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Research Journal of Management Sciences _____________________________________ Res. J. Management Sci.
               Vol. 1(1), 7-13, August (2012)


     Effect of Orgenised retail on Unorgenised retail in Indian retail market
                                         Gupta Himanshu1 Dubey Neetu2 and Patani Pawan3
                                             1
                                               Pioneer Institute of Professional Studies, Indore, INDIA
                                   2
                                       Institute of Management and research, IPS Academy, Indore, INDIA
                                             3
                                               Pioneer Institute of Professional Studies, Indore, INDIA
                                                    Available online at: www.isca.in
                                 Received 25th May 2012, revised 28th June 2012, accepted 30th June 2012
    Abstract
    Retail is currently the flourishing sector of the Indian economy. This trend is expected to continue for at least the next two-
    three decades, and it is attracting huge attention from all entrepreneurs, business heads, investors as well as real estate
    owners and builders. Availability of quality, retail space, wider availability of products and brand communication are some
    of the factors that are driving the retail in India Retail sector is also supporting to create huge employment while a new
    form of organized retail sector has emerged within the retail industry and it gave speedy phase to Indian retail sector. The
    rationale of the study is twofold: First, to examine the nature of changes in the retail sector taking place due to organized
    form of retailing and implications of shift to this new form of retailing. Secondly, this area has remained largely an
    unexplored part of research till date especially in the Indian context. The broad objective of the study is to understand
    consumer behavior towards organised and unorganised retail stores and to find out the consumers satisfaction level from
    organised retail stores as well as unorganised retail stores. The perception of the traditional retailers about the modern
    retailing. The study uses primary data collected through in depth qualitative analysis to represent organized and
    unorganized retails sectors respectively.
    Keywords: Orgenised retail, unorgenised retail, consumer satisfaction, consumer behavior

Introduction                                                           The most important debate concerning the implications for the
                                                                       expansion of the organized retailing in India revolves around
India started its Retail Journey since ancient time. In Ancient        whether it is going to have positive impacts on the economy as a
India there was a concept of weekly HAAT, where all the buyers         whole as compared to the traditional unorganized form of
and sellers gather in a big market for bartering. It takes a pretty    retailing. According to one camp, it has overall positive impacts
long times to and step to shape the modern retail. In between          in terms of generating more number of employments, new
these two concepts (i.e. between ancient retail concept and the        diversified forms of employments, and improving the nature of
modern one there exist modern Grocery/ mom and pop shops or            retail employment (higher salary, more job benefits, security of
Baniya ki Dukan. Still it is predominating in India So the Indian      job, employability etc). This form of retail sector is also looked
retail industry is divided into two sectors- organized and             upon as a huge sector having immense business opportunities
unorganized. The Indian retail industry is now beginning to            for entrepreneurs and capital investors. Moreover, organized
evolve transformation that has swept other large economies.            retailing is considered to be efficient and apt to cater to the
There is a vast change in Indian retail, the liberalization of the     diversified and changing nature of the consumer demands in
consumer goods industry initiated in the mid-80’s and accelerated      growing economies like India. The general benefits of organized
through the 90’s has begun to impact the structure and conduct of      retail also include improved supply-chain, improved
the retail industry. The concept retail, which includes the            marketability of farmer’s produce and it is also expected that it
shopkeeper to customer interaction, has taken many forms and           will contribute to heightened economic activity. The extensive
dimensions, from the traditional retail outlet and street local        research brought me to conclude that departmental stores are
market shops to upscale multi brand outlets, especially stores or      soon emerging on the top priority lists, amongst the shopping
departmental stores.                                                   spree in Delhi, as they seem to derive immense pleasure as
                                                                       shopping is considered as a experience now rather than a task
Hence, focusing on two aspects of retail marketing i.e. store          and exposure to variety under one roof in their extremely busy
retailing and non store retailing. Store Retailing as the              lives, when they don’t have time for things.
departmental store, which is a store or multi brand outlet,
offering an array of products in various categories under one          The organized retail food and grocery stores make constant
roof, trying to cater to not one or two but many segments of the       efforts to induce customers to visit the store by discount offers.
society and Non store retailing as the direct selling, direct          Most of these stores believe in creating not just a marketing
marketing, automatic vending.                                          activity with its customers, but rather favor relationship building
                                                                       with him so as to convert first time customers into a client. They


 International Science Congress Association                                                                                           7
Research Journal of Management Sciences _________________________________________________ Res. J. Management Sci.
Vol. 1(1), 7-13, August (2012)

provide better parking facilities to customers and the facility to       In any newspaper or television channel, we find hordes of news
examine the product. They also offer a wide range of payment             about happening in organized retail sectors, which is indeed
options to customers.                                                    fairly real situation. While the role of organized retail sector in
                                                                         growth of economy cannot be denied, but one thing is also of
India is currently the twelfth largest consumer market in the            extreme importance that unorganized retail format is a support
world. According to a study by McKinsey Global Institute,                to a large chunk of population- providing direct employment to
India is likely to join the premier league of the world’s                39,500,000 individuals. So there is no way that government or
consumer markets by 2025 improving its position to the fifth.            anyone can discount these foundation stone of Indian economy.
But this growth is not going to happen is smooth way. Any
change always comes up with some friction and Indian retail              Changing landscape of Indian consumerism: The face of
sector is and will be witnessing the same friction. Indian retail        Indian consumerism is changing: not Indian consumerism is
sector is still in its nascent form if we consider its full potential.   evolving from Bajaj Scooter family man to Bajaj Pulsar trendy
While most of the developed market of US and Europe and also             youngster. This changing consumer’s taste and lifestyle,
some SE Asian emerging market economies have reaped the                  somewhere automatically give some advantage to organized
benefits of modern retail, India has not yet entered into                sector. This makes imperative for unorganized retail sector to
advanced phase of modern retail forms. Unorganized retailing,            restructure itself in order to withstand the increasing
on the other hand, refers to the traditional formats of low-cost         competition and to meet consumer expectations by moving with
retailing, for example, hand cart and payment vendors, and               trends. What they can do and what they are doing, some of these
mobile vendors, the local Grocery shops, owner manned general            issues will be discussed in future parts of article.
stores, paan / beedi shops, convenience stores, hardware shop at
the corner of your street selling everything from bathroom               Role of government: As in other countries, government policy
fittings to paints and small construction tools; or the slightly         can and should play an important role in modernizing the
more organized medical store and a host of other small retail            unorganized sector and improve its competitiveness. But
businesses in apparel, electronics, food etc. Small-store retailing      question is what should be exact role of government. Should it
has been one of the easiest ways to generate self-employment,            go for policies for protection of traditional retailers by
as it requires limited investment in land, capital and labor. It is      restricting organized retail or encourage organized retail to reap
generally family run business, lack of standardization and the           benefits that are generated by it? What should be mechanism to
retailers who are running this store they are lacking of                 promote or protect one or other? Can government act only as a
education, experience and exposure. This is one of the reasons           facilitator         or          enablers        or           both?
why productivity of this sector is approximately 4% that of the          In the said context, it is imperative to develop a strategic
U.S. retail industry. Unorganized retail sector is still                 roadmap for unorganized retail form to be able to survive,
predominating over organized sector in India, unorganized retail         compete and keep the economy growing.
sector constituting 98% (twelve million) of total trade, while
organized trade accounts only for 2%.                                    Retail Trends in past few years: Before the decade of eighties,
                                                                         India with hundreds of towns and cities was a nation striving for
The road side hawkers and the mobile (pushcart variety)                  development. The evolution was being witnessed at various
retailers. The Grocery stores (the Indian equivalent of the mom-         levels and the people of the nation were learning to play
and-pop stores of the US), within which are: i. Open format              different roles as businessmen and consumers. The foundation
more organized outlets, ii. Small to medium food retail outlets.         for a strong economy were being laid, youth were beckoning
                                                                         new awareness in all spheres. And this brought in an
Modern trade or organized retailers within modern trade, we              opportunity for retail industry to flourish. First in the metros and
have: i. The discounter (Subhiksha, Apna Bazaar, Margin Free),           major cities later to impact sub urban and rural market as well.
ii. The value -for- money store (Nilgiris), iii. The experience          Retailing in India at this stage was completely unorganized and
shop (Food world, Trinethra). Iv. The home delivery                      it thrived as separate entities operated by small and medium
(Fabmart)Tug of war:                                                     entrepreneurs in their own territories. There was lack of
                                                                         international exposure and only a few Indian companies
Organized vs. Unorganized Sector: Future of retail sector in             explored the retail platform on a larger scale. From overseas
India is swerving- on one side organized retail is marching into         only companies like Levi's, Pepe, Marks and Spencer etc. had
life of urban consumers, while on the other our own                      entered targeting upper middle and rich classes of Indians.
neighborhood ‘Grocery stores’ are resisting fiercely with their          However as more than 50 % population was formed by lower
existing strong foothold. India today is at the crossroads with          and lower middle class people, the market was not completely
regard to the retail sector. A shift between organized and               captured. This was later realized by brands like Big Bazaar and
unorganized retail sector is evident, which has led to a number          Pantaloons who made their products and services accessible to
of speculations on the fate of Indian retail. Unorganized sector         all classes of people and today the success of these brands
cannot ignore.                                                           proves the potential of Indian retail market. A great shift that
                                                                         ushered in the Indian Retail Revolution was the eruption of


 International Science Congress Association                                                                                         8
Research Journal of Management Sciences _________________________________________________ Res. J. Management Sci.
Vol. 1(1), 7-13, August (2012)

Malls across all regional markets. Now at its peak, the mall           Mathew Joseph: Unorganized retailers in the vicinity of
culture actually brought in the organized format for retailing in      organized retailers experienced a decline in their volume of
India which was absent earlier. Though malls were also initially       business and profit in the initial years after the entry of large
planned for the higher strata, they successfully adapted to cater      organized retailers. The adverse impact on sales and profit
to the larger population of India. And it no wonder, today malls       weakens over time. There was no evidence of a decline in
are changing the way common Indians have their shopping                overall employment in the unorganized sector as a result of the
experience. However there is still great scope for enhancing           entry of organized retailers. There is some decline in
Indian mall culture as other than ambience and branding many           employment in the North and West regions which, however,
other aspects of Retail Service remains to be developed on             also weakens over time. The rate of closure of unorganized
international standards. it is surprise that there was not a single    retail shops in gross terms is found to be 4.2 per cent per
mall in India a decade before and just a few years ago only a          annum which is much lower than the international rate of
handful of them were striving, today there are more than 50            closure of small businesses. The rate of closure on account of
malls across different cities and 2 years from now around 500          competition from organized retail is lower still at 1.7 per cent
malls are predicted to come up. Indeed this shows a very               per annum. There is competitive response from traditional
promising trend ahead, however before taking a leap into the           retailers through improved business practices and technology
future of Retail in India, let's see what the Indian retail Industry   upgradation. A majority of unorganized retailers is keen to stay
is currently occupied with.                                            in the business and compete, while also wanting the next
                                                                       generation to continue likewise. Small retailers have been
Review of literature: Purohit and kavita according there studies       extending more credit to attract and retain customers. However,
that the traditional retailers are not very much clear about the       only 12 per cent of unorganized retailers have access to
consequences of the modern retailing the traditional retailers are     institutional credit and 37 per cent felt the need for better access
netural or undecided, modern retailing will cut the profit margin      to commercial bank credit. Most unorganized retailers are
of the traditional retailers; the modern retailing will lead healthy   committed to remaining independent and barely 10 per cent
compition in the market, modern retailing will reduce the sales        preferred to become franchisees of organized retailers.
volume of the traditional retailers and traditional retailers should
improve customer care services in the era of modern retailing.         The objectives of the research are: i.To find out the consumer
                                                                       behavior towards organised (supermarkets/malls, hypermarkets,
Shaoni Shabnam: It is important to highlight that in organized         departmental storesetc) and unorganized (local Grocery stores,
retail, the status of employment is much better than that in           weekly bazaars etc) retail stores in Indore, ii. To find out the
unorganized retail. Hence it is definitely desirable that more and     consumers satisfaction level from organised retail stores as well
more labour gets absorbed in this sector of retail. In the current     as unorganised retail stores.
context, the labour employed in unorganized retail stands unfit
for finding employment in organized retail. If appropriate             Research Methodology
training and skills could be imparted to them, it is possibly
feasible to offer better forms of employment to them in the            The data for this research paper has been taken from primary
organized retail sector. The status of employment is much better       data collected by a survey of the retailers between Dec 2010 and
than that in unorganized retail. Hence it is definitely desirable      May 2011 for the doctoral thesis being prepared by the author,
that more and more labour gets absorbed in this sector of retail.      for submission to The DAVV University, Indore, India.
In the current context, the labour employed in unorganized retail
stands unfit for finding employment in organized retail. If            Sampling Method: The sampling method chosen is simple
appropriate training and skills could be imparted to them, it is       random sampling which is a type of probability sampling.
possibly feasible to offer better forms of employment to them in
the organized retail sector.                                           Sample Size: To calculate the sample size following formula
                                                                       was used. If the researcher plans the results in a variety of ways
Meeta Punjabi: According there study they suggest that the             or if he/she has difficulty in estimating the proportion or
development efforts in this area are based on three grounds:           standard deviation of the attribute of interest, the following
First, farmers associated with the modern value chains earn            formula may be more useful.
                                                                                             ୒୞ଶ×ଶହ
higher returns than selling to the traditional markets. Second,                  ݊=
                                                                                       {ୢଶ × (୒ିଵ)} ା {୞ଶ × ଶହ}
the modern supply chains have specific quality requirements            Where n= Sample size required, d= Accuracy precision level
which are easier to meet by the large and medium farmers and           (i.e 0.01, 0.05, 0.10 etc.), Z= Standardization value indicating a
the small farmers tend to get left out of these markets. Third,        confidence level (Z= 1.96 at 95% confidence level and Z= 2.56
there are several successful examples of linking small farmers to      at 99% confidence level N= Population Size (known or
these modern value chains with effort from government                  estimated)
agencies, NGOs and development agencies. This knowledge                Here N= 180 Let us take confidence level as 90% and ± 10%
presents strong grounds for a closer look at the emerging sector       precision level (d=0.10 and Z= 1.64), then the sample size (n):
in India.


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Research Journal of Management Sciences _________________________________________________ Res. J. Management Sci.
Vol. 1(1), 7-13, August (2012)

                ଵ଼଴×(ଵ.଺ସ)ଶ×଴.ଶହ                                       the initial years after the entry of large organized retailers.
           n=
                ଵ଼଴×(ଵ.଺ସ)ଶ×଴.ଶହ                                       According to the Indian Council for Research in Impact of
           n = 49.15 = 50 companies                                    Organised Retailing on Unorganised sector International
                                                                       Economic Relations (ICRIER), there would be no long term
There are many traditional and modern retailers were sent the          impact due to the entry of organised retail chains on the
201.72Questionnaire, which was structured in nature. These             neighbourhood irana shops in the country. In clear terms the
retailers were located Indore. Questionnaires were filled by           impact of organised retailing on unorganised sector is as
direct interview. The Questionnaire was filled mostly by               follows: i.The adverse impact on sales and profit weakens over
retailers.                                                             time, ii.There is some decline in employment in the North and
                                                                       West regions which, however, also weakens over time., iii. The
Questionnaire Testing and Reliability Analysis: The                    rate of closure of unorganized retail shops in gross terms is
questionnaire was pretested on 38 retailers and data was fed into      found to be 4.2% per annum which is much lower than the
SPSS software. Using SPSS reliability analysis was conducted.          international rate of closure of small businesses., iv. The rate of
The validity of the questionnaire was tested by using expert           closure on account of competition from organized retail is lower
validity, which is part of expert validity. The Experts approved       still at 1.7% per annum.
the questionnaire with small modifications. The revised
questionnaire was administered and data was collected from 50          The Grocery stores and pan shops are seen as part of community
retailers in Indore.                                                   life and hence unorganised retail will stay but ICRIER observes
                                                                       that if organised retail does not grow, the unorganised sector
Survey: A two page, Questionnaire was designed keeping in              will not be able to handle the surging demand. Hence the share
mind the objectives of the study which were To analyze the             of organised retail will grow at a rate between 45 and 50% per
impact of orgenised retailing on unorganized retail and to find        annum. The observation rings true as well, this is being
out the survival strategies adopted by unorgenised retailers in        witnessed in some urban centres already.
mall culuture. The Literature survey and pre study consultation
with industry experts were taken into account. The                     It has come out with certain valuable recommendations. It
questionnaire consisted of few open ended questions, some              suggests a nationwide uniform licensing policy to aid modern
questions were either using ranking scale or Likert scale, and         retailing which will help carry the countries retail sector to the
dicotomes type of questions and open ended question.                   USD (US Dollar) 590 billion mark in 2011-12. It suggests better
                                                                       access to cheaper institutional credit so the Grocery stores can
This survey intends to analyse the impact of organised retailing       take on competition from organised retail. Presently, only 12%
on unorganised retail sector in Delhi/NCR. This research               of unorganised retail enjoys access to institutional credit.
explicates various aspects like the perceived and expected levels      Another recommendation by ICRIER is worth a serious try. It
of satisfaction of the consumers and the factors which                 suggests cash and carry outlets which will sell to unorganised
unorganised retailer should take cognizance of in the course of        retail and procure from farmers. This can help unorganised retail
establishing and enhancing their business.                             to buy at wholesale prices for eventual retailing, thereby
                                                                       generating a handsome margin. Farmers too can benefit since
The survey is based on interviewing grocery store consumers at         they can sell at lucrative prices and realise the sale proceeds in a
various catchment areas in Indore, India. Four areas                   swift and transparent manner. Once this cushion is provided,
Gumastanagar, Sch no71, A.B Road, Laxmi Nagar are selected             unorganised retail can have no grouse against the government
based on number of households and income groups in the                 and even if it has, the government can ignore it. Being
catchments. The data is collected using a random sample of             unorganised retailing is at serious step; there are still challenges
consumers. Consumers who have significant knowledge of the             for organised retailing in India. Traditional retailing has been
topic were identified and selected at random for questioning. As       established in India for some centuries. It has a low cost
per questionnaire, interviews were conducted face to face so as        structure, mostly owner operated, has negligible real estate and
to capture the attitude and experience of consumers who had            labour costs and little or no taxes to pay. Consumer’s familiarity
just purchased grocery items from organised and unorganised            that runs from generation to generation is one big advantage for
retail outlets. Both qualitative and quantitative data analysis is     the traditional retailing sector. In contrast, players in the
done in order to get deeper insights into the consumer behaviour       organised sector have big expenses to meet, and yet have to
and store loyalty for local grocery stores. Larger the sample size     keep prices low enough to be able to compete with the
greater is the precision or reliability when research is replicated.   traditional sector. Moreover, organised retailing also has to cope
But constraints on time, manpower and costs have influenced            with the middle class psychology that the bigger and brighter
decisions on the study sample size.                                    sales outlet is, the more expensive it will be.
Impact of Organised retailing on Unorganised sector:
Unorganized retailers in the vicinity of organized retailers
experienced a decline in their volume of business and profit in



 International Science Congress Association                                                                                       10
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                                        ________________________________________________ Res. J. Management Sci.
                                                                            _____________
Vol. 1(1), 7-13, August (2012)

Results and Discussion                                             Purpose of visiting malls: 32% Customers visit mall for
                                                                   Shopping while 36% visits for Entertainment and rest 34 %
                                                                                             its
Preference of Customers towards retail outlets 38%
                                           etail outlets:          visits for Window shopping. During the survey, I got straight
customers prefers unorganised retail shopping while 26%            forward Purpose of visiting Malls Shopping, Entertainment, and
customers prefers organised retail shopping but 36 % customers     Window Shopping.
are still not sure.
                                                                                      Purpose of visiting malls
           Preference of Customers towards retail
                           outlets

         36%                    26%                                                        32%          For Shopping
                                              Unorganised                      36%

                                              Organised                                                 For Entertainment
                                                                                       34%
                                              Not sure
                                38%                                                                     For Window shopping
                         Figure-1
       Preference of Customers towards retail outlets
                                                                                             Figure- -4
Customers preferences towards the retail stores for                                   Purpose of visiting malls
purchase of daily groceries: 38% customer’s purchases daily
groceries from local Grocery stores while 24% customers shop       Customer’s satisfaction on the basis of price strategy
from Supermarkets, 22% customers from Convenience Stores           adopted by malls: 64% Customers are satisfied with the pricing
and rest 16% Customers prefer Hypermarket. Thus, highest           strategy of the malls after considering various discounts, sales
percentage is still with local Grocery stores however the          and other offers, while 36 % Customers are not satisfied
difference between supermarket and local Grocery is less.                        Customers satisfaction on the basis of
          Coutomers preferences towards the retail                                  price strategy adopted by malls
            stores for purchase of daily groceries

           16%                                                                     36%
                                         local kirana stores                                                      Satisfied
                            38%                                                               64%
         22%                             Supermarkets                                                             Unsatisfied
                     24%                 Convenience Stores
                                         Hypermarket
                                                                                             Figure--5
                                                                       Customer’s satisfaction on the basis of price strategy
                                                                                                               pric
                       Figure-2                                                         adopted by malls
    Customers preferences towards the retail stores for
               purchase of daily groceries                         Customers Preference for Best Shopping Deals: It was found
                                                                                                               Deals
                                                                   64%consumers finds best shopping deals in malls with various
Frequency for Visiting Malls: 44% Customers visit fortnightly      Discount offers, gift packages etc. 28% customers are satisfied
to the malls for various different purposes, 32% customers visit   with the shopping deals served by the local Grocery stores while
weekly, 18% monthly and rest 6% Daily visiting mall
                                                 mall.             8% customers has no opinion.
                   Frequency for visiting malls
                                                                             Customers Preference for Best Shopping
            18%            6%                                                                Deals
                                                  Daily                         8%                          Organised
                                32%                                                                         Retailing
                                                  Weekly                  28%                               Unorganised
               44%                                Fortnightly                            64%                Retailing
                                                  Monthly                                                   Not sure


                          Figure - 3                                                       Figure--6
                  Frequency for Visiting Malls                            Customers Preference for Best Shopping Deals


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                                        ________________________________________________ Res. J. Management Sci.
                                                                            _____________
Vol. 1(1), 7-13, August (2012)

Impact of organized retailing on spending 48% consumers
                                    spending:                        vital function in the economy and is a significant source of
declared an increase in spending 28% indicated a decrease and        employment. However, it suffers from huge inefficiencies as
rest 24% no change. Thus the arrival of organized retail has         a result of which consumers do not get what they want. In
enhanced spending in general. The reasons indicated for higher       contrast, organized retail provides consumers with a wider
spending have been mainly the purchase of larger quantities due      choice of products, lower prices, and a pleasant shopping
to wider range of products, availability of attractive offers like   environment.
discounts and promotional schemes, and access to better quality
products with higher price.                                          Conclusion
                                                                     The concept of retail is primitive in Indian context. we had
                                                                     Grocery stores, medical stores and lot many other stores
            Impact of organized retailing on                         working surprisingly well all over the country. Recently
                       spending                                      with the entrance of big players like Walmart or Reliance,
                                                                     people are getting idea of the traditional stores going to be
            24%                                                      vanished. But just to remind us, we should never forget how
                           48%                  Increase             deep rooted is this old concept. The very modern organised
                                                                                               oncept.
                                                                     stores have taken the idea of retailing nowhere else than from
                28%                             Decrease
                                                                     these old shops.
                                                No change
                                                                     The survey concluded that India's organised and unorganised
                                                                     retail sectors can co-exist and flourish. The growth in the
                                                                                            exist
                          Figure-7                                   Indian organized retail market is mainly due to the change in
          Impact of organized retailing on spending                  the consumer’s behaviour. This change has come in the
                                                                     consumer due to increased income, changing, lifestyles, and
Key Findings and Recommendations: The key finding of                 patterns of demography which are favourable. Now the
the research is as follows: i. Unorganized retailers in the          consumer wants to shop at a place where he can get food,
                                                                                                                       c
vicinity of organized retailers have been adversely affected         entertainment, and shopping all under one roof. This has
in terms of their volume of business and profit. Unorganized         given Indian organized retail market a major boost. While on
retail has maintained employment levels perhaps as a result          the other hand the traditional stores are shops where the
of competitive response, ii. The adverse impact on                   various product available are the range of product really
unorganized retailers tapers off over time, iii. The major           required by the customers. They cautiously take care of the
factors that attract unorganized retailers to consumers are          choice of the customers and bring the product which is
proximity, goodwill, credit sales, bargaining, loose items,          demanded by them. They try to satisfy them with the wide
convenient timings, and home delivery, iv. There is clear            range and at the same time maintain a good relationship to
evidence of a competitive response from traditional retailers        retain them and consequently convert them into their loyal
                                                                                                     conve
who are gearing up to meet the threat from organized                 customer. The shopkeepers keeps latest products to their
retailers., v. Consumers have generally gained with the              stores and then learn how is it actually affecting the sales of
emergence of organized outlets through the availability of           products Although there stores have comparatively less
better quality products, lower prices, oneone-stop shopping,         product range the selection made is quite relevant. Having
choice of additional brands and products, family shopping,           looked at the features let us find the loopholes. However
and fresh stocks. Lower income consumers have saved more             good is the ambience and wide is the product range, when it
from purchases at organized outlets.                                 comes the selling price of the various goods, traditional
                                                                     shops are always more efficient than these newly evolved
These results are not indicative of the countrywide scenario.        stores. These retail shops lacking the interaction with the
                                                                                      tail
For the country as a whole, unorganized retail is growing at a       customers have miserably failed in building base with loyal
reasonable rate and will continue to do so for many years to         customer. No matter how much the companies talk about
come. Yet it is clear that the growth in demand for retail           CRM (customer relationship management), when it comes to
business is likely to substantially exceed any possible supply       the implementation they endeavour it only through the
response coming exclusively from the unorganized retailers.          discount sales driven by their profit motive. Thus, in India it
India is at the crossroads with regard to the retail sector.         is quite doubtful that the organised retail will be ever able to
Several emerging market economies have gone ahead and                overcome the unorganised retail completely. The values,
reaped the benefits of modern retail. India is however a             culture and beliefs of the customers prompt them to go the
latecomer to organized retail expansion and the picture still        same retail shop where they can get the product required, at
remains unclear as to its future direction. The study                low price and with least waiting time for billing. No matter
advocates a balanced approach to retail and suggests that the        how lucrative is this sector and how bright is the market; the
government plays a major role in shaping its future course.          organised sector in retailing has to go a long way to
There is no doubt that traditional retail has been performing a      understand the customer requirement.


 International Science Congress Association                                                                                 12
Research Journal of Management Sciences _________________________________________________ Res. J. Management Sci.
Vol. 1(1), 7-13, August (2012)

References                                                        5. Dave Sumita, Shikha Sondhi and Saket Ranjan Praveer,
                                                                     Effectivness of E-Tailing in the era of Techno Revolution
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    Marketing, (13-17) (2004)                                        Journal of Marketing and Communication, 4, (80-88)
 3. Joseph Mathew, Nirupama soundararajan, Manisha Gupta,            (2008)
    and Sanghamitra Sahu Impact of Organised Retailing on         7. Dixon, T J. The Role of Retailing in Urban Regenera-tion,
    Unorganised Sector Working paper ICRIER, 222 (2008)              Local Economy, 20(2), 168-182 (2005)
 4. Baseer Amatual and G.Laxmi Prabha, Prospects and              8. Venkatshwarlu,H. and C.V.Ranjani, Small Vs Mall -
    problems of Indian retailing - Indian Journal of Marketing,      Indian Journal of Marketing,29-33 (2007)
    (26-28) (2007)




 International Science Congress Association                                                                           13

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2.isca rj mgt-s-2012-003

  • 1. Research Journal of Management Sciences _____________________________________ Res. J. Management Sci. Vol. 1(1), 7-13, August (2012) Effect of Orgenised retail on Unorgenised retail in Indian retail market Gupta Himanshu1 Dubey Neetu2 and Patani Pawan3 1 Pioneer Institute of Professional Studies, Indore, INDIA 2 Institute of Management and research, IPS Academy, Indore, INDIA 3 Pioneer Institute of Professional Studies, Indore, INDIA Available online at: www.isca.in Received 25th May 2012, revised 28th June 2012, accepted 30th June 2012 Abstract Retail is currently the flourishing sector of the Indian economy. This trend is expected to continue for at least the next two- three decades, and it is attracting huge attention from all entrepreneurs, business heads, investors as well as real estate owners and builders. Availability of quality, retail space, wider availability of products and brand communication are some of the factors that are driving the retail in India Retail sector is also supporting to create huge employment while a new form of organized retail sector has emerged within the retail industry and it gave speedy phase to Indian retail sector. The rationale of the study is twofold: First, to examine the nature of changes in the retail sector taking place due to organized form of retailing and implications of shift to this new form of retailing. Secondly, this area has remained largely an unexplored part of research till date especially in the Indian context. The broad objective of the study is to understand consumer behavior towards organised and unorganised retail stores and to find out the consumers satisfaction level from organised retail stores as well as unorganised retail stores. The perception of the traditional retailers about the modern retailing. The study uses primary data collected through in depth qualitative analysis to represent organized and unorganized retails sectors respectively. Keywords: Orgenised retail, unorgenised retail, consumer satisfaction, consumer behavior Introduction The most important debate concerning the implications for the expansion of the organized retailing in India revolves around India started its Retail Journey since ancient time. In Ancient whether it is going to have positive impacts on the economy as a India there was a concept of weekly HAAT, where all the buyers whole as compared to the traditional unorganized form of and sellers gather in a big market for bartering. It takes a pretty retailing. According to one camp, it has overall positive impacts long times to and step to shape the modern retail. In between in terms of generating more number of employments, new these two concepts (i.e. between ancient retail concept and the diversified forms of employments, and improving the nature of modern one there exist modern Grocery/ mom and pop shops or retail employment (higher salary, more job benefits, security of Baniya ki Dukan. Still it is predominating in India So the Indian job, employability etc). This form of retail sector is also looked retail industry is divided into two sectors- organized and upon as a huge sector having immense business opportunities unorganized. The Indian retail industry is now beginning to for entrepreneurs and capital investors. Moreover, organized evolve transformation that has swept other large economies. retailing is considered to be efficient and apt to cater to the There is a vast change in Indian retail, the liberalization of the diversified and changing nature of the consumer demands in consumer goods industry initiated in the mid-80’s and accelerated growing economies like India. The general benefits of organized through the 90’s has begun to impact the structure and conduct of retail also include improved supply-chain, improved the retail industry. The concept retail, which includes the marketability of farmer’s produce and it is also expected that it shopkeeper to customer interaction, has taken many forms and will contribute to heightened economic activity. The extensive dimensions, from the traditional retail outlet and street local research brought me to conclude that departmental stores are market shops to upscale multi brand outlets, especially stores or soon emerging on the top priority lists, amongst the shopping departmental stores. spree in Delhi, as they seem to derive immense pleasure as shopping is considered as a experience now rather than a task Hence, focusing on two aspects of retail marketing i.e. store and exposure to variety under one roof in their extremely busy retailing and non store retailing. Store Retailing as the lives, when they don’t have time for things. departmental store, which is a store or multi brand outlet, offering an array of products in various categories under one The organized retail food and grocery stores make constant roof, trying to cater to not one or two but many segments of the efforts to induce customers to visit the store by discount offers. society and Non store retailing as the direct selling, direct Most of these stores believe in creating not just a marketing marketing, automatic vending. activity with its customers, but rather favor relationship building with him so as to convert first time customers into a client. They International Science Congress Association 7
  • 2. Research Journal of Management Sciences _________________________________________________ Res. J. Management Sci. Vol. 1(1), 7-13, August (2012) provide better parking facilities to customers and the facility to In any newspaper or television channel, we find hordes of news examine the product. They also offer a wide range of payment about happening in organized retail sectors, which is indeed options to customers. fairly real situation. While the role of organized retail sector in growth of economy cannot be denied, but one thing is also of India is currently the twelfth largest consumer market in the extreme importance that unorganized retail format is a support world. According to a study by McKinsey Global Institute, to a large chunk of population- providing direct employment to India is likely to join the premier league of the world’s 39,500,000 individuals. So there is no way that government or consumer markets by 2025 improving its position to the fifth. anyone can discount these foundation stone of Indian economy. But this growth is not going to happen is smooth way. Any change always comes up with some friction and Indian retail Changing landscape of Indian consumerism: The face of sector is and will be witnessing the same friction. Indian retail Indian consumerism is changing: not Indian consumerism is sector is still in its nascent form if we consider its full potential. evolving from Bajaj Scooter family man to Bajaj Pulsar trendy While most of the developed market of US and Europe and also youngster. This changing consumer’s taste and lifestyle, some SE Asian emerging market economies have reaped the somewhere automatically give some advantage to organized benefits of modern retail, India has not yet entered into sector. This makes imperative for unorganized retail sector to advanced phase of modern retail forms. Unorganized retailing, restructure itself in order to withstand the increasing on the other hand, refers to the traditional formats of low-cost competition and to meet consumer expectations by moving with retailing, for example, hand cart and payment vendors, and trends. What they can do and what they are doing, some of these mobile vendors, the local Grocery shops, owner manned general issues will be discussed in future parts of article. stores, paan / beedi shops, convenience stores, hardware shop at the corner of your street selling everything from bathroom Role of government: As in other countries, government policy fittings to paints and small construction tools; or the slightly can and should play an important role in modernizing the more organized medical store and a host of other small retail unorganized sector and improve its competitiveness. But businesses in apparel, electronics, food etc. Small-store retailing question is what should be exact role of government. Should it has been one of the easiest ways to generate self-employment, go for policies for protection of traditional retailers by as it requires limited investment in land, capital and labor. It is restricting organized retail or encourage organized retail to reap generally family run business, lack of standardization and the benefits that are generated by it? What should be mechanism to retailers who are running this store they are lacking of promote or protect one or other? Can government act only as a education, experience and exposure. This is one of the reasons facilitator or enablers or both? why productivity of this sector is approximately 4% that of the In the said context, it is imperative to develop a strategic U.S. retail industry. Unorganized retail sector is still roadmap for unorganized retail form to be able to survive, predominating over organized sector in India, unorganized retail compete and keep the economy growing. sector constituting 98% (twelve million) of total trade, while organized trade accounts only for 2%. Retail Trends in past few years: Before the decade of eighties, India with hundreds of towns and cities was a nation striving for The road side hawkers and the mobile (pushcart variety) development. The evolution was being witnessed at various retailers. The Grocery stores (the Indian equivalent of the mom- levels and the people of the nation were learning to play and-pop stores of the US), within which are: i. Open format different roles as businessmen and consumers. The foundation more organized outlets, ii. Small to medium food retail outlets. for a strong economy were being laid, youth were beckoning new awareness in all spheres. And this brought in an Modern trade or organized retailers within modern trade, we opportunity for retail industry to flourish. First in the metros and have: i. The discounter (Subhiksha, Apna Bazaar, Margin Free), major cities later to impact sub urban and rural market as well. ii. The value -for- money store (Nilgiris), iii. The experience Retailing in India at this stage was completely unorganized and shop (Food world, Trinethra). Iv. The home delivery it thrived as separate entities operated by small and medium (Fabmart)Tug of war: entrepreneurs in their own territories. There was lack of international exposure and only a few Indian companies Organized vs. Unorganized Sector: Future of retail sector in explored the retail platform on a larger scale. From overseas India is swerving- on one side organized retail is marching into only companies like Levi's, Pepe, Marks and Spencer etc. had life of urban consumers, while on the other our own entered targeting upper middle and rich classes of Indians. neighborhood ‘Grocery stores’ are resisting fiercely with their However as more than 50 % population was formed by lower existing strong foothold. India today is at the crossroads with and lower middle class people, the market was not completely regard to the retail sector. A shift between organized and captured. This was later realized by brands like Big Bazaar and unorganized retail sector is evident, which has led to a number Pantaloons who made their products and services accessible to of speculations on the fate of Indian retail. Unorganized sector all classes of people and today the success of these brands cannot ignore. proves the potential of Indian retail market. A great shift that ushered in the Indian Retail Revolution was the eruption of International Science Congress Association 8
  • 3. Research Journal of Management Sciences _________________________________________________ Res. J. Management Sci. Vol. 1(1), 7-13, August (2012) Malls across all regional markets. Now at its peak, the mall Mathew Joseph: Unorganized retailers in the vicinity of culture actually brought in the organized format for retailing in organized retailers experienced a decline in their volume of India which was absent earlier. Though malls were also initially business and profit in the initial years after the entry of large planned for the higher strata, they successfully adapted to cater organized retailers. The adverse impact on sales and profit to the larger population of India. And it no wonder, today malls weakens over time. There was no evidence of a decline in are changing the way common Indians have their shopping overall employment in the unorganized sector as a result of the experience. However there is still great scope for enhancing entry of organized retailers. There is some decline in Indian mall culture as other than ambience and branding many employment in the North and West regions which, however, other aspects of Retail Service remains to be developed on also weakens over time. The rate of closure of unorganized international standards. it is surprise that there was not a single retail shops in gross terms is found to be 4.2 per cent per mall in India a decade before and just a few years ago only a annum which is much lower than the international rate of handful of them were striving, today there are more than 50 closure of small businesses. The rate of closure on account of malls across different cities and 2 years from now around 500 competition from organized retail is lower still at 1.7 per cent malls are predicted to come up. Indeed this shows a very per annum. There is competitive response from traditional promising trend ahead, however before taking a leap into the retailers through improved business practices and technology future of Retail in India, let's see what the Indian retail Industry upgradation. A majority of unorganized retailers is keen to stay is currently occupied with. in the business and compete, while also wanting the next generation to continue likewise. Small retailers have been Review of literature: Purohit and kavita according there studies extending more credit to attract and retain customers. However, that the traditional retailers are not very much clear about the only 12 per cent of unorganized retailers have access to consequences of the modern retailing the traditional retailers are institutional credit and 37 per cent felt the need for better access netural or undecided, modern retailing will cut the profit margin to commercial bank credit. Most unorganized retailers are of the traditional retailers; the modern retailing will lead healthy committed to remaining independent and barely 10 per cent compition in the market, modern retailing will reduce the sales preferred to become franchisees of organized retailers. volume of the traditional retailers and traditional retailers should improve customer care services in the era of modern retailing. The objectives of the research are: i.To find out the consumer behavior towards organised (supermarkets/malls, hypermarkets, Shaoni Shabnam: It is important to highlight that in organized departmental storesetc) and unorganized (local Grocery stores, retail, the status of employment is much better than that in weekly bazaars etc) retail stores in Indore, ii. To find out the unorganized retail. Hence it is definitely desirable that more and consumers satisfaction level from organised retail stores as well more labour gets absorbed in this sector of retail. In the current as unorganised retail stores. context, the labour employed in unorganized retail stands unfit for finding employment in organized retail. If appropriate Research Methodology training and skills could be imparted to them, it is possibly feasible to offer better forms of employment to them in the The data for this research paper has been taken from primary organized retail sector. The status of employment is much better data collected by a survey of the retailers between Dec 2010 and than that in unorganized retail. Hence it is definitely desirable May 2011 for the doctoral thesis being prepared by the author, that more and more labour gets absorbed in this sector of retail. for submission to The DAVV University, Indore, India. In the current context, the labour employed in unorganized retail stands unfit for finding employment in organized retail. If Sampling Method: The sampling method chosen is simple appropriate training and skills could be imparted to them, it is random sampling which is a type of probability sampling. possibly feasible to offer better forms of employment to them in the organized retail sector. Sample Size: To calculate the sample size following formula was used. If the researcher plans the results in a variety of ways Meeta Punjabi: According there study they suggest that the or if he/she has difficulty in estimating the proportion or development efforts in this area are based on three grounds: standard deviation of the attribute of interest, the following First, farmers associated with the modern value chains earn formula may be more useful. ୒୞ଶ×ଶହ higher returns than selling to the traditional markets. Second, ݊= {ୢଶ × (୒ିଵ)} ା {୞ଶ × ଶହ} the modern supply chains have specific quality requirements Where n= Sample size required, d= Accuracy precision level which are easier to meet by the large and medium farmers and (i.e 0.01, 0.05, 0.10 etc.), Z= Standardization value indicating a the small farmers tend to get left out of these markets. Third, confidence level (Z= 1.96 at 95% confidence level and Z= 2.56 there are several successful examples of linking small farmers to at 99% confidence level N= Population Size (known or these modern value chains with effort from government estimated) agencies, NGOs and development agencies. This knowledge Here N= 180 Let us take confidence level as 90% and ± 10% presents strong grounds for a closer look at the emerging sector precision level (d=0.10 and Z= 1.64), then the sample size (n): in India. International Science Congress Association 9
  • 4. Research Journal of Management Sciences _________________________________________________ Res. J. Management Sci. Vol. 1(1), 7-13, August (2012) ଵ଼଴×(ଵ.଺ସ)ଶ×଴.ଶହ the initial years after the entry of large organized retailers. n= ଵ଼଴×(ଵ.଺ସ)ଶ×଴.ଶହ According to the Indian Council for Research in Impact of n = 49.15 = 50 companies Organised Retailing on Unorganised sector International Economic Relations (ICRIER), there would be no long term There are many traditional and modern retailers were sent the impact due to the entry of organised retail chains on the 201.72Questionnaire, which was structured in nature. These neighbourhood irana shops in the country. In clear terms the retailers were located Indore. Questionnaires were filled by impact of organised retailing on unorganised sector is as direct interview. The Questionnaire was filled mostly by follows: i.The adverse impact on sales and profit weakens over retailers. time, ii.There is some decline in employment in the North and West regions which, however, also weakens over time., iii. The Questionnaire Testing and Reliability Analysis: The rate of closure of unorganized retail shops in gross terms is questionnaire was pretested on 38 retailers and data was fed into found to be 4.2% per annum which is much lower than the SPSS software. Using SPSS reliability analysis was conducted. international rate of closure of small businesses., iv. The rate of The validity of the questionnaire was tested by using expert closure on account of competition from organized retail is lower validity, which is part of expert validity. The Experts approved still at 1.7% per annum. the questionnaire with small modifications. The revised questionnaire was administered and data was collected from 50 The Grocery stores and pan shops are seen as part of community retailers in Indore. life and hence unorganised retail will stay but ICRIER observes that if organised retail does not grow, the unorganised sector Survey: A two page, Questionnaire was designed keeping in will not be able to handle the surging demand. Hence the share mind the objectives of the study which were To analyze the of organised retail will grow at a rate between 45 and 50% per impact of orgenised retailing on unorganized retail and to find annum. The observation rings true as well, this is being out the survival strategies adopted by unorgenised retailers in witnessed in some urban centres already. mall culuture. The Literature survey and pre study consultation with industry experts were taken into account. The It has come out with certain valuable recommendations. It questionnaire consisted of few open ended questions, some suggests a nationwide uniform licensing policy to aid modern questions were either using ranking scale or Likert scale, and retailing which will help carry the countries retail sector to the dicotomes type of questions and open ended question. USD (US Dollar) 590 billion mark in 2011-12. It suggests better access to cheaper institutional credit so the Grocery stores can This survey intends to analyse the impact of organised retailing take on competition from organised retail. Presently, only 12% on unorganised retail sector in Delhi/NCR. This research of unorganised retail enjoys access to institutional credit. explicates various aspects like the perceived and expected levels Another recommendation by ICRIER is worth a serious try. It of satisfaction of the consumers and the factors which suggests cash and carry outlets which will sell to unorganised unorganised retailer should take cognizance of in the course of retail and procure from farmers. This can help unorganised retail establishing and enhancing their business. to buy at wholesale prices for eventual retailing, thereby generating a handsome margin. Farmers too can benefit since The survey is based on interviewing grocery store consumers at they can sell at lucrative prices and realise the sale proceeds in a various catchment areas in Indore, India. Four areas swift and transparent manner. Once this cushion is provided, Gumastanagar, Sch no71, A.B Road, Laxmi Nagar are selected unorganised retail can have no grouse against the government based on number of households and income groups in the and even if it has, the government can ignore it. Being catchments. The data is collected using a random sample of unorganised retailing is at serious step; there are still challenges consumers. Consumers who have significant knowledge of the for organised retailing in India. Traditional retailing has been topic were identified and selected at random for questioning. As established in India for some centuries. It has a low cost per questionnaire, interviews were conducted face to face so as structure, mostly owner operated, has negligible real estate and to capture the attitude and experience of consumers who had labour costs and little or no taxes to pay. Consumer’s familiarity just purchased grocery items from organised and unorganised that runs from generation to generation is one big advantage for retail outlets. Both qualitative and quantitative data analysis is the traditional retailing sector. In contrast, players in the done in order to get deeper insights into the consumer behaviour organised sector have big expenses to meet, and yet have to and store loyalty for local grocery stores. Larger the sample size keep prices low enough to be able to compete with the greater is the precision or reliability when research is replicated. traditional sector. Moreover, organised retailing also has to cope But constraints on time, manpower and costs have influenced with the middle class psychology that the bigger and brighter decisions on the study sample size. sales outlet is, the more expensive it will be. Impact of Organised retailing on Unorganised sector: Unorganized retailers in the vicinity of organized retailers experienced a decline in their volume of business and profit in International Science Congress Association 10
  • 5. Research Journal of Management Sciences ___ ________________________________________________ Res. J. Management Sci. _____________ Vol. 1(1), 7-13, August (2012) Results and Discussion Purpose of visiting malls: 32% Customers visit mall for Shopping while 36% visits for Entertainment and rest 34 % its Preference of Customers towards retail outlets 38% etail outlets: visits for Window shopping. During the survey, I got straight customers prefers unorganised retail shopping while 26% forward Purpose of visiting Malls Shopping, Entertainment, and customers prefers organised retail shopping but 36 % customers Window Shopping. are still not sure. Purpose of visiting malls Preference of Customers towards retail outlets 36% 26% 32% For Shopping Unorganised 36% Organised For Entertainment 34% Not sure 38% For Window shopping Figure-1 Preference of Customers towards retail outlets Figure- -4 Customers preferences towards the retail stores for Purpose of visiting malls purchase of daily groceries: 38% customer’s purchases daily groceries from local Grocery stores while 24% customers shop Customer’s satisfaction on the basis of price strategy from Supermarkets, 22% customers from Convenience Stores adopted by malls: 64% Customers are satisfied with the pricing and rest 16% Customers prefer Hypermarket. Thus, highest strategy of the malls after considering various discounts, sales percentage is still with local Grocery stores however the and other offers, while 36 % Customers are not satisfied difference between supermarket and local Grocery is less. Customers satisfaction on the basis of Coutomers preferences towards the retail price strategy adopted by malls stores for purchase of daily groceries 16% 36% local kirana stores Satisfied 38% 64% 22% Supermarkets Unsatisfied 24% Convenience Stores Hypermarket Figure--5 Customer’s satisfaction on the basis of price strategy pric Figure-2 adopted by malls Customers preferences towards the retail stores for purchase of daily groceries Customers Preference for Best Shopping Deals: It was found Deals 64%consumers finds best shopping deals in malls with various Frequency for Visiting Malls: 44% Customers visit fortnightly Discount offers, gift packages etc. 28% customers are satisfied to the malls for various different purposes, 32% customers visit with the shopping deals served by the local Grocery stores while weekly, 18% monthly and rest 6% Daily visiting mall mall. 8% customers has no opinion. Frequency for visiting malls Customers Preference for Best Shopping 18% 6% Deals Daily 8% Organised 32% Retailing Weekly 28% Unorganised 44% Fortnightly 64% Retailing Monthly Not sure Figure - 3 Figure--6 Frequency for Visiting Malls Customers Preference for Best Shopping Deals International Science Congress Association 11
  • 6. Research Journal of Management Sciences ___ ________________________________________________ Res. J. Management Sci. _____________ Vol. 1(1), 7-13, August (2012) Impact of organized retailing on spending 48% consumers spending: vital function in the economy and is a significant source of declared an increase in spending 28% indicated a decrease and employment. However, it suffers from huge inefficiencies as rest 24% no change. Thus the arrival of organized retail has a result of which consumers do not get what they want. In enhanced spending in general. The reasons indicated for higher contrast, organized retail provides consumers with a wider spending have been mainly the purchase of larger quantities due choice of products, lower prices, and a pleasant shopping to wider range of products, availability of attractive offers like environment. discounts and promotional schemes, and access to better quality products with higher price. Conclusion The concept of retail is primitive in Indian context. we had Grocery stores, medical stores and lot many other stores Impact of organized retailing on working surprisingly well all over the country. Recently spending with the entrance of big players like Walmart or Reliance, people are getting idea of the traditional stores going to be 24% vanished. But just to remind us, we should never forget how 48% Increase deep rooted is this old concept. The very modern organised oncept. stores have taken the idea of retailing nowhere else than from 28% Decrease these old shops. No change The survey concluded that India's organised and unorganised retail sectors can co-exist and flourish. The growth in the exist Figure-7 Indian organized retail market is mainly due to the change in Impact of organized retailing on spending the consumer’s behaviour. This change has come in the consumer due to increased income, changing, lifestyles, and Key Findings and Recommendations: The key finding of patterns of demography which are favourable. Now the the research is as follows: i. Unorganized retailers in the consumer wants to shop at a place where he can get food, c vicinity of organized retailers have been adversely affected entertainment, and shopping all under one roof. This has in terms of their volume of business and profit. Unorganized given Indian organized retail market a major boost. While on retail has maintained employment levels perhaps as a result the other hand the traditional stores are shops where the of competitive response, ii. The adverse impact on various product available are the range of product really unorganized retailers tapers off over time, iii. The major required by the customers. They cautiously take care of the factors that attract unorganized retailers to consumers are choice of the customers and bring the product which is proximity, goodwill, credit sales, bargaining, loose items, demanded by them. They try to satisfy them with the wide convenient timings, and home delivery, iv. There is clear range and at the same time maintain a good relationship to evidence of a competitive response from traditional retailers retain them and consequently convert them into their loyal conve who are gearing up to meet the threat from organized customer. The shopkeepers keeps latest products to their retailers., v. Consumers have generally gained with the stores and then learn how is it actually affecting the sales of emergence of organized outlets through the availability of products Although there stores have comparatively less better quality products, lower prices, oneone-stop shopping, product range the selection made is quite relevant. Having choice of additional brands and products, family shopping, looked at the features let us find the loopholes. However and fresh stocks. Lower income consumers have saved more good is the ambience and wide is the product range, when it from purchases at organized outlets. comes the selling price of the various goods, traditional shops are always more efficient than these newly evolved These results are not indicative of the countrywide scenario. stores. These retail shops lacking the interaction with the tail For the country as a whole, unorganized retail is growing at a customers have miserably failed in building base with loyal reasonable rate and will continue to do so for many years to customer. No matter how much the companies talk about come. Yet it is clear that the growth in demand for retail CRM (customer relationship management), when it comes to business is likely to substantially exceed any possible supply the implementation they endeavour it only through the response coming exclusively from the unorganized retailers. discount sales driven by their profit motive. Thus, in India it India is at the crossroads with regard to the retail sector. is quite doubtful that the organised retail will be ever able to Several emerging market economies have gone ahead and overcome the unorganised retail completely. The values, reaped the benefits of modern retail. India is however a culture and beliefs of the customers prompt them to go the latecomer to organized retail expansion and the picture still same retail shop where they can get the product required, at remains unclear as to its future direction. The study low price and with least waiting time for billing. No matter advocates a balanced approach to retail and suggests that the how lucrative is this sector and how bright is the market; the government plays a major role in shaping its future course. organised sector in retailing has to go a long way to There is no doubt that traditional retail has been performing a understand the customer requirement. International Science Congress Association 12
  • 7. Research Journal of Management Sciences _________________________________________________ Res. J. Management Sci. Vol. 1(1), 7-13, August (2012) References 5. Dave Sumita, Shikha Sondhi and Saket Ranjan Praveer, Effectivness of E-Tailing in the era of Techno Revolution 1. Agrwal Vaishli and Sanjay Mishra (2008), Role of in retailing With respect to Vending Machines-Journal of Retailers in redusing inventory and improving customer Marketing and Communication, 4, (71-79) (2008) satisfaction: An empirical study of consumer durables - Indian Journal of Marketing, (36-43) (2008) 6. Gupta C.P. Rajeev Agarwal and Madhulica sinhaOrganised Retailing and its effect on consumer 2. Bhatnagar Gitanjali , Retail Revolution -Indian Journal of buying behavior with special reference to Agra city - Marketing, (13-17) (2004) Journal of Marketing and Communication, 4, (80-88) 3. Joseph Mathew, Nirupama soundararajan, Manisha Gupta, (2008) and Sanghamitra Sahu Impact of Organised Retailing on 7. Dixon, T J. The Role of Retailing in Urban Regenera-tion, Unorganised Sector Working paper ICRIER, 222 (2008) Local Economy, 20(2), 168-182 (2005) 4. Baseer Amatual and G.Laxmi Prabha, Prospects and 8. Venkatshwarlu,H. and C.V.Ranjani, Small Vs Mall - problems of Indian retailing - Indian Journal of Marketing, Indian Journal of Marketing,29-33 (2007) (26-28) (2007) International Science Congress Association 13