FACTORS INFLUENCING SHOPPING EXPERIENCE IN ORGANIZED RETAILING

SAJMMR Volume 2, Issue 12 (December, 2012) ISSN 2249-877X

South Asian Academic Research Journals http://www.saarj.com

138

Published by: South As ian Academic Research Journals

SAJMMR:

S o u t h A s i a n J o u r n a l o f

M a r k e t i n g & M a n a g e m e n t

R e s e a r c h

FACTORS INFLUENCING SHOPPING EXPERIENCE IN ORGANIZED

RETAILING: AN EMPIRICAL INVESTIGATION

ADIL ZIA*; ASIF AKHTAR**; MOHAMMAD KHALID AZAM***

*Research Scholar,

Department of Business Administration,

FMSR, Aligarh Muslim University, Aligarh.

**Assistant Professor,



***Professor,



ABSTRACT

The concept of shopping is one of the oldest activities that the human race has been

performing with high level of regularity and involvement. Over the years, retail

shoppers’ orientation towards this routine activity has been changing with the

inception of organized retail. The innovations brought by retailers and marketers in

the practice of retailing have been providing new paradigms for shopping. This has

also led to a body of knowledge that aims to understand orientation of organized

retail shoppers towards shopping.

Organized retailing refers to trading activities undertaken by licensed retailers, that

is, those who are registered for sales tax, income tax, etc. These include the

corporate-backed hypermarkets and retail chains, and also the privately owned

large and small retail businesses. According to AT Kearney report for the year 2011,

Organized retail accounts for 7 per cent of India's roughly US$ 435 billion retail

market and is expected to reach 20 per cent by 2020.

This paper is an attempt to explore the factors of Shopping Experience and to

measures the impact of these factors in the context of organized retail. Hypothesized

model was developed based on literature survey and refined using exploratory and

confirmatory factor analysis. Reliability and validity of scale was checked using



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chronbach alpha. Impact was measured using multiple regression method. This

study is primary data based and the sample of 355 retail consumers was taken.

KEYWORDS: Indian Retail, Un-organized retail, Shopping Experience.

_____________________________________________________________________________

INTRODUCTION

Organized retailing refers to trading activities which have departmentalization on activities.

Further these activities are undertaken by licensed retailers, that is, those who are registered for

sales tax, income tax, etc. These include the corporate-backed hypermarkets and retail chains,

and also the privately owned large and small retail businesses. According to AT Kearney report

for the year 2011, Organized retail accounts for 7 per cent of India's roughly US$ 435 billion

retail market and is expected to reach 20 per cent by 2020. Food accounts for 70 per cent of

Indian retail, but it remains under-penetrated by organized retail. Organized retail has a 31 per

cent share in clothing and apparel and continues to see growth in this sector. The home segment

shows promise, growing 20 to 30 per cent per year. India's more urban consumer mindset means

this sector is poised for growth.

In organized retail there is growing competition with the growth of more national and

international players into this sector. Looking into the profitability of this sector recently Sahara

group also ventured with anew range of FMCG products with Q-Value stores. Looking the

importance of retail sector, investigating factors responsible for shopping experience is of

immense importance for the organizations. This is because all organizations want to improve

factors of shopping experience and to face competition by giving best shopping experience to

more and more customers.

LITERATURE REVIEW

Literature review is a body of text that aims to review the critical points of current knowledge

including substantive findings as well as theoretical and methodological contributions to a

particular subject of discussion. Literature review stars with the theoretical definitions of

shopping experience followed by a brief description of researches in organized retail shopping

experience. For the present study while review of literature a gap was identified and objectives

were framed to fulfill that gap.

SHOPPING EXPERIENCE

Shopping is considered as an enjoyable and rewarding experience by hedonic consumers

(Holbrook and Lehmann, 1981; Arnold and Reynolds, 2003) and therefore they perceive lower

time and effort costs than the consumers who view shopping as unpleasant. Shopping has been

referred to as a fun, pleasurable activity that leads to feelings of „joy‟ (Jin and Sternquist, 2004).

Verma and Gupta (2005) studied the impact of store image on the perception of the product

quality and found that in a retail setup store image may or may not have significant contribution

in the product quality perception but the proximity of the store is very important factor for the

product purchase and repeated purchase.



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A strong store image has been shown to result in higher levels of pleasant feelings in customers,

and reflects their enjoyment of spending time in the area, moreover teenagers also preferred

going to a shopping mall whose atmosphere is friendly and made them feel welcomed. They

wanted a mall which provided cool stores, entertainment options, attractive designing and a good

place to spend time with friends, on the whole a good shopping experience (Bell, 1999).

Shopping enjoyment refers to a customer‟s positive affect toward shopping for items in specific

product or service categories, such as apparel or travel services (Seiders, et al, 2007).

The prime advantage of an experience product is the experience that the shopper goes through by

purchasing that product or service. Consumers derive value from purchasing these goods or

services because of their unique qualities and are ready to pay a little extra for them. Mall

developers have also tried to cope up in the experience economy by providing the consumers

with good store ambience as well as entertaining and amusing experiences apart from shopping.

They have added movie theatres or keep organizing live performances for the consumers in

which they can get engaged and enjoy their experience while shopping in the mall. An example

is the various entertainment activities, like theme park and an ice skating rink along with a huge

variety of stores that are provided in the Mall of America (Sinha & Banerjee, 2004).

Mittal and Parashar (2011) explained that irrespective of area, people prefer grocery stores to be

nearby, product assortment is important for grocery. Ghosh & Srivastava (2010) service quality

has become vital for service firms to pay attention due to increased competition.

Sivaraman (2010) analyzed customer attitude towards unorganized and organized retailers which

shows that there were a perceived difference between organized retailers and unorganized

retailers on the attributes of store image, range of products, brand choices, price, store ambience,

credit availability, shop proximity and complements. However there were no perceived

difference on product freshness and customer care. This study clearly point out that the

unorganized retailers are facing stiff competition from the organized retailers. This has reduced

their sales, profit, and employment considerably. The operational cost, consumer credit also

increased due to the presence of organized retailers.

Kumar (2011) did a study on the strategies of unorganized retailers with reference to consumer

durables and found that a product strategy which means merchandise is the most important factor

followed by price, distribution and promotion. Kushwaha (2011) compared the perception of

consumers in organized and unorganized retail market and found that factors like cleanliness,

distance, price, quality, safety and space for shopping are the determinant factors for unorganized

retail.

On the basis of literature review it may be concluded that many researchers have tried to

elucidate the concept and determinants of shopping experience in their own way. Some

researchers have tried to study it in the context of organized retail while some have tried to study

in unorganized retail perspective. Further the researcher has tried to sum up these factors for

shopping experience into three main factors which have nine items. These three factors are

Execution related excellence, Expediting and Problem recovery. The items determining these

factors are expediting, problem recovery and execution related excellence. The nine factors

derived for the study are shopping convenience, physical aspect, personal attention,



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courteousness, enjoyment, shopping time, store service quality, complain handling and returns &

exchange.

OBJECTIVES

1. To explore the factors responsible for shopping experience in the context of organized retail.

2. To investigate the impact of factors of shopping experience for organized retail setup.

METHODOLOGY

Population was defined as active retail shoppers. The sample consisted of 355 retail shoppers.

A little over half of the respondents (53%) were male. Respondents were mostly between the

ages of 22 to 50 (72%). Sixty-five per cent of the respondents were married. Almost seventy per

cent of the respondents had at least higher secondary education. Personal interviews were

conducted immediately after the completion of the shopping. Retail shoppers were selected for

analysis because they offer a mix of merchandise and service while individual retail shops were

identified on convenience-sampling basis. In all, 32 retail stores were selected from Delhi and

national capital region. The retail stores varied in their size from small to big stores and were

selected across stores setups such as food, clothing, consumer durables, books, music, etc.

Shoppers were interviewed while they finished shopping or outside the stores. The instrument

used was questionnaire with 17 questions which employed a 5-point Likert scale (5-strongly

agree, 1-strongly disagree).

MODEL DEVELOPMENT

Extensive literature survey egged various models and theories explaining relationships among

several factors responsible for shopping experience. After hypothesized model have been

developed (Figure 1), overall reliability and validity was checked. After getting the model

reliable and valid, exploratory factor analysis and then confirmatory factor analysis was

performed. The hypothesized model for shopping experience consists of three independent

variables and one dependent variable; these three dimensions are measured by nine elements as

mentioned in Table 1.

TABLE: 1- SHOPPING EXPERIENCE

S.No Factors Elements

1 Execution related Excellence

Shopping convenience

Physical aspect

Personal attention

courteousness

Enjoyment



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2 Expediting Shopping Time

Store Service Quality

3 Problem Recovery Complain Handling

Returns and Exchange

The conceptual model in Figure 1 shows the direct relationship of three independent factors

namely Execution related excellence, Expediting and Problem recovery with Shopping

experience.

FIGURE 1 CONCEPTUAL MODEL

FIGURE 1 DEVELOPED BY RESEARCHER

The first factor execution related excellence means patient explanation and advice, checking

stock, helping find products, having product knowledge and providing unexpected product

quality. Execution Related Excellence is a term given to the Shopping convenience, Physical

aspects of the store, Personal Attention given by the staff, Courteousness of staff and to the

feeling of enjoyment experienced by the consumers in the store. Second factor is Expediting that

is being sensitive to customers‟ time and long check-out lines, and being proactive in helping

speed up the shopping process and the third factor Problem Recovery which means helping

resolve and compensate for problems, upgrading quality and ensuring complete shopper

satisfaction.

Execution

Related Excellence

Expediting

Problem

Recovery

Shopping

Experience

Factors for Shopping Experience in Organized Retail

F1

F2

F3



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RELIABILITY AND VALIDITY OF SCALE

The trustworthiness and stability of an instrument is determined by its reliability. Reliability

refers to the degree of dependability and stability of a scale. It reflects the scales ability to

consistently yield the same responses.

The reliability of the construct is determined by computing the alpha coefficient of internal

consistency (Chronbach, 1951). Chronbach‟s coefficient alpha value of 0.6 is considered

acceptable for the exploratory purposes, 0.7 is considered adequate, and 0.8 good for

confirmatory purposes. It is also worth mentioning here that an alpha coefficient of 0.6 and

above is considered to be good for research in social sciences. The reliability estimates based on

the actual data collected is shown as under.

The overall chronbach alpha value obtained is 0.894 which shows high reliability of the scale

(Table 2). Since the value is well above 0.7 it is valid to use this scale. The individual alpha

values were above 0.7 except for D6 which is frequent buyer program. As overall chronbach

alpha value is under the acceptable limits so the scale is adapted for further analysis.

TABLE 2: OVERALL CRONBACH’S ALPHA VALUE = 0.910

Factor No. Factors Cronbach’s alphas value

F1 Execution Related Excellence 0.794

F2 Expediting 0.804

F3 Problem Recovery 0.868

F4 Overall Shopping Experience 0.711

EXPLORATORY FACTOR ANALYSIS (EFA)

In order to develop structure of shopping experience for unorganized retail consumers, an

exploratory factor analysis on all 17 items was performed. This was performed for the factor

structure using the principal components factoring method and varimax rotation with Kaiser

Normalization. The results of the factor analysis indicates that the 17 items obtained gives a

three factor structure (Table 3). Also, the factors did not load according to the factor structure

given by Dabholkar (1996). Other rotation methods such as Equamax rotation with Kaiser

Normalization also failed to improve the factors loading and factor structure.



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TABLE 3: EXPLORATORY FACTOR ANALYSIS

Items of

Questionnaire

Factors

Mean Std. Deviation

1 2 3 4

S1 .728 2.9014 .97069

S2 .463 2.7268 .99220

S3 .753 2.8282 1.15289

S4 .869 2.6310 .97520

S5 .648 3.2141 1.39989

S6 .730 3.1662 1.34794

S7 .411 3.0197 1.30931

S8 .471 3.3634 1.48260

S9 .714 3.6197 1.47068

S10 .832 3.8141 1.29725

S11 .491 3.3690 1.14074

S12 .659 3.1324 1.14336

S13 .712 2.8254 .95250

S14 .799 3.1944 1.04366

S15 .507 3.1437 1.42384

S16 .471 3.6620 1.49144

S17 .613 3.0592 1.38776



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CONFIRMATORY FACTOR ANALYSIS (CFA)

A confirmatory factor analysis (CFA) was used on the factors- F1, F2, F3 and F4 to investigate

model fitness. This methodology was suggested by Gerbing and Anderson (1988) to assess the

measurement model As shown in Table 4 the overall model fit indices show that all fit indices

measures are within acceptable levels. Hair et al. (1998) suggested that all standardized factor

loadings should reach a significance level of over 0.6. The results of the analysis show that all

standardized factor loadings are over 0.6 and significant at p = 0.01 level.

FIGURE 2

.28

F1

s17

1.40

7

1.00

1

s15

1.28

6

1.77

1

s14

1.11

5

1.971

s13

1.02

41.571

s6

.75

3 1.031

s5

.96

2.54

1

s2

1.13

1

1.31

1

.14

F2

s38

.91

11

1.00

1

s12

.90

10

2.581

s10

.75

9 1.201

s9

1.06

81.39

1

.87

F3

s37

1.04

14

1.001

s23

1.37

13.991

s11

1.07

12 1.011

.21

F4

s36

.95

17

1.001

s27

1.57

161.511

s22

.62

15 2.561

.18

.31

.31

.43

.21

.12

CFA for Shopping Experience in Organized Retail



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The scale developed is called “Retail Shopping Experience Scale” (RSES) as it measures the

shopping experience of organized retail consumers. The model fit measures are shown in Table

4. Two fit measures namely RMSEA (rout mean square error estimate) and Chi-square/df are

known as the badness of nit indices, these indices measure the badness of the model developed

(see Figure 2 and Table 4). The other measure are CMIN/DF, GFI (goodness of fit index), AGFI

(adjusted goodness of fit index), and CFI (comparative fit index) are called the goodness of fit

indices. These indices measure the goodness of fit of default model achieved by CFA. The Table

4 shows that all the indices are within the acceptable limits.

With overall model accepted, each of the dimensions was evaluated separately for construct

reliability (CR) and variance extracted. Hair et al. (1998) suggested that construct reliability

should be over 0.7, and the construct‟s average variance extracted (AVE) should be over 0.5.

The observed values in the present study are shown in Table 7. It shows that the CR ranges from

0.701 to 0.812, the constructs‟ average variance extracted (AVE) ranges from 0.541 to 0.622,

and the constructs‟ AVE of each latent variable is over 0.5, which represents sufficient

convergent validity (Hair et al., 1998).

TABLE: 4 MODEL FIT INDICES

S.No. Parameters Recommended

Value

Observed

Value

1 CMIN/DF 2.5- 4.5 3.941

2 GFI >=0.90 0.871

3 AGFI <0.937 0.816

4 CFI >0.90 0.917

5 RMSEA <0.08 0.074

6 Chi-square/df <5.0 3.192

Source: Hair et al. (2006), Arbuckle (2003), Byrne (2001) and Kline (1998)

TABLE: 5

S.No FACTORS CR AVE Cronbach’s Alpha

F1 Execution Related Excellence 0.701 0.557 0.794

F2 Expediting 0.812 0.541 0.804

F3 Problem Recovery 0.714 0.622 0.868

F4 Shopping Experience 0.731 0.630 0.711



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MULTIPLE REGRESSION

In order to access the impact of independent variables on shopping experience as dependent

variable, enter method of multiple regression has been applied.

Model Summary (Table 5) shows the value of R as 0.780, R2

as 0.608 and adjusted R2

as 0.604

which indicates that this regression model is capable to explain 60.8% of variation of dependent

variable due to independent variables rest 39.2% is unexplained. This is unexplained because it

may depend upon other factors like consumer loyalty.

TABLE 6: MODEL SUMMARY

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .780 .608 .604 .62536

TABLE 7 COEFFICIENTS

Model

Unstandardized

Coefficients

Standardized

Coefficients t Sig.

B Std. Error Beta

1

(Constant) -.258 .161 -1.598 .111

Execution related

excellence .834 .061 .677 13.672 .000

Problem recovery .271 .064 .188 4.204 .000

Expediting -.041 .041 -.046 -1.000 .318

a. Dependent Variable: Shopping Experience

Table 6 shows the standardized regression coefficients, which tells us the strength of impact and

its direction (positive/ negative). It also comprises of T and significant values to validate the

hypothesis framed to measure the sig. impact of dimensions of shopping experience on overall

shopping experience.

The regression equation is SE=ax1+bx2+cx3+C

SE = Shopping Experience, a, b, c are the β values.



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x1= Execution related excellence x2= Problem Recovery, x3= Expediting and C = Constant.

The value of a = 0.677, b = 0.188, c = -0.046 and C= 0.258

After replacing the values final regression equation will be

SE = 0.677 x1+0.188x2+0.046x3+0.258

FINDINGS

From the Table 6 it is observed that two factors namely Execution related excellence and

Problem recovery have positive and significant impact where as one factor which is Expediting

have negative but insignificant impact on shopping experience under organized retail.

“Execution related excellence” has highest impact on shopping experience among all factors

with β=0.677, this impact is highly significant as significant value is 0.000. This is probably

because consumers pay maximum importance to the items covered under this factor. The items

covered under this factor are shopping convenience, physical aspect, personal attention,

courteousness and enjoyment etc. In the context of organized retail environment all these items

covered under this factor are of vital importance as these are the consumers‟ expectations.

Study reveals that consumers find pleasure in visiting a store or shopping center. This finding is

consistent with the observation of Lehoten and Maenpaa (1997). Pleasure found in shopping was

first connected with tourism, the idea of the leisurely spending of time, of going „somewhere

else‟, away from the spheres of home and work, in order to be freed from duties and in order to

enjoy oneself. Thus, despite consumers‟ supposed desire to „„nest‟‟ or „„cocoon‟‟ in their homes,

shopping by catalog, phone or computer, brick-and-mortar shopping still offers a unique appeal

to many consumers and the opportunity to get out of the house and experience a change of scene.

“Expediting” has the least impact on shopping experience among all three dimensions with

β=0.046, this impact is insignificant as significant value is 0.318. This is probably because

consumers by default expect a better and quick shopping time, store service quality from

organized retailers.

MANAGERIAL IMPLICATIONS

The results of study provide managers‟ information about the factors responsible for the

shopping experience in organized retail environment. The chronology of importance as shown in

Table 8 shows that retailers should pay maximum importance to Executional related excellence

which is a constituent of shopping convenience, physical aspect, personal attention,

courteousness and enjoyment. The Table 8 shows factors in order of their impact on shopping

experience in organized retail setup. Retailers should pay attention according to their chronology

of impact.



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TABLE 8

S.No Factors β-Value

1 Executional related excellence 0.677

2 Problem recovery 0.188

3 Expediting 0.046

CONCLUSION

This paper is an attempt to identify the key factors influencing the customers of unorganized

retail setup. With the help of these factors a structured scale comprising of 17 items has been

developed and properly validated by applying EFA and CFA. Thus the study has the important

implications for target marketing, product positioning, market penetration and market expansion

for unorganized retail market in India.

LIMITATIONS

Although the results can be considered statistically significant, still the study has several

limitations that affect the reliability and validity of the findings. First of all, the sample selected

was small and limited to Delhi and national capital region which might limits the generalization

of results, the researchers believe that it represents a necessary and economical first step in

identifying relevant organized shopping experience dimension that can later be tested in larger,

more representative samples in Indian context. The second limitation concerns the sampling.

Convenient sampling procedure was employed to collect data from organized retail consumers

this may restrict the generalization.

Moreover the impact of other factors like consumer loyalty on shopping experience have not

been taken into consideration which might have significant impact which might have diminished

the impact of factors taken into consideration. The other limitation of this work concerns the

limited geographic extent of the study necessitates that findings be viewed with caution.

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FACTORS INFLUENCING SHOPPING EXPERIENCE IN ORGANIZED RETAILING