International Journal of Management (IJM), ISSN 0976 MANAGEMENT(IJM) INTERNATIONAL JOURNAL OF 6502(Print), ISSN 0976 6510(Online), Volume 3, Issue

2, May-August (2012)

ISSN 0976 6367(Print) ISSN 0976 6375(Online) Volume 3, Issue 2, May- August (2012), pp. 370- 380 IAEME: www.iaeme.com/ijm.html Journal Impact Factor (2012): 3.5420 (Calculated by GISI) www.jifactor.com

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A COMPARATIVE STUDY OF CUSTOMER PERCEPTIONS OF STORE ATMOSPHERICS OF SPENCERS VS RELIANCE FRESH

Vijay.R.Kulkarni M.Com, MBA Assistant Professor Sinhagad Institute of Management and Computer Applications Pune, Maharashtra, India Email: Vijaykulkarni_r@rediffmail.com

ABSTRACT This study is a comparative analysis of the customer perceptions of stores atmospherics of Spencers and Reliance Fresh. The study was conducted in Pune city during 1st May 2012 to 16th June 2012. For the purpose of the study Exploratory Research Design is used. Convenience sampling method is adopted for the study. Survey method is used for collecting the data. The data is collected through intercepts at Spencers and Reliance Fresh stores. A well structured questionnaire is designed for the study and due care is taken to avoid any kind of ambiguity. The sample for the study is 172 respondents. Nominal scale is used for all the variables except age, income, family size, no of children wherein ratio scale is used. For data analysis SPSS 17 version is used. Various statistical tools like Cronbachs Alpha for Scale Reliability, KaiserMeyer-Olkin Measure of Sampling Adequacy, ANOVA have been used. The findings of the study reveal that of the thirteen variables considered in the study the customers perception is found to be unfavorable in case of four variables viz. 1) Appeal of the stores from outside, 2) Isles are wide-ability to walk freely in the store, 3) Illumination in the Stores and 4) Hygiene of Washrooms/restrooms. Key words: Comparative study, Store Atmospheric, Store Faade, Customer Perception 1. INTRODUCTION 1.1 Overview of Indian Retail Industry It is pertinent to have a look at the evolution of retail in India. Post independence where most of India was rural, weekly markets, village fairs and melas co-existed which predominantly met the exchange needs of the majority of the population. This was followed by convenience and mom
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and pop stores, the neighbourhood markets which met the needs of the customers in the vicinity. To overcome the scarcity and to make the essential goods available to the consumers through the length and breadth of the country, the central government established the Public distribution system through the state governments along with Khadi and Cooperative stores. (Kukum Negi)*. Post liberalization the modern retail format came into being comprising of exclusive brand outlets, Hyper/Super Stores, Convenience stores, Departmental stores, shopping malls etc. Thus from the Historical Rural reach to the traditional reach to the government supported reach the and finally to the contemporary modern formats the retail business in India is evolved over period of time. The Indian retail industry in valued at about $300 billion and is expected to grow to $427 billion in 2010 and $637 billion in 2015. Only three percent of Indian retail is organised. Currently multinational retailers of multiple brands operate through franchise or cash-and-carry wholesale model alongside the local retail chains. Retail is Indias largest industry, accounting for over 10 percent of the countrys GDP and around eight percent of employment. Retail in India is at the crossroads. It has emerged as one of the most dynamic and fast paced industries with several players entering the market. That said, the heavy initial investments required make breakeven hard to achieve and many players have not tasted success to date. However, the future is promising; the market is growing, government policies are becoming more favorable and emerging technologies are facilitating operations. ORGANIZED RETAIL MARKET IN INDIA 2004 Category Value in Rs. Cr. Food, Grocery & general merchandize Clothes, Textile & Fashion Durables & Mobiles Food Service Home Improvement Jewellery & Watches Footwear Books, Music, Toys and Gifts Others Total 100% 2,950 10,900 3,340 2,000 2,500 1,960 2,500 800 1,350 28,000 10% 39% 12% 7% 8% 7% 9% 3% 5% 100% % share 2015 Value in Rs. Cr 1,02,546 40,605 28,891 24,351 16,346 8,770 6,508 3,722 14,692 2,46,431 % Share 42% 16% 12% 10% 7% 3% 3% 1% 6% 100%

1.2 Spencers One of the first entrants into organized food & grocery retail with Food world stores in 1996 and then formed an alliance with Dairy farm International and launched health & glow (pharmacy &
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beauty care) outlets. The alliance with Dairy farm International stands dissolved. Their turnover for the financial year 2010-11 was Rs. 1,056 crores. Spencer's focuses on verticals like fresh fruit and vegetables, food and grocery, personal care, garments and fashion accessories, home and office essentials, electrical and electronics. Established in 1996, Spencer's has become a popular destination for shoppers in India with hypermarkets and convenient stores catering to various shopping needs of its large consumer base. Spencer's has retail footage of approximately 1 million square feet and over 220 Spencer's stores in 35 cities. The company operates through the following formats: The Spencer's hyper stores The Spencer's hyper stores are destination stores, of more than 15,000 sq. ft in size. They offer everything under one roof. The merchandise ranges from fruits & vegetables, processed foods, groceries, meat, chicken, fish, bakery, chilled and frozen foods, garments and fashion accessories, consumer electronics & electrical products, home decor and needs, office stationeries, soft toys. On an average, a Spencer's hyper stocks 70,000 SKUs across 35,000 items. The Spencer's stores The Spencer's stores are neighborhood stores ranging from 1500 less than 15000 sq. ft. These stores stock the necessary range and assortment in fruit and vegetables, FMCG food and nonfood, staples and frozen foods and cater to the daily and weekly top-up shopping needs of the consumer. As of March 2011, they have around 182 Spencers neighborhood Stores. 1.2 Reliance Fresh Reliance is gearing to be a major player in the Indian Retail Revolution. Reliance Retail, a subsidiary of Reliance, which started in 2006, runs over 1,000 stores across 86 cities across formats and product categories. At present there are about 500 are Reliance Fresh Stores located in 86 cities in the country. Reliance Fresh, is a convenience store format. These stores, range from 2,000 to 5,000 sq feet, provide customers with a variety of fresh fruits, vegetables, staple foods and other products in a world-class ambience. They aggressively partnered farmers by following a farm-to-folk strategy to ensure fresh fruits and vegetables at affordable prices. As per the Annual Report of Reliance Fresh for the financial year 2010- Reliance Fresh has posted a turnover of Rs 2,513 crores (Rs 25.13 billion) during the last financial year, while Reliance Hyper mart posted revenues of Rs 619 crores (Rs 6.19 billion) (Source:http://www.chillibreeze.com/articles_various/Reliance-Industries.asp. &http://www.rediff.com/money/report/retail-claim-biyani-joins-issue-withmukeshambani/20110606.htm downloaded on 19.07.2012)

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2. LITERATURE REVIEW a. A stores environment can be defined as external to the person being studied which can be measured independently of the person (Russel and Mehrabian 1976). That environment is never natural, but includes cues, messages, and suggestions to consumers (Bitner1992; Markin, Lillis and Narayan 1976)1. b. Visual aesthetics for services is about the visual aspects of physical evidences (Booms and Bitner, 1981), which includes the tangible cues and the surroundings. Unlike for products, owing to the intangibility (Lovelock and Gummesson, 2004), customers generally rely on cues from physical evidences to evaluate the quality of services. Often for many services, production and consumption happens simultaneously in the same environment. So in physical evidence, aesthetics of service environment (henceforth services capes), is a major aspect of physical evidences compared to other physical evidences present in service delivery, especially when the services are facility driven (Turley and Fugate, 1992). While Bitner (1992) proposed the term services capes in reference to the physical surroundings as fashioned by service organizations to facilitate the provision of service offerings to customers, the same / similar concept has been discussed in various names in literature. A few key terms are; shelf space (Cox, 1970) atmospherics (Kotler, 1974), the physical environment (Baker, 1986) etc.2. c. Studies of the store environment (also known as atmospherics) examined multiple aspects of consumers behavior. A recent review by Turkey and Miliman (2000) identified 58 variables into 5 main categories: external, general interior, layout and design, point of purchase and decoration and human. Their classification however, lacks a theoretical frame, reflecting the main problem of this field of inquiry. Similarly, Foxall and Greenley (1998) proclaimed that researchers have generated settings in random, convenience, intuitive manner without a justified typology. Both authors conclude that atmospheric effects exist, but more effort is needed to explain, predict and control consumers behavior.3 d. This study examines how various characteristic of retail environments influence consumer emotional responses in the shopping experience, and how these emotions, in turn, influence consumers store attitudes. It also supplements emerging research on in-store emotions by identifying through ethnographic interviews, emotions generated in the retail shopping environment that are not typically tapped by standard inventories of general human emotions. The data, collected form a sample of 254 consumers in Korea, indicate that store characteristics have a pronounced effect on consumers in-store emotions, and that these emotional experiences serve as critical MEDIATORS IN the store characteristics-store attitudes relationship. The implications of this research for future work on the retail environment and consumers emotional responses are discussed.4 e. This study examines the cognitive influences of atmospherics on customer value, store image and patronage intentions in the emerging market condition. Retail store visuals have the capacity to transcend the boundary between external worlds (Alan, 2002) and what is happening inside us. The exploratory framework of the study makes it easier to understand the emerging retailing conditions in terms of larger stores, design changes, architectural makeover and its value perception among customers. The customers in an emerging market such as India reported discrepancies between value experienced and expected value ( hedonic and utilitarian) due to ambiguity in the role of factors in creating appropriate state of arousal (emotional appeal). The study is successful in correlating customer value with retail environment5.
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f. Many retailers acknowledge the importance of store environment as a tool for market differentiation (Levy and Weitz 1995). Store environment, the physical surroundings of a store, is made up of many elements, including music, lighting, layout, directional signage and human elements, and can also be divided into external environment and internal environment (that is, exterior and interior of a store). The effects of store environmental elements could be complex. While many of these elements influence shoppers behavior through their effects on shoppers emotion, cognition and physiological state, some of these elements could elicit more direct response from shoppers with very little impact on their thinking, feeling or body comfort. Despite numerous studies on store environment, their findings are not enough to provide a detailed understanding of the store environmental effects.6 g.Retailers may be surprised to learn how sensitive shoppers are to the lighting, noise level, layout, and other details. Three in four customers surveyed said they would spend more money if a store was remodeled or renewed in line with the features they want or value most highly. On average, they said they would increase spending by 21% (Wilson, 2007)7. 3. RESEARCH OBJECTIVE To compare customer perceptions on various store atmospherics elements between Spencers and Reliance Fresh 4. RESEARCH METHODOLOGY For the purpose of the study Exploratory Research Design is used. Convenience sampling method is adopted for the study. Survey method is used for collecting the data. The data is collected through intercepts at Spencers and Reliance Fresh stores. A well structured questionnaire is designed for the study and due care is taken to avoid any kind of ambiguity. The sample for the study is 172 respondents. Nominal scale is used for all the variables except age, income, family size, no of children wherein ratio scale is used. The study was conducted in Pune city. The study was conducted during the period 01.05.2012 to 15.06.2012. Scale Reliability Cronbachs Alpha .842 Kaiser-Meyer-Olkin Measure of Sampling Adequacy .899 5. DATA ANALYSIS TOOLS For the purpose of this study the following statistical tools were used SPSS- Scale Reliability Cronbachs Alpha, SPSS-Kaiser-Meyer-Olkin Measure of Sampling Adequacy, SPSS-Factor Analysis, Tables & Percentages

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6. DATA ANALYSIS Factor 1: Appeal of the store from outside Ho: There are no significant differences in customer perceptions about Appeal of the store from outside Names of the Stores Spensers Reliance Fresh n 86 86 Mean 6.30 6.73 SD 1.448 1.343 Z Value -2.05 Ho: Accepted/Rejected Rejected

Factor 2: Isles are wide-ability to walk freely in the store Ho: There are no significant differences in customer perceptions about their ability to walk freely in the stores Names of the Stores Spensers Reliance Fresh n 86 86 Mean 6.22 6.73 SD 1.537 1.508 Z Value -2.21 Ho: Accepted/Rejected Rejected

Factor 3: Arrangement to locate the products Ho: There are no significant differences in customer perceptions about the arrangements in the stores to locate the products Names of the Stores Spensers Reliance Fresh n 86 86 Mean 6.56 6.60 SD 1.500 1.439 Z Value -.18 Ho: Accepted/Rejected Accepted

Factor 4: Aesthetics and beauty of the store from inside Ho: There are no significant differences in customer perceptions about the arrangements in the stores to locate the products Names of the Stores Spensers Reliance Fresh n 86 86 Mean 6.27 6.45 SD 1.467 1.278 Z Value -.76 Ho: Accepted/Rejected Accepted

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Factor 5: Quality of air conditioning in the store Ho: There are no significant differences in customer perceptions about the Quality of Air conditioning in the store Names of the Stores Spensers Reliance Fresh n 86 86 Mean 6.23 6.43 SD 1.621 1.499 Z Value -.87 Ho: Accepted/Rejected Accepted

Factor 6: smell/odor in the store-Freshness of air in the store Ho: There are no significant differences in customer perceptions about the Quality of Air conditioning in the store Names of the Stores Spensers Reliance Fresh n 86 86 Mean 6.33 6.50 SD 1.545 1.612 Z Value -.71 Ho: Accepted/Rejected Accepted

Factor 7: Illumination in the store Ho: There are no significant differences in customer perceptions about the Illumination in the stores Names of the Stores Spensers Reliance Fresh n 86 86 Mean 6.41 6.85 SD 1.278 1.287 Z Value -2.32 Ho: Accepted/Rejected Rejected

Factor 8: Cleanliness of the Store Ho: There are no significant differences in customer perceptions about the Cleanliness of the Store Names of the Stores Spensers Reliance Fresh n 86 86 Mean 6.49 6.78 SD 1.493 1,324 Z Value -1.38 Ho: Accepted/Rejected Accepted

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Factor 9: Hygiene and cleanliness of the wash rooms Ho: There are no significant differences in customer perceptions about the Hygiene and Cleanliness of the wash rooms Names of the Stores Spensers Reliance Fresh n 86 86 Mean 6.07 6.57 SD 1.600 1.685 Z Value -2.00 Ho: Accepted/Rejected Rejected

Factor 10: Attractive Displays in the Stores Ho: There are no significant differences in customer perceptions about the Attractiveness of the Displays in the Stores Names of the Stores Spensers Reliance Fresh n 86 86 Mean 6.38 6.63 SD 1.266 1.262 Z Value -1.25 Ho: Accepted/Rejected Accepted

Factor 11: Availability of clean drinking water Ho: There are no significant differences in customer perceptions about the Availability of Clean Drinking Water in the Stores Names of the Stores Spensers Reliance Fresh n 86 86 Mean 5.70 6.18 SD 1.749 1.786 Z Value -1.25 Ho: Accepted/Rejected Accepted

Factor 12: Friendly and Courteous behavior of the store personnel Ho: There are no significant differences in customer perceptions about the Overall Satisfaction based on Store Atmospherics Names of the Stores Spensers Reliance Fresh n 86 86 Mean 5.94 6.29 SD 1.482 1.410 Z Value -1.59 Ho: Accepted/Rejected Accepted

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Factor 13: Overall satisfaction based on Stores Atmospherics Ho: There are no significant differences in customer perceptions about the Overall Satisfaction based on Store Atmospherics Names of the Stores Spensers Reliance Fresh n 86 86 Mean 6.77 6.99 SD 1.378 1.365 Z Value -.95 Ho: Accepted/Rejected Accepted

7. DISCUSSION & SUGGESTIONS 7.1. Appeal of the store from outside The visual appeal of the exterior (faade) is a very critical element in the entire stores atmospherics. It is the exterior of the store which attracts/pulls the customer to the store. The retailers need the retailers need to keep this fact top of the mind and try to make the exterior of the store as appealing as possible. The elements of store faade include height of the building, color scheme, business sign, parking areas, the neighborhood, window displays, illumination of the frontage, approach & the entry door of the store, to mention a few. The retailers need to ensure proper upkeep and maintenance of each and every aspect of store faade and ensure a robust and vibrant appeal of the store from the outside. 7.2. Isles are wide-ability to walk freely in the store Isles are the place between two racks. If the space is too narrow in the isles then it imposes restrictions on the movement of the personnel. The customers often shop with family members and other social groups and need personal space. This is an area that when encroached upon causes customers to feel uncomfortable and frustrated. Personal space in a retail stores viewed from the perspective of retail environment suggests that when a shopper is bumped or jostled while looking at merchandise, may become uncomfortable, get annoyed, lose interest, and leave the area. Therefore provision of enough spaces for the customers to maneuver makes the customers comfortable and results in customers spending more time in the store thereby increasing the possibility of spending more &translating into enhanced profitability for the stores. Since Aisles are part of the store design the same may be incorporated in the store design stage itself anticipating future footfalls in the store. 7.3. Illumination in the store Lighting is an important tool in retail marketing and an important determinant of retail environment. In the past lights were used more for illumination purposes only but in todays contemporary context retail stores/malls illumination has become a strategic tool in image building through associations created in the consumer memory which is endured in the minds of the customers for a long time. Illumination in the store increases the aesthetic and visual appeal of the store and merchandise, impacts customers senses and vision and can be used to draw consumers' attention to pockets in the store with the profitable products or it may help in
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downplaying less attractive areas. The pleasing environment created in the store through lighting favorably impacts customers, boosts their mood & results in customer spending longer time in the stores, improves visibility leading to converting the passive customer to browser, browser to spender and spender to big spender. Retailers need to be proactive & take benefit of the innovations taking place in the lighting technology like fluorescent lighting, LED bulbs, track lights to mention a few, Induction lamps with prismatic diffusers etc., and incorporate these technologies to make the illumination in the stores as pleasing as possible for the customers and tempt customers to spend more and more time and money in the store. 7.4. Hygiene and cleanliness of the wash rooms/restroom Generally washrooms are neglected areas. Hygiene has been determined to be a potential enhancer of service quality. Hygiene is an important factor that can enhance customer service satisfaction and if it is not evident to the customer, it may cause dissatisfaction. Customers may use the washrooms anytime. If the wash rooms have dirty or soiled sink, dirty, cracked wall, and ceiling tiles, trash in toilet, odor in restroom can leave indelible negative impact on the customers psyche. This calls for giving adequate attention towards maintaining the hygiene of the washrooms. The wonderful experience the customer otherwise has had in the store can be negated by failure of any touch point including ill maintained washrooms/restrooms. It calls on the part of the retailers to keep continuous vigil on the cleanliness of the fixtures & fittings, deploy manpower for continuous cleaning of the washrooms, usage of disinfectants and perfumes to eliminate bad odor, provision of liquid soaps /tissue papers etc and ensure good washroom usage experience to the customers which will eventually go down the memory lane of the customers well and will result in positive image building in the minds of the customers. 8. SCOPE FOR FURTHER RESEARCH Marketing environment is a dynamic phenomenon and so customers expectations. Both continuously evolve. Therefore the benchmarks of customer expectations keep on changing and always go up in response to the changes taking place in the environment, Therefore it is imperative that the retail organizations keep a close watch and anticipate changes, incorporate the changes in their working and brace themselves to meet the challenge of fulfilling the changing expectations of the customers. Therefore it offers tremendous scope for in depth research on a continuous basis about changes in the environment and simultaneous changes in the customer expectations. 9. REFERENCES 1. Shaked Gilboa and Anat Rafaeli: Store Environment, Emotions and Approach Behavior: Applying Environmental Aesthetics to Retailing http://iew3technion.ac.il/Home/Users/anatr/COMPLE-FINAL-20-11-02.pdf 2. Appraising Visual Services cape Aesthetics: An Environmental Psychology Approach. http://marketing.conference services.net/resources/327/2958/pdf/AM2012_0218_paper.pdf

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3. Shaked Gilboa and Anat Rafaeli: Store Environment, Emotions and Approach Behavior: Applying Environmental Aesthetics to Retailing) http://iew3technion.ac.il/Home/Users/anatr/COMPLE-FINAL-20-11-02.pdf 4. Changjo Yoo, Johngee Park and Deborah J. Maclnnis; effects of Store Characteristics and InStore Emotional Experiences on Store Attitude https://msbfile03.usc.edu/digitalmeasures/macinnis/intellcont/store_characteristics98-1.pdf

5. Ishwar Kumar, Ruchi Garg and Zillur Rahman: Influence of Retail Atmospherics on Customer Value in an Emerging Market Condition http://greatlakes.edu.in/uploads/pdf/Chapter1.pdf 6. Shun Yin Lam: The Effects of Store Environment on Shopping Behaviors; A Critical Review www.acrwebsite.org/volumes/display.asp?id=8468 7. Brienna Kruger, Josie Oman and Brita Thomas, Retail Atmospherics: Affects on purchasing http://www.ndsu.edu/fileadmin/hde/research/Capstone_Poster_Group_3. Pdf 8. C.R.Kothari, Research Methodology, Methods & Techniques by, Second revised edition, 2010, New Age International (P) Ltd, New Delhi, India. 9. Schiff man & Kanuk, Consumer Behavior, 9th Edition, , Pearson. 10. Anantnarayan & Jayashree Nimagadda. A Hand Book of Research Process - 2009 edition, Macmillan Publishers India Limited, New Delhi, India. 11. S.C.Gupta, Fundamentals of Statistics, sixth revised and enlarged edition, 2010, Himalaya Publishing House, Mumbai, India. 12. Richard I Levin & David.S. Rubin, Statistics for Management, Seventh edition, Pearson Education.

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