A Study on Impact of Organized Retailing on Consumers

Purpose: The purpose of the survey of consumers is to understand the behaviour of and benefits to consumers in shopping at organized vs. unorganized retail outlets.

Design/ Methodology/Approach: Exit interviews were conducted with 75 consumers who shopped at 10 organized outlets in the cities of Raipur and Bhilai and an equal number of consumers who shopped at 10 unorganized outlets in the same cities. After dropping the outliers, the sample has 72 customers at organized outlets and 73 at unorganized outlets. Stratified systematic sampling design with a sample size of 150 was used for the study. Multivariate statistical techniques were used to analyze the data collected with the help of a structured questionnaire.

Findings: Consumers have definitely gained from organized retail on multiple counts.

• Overall consumer spending has increased with the entry of the organized retail.

• While all income groups saved through organized retail purchases, the survey revealed that lower income consumers saved more. Thus, organized retail is relatively more beneficial to the less well-off consumers.

• Proximity is a major comparative advantage of unorganized outlets.

• Unorganized retailers have significant competitive strengths that include consumer goodwill, credit sales, amenability to bargaining, ability to sell loose items, convenient timings, and home delivery.

Research limitation: This study was carried out in Chhattisgarh in the towns of Raipur and Bhilai and, therefore, the results obtained may not be generalized to the country as a whole. The small sample size of 150 may also generate error-prone results. Factor analysis with such a small sample would have questionable applicability.

Practical implication: The outcomes of the study are sufficient to indicate towards the importance of low income groups and the savings they manage by the route of targeted shopping against as expected that it is the upper middle and upper class that benefit maximum from shopping at organized retail outlets.

Originality/ Value: The study would help the organized retailers to develop programs suitable to cater to the focused group along with optimizing the sales period spread.