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Shoppers’ Interaction with Visual Merchandising

Elements in Organized Grocery Stores

Anushree Agnihotri and Prathap Oburai

KEY WORDS: Retail in India; Organized Grocery Stores; External Visual Merchandising; In -store
Visual Merchandising.

INTRODUCTION AND LITERATURE SURVEY

The Indian economy seems to be on a growth spin and the country has appeared as the
fourth largest economy in the world on a purchasing power parity basis. The Indian
business environment quality has also improved to a noticeable extent and this is
apparent as India has attained a position of 43rd rank (GCI Rankings, 2006-07) in the
World Economic Forum's Global Competitiveness Index. Concurrently, Indian retail
industry has been graded among the ten major retail markets in the world economy
(FICCI-BISNET, 2008) and ranked at the top in Asian retail markets (A.T. Kearney
GRDI, 2005). This shows that competition has gripped all the sectors of business
including retail in India. As a result there is an attitudinal shift of the Indian consume r in
terms of choice and value for money. Shoppers are becoming more aware and
knowledgeable about product display, formats and practices of retailing to uphold a
consciousness for lifestyles and shopping standards.

In the most recent years, Indian shoppers have undergone a remarkable trans formation in
their lifestyles by shifting from conventional shopping notions for foodstuff, groceries
and apparel to upgraded standards in categories that deliver enhanced quality and
experience (FICCI- BISNET, 2008).

Keeping this in view, a store must possess an environment which has an appealing
merchandise display that can trigger the shoppers’ buying eagerness and intent, which
can alongside help in coping with the changing environment and rising expectations.

Anushree Agnihotri, Wing 14K , Indian Institute of Management, Vastrapur, Ahmedabad 380
015, India • Phone: 079 66324940 • E-mail: anushree@iimahd.ernet.in.

Prathap Oburai, Wing 15, Indian Institute of Management, Vastrapur, Ahmedabad 380 015,
India • Phone: 079 66324942 • E-mail: prathap@iimahd.ernet.in.

3rd IIMA Conference on Marketing Paradigms for Emerging Economies

There are various aspects in retail which actually contribute to the sales of merchandise
but display is a factor which speaks louder than everything else. Eighty per cent of our
impressions are shaped by sight that is why one picture is worth a thousand words (Holly
et al., 1991).

Visual merchandising is not a mere arrangement of products but goes deeper and wider
into the essence of physicality of the store (Davies and Ward, 2005). It can be viewed as
all the things the shopper witnesses, both exterior and interior, which shape a constructive
impression of the store and result in higher purchase action at the shoppers’ end. More
attempts should be made to improve the visual merchandising elements so as to make it
easier for the shoppers to locate the stuff they need or wish for.

merchandising can be considered to constitute a fat chunk of the overall retail function of
the marketing discipline. It is an indispensable, sophisticated and encompassing
component (can also be identified as a stratagem) of the retail sector. The Visual
Stimulation term figured by Kerfoot et al. (2003) has a significant position in the
lives of retailers and academicians (McGoldrick, 2002). This concern in fact, guides
towards the formulation of new visual merchandising elements and practices all over the
world. But visual merchandising has still been inadequately responded to (Lea-
Greenwood, 1998).

The value magnitude of visual merchandising had been recognized in the world long ago,
around the year 1897. In 1897, Lyman Frank Baum realized a need for ‘The Show
Window’ magazine regarding window display. Holly, et al. (1991) has also
acknowledged that visual merchandising is second only to effective customer relations.

Surprisingly, physical visual merchandising is still a neglected customer-facing contact


channel in India. It is at its rudimentary stage only, possibly because visual
merchandising has its own progression of motion everywhere! Additionally, there has
been a notable paucity of research studies in physical visual display of merchandise
assortments in India . The paradox stands here that though visual merchandising is a key
contributor towards the sales of product assortments, it often goes unnoticed in the Indian
retail management scenario. Conversely, the retail literature is slowly but surely
flourishing for in-store physicality and display in apparel, accessories and fashion
retailing (Thompson and Chen, 1998) almost everywhere in the world leaving the food
and grocery

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facade somewhere behind. The attention is largely nonexistent for visual


presentations at food and grocery stores. Till now literature was spinning around the
macro level aspects of retail (retail formats, organized Indian retail and visual display and
store design) which appeared ill-suited for all the product categories to view this
customer-facing contact channel (visual merchandising). The findings of the paper by V.
Zeithaml (1988), stated that shopper perception keeps on changing with the changing
competitive environment, transparency of information leading to added knowledge and
growing expectations. Shoppers formulate a positive outlook for anything that reduces
their search time, locating and expenses. Improved visual merchandising practices and
easy product display can help shoppers save their time and expenses.

The present study illustrates an effort towards addressing this insufficiency from the
shoppers’ perspective. It explores the food and grocery store visual merchandising
of organized retail, which is a less traversed path.
RESEARCH OBJECTIVES

1. To explore how the visual merchandising elements are being used by organized
grocery retailers in India.

2. To recognize the relative importance of the visual merchandising elements


used in the grocery store by shoppers.

3. To identify which visual merchandising element is most preferred by shoppers


in a grocery arrangement.

4. To trace variations in the preference of visual merchandising elements across


demographic variables.

The Organized Food and Grocery Sector

In the present scenario, food and grocery is not just related to food items and fresh
vegetables but it extends far beyond that. Shoppers now look for convenience, style,
display, easy accessibility and a complete shopping experience.

Food and Grocery store visual merchandising has been preferred as a suitable research
domain because of the entrenched links between growing organized food and grocery
retail, lifestyle of shoppers and their shopping notions. • 52 per cent of the growing
consumer expenditure is accounted for food and
grocery (www.austrade.gov.au/ArticleDocuments/1418/RTE3 -Presentation
Harsh-Puri.pdf.aspx).

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• Food and grocery is the fastest growing segment . If we see the organized retail
industry as a whole, food and grocery is the leading sector with 59.5 per cent
share, valued at Rs 792,000 crore , followed by apparel sector at 9.9 per cent
share valued at Rs 131,300 crore (Singh, 2008).

• Supermarkets are becoming more prominent and Hypermarkets contributing


better choice at lower prices, expected to dominate (ATK Retail Survey, 2005).
• Early mover advantage is still available in grocery retail (Denstadli et al.,
2005).

Visual merchandising in the Indian context has not evolved much on this front. As the
study focuses on ‘food and grocery store visual merchandising’, the six organized pan-
India grocery retail chains (Spencer’s, More, Food Bazaar, Reliance Fresh, Indiabulls and
Star India Bazaar) were assumed to be most ideal for the present exploration.

RESEARCH METHODOLOGY

This study has been split into two research phases.


Phase I

This phase is exploratory and qualitative in nature. An observation research (Instore and
exterior) has been carried out in six organized pan-India grocery retail chains (Spencer’s,
More, Food Bazaar, Reliance Fresh, Indiabulls and Star India Bazaar) of Ahmedabad city
to understand the visual merchandising elements they have adopted. As an outcome, a
total of nine elements have been chosen for this study assuming their relevance attached
to any Indian organized grocery store. Exterior Visual Merchandising Elements

• Marquees

• Entryway

• Store windows

In-store Visual Merchandising Elements • Store layout plan

• Color

• Lighting

• In-store signage

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• Merchandise sequencing style • Fixtures and Hardware

The above in-store visual merchandising elements were found analogous and consistent
with the findings of Kerfoot et al., (2003).

Phase II

In this phase an empirical field research would be conducted to find the significance and
value the shopper connects, to each of the nine elements of visual merchandising
(recognized in Phase I). To measure shoppers’ overall assessment of these elements, a
self-administered structured questionnaire would be constructed and piloted.

SAMPLE DESIGN

Population and Sample Size

A sample of shoppers from Ahmedabad a mini metro city of Gujarat would be selected
and surveyed. Convenient sample of 150 shoppers would be drawn from randomly
selected 6 stores of each of the pan-India grocery retail chain under this study.

25 shoppers × 6 stores = 150 respondents + 6 store managers (N = 156)


Shopper’s Profile

As the buying decision about groceries is generally taken by housewives, the researcher
would survey female respondents (not strictly housewives). The age of the subjects will
range from 21 to 50 years, across all the socio-economic backgrounds.

Contact Method and Research Instrument 3

‘In-depth Interviews’ would be conducted for 6 grocery store managers and


‘Questionnaire’ would be administered for 150 grocery shoppers.

The instrument would be administered methodically to the shoppers outside the store
immediately after their experience and interaction with the visual merchandising
elements on randomly picked week days. Shoppers would be asked to cooperate by
providing complete response to the questions, so that more accurate outcomes can be
attained.

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Pilot-testing of the Instrument

The questionnaire would be pilot-tested on 15 female respondents (approximately 10 per


cent of the main survey sample size) belonging to different age groups, household
income levels and socio-economic backgrounds. Based on their responses, the
required modifications would be made in the instrument. The amended questionnaire
would be used for the further study.

Data Analysis and Results

Statistical Analysis Software (SAS) would be used to analyze the data collected. Test of
mean and regression analysis would be employed as tools. This paper proposes to map
the effects of the visual merchandising elements on the overall assessment of store visual
merchandising from shoppers’ perspective. This study focuses on the shoppers’
preference amongst the in-store visual merchandising elements and exterior visual
merchandising elements. The author proposes to portray the findings in the final paper.

IMPLICATIONS

This study is among the first to offer a comprehensive picture of the most neglected face
of the modern organized grocery stores in India. It exemplifies an association of the in-
store and exterior visual merchandising elements with the shoppers’ preferences in an
organized grocery setting. This paper proposes to draw the facts, which will help the store
managers in recognizing the significance of visual merchandising elements on the
overall assessment of store visual merchandising. Implications would be extended in
the final paper.

REFERENCES
Bastow-Shoop, H.; Dale , Z. and Gregory , P. (1991). Visual Merchandising : A Guide for Small
Retailers, Arnes, IA : Iowa State University.

, B.J. and Ward , P. (2005) . “Exploring the Connections between Visual Merchandising and
Retail Branding,” International Journal of Retail & Distribution Management, 33( 7) ,
505-13. Denstadli, J.M .; Lines , R. and Gronhaug, K. (2005). “First Mover Advantages in the Discount
Grocery Industry ,” European Journal of Marketing, 39(7 / 8), 872-84.

Kerfoot, S.; Davies , (2003). “Visual


B. and Ward , P . Merchandising and
the Creation of
Discernible Retail
Brands,”
International
Journal of Retail
and Distribution
Management,
31 (3), 1 43-52.
Lea-Greenwood, G. (1998). “Visual
Merchandising: A
Neglected Area in
UK Fashion
Marketing?”
International
Journal of Retail
and Distribution
Management,
26( 8), 324-30.

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Levy, M. and Weitz, B.A. (1998). Retailing Management, Boston: Irwin McGraw-Hill, McGoldrick, P .
(2002), Retail Marketing, (2nd edition), London: McGraw-Hill. Sinha, P.K. and Banerjee, A . (2004).
“Store Choice Behaviour in an Evolving Market,”
International Journal of Retail and Distribution Management, 32( 10) , 482-94. Sinha,
P.K. and Uniyal, D. (2004). “Using Observational Research for Behavioural Segmentation
of Shoppers ,” Journal of Retailing and Consumer Research, 12( 1) , 35- 48. Thompson, K.E.
and Chen, Y.L. (1998). “Retail Store Image: A Means-End Approach,” Journal
of Marketing Practice: Applied Marketing Science, 4(6), 161-73.

Underhill, P . (1999) . Why We Buy: The Science of Shopping, New York, NY: Simon and Schuster.
Zeithaml, V.A. (1988). “Consumer Perception on Price Quality and Value: A Means-End Model and Synthesis
of Evidence,” Journal of Marketing, 52( 3) , 2-22.

Web References

A.T. Kearney Global Retail Development Index, ( 2005). http://www.atkearney.com/main.taf?


p=5,3,1,110 .

ATK Retail Survey, (2005). http://www.dessenceconsulting.com/pdf/Doing%20Business%20in%


20India%20 -Unlimited%20Opportunities.pdf.

FICCI- BISNET , ( 2008). http://www.indiainbusiness.nic.in/economy/economic_snapshot.htm. GCI


Rankings, (2006-07). http://www.weforum.org/pdf/pressreleases/india.pdf.
http://www.austrade.gov.au/ArticleDocuments/1418/RTE3-Presentation-Harsh-Puri.pdf.aspx. Singh, ( 2008).
http:/www.expresshospitality.com/20080615/management07.shtml
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