1. Retail Marketing
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The Retail Marketing dimension is the face
of Retail Management that is visible to the
consumers.
All the efforts of the retailer to manage his
retail business is to finally attract
customers / consumers to his store and
make them buy more and stay with him.
Broadly, Retailing can be classified into
product retailing & services retailing

2. Retail Marketing
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The add-on services that the retailer
provides represents marketing of services
other than the actual service or product that
is retailed.
7Ps: The additional 3Ps are: People,
Physical Evidence and Process(es).

3. Shopping Behaviour
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Marketing Management for products &
services starts with the understanding of
Consumer Behaviour.
Retail marketing Needs to start with an
understanding of Shopping Behaviour.
Shopping behaviour needs to be
distinguished from consumer behaviour.
The study of consumer behaviour is
generally product or service centric.
(Consumer behaviour for soaps / banking services)

4. Shopping Behaviour
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However, one aspect of buying behaviour
which is not stressed upon is the place
where one buys it.
This represents the retail business. A
product or brand or service could be
available through multiple channels / outlets
but a consumer or a group of consumers
buy them in deference to their preference
for a particular channel / outlet.

5. Shopping Behaviour
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The study of shopping behaviour helps us to
answer questions like how many shops
does a customer go to before a decision to
buy a product is made; why does he / she
choose a retailer compared to others, etc.
The other aspect that would be of relevance
to retailers is the reason for shoppers to
shop. Shoppers could have different
reasons to shop ranging from SOCIALISING
to THERAPY to INFORMATION SEEKING.

6. Shopping Behaviour
CASE IN POINT
GROCERY / CONVENIENCE STORE

7. Shopping Behaviour
Crucial challenges / issues faced by
Grocery / Convenience Stores
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Related categories and promotional
effectiveness
Variety seeking
Monitoring consumption rates for packaged
goods
Long term effects of promotions on
shopping / shoppers' behaviour

8. Shopping Behaviour
Related Categories & Promotional
Effectiveness
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Most grocery stores display related
categories together
The underlying assumption is that a
household choice in one category is
dependent of its choice in the other. In other
words, when to purchase in one product
category might depend on the decision for a
related category.

9. Shopping Behaviour
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Such an understanding is useful for the
retailer because it helps by giving an idea
about what kind of promotion will click with
the customers.
A critical issue, while studying household
purchases of multiple categories is being
able to identify related product categories.
Consumers typically consume certain
products together and therefore purchase
them together.

10. Shopping Behaviour
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This gives the retailer some extra space to
promote unrelated categories “together” or
otherwise.

11. Shopping Behaviour
Variety Seeking
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Variety seeking behaviour of consumers can
be studied under True Variety Seeking and
Derived Varied Behaviour.
The distinction between true variety seeking
behaviour depends on whether observed
switching is motivated intrinsically or
extrinsically.
True variety seeking of consumers takes
place only when variation is rewarding in
itself.

12. Shopping Behaviour
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Retailers need to differentiate between
variety seeking behaviour, repeat
purchasing and derived switching
behaviour.
Variety seeking behaviour is more likely to
occur for products that evoke lower rather
than higher levels of involvement (Salt)
Higher rather than lower purchase
frequency (Toothpaste)

13. Shopping Behaviour
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Where perceived differences among the
alternatives are smaller rather than larger
(Brown breads)

14. Shopping Behaviour
Monitoring consumption rate for packaged
goods
Rationale: Economic & behaviour theory
Households increase their usage when they
have high inventory.
Faster usage rates also occur if products are
perishable, need refrigeration or occupy a
prominent place in the kitchen
Retailers can categorise these categories and
thus promote them effectively

15. Shopping Behaviour
Long term effect of promotions on
shopping / shoppers' behaviour
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In categories where promotions have
become frequent, consumers might learn to
anticipate future deals.
This scenario suggests that a particular
promotional event induces a household to
stockpile on a given purchase occasion,
followed by the promotion's long term
negative effect, which is manifested as an
increased probability that the household......

16. Shopping Behaviour
...... waits for another promotion before buying
on subsequent purchase occasions.
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Households develop price expectations
based on their prior exposure to promotions
over a long period such as moths / years
These expectations, coupled with cost of
inventorying product, affect consumer
purchase timing and purchase quantity
decisions.

17. Shopping Behaviour
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Increasing expectations of future promotions
lead to a reduced likelihood of purchase
incidence on a given shopping trip and an
increase in the quantity bought during a
purchase.
This strategy is consistent with the
consumer learning to wait for good deals
and stockpiling when these deals occur.
Promotions thus lead to higher price
sensitivities, reduced promotional efficacy,
greater inventories and higher demand
volatility

18. Shopping Behaviour
Loyalty Programmes
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Social identity research has shown that
consumers feel a sense of group
identification.
Loyalty programmes generally use loyalty
cards that members carry with them and
have to show at each transaction with the
company.
This explicit token of membership will
strengthen their sense of belonging to the
company and enhance the identification
effect.

19. Shopping Behaviour
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Loyalty programmes give rewards to
members, varying from saving for items and
targeted offers, to special shopping nights,
preference in retailer's partner institutions
and preferred service treatment.
The marketing activities within the loyalty
programmes reward stimulates customer
loyalty by providing either social or
economic value.

20. Shopping Behaviour
Benefits of Loyalty Programmes
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Increased customer retention rates
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Increased purchase per customer
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Increased referrals
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Reduced cost of acquisition
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Reduced advertising cost for customer
retention

21. Shopping Behaviour
Aspects of Loyalty Programmes
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Loyalty segments
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Programme cycle
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Instant gratification
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Measurement
Level of take up among customers
Longevity of the programme
Redemption rates
Contribution to knowledge base
Level of dialogue with customers
Ability to segment customers
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Cooperation