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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.

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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.
Visual 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 Stimulatio n 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.
Organized 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 (In-
store 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 signi-
ficance 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 back-
grounds.

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.
Davies, 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, B. and Ward, P. (2003). “ Visual Merchandising and the Creation of
Discernible Retail Brands,” International Journal of Retail and Distribution Management,
31(3), 143–52.
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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