Study of hypermarkets and choice modelling

Abstract

Retail in India has been growing at a rapid pace. This means an increase in competition. To succeed in this competitive environment understanding the customer store choice becomes very important. Store choice and patronage has been widely studied in the world. But there is still vast scope for research in this field because the retail environment keeps changing rapidly. This phenomenon gains greater significance in the Indian market, with the introduction of larger and more diverse retail formats by organised retailers. It is providing new experiences to customers. Customers have a lot of choice these days with respect to both the choice of retail store and there are a lot of choices within a format. Through this study we have tried to come with a set of attributes which influence the customer choice for a store, the most. For this study we chose to analyze three retail store formats namely, hypermarkets, supermarkets and convenience stores. We have used both secondary and primary research techniques. We have used exploratory research techniques like depth interviews and surveys to get the important attributes. We then used SAS software and ran multinomial log it analysis on the data to get the probabilities of the customer choosing a particular store format. We have also tried to segment and profile the customer based on the demographic and psychographic data that we have gathered. Based on this we have been able to analyze that quality, variety of products, store layout, convenience and accessibility are the most important attribute for retail choice. Therefore, store managers need to concentrate on these parameters for higher profitability.