Appropriate retail formats based on market segments

Abstract

Purpose The purpose of this paper is to find out empirical relationship between growths of different types of retail format corresponding to different types of population across major cities in India and then predict future growth of these formats for retailers to focus their attention to. Design/methodology/approach Demographic and psychographic data of 24 different cities in India reported in National Readership survey (NRS) and data of retail chain in India with different retail formats present in corresponding cities were analyzed with regression technique. Also, Gini coefficient was used to measure income disparity to explain the retail formats. FindingsIn method 1, the growth of the supermarket can be empirically attributed to consumers belonging to SEC C, A1, A+ i.e. both the ends of the consumer spectrum IN method 2, we used Gini coefficients to explain the number of store types with income disparity across Tier I, II and III cities. We found that as we moved along Tier I to Tier II, III cities, the number of departmental stores decreased but the number of superstores and hyper marts went up. Research limitations/implications The research data rests on a sample size as a representation of population across different cities in India. Also, the data for stores was collected and collated for all major stores whose information was available online and in database to which we had access too. Originality/ValueThis paper takes an open view on the evolution of store formats in India. It attempts to negotiate the problem in terms of different approaches. Literature study on the development of formats based on consumers economizing on shopping time was done. Later we approached the same problem via characteristics of the consumer profile indifferent cities. Also, insights into income disparity and its relation to store format were given.