Constructing quantitative cult scale for retailing

Abstract

Research proposition Retailing in India is being recognized the world over as a sunrise industry with tremendous growth potential. Rated as one of the most attractive retail locations in the world, the Indian economy seems perfectly poised to take full advantage of the retailing wave. The fact that organized retailing is still nascent in India coupled with the critical opening up of the industry through FDI will set the stage for potential breakthrough successes. Various factors like the growing consumer base with disposable incomes; favourable shift towards service sectors like IT, telecommunications and healthcare; high economic growth rates touching 7-8% and increasing FDI inflows make the Indian retailing sector the second most attractive destination amongst emerging markets. In fact, the sheer size of the population demands attention from retailers worldwide! Currently, retailing in India makes a significant 35% contribution to the GDP. This is expected to grow at 25-30% per annum and is estimated to reach an astounding INR 100,000 Crores by 2010. However, retailing in India is still evolving and the sector is witnessing a series of experiments with new formats being tested out: the old ones tweaked or discarded; notable being hypermarket chains like Shoppers’ Stop, Nanz, Big Bazaar and others. In this backdrop, this study attempts to develop a model to understand and evaluate retailing as a culture—more than “just another way to buy”. The paper discusses factors that contributed to the development of various types of cults and draws commonalities from them. From these distilled factors, a generic cult model is developed that explains the causal variables behind successes of cults. The model is then applied to retailing (in particular, a mall in Bangalore) and a cult scale developed that can be used as a yardstick for measuring the development of other retail artifacts into cults.