion per year by the same period. Faster internet speeds, more accessible internet, and more convenient ecommerce will be prime factors behind this enormous growth. It is expected that by 2021, the direct selling sector of India will reach Rs.159.3 billion or US$2.5 billion. However, the sector needs a more favourable environment for easy growth. India is going to the 3rd largest consumer economy reaching almost US$400 billion mark by the end of 2025. Simultaneously, the luxury market is expected to grow rapidly and reach US$30 billion by the end of 2018. The same figure for 2017 was US$23.8 billion. Several international brands have either opened their establishments or expected to come up soon making the market more attractive. At the same time, according to ASSOCHAM, the income of upper middle class of people in tier 2 and 3 cities in India is growing at a faster rate making them more frequent buyers. By the end of 2019, the modern retail of this country will reach US$ 11.25 billion from 7.45 billion in 2016. With the 2nd largest population, rapid urbanization, the rapid growth of the internet and affluent middle class the retail

potential.

The following are the most popular and established organized retailers in India:

• Future Group

• Landmark Group

• Pantaloons Retail

• Spencer‘s Retail

• Shoppers Stop

• Reliance Retail

• Tata Group

Some drastic steps have also been taken by the Government of India with an aim to improve the weaker aspects of this sector. Most important steps taken by the Government are as follows: ● The Government of India has modified certain aspects of the Foreign Direct Investment (FDI) in the sectors like Food Processing and FMCG (IBEF, 2018). The primary aim is to help the ecommerce and foreign retailers to sell Indian products through the organized retail process. ● The Government has allowed 100% FDI in online retailing through automatic routes which are aimed to provide more clarity in the existing business of ecommerce companies operational in India (IBEF, 2018).

Understanding consumers‘ decision-making process including the way consumers develop and adopt strategies is very vital for the marketers (Mitchell, et. al., 1995). According to Du Plessis et al (1991), the decision-making is the behaviour patterns of the consumers that help them to acquire ideas, products, or services to meet their certain needs (Du Plessis, et. al., 1991). The decision-making process of consumers has remained an important subject of discussion and research for the experts and academicians in this field. The earliest consumer decision-making research works kept focus on the purchase action of the buyers (Loudon and Bitta, 1993). After the 1950s, with the introduction of the modern formats of marketing, the studies related to consumer decision-making had contemporary research works show the purchase is the last action consequent to the decision-making process. In fact, many other factors have a direct and indirect influence on a buyer‘s decision to buy a product or service. Several studies have been done on this subject and several models have been developed. The models try to find the decision-making process and related impactful factors. In reality, consumer behaviour is a multidisciplinary subject and the decision-making process that a consumer undertakes is a vast part of it. In the words of Kotler (2009), ―Consumer behaviour is the study of how individuals or groups buy, use and dispose of goods, services, ideas or experience to satisfy their needs or wants‖ (Kotler, 2009). In the early studies, consumer behaviour was assumed to be the same as buyer behaviour. In the 1950s and early years of the 1960s, it was the interactions between the consumers and retailers or producers just at the time of purchase. Now, in the modern concept of marketing, the consumer behaviour is considered as a ceaseless process which is not concentrated only at the time of buying a product or service. According to Keller (2012), the topics of consumer behaviour is one of the most vastly researched topics in the field of sales and marketing till now (Keller, 2012). It is obvious that consumer behaviour is the prime factor in any kinds of business development which should be taken with utter seriousness. Abratt et al (2000) have analysed the role played by the previous experience of a buyer in buying behaviour of fresh food items, especially mussels (Abratt and Goodey, 2000). In this study, the researchers have applied the structural equation model to find the link between the previous experience of a consumer and their buying habit and how these two aspects conjointly influence the buying decision of the consumer. The research findings have revealed that these above mentioned two factors have an immense influence on a buyer‘s buying decision. According to Sinha (2003), Indian customers also value the entertainment they experience while shopping (Sinha, 2003). The majority of the Indian population can be assumed to be young, employed, and belongs to higher income brackets. They look for emotional value from a shopping experience and prefer it more than the functional value related to shopping. They also expect more varieties and convenience in a shopping destination. Park and Lenon (2006) have conducted their research on the different shopping environments (Park and Lennon, 2006). The researchers have

works in this realm have remained limited to the impulse-buying behaviour in traditional buying concept. The research work of Zhou and Wong (2004) is primarily focused on the economic and promotional effects of different factors related to marketing (Zhou and Wong, 2004). Alternatively, the factors that did not support the hypothesis of the researchers were considered as the factors with atmospheric, experimental, entertaining, and hedonic effects. The research of Baker (1992) was focused on the influence of packaging on the decision-making process of the fast-moving consumer goods (Baker, et. al., 1992). The target of the research work was to analyse the influence of packaging on the decision-making process of low-income groups of consumers in the retail industry. The researchers conducted a survey among 250 respondents in Star Hyper. The research findings indicate that the low-income groups of people prefer premium packaging as they think that they can use the packets or containers after the product has been consumed. But, they researchers detected feeble relationships between packaging and brand experience. Overall, the research findings indicate that the consumers of the low-income groups have higher brand experience when they purchase ―premium‖ quality products. Mick (1996) has stated that the consumers feel more connected with a brand when the brands use the image of certain celebrities who they prefer or follow (Mick, 1996). Such a brand orientation gets more impetus when the image of the celebrity and the brand match with each other.

There are several factors that influence the shoppers. Most of these factors are related to the shoppers‘ personal traits, the shopping environments, and the quality of products, the demographics, and the socio-cultural aspects:

An external stimulus is something tangible or intangible that makes a potential buyer get hooked with the product or service or the store for a long time and take a positive buying decision (Youn and Faber, 2000). It is a kind lure attempted towards customers. Any kinds of external stimuli are related to the shopping and marketing environments where the shopping environment includes the size, design, and ambiance of the store and the marketing environment includes various promotional and advertisement activities that the marketers plan to attract the buyers. (Piron, F. (1991). In the modern shopping environments, impulse buying is given a high priority. For this, the marketers use innovative promotional tools, different kinds of technologies, and creative messages in the retail environments.

According to Terrazas (2006), the most vital aspect that determines the success of an in-store display for the retailers is to comprehend their customer's buying habits (Terrazas, 2006). Once the buying habits of the customers are known, strategic in-store displays could be designed that can boost the sales volume of the store. One effective strategy is to study the common goods that most of the customers buy and then display the complementary products next to these common products. Displaying the common products at the back of the store could be another good strategy which induces the customers to walk past many other items that may create their interests. Even the shopping trolleys that can accommodate lids may be designed with certain heights to keep the kids‘ attention on the shelves as kids play a vital role in the decision-making process of the families.

It is another vital determiner of impulsive buying. There are several micro variables are included in the in-store shopping environment. Factors like the background music, displays, light, cleanliness, congestion in the shop, etc. determine the inner environment of a store (Zhou and Wong, 2004).

Prices and discounts have multifaceted effects on the buying decisions and impulsive buying of the customers. The sudden price hike may reduce the spending capacity of the customers. The Consumer Mental Accounting model can explain the price-induced impulse buying of the customers.

Having supporting and friendly shop assistants mean more enjoyable shopping experience for the customers (Jones, 1999). It is found that these kinds of sales personnel not only make the in-store environment more enjoyable for the shoppers but also increases the brand orientations of the shoppers.

According to Michon et al (2005), crowding or congestion brings bad shopping experience to the buyers (Michon, et. al., 2005). In such situations, consumers spend less time in shopping, reduce their shopping items, deviate from shopping plans, reduce interpersonal communications, and refrain from their exploratory behaviour. All of these aspects go against the impulsive buying behaviour of the buyers.

These stimuli depict the personality related factors of an individual. According to Youn and Faber (2000), the necessity of shopping originates from within (Youn and Faber, 2000). There are certain traits like perceived shopping enjoyment, the sheer attraction for certain products or services, and several other internal factors work as internal stimuli leading to impulsive buying. Buying behaviour has changed in many aspects. Consumers‘ willingness to spend more time and money in buying, availability of products, cosy buying environment, growing levels of aspirations have been providing more opportunities to the marketers and retailers to focus on the impulsive buying behaviour of the modern-day consumers.

For the study exploratory research analysis has been done. Purpose of the research is to understand the Behaviour and consumer preference towards organized retail outlets in India. Primary data is being collected from 80 respondents through structured questionnaire related to the research work. This predesigned questionnaire has both internal and external factors which induce impulse purchase of the consumer. ● Research Design ● Population ● Sample design ● Data collection method ● Statistical tools used ● Limitation

For research purpose, exploratory research design has been used. Predesigned questionnaire has been used to designed to the achieve the research objective. For first objective achievement wherein the objective is to find the factors to help in finding induce impulse purchase of the consumer. To achieve the second objective, another questionnaire has been designed for the store manager, wherein the objective is to find the external factors in the organized retail sector.

Population data is customers of selected organized retail stores in Lucknow. In India, Modern Retail or Organized stores formats are supermarkets, convenience stores, discount stores, hypermarkets, departmental stores and specialty stores. In the study, stores located in malls were considered.

For the purpose of the study, 80 respondents have been taken from the selected organized retail stores. Before conducting the survey concern from the respective people has been taken.

To check the data reliability Cronbach‘s alpha test has been done. Post checking the reliability of the data, Pearson correlation coefficient test has been done to find the significance level of the relationship between the variables. All these tests were analyzed with the help of Statistical Package for the Social sciences (SPSS). Demographics are shown with the help of bar diagrams, histograms and with percentage method. Primary data is being collected through structured questionnaire for the purpose of collecting information regarding faculty attrition and retention in the engineering college of ―Factors Affecting Consumer Buying Behaviour and Consumer Preference towards Organized Retail Outlets in India‖. Like kart method has been used to collect data in numerical form. In like kart scale following are the assumptions strongly disagree is termed as 1, disagree is termed as 2, undecided is termed as 3, agree is termed as 4 and strongly agree is termed as 5.

In general studies based on surveys through questionnaire suffer significantly from the limitation of the possibility of difference in the actual vs. recorded data. No matter how carefully data has been entered into the system there is always a difference in the reality. Sometimes, it also depends how the responded has filled the data; if the approach is casual or just filling the questionnaire then the entire result is different than the fact. At, the time of filling the questionnaire such precautions

1. Sample size in comparison with the total size of the population is significantly small. 2. There is a high probability of personal biasness of the respondents while responding.

In result and discussion, primary data analysis has been done to understand the responses of the respondents. Result and discussion have been divided into two parts; first part will talk about the analyses and the results of the interview which has come from the organized retail store customers. Whereas the second part talks about the analyses and the results from the gathered information. This information has come from the retail store managers who work in these organized retail sectors. Sample size of 80 customers has been selected to do the respective study. First part of the questionnaire is the demographics of the respondents such as age, gender, age and occupation.

Source: Primary Data collected from the questionnaire

Source: Primary Data collected from the questionnaire

Above table shows the distribution based on gender. Male contributes 76.25% of the total sample size of the survey

Source: Primary Data collected from the questionnaire

Age is segregated in 16 to 25 years, 26- 35 years and >35 years. It has been observed that majority of the respondents (43.75%) belongs to the age group of 26-35 years followed by 28.75% in the 16- 25 years age group and 27.50% in >35 years respectively.

Above table shows the distribution based on the occupation. It has been found that significant number of respondents (60%) belongs to the service class followed by self-employed (17.50%), retired (12.50%) and none (10%).

Below table talks about the descriptive statistics of the collected data from the questionnaire. According to the data total 80 questionnaires are filled and their mean value is closure to 3.8 with average standard deviation of 0.52.

In exploratory factor analysis, hypothesis testing is not applicable. It is a methodology, which is designed to examine the set of variables which might to be interlinked with the domain under the study. Two types of methods are being used in EFA they are statistical and heuristic methods. Goal of exploratory factor analysis is to find the relationships within the set of variables. This process helps in reducing the components to the meaningful factors. In order, to find the significant factors affecting impulse purchase Behaviour 10 statements on five points like kart scale has been set. Further to this, respondent‘s responses are being loaded to the SPSS to do factor analysis. In Factor analysis, reliability of the scale has been checked via Cronbach‘s Alpha and the value is 0.769, which means data is not biased and good to use for further analysis. Post this Kaiser Meyer Olkin (KMO) test has been done to measure the accuracy of the sample and the result is .602. Varimax rotation method has used to extract the Factor loadings.

The person-trait variables are eliminated and the remaining variables are rotated using Varimax. While doing this three factors or components are being yielded with eigenvalues of 1.0 or higher as shown in below table. Over 75.2% of the total variance is being explained by these three components.

Source: Primary Data collected from the questionnaire

Source: Primary Data collected from the questionnaire

According to the above table the most significant factor is the factor F1, wherein at reliability scale Cronbach‘s value is .785. In this factor customer makes unplanned purchases as an when they feel stressed, customer doesn't visit the crowded store, customers buy‘s things as an when they need, and customer also does unplanned purchases after seeing the ambience of the store. Second most relevant factor is F2 factor, wherein at reliability scale Cronbach‘s value is .768. In this factor store Innovation attracts customers, Behaviour of the sales person and the accessibility of the products attracts customer. The least significant factor is F3 factor, wherein sales assistant‘s knowledge about the product attributes, discounts and promotional schemes attracts customers.

It has been observed that now days increase amount of spending has twisted a new life style, wherein consumers have started shelling out a lot of money. Owning expensive items has significantly become a self-identity for lot of consumers, due to which increase shopping has become a lifestyle. Now day‘s impulse buying has become a norm which each one of us have adopted or adopting. It has also been seen that feelings and emotions plays a decisive role in purchasing. In the study, an attempted to determine the personality trait of such type of people (frequently buying or impulse buying) is being done. This study has aimed at achieving below listed following objectives:- 1. To identify factors contributing in impulse purchase in organized retail sector in India. 2. To understand the significant role of organized retail outlets in impulse purchase by Indian customers 3. To understand the Indian organized retail scenario 4. To understand the Indian retail customers 5. To examine and analyse the factors that affect the buying behaviour of consumers towards organized retail outlets in India Significant factor contributes in making impulse purchase is ―Personality Traits of the customer i.e. F1‖ Second most significant factor in making impulse purchase is ―Sales persons Overall behavior with the custom i.e. F2‖ Third significant factor in making impulse purchase is ―Discounts and offers offered by the store i.e. F3‖

Purpose of the entire study is to find most significant factor or factors affecting impulse purchase. Findings from the research has shown that, the most significant factors that affect impulse buying are floor staff behavior, store ambiance, store display, internal state of mind of the customer and store promotions and offers.

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Research Scholar, Department of Commerce & Business Management, Integral University, Lucknow, India