Online Consumer Behavior
Content
Retail Marketing
Project Report
On
The retail value proposition of the organised and unorganised Eyewear retailers
Submitted To: Prof. Sapna Parashar
Submitted By: Amit Vijayvargiya (111207) Institute of Management, Nirma University, Date of Submission – 1st Sep, 2012.
Declaration
I declare that the project on “The retail value proposition of the organised and unorganised Eyewear retailers” is an original piece of work carried out by me under the guidance of Proj Sapna Parashar and that it is free from any kind of unacknowledged data references. The report is submitted to the Faculty in Partial Fulfillment of requirement for the award of Degree of Master of Business Administration (2010 - 2012) from Nirma University, Ahmedabad.
Place: Ahmedabad Date: 1st Sep, 2012
Amit Vijayvargiya 111207
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 2
Acknowledgement
I take this opportunity to thank Prof. Sapna Parashar (Faculty, Retail Marketing Area. Institute of Management., Nirma University) for allowing me to pursue my course based project on the specified topic. I am grateful to the Faculty for her pertinent support, motivation and guidance during the course of the project.
This project has helped me in reinforcing the retail concepts learned during the course of 30 sessions in the Retail Marketing field. The learning and experience from this project are valuable to me and would go a long way in helping me relate theory with practical aspects.
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 3
Contents
Contents................................................................................................................ 4 Overview about the Industry.................................................................................5 Objectives of the study..........................................................................................6 Data Analysis and Findings....................................................................................7 Selection........................................................................................................... 10 Customer Experience........................................................................................13 Convenience.....................................................................................................15 Price..................................................................................................................17 Inferences & Suggestions....................................................................................19 Research Methodology:.......................................................................................23 Method of Data collection:...................................................................................23 References...........................................................................................................25 Annexure............................................................................................................. 26
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 4
Overview about the Industry
The Eyewear Retail industry is one of the few industries which offer products & services varying from being a necessity to luxury – all depending whether you need glasses / lenses for reading or shades. Fast changing fashion trends, an extremely cost sensitive consumer, stiff competition from departmental store with well-appointed optical departments; as well as general merchandise discounters such as Wal-Mart, exert additional pressure on the optical retailer to remain competitive. The eyewear market is mainly unorganised with only few organised players present in the market. Most of the stores carry multi-brands; have shop-in-shop formats. The basic requirement for any store depends on many factors like location, store size, business targets etc.
Major players in the industry
The current size of optical retailing in India is estimated at Rs 2,700-3,000 crore, and is projected to grow over Rs 6,000 crore over the next five years. The split by categories is: Spectacles Sunglasses contact lenses 80 per cent 18 per cent 3 per cent
The major national players in the market are GKB opticals, Lawrence & Mayo, Titan Eye +, Vision Express-a joint venture between Reliance Retail and Pearle Europe, offering international designs and optical skills.
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 5
Players to work on
In this report the main focus is on two players, one belonging to organised sector and the other belonging to unorganised sector.
S.No 1 2
Player Titan Eye+ Nagar ChasmaGhar
Sector Organised Unorganised
Objectives of the study
•
• •
To compare the store location, Layout and merchandising mix of the above retailers To compare the retail value proposition of the above mentioned brands. To distinguish and compare the customer base of the above organised and unorganised retailers.
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 6
Data Analysis and Findings
Most of the segments in this sector are characterized by intense competition, price discounts, technological innovation and improvements and exchange schemes. The eyewear sector in India is characterized by the emergence of organized sector carrying the big names. These big players main target is the growing middle class population of India. Organized players offer superior technology and comfort to the consumers whereas the unorganized players compete on the basis of firm grasp of the local market, their well acknowledged name and hold over wide distribution network.
About Titan Eye+
Titan Industries Limited, a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation (TIDCO) commenced operations in 1987 under the name Titan Watches Limited. In 1994, Titan Industries diversified into Jewellery and more recently into Eyewear with Titan Eye+ Titan Eye+ focuses on understanding the needs of its customers and meeting them in a manner that delights them. Eyewear shopping, in today's scenario, is a challenging experience due to the wide variety of choices and the emerging competition both from organized and unorganized sector. Thus, making the right choice in such a scenario is essential but difficult. Titan Eye+ has entered the Eyewear retailing scene to help customers understand their needs and suggest all suitable options. Titan Eye+ commitment is to provide its customers an unmatched shopping experience with their wide range of product options. Knowledgeable and helpful staff, committed customer service coupled with great prices and deals in an international shopping ambience is what Titan Eye+ offers.
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 7
Trade area Profile
Titan Eye+ stores are situated at various locations covering more or less the whole Ahmedabad. Some of the key areas are Satellite,C.G Road,Navrangpura,Maninagar etc. Mostly the stores of Titan Eye+ are situated in the CBD’s (Central Business Districts) or the SBD’s (Secondary Business Districts) .The household income of the residents in this area is high and the people are mostly business class.
Store Layout
The layout of the store is not decided at the store. It is communicated by the head quarters and the store managers are just expected to follow it. Though there are major minor changes made in the layout as per customer traffic but it is mostly HQ driven. The layout, at the headquarters is determined by experiences, feedbacks from customers and trial experiments and thus is common for Titan Eye+ stores all over India. The store arrangement of furniture and fixtures has been made in a way so as to facilitate orderly purchase.
The type of layout that Titan Eye+ has adopted is majorly a Free Form (Boutique) layout which provides convenience as far as shopping of an Eyewear is concern. The layout emphasizes on the fact that no matter wherever a customer is in a store, he can visually see all the display available. .
About Local Unorganized Eyewear Store
These stores were mainly specific to a city or region. These stores are located mostly in the NBD’s( Neighborhood business districts) but there can be exceptions also. They don’t really have a chain structure. Their main aim is to provide value added products to the customers. These stores work on the model of having less durable products but at the same time their prices are very low. These stores are providing a tradeoff to the customers to get the product in less prices as compared to big organized shop, but the customers have to compromise with the quality.
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 8
A decade before ,these unorganized stores were considered as a small shop which helps in fulfilling the basic customer needs, but now a days due to the increased per capita income and higher impact of western culture, these stores have also become fashionable and thus they are providing a healthy competition to the Organized Eyewear stores
Trade area Profile
For the report analysis and comparison, I have studied a local Eyewear store Nagar Chasma Ghar, which is located at the C.G road. This store is quite a popular store in the city both because of its products range and value for money. The location of the store is also a big plus point for its increasing sales, because C.G road is amongst the most developed shopping area catering to the middle and upper middle class people of the city.
Store Layout
Normally the unorganized stores such as Nagar Chasma Ghar don’t have any other stores anywhere else in the country, so they don’t have to follow any specific standard while designing a store layout. They can follow any store layout they want pertaining to the customer’s convenience. But usually it has been observed in the Eye wear industry that Free Form Layout is mostly followed in both organized and unorganized sectors. In the Eyewear shops customers usually want to have a glimpse of the whole shop without compromising the convenience and thus boutique structure proves to be the most appropriative layout.
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 9
Comparison of the Retail Value Proposition of the Organized Eyewear Store (Titan Eye+) with Unorganized Eyewear Store.
RVP =
SELECTION +CUSTOMER EXPERINECE+ CONVINIENCE PRICE
Selection
Selection basically means what value you are providing to the customers. Usually to have good customer relations the value should be real, unique and should meet with the offerings that a particular product promises. The Definition of selection varies for a branded store to a store which is locally located and has no brand name associated with it.
Titan Eye+
Talking about a store like Titan Eye+, which is nationally present and which offers a wide range of Eyewear products, the people have a perception that this store will offers a good quality but at the same time in a premium price. If a customer is highly quality conscious he will still prefer this store. Analyzing the store like Titan Eye + on the basis of selection shows that this store has much value to offer. Its assortment mix is quite wide. The varieties offered by Titan Eye+ are also quite broad and thus it proves to be a great destination for the variety seeking customers. The main factors that came under Selection are as follows:
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 10
Merchandising Mix
Merchandising at Titan Eye+ is categorized into 3 broad categories:
•
Spectacle
• Goggles • Lenses. In each category there are several sub categories differentiated on the basis of price, latest trends, the form of material used etc. Stores like Titan Eye + are increasing because they offer a complete shopping value to the customer.
Display of Product
Talking about the display, all the products are displayed at eye level so as to facilitate display as well as trial. It has been observed that more than 80% of the purchases that are made are on the basis of display of merchandise.
Local Eyewear Store
In a local Eyewear store, the concept of selection doesn’t hold that much importance as was in Titan eye+ .In case of Titan Eye+ it’s the value and uniqueness of the products which differentiate it from the others where in case of Local Eyewear store its basically the pricing and the convenience which overpower all the other factors.
Merchandising Mix
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In a store like Nagar Chasma Ghar the merchandising mix is quite limited, their assortment is not wide and they don’t have that unique factor in their product. Categories in Local Stores are somewhat similar to Titan Eye+ i.e. • • • Goggles Spectacles Lenses
The difference arises in the sub categories. Local stores don’t have much sub categories to offer. There limited assortment restricts them in comparison to the branded stores. These local stores offers value only in terms of varied low level price range. Customers belonging to low middle class are highly related to these types of stores.
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Customer Experience
Talking about customer experience, there is a high diversity in between an organized eyewear store and an unorganized store
Titan Eye+
From the data collected through the questionnaire it is clear that the customers who prefer titan Eye+ over any other local eyewear store puts experience as their top most priority while buying any eyewear related product. Among the respondent almost 90% have the view that people visiting Titan Eye+ stores don’t have any money constraints, they visit these stores for the experience and quality.
This experience could be in variety of field such as • • Customer Service Quality of Product
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 13
• • •
Ambience inside the store Premiumness of the Product Variety
Local Eyewear Store
For the Customers visiting the local Eyewear store, customer experience don’t hold that much important value. These customers were basically the low range customers who give less important to experience as compared to basic fulfillment of needs .These customer don’t need any special staff care assistance. They don’t have any special demand while buying an eyewear related product. These customers were also asked why they prefer going to NgarChasma ghar and the response was quite clear. These people prefer reasonable price over experience and quality. For some ,Location is also a factor while considering this store.
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Convenience
From the survey an interesting finding came out that the definition of Convenience varies differently for organized and unorganized sector.
Titan Eye+
For a store like titan Eye+ convenience plays a very important role. Normally convenience for the customers of Titan Eye+ includes everything. • The store location of Titan Eye+ is chosen in such a way that it adds to the convenience of the customer visiting the store. • Sales staff assistance in Titan Eye+ helps in adding convenience value to the customer. • In Titan Eye+ convenience also holds value for the good quality. Customer travels a long distance to buy only a Titan Eye+ product just because of its quality and in store experience
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Local Eyewear Store
From the survey it is clear that nearly all the customers who visits Local Eyewear store is because of its location advantage. These customers see convenience mostly in the form of distance travel to reach a shop. As these type of local shops are present in the vicinity and thus it add to the convenience of the customer.
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Price
This is the most important retail value preposition which helps in selection of a particular brand of a product. Price is the factor which could make customers to switch from their existing brand to the other reasonable brand. There are people who would make tradeoff on quality, convenience just because of price.
Titan Eye+
Stores like Titan Eye+ follows the Fixed Pricing Strategy, theses stores follow one price policy .There is no scope of bargaining in these shops .Normally in a normal shopping experience the customer tends to divert towards the other brand when offered a more attractive deal in terms of pricing. But in case of store like Titan Eye+, the scenario is totally different .Customer are loyal towards the brand and are not ready to switch on the terms of money. This concept is proved from the survey result as well, it’s been clear from the data that given a choice to the customer to switch from Titan Eye+ to a local store because of price, location Advantage and Quality. Almost 50% refused to switch and they wanted to remain loyal to titan Eye+
But there are some customers who could be tempted by giving some offers, thus we could generalize the customers of Titan Eye+ in two categories.
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1. Customer who are loyal to the brand and will not switch if given an attractive price offer by other store. 2. Customers who are not loyal and thus can switch if given an attractive price offer The second types of customers are less but they do matter for the overall sales of the store. These individuals rely heavily on the pricing structure of the product. These are the people who want to led a high profile life with all branded stuff but at the same time are also a bit prices conscious. These people will switch only when they will get an attractive offer where by compromising the quality a bit.
Local Eyewear Store
From the survey result, it could be inferred that the customers of such local stores are never loyal to the stores. These customers are buying from the local shops just because of location advantage or due to low reasonable pricing. Thus these customers could any time switch to other local store, if given attractive deals in terms of low prices or convenience on the basis of nearby location.
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 18
Inferences & Suggestions
Suggestions for both the stores would be on the basis of total retail value proposition, considering all the factors (Selection, Customer Experience, Convenience, and Price) in mind. These suggestions are basically drawn by the study done taking questionnaire as the tool and also by the general observations taking into consideration while doing shopping at these types of stores.
Titan Eye+
Titan Eye+ is one of the leading brands in the field of organized Indian Eyewear retailing. Titan Eye+ is providing its customers an all time shopping experience by providing an extra value added services along with the product. The market share of Titan Eye + in Indian Eyewear Industry is increasing, but its progress is little slow. On an Overall analysis, all seems to be in favor of Titan Eye+ whether be the quality satisfaction from the customer’s side or the pricing structure or the overall experience, but according to my analysis there are certain grey areas where Titan Eye+ could work in order to increase its growth. Some of them are mentioned below • The online delivery of the product is the main hiccup in the smooth functioning of the store. There are incidences where delivery was done after the due date that too the product was not the same as it was ordered. This act as a main downfall on the convenience part towards the customers. • Titan Eye+ is known for its quality all over India, but there are cases where customers are complaining about the cheap material used while manufacturing the glasses, these instances are less but should be considered at utmost priority by the brand because quality is what that showcase Titan Eye+ as a brand. • Another main important factor in the retail value proposition is Price. Titan Eye+ has to work hard about its pricing structure. Due to cheap availability of fashionable Eye wear in Local Stores, the customers are diverting toward these stores because they are getting fashionable products in low prices and for this they are ready to compromise little bit with the quality.
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 19
So the overall Retail Value proposition for Titan Eye + is: RVP= Selection (Good) +Customer Experience (High) +Convenience (Moderate) Price (Costly) So thus Titan Eye+ have to work on its pricing structure, try to cater the lower middle class people with attractive and low pricing schemes .Titan Eye+ also have to look into the efficient online delivery of products in order to increases the satisfaction level among the customers as far as convenience is concerned.
Local Eyewear Store
In the Indian Eyewear industry the maximum market is captured by these unorganized stores. Stores like Titan Eye+ etc are giving competition to these stores, but in a diverse country like India it will take time to switch customers buying habits and thus organized sector will take time to hold its foot in the market. In India as the per capita income of an individual is increasing, so the buying behavior of the customer is changing, they are ready to spend a little extra in order to earn some benefits. These benefits can be in the form of quality, services or experience. These are the parameters on which a local store lacks. These local stores are not able to provide these extra benefits to the customers. Talking about the retail value proposition for the unorganized Local Stores, there can be number of suggestions that could be given to a local store to increase its sales .Some of them are mentioned below • Today’s customer is price conscious, but at the same time for a product which is directly affecting your eyes, he will not compromise with the quality. So to get that extra edge over organized stores the local stores should start providing good quality along with a reasonable cost. This will also enhance their image from being a low quality store to more reasonable store to shop. • Convenience can be an important parameter as far as local stores are concerned. Now a day’s customers have become choosy and thus they demand
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 20
convenience at every possible way they can and for that they are ready to pay a little extra. So local stores should start working on providing convenience to the customers while enhancing their prices a little bit. For providing convenience, what a local store can do is to make the ambience of the store customer friendly .Store location both in the form of distance as well area plays an important role in defining convenience for a customer, so local store should open their store in a more secure and customer friendly area. • One of the most important retail value proposition on which Local Eyewear stores lacks is the fulfillment of total customer experience. So Local stores should work on providing a customer experience at least in the form of quality and convenience. So the overall Retail Value proposition for Local Eye Wear Store (Nagar Chasma Ghar) is: RVP = Selection (Moderate) +Customer Experience (Low) +Convenience (Low) Price (Reasonable)
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 21
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 22
Research Methodology:
Type of Research: Qualitative Research
Qualitative research aims to achieve an in depth understanding of a situation; it helps to portray people’s hidden interpretation, understanding and motivation. Qualitative research is designed to tell researcher how (process) and why (meaning) things happen as they do.
Nature of Sampling: Probability Sampling Sample Size: 50 Sampling Method: Simple Random Sampling
Here simple random sampling because sample size is small so there is no such need to divide people on the basis of clusters and subpopulation.
Method of Data collection:
Two methods would be used in the work of data collection. • Questionnaire: As the interaction was directly with the customers, so the source of data was primary in nature. The collection of data was basically through simple questionnaire, which mainly consisted of multiple choices, closed ended, ranking preferences, etc. These questionnaires would be filled by the past, current and future customers of the three different outlets.
•
Observation: Another important method would be observing the customer’s entering the three different retail outlets and then forming a conclusion about the buying habits of the customers.
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Conclusion
Both the stores whether Titan Eye+ or Nagar Chasma Ghar belongs to a different sector of retailing, one being in organized retailing and the other in unorganized retailing. Thus both the stores have their own way of working and both are performing well in their fields. But due to the changing face of Indian retail market there are certain parameters that are mentioned in the report where these two stores could work in order to increase their good run in future also.
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 24
References
1. Randal Watson (2005),”Entry and Location choice in Eyewear Retailing” https://webspace.utexas.edu/rbw264/www/papers/GlassEntry2.pdf 2. Study on Entry and location choice by “Hass-Wilson (2005)” https://webspace.utexas.edu/rbw264/www/papers/GlassEntry2.pdf 3. John Sailer (March 5, 2012),The “Eyewear Industry Grapples with E-Tailers’
Impact” http://www.visionmonday.com/CMSDocuments/2012/3/cover_story_ VM0305.pdf
4. Delia Paunescu (March 5,2012) ,”Online Optical Retailers Talk Shop”
http://www.visionmonday.com/CMSDocuments/2012/3/cover_story_ VM0305.pdf
5. Study on Product Variety and Competition by “Randal Watson (May 19,2009)
http://onlinelibrary.wiley.com/doi/10.1111/j.14676451.2009.00381.x/full
6. Study on Small and Medium district Enterprises by “Alberto De Toni and Guido
Nassimbeni (May 19,2009)” http://www.emeraldinsight.com/journals.htm? articleid=849480&show=abstract
7. Netscribes Pvt.Ltd.(2010) report on Indian Eyewear Market.
http://www.news-medical.net/news/20100515/Netscribes-launchesreport-on-Indian-eyewear-market.aspx
8. Study on Indian Eyewear Market by D.S.Rawat (April10,2010)
http://www.thehindu.com/business/Industry/article3291483.ece
9. Study on Indian Eyewear Market
http://www.euromonitor.com/eyewear-in-india/report
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Annexure
Consumer Perception over Titan Eye+ & Local Eye Wear Stores
* Required Name of the Respondent * Age *
• • • •
Below 18 18-25 26-35 Above 35
Sex *
• •
Male Female
Employment Status *
• • •
Student Employed Unemployed
How often do you go for shopping *
• • • •
Once in a week Once in a month Once in 6 months Once in a year
Which store do you visit to buy eye wear related Products. *
• • •
Branded Showrooms(Titan Eye+) Local Eye Wear Stores Other:
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 26
Titan Eye+
Kindly fill the information regarding Titan Eye + Where will you prefer the location of showrooms of Titan Eye+ *
• • •
In Malls Open Stand Alone Shops Other:
Which Eye Wear Product will you Shop from Titan Eye+ *
• • •
Goggles Spectacles Both
Kindly rate the store on the basis of following Parameters. * Excellent Store Location Store Ambience Quality of Products Customer Service Store Layout How do you consider the pricing structure at Titan Eye+ *
• • •
Good
Average
Below Average
Bad
Over Priced Reasonable Under Priced
What according to you is the customer Base of Titan Eye + *
• • • • •
Premium Quality Prone Price Conscious Fashionable Other:
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 27
If given a choice to switch from Titan Eye+ to Local Eye Wear Store. What can be the probable reasons for switching *
• • • • •
Quality Reasonable Pricing Location Advantage You will never Switch Other:
Local Eyewear Stores
Kindly fill the information regarding any local Eye Wear Store Where will you prefer the location of the Local Eye Wear Store *
• • •
In Malls Stand Alone Shops Other:
Which Eye Wear Product will you shop from Local Stores *
• • •
Goggles Spectacles Both
Kindly rate the store on the basis of following Parameters. * Excellent Store Location Store Ambience Quality of Products Customer Service Store Layout How do you consider the pricing Structure of Local Eye Wear Stores *
• • •
Good
Average
Below Average
Bad
Over Priced Reasonable Under Priced
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 28
What according to you is the customer base of Local Eye Wear Stores *
• • • • •
Premium Quality Prone Price Conscious Fashionable Other:
If given a choice to switch from Local Eye Wear Store to Titan Eye+ .What can be the probable reasons for switching *
• • • • •
Quality Reasonable Pricing Location Advantage You will never Switch Other:
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Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 29
Project Report
On
The retail value proposition of the organised and unorganised Eyewear retailers
Submitted To: Prof. Sapna Parashar
Submitted By: Amit Vijayvargiya (111207) Institute of Management, Nirma University, Date of Submission – 1st Sep, 2012.
Declaration
I declare that the project on “The retail value proposition of the organised and unorganised Eyewear retailers” is an original piece of work carried out by me under the guidance of Proj Sapna Parashar and that it is free from any kind of unacknowledged data references. The report is submitted to the Faculty in Partial Fulfillment of requirement for the award of Degree of Master of Business Administration (2010 - 2012) from Nirma University, Ahmedabad.
Place: Ahmedabad Date: 1st Sep, 2012
Amit Vijayvargiya 111207
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 2
Acknowledgement
I take this opportunity to thank Prof. Sapna Parashar (Faculty, Retail Marketing Area. Institute of Management., Nirma University) for allowing me to pursue my course based project on the specified topic. I am grateful to the Faculty for her pertinent support, motivation and guidance during the course of the project.
This project has helped me in reinforcing the retail concepts learned during the course of 30 sessions in the Retail Marketing field. The learning and experience from this project are valuable to me and would go a long way in helping me relate theory with practical aspects.
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 3
Contents
Contents................................................................................................................ 4 Overview about the Industry.................................................................................5 Objectives of the study..........................................................................................6 Data Analysis and Findings....................................................................................7 Selection........................................................................................................... 10 Customer Experience........................................................................................13 Convenience.....................................................................................................15 Price..................................................................................................................17 Inferences & Suggestions....................................................................................19 Research Methodology:.......................................................................................23 Method of Data collection:...................................................................................23 References...........................................................................................................25 Annexure............................................................................................................. 26
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 4
Overview about the Industry
The Eyewear Retail industry is one of the few industries which offer products & services varying from being a necessity to luxury – all depending whether you need glasses / lenses for reading or shades. Fast changing fashion trends, an extremely cost sensitive consumer, stiff competition from departmental store with well-appointed optical departments; as well as general merchandise discounters such as Wal-Mart, exert additional pressure on the optical retailer to remain competitive. The eyewear market is mainly unorganised with only few organised players present in the market. Most of the stores carry multi-brands; have shop-in-shop formats. The basic requirement for any store depends on many factors like location, store size, business targets etc.
Major players in the industry
The current size of optical retailing in India is estimated at Rs 2,700-3,000 crore, and is projected to grow over Rs 6,000 crore over the next five years. The split by categories is: Spectacles Sunglasses contact lenses 80 per cent 18 per cent 3 per cent
The major national players in the market are GKB opticals, Lawrence & Mayo, Titan Eye +, Vision Express-a joint venture between Reliance Retail and Pearle Europe, offering international designs and optical skills.
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 5
Players to work on
In this report the main focus is on two players, one belonging to organised sector and the other belonging to unorganised sector.
S.No 1 2
Player Titan Eye+ Nagar ChasmaGhar
Sector Organised Unorganised
Objectives of the study
•
• •
To compare the store location, Layout and merchandising mix of the above retailers To compare the retail value proposition of the above mentioned brands. To distinguish and compare the customer base of the above organised and unorganised retailers.
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 6
Data Analysis and Findings
Most of the segments in this sector are characterized by intense competition, price discounts, technological innovation and improvements and exchange schemes. The eyewear sector in India is characterized by the emergence of organized sector carrying the big names. These big players main target is the growing middle class population of India. Organized players offer superior technology and comfort to the consumers whereas the unorganized players compete on the basis of firm grasp of the local market, their well acknowledged name and hold over wide distribution network.
About Titan Eye+
Titan Industries Limited, a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation (TIDCO) commenced operations in 1987 under the name Titan Watches Limited. In 1994, Titan Industries diversified into Jewellery and more recently into Eyewear with Titan Eye+ Titan Eye+ focuses on understanding the needs of its customers and meeting them in a manner that delights them. Eyewear shopping, in today's scenario, is a challenging experience due to the wide variety of choices and the emerging competition both from organized and unorganized sector. Thus, making the right choice in such a scenario is essential but difficult. Titan Eye+ has entered the Eyewear retailing scene to help customers understand their needs and suggest all suitable options. Titan Eye+ commitment is to provide its customers an unmatched shopping experience with their wide range of product options. Knowledgeable and helpful staff, committed customer service coupled with great prices and deals in an international shopping ambience is what Titan Eye+ offers.
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 7
Trade area Profile
Titan Eye+ stores are situated at various locations covering more or less the whole Ahmedabad. Some of the key areas are Satellite,C.G Road,Navrangpura,Maninagar etc. Mostly the stores of Titan Eye+ are situated in the CBD’s (Central Business Districts) or the SBD’s (Secondary Business Districts) .The household income of the residents in this area is high and the people are mostly business class.
Store Layout
The layout of the store is not decided at the store. It is communicated by the head quarters and the store managers are just expected to follow it. Though there are major minor changes made in the layout as per customer traffic but it is mostly HQ driven. The layout, at the headquarters is determined by experiences, feedbacks from customers and trial experiments and thus is common for Titan Eye+ stores all over India. The store arrangement of furniture and fixtures has been made in a way so as to facilitate orderly purchase.
The type of layout that Titan Eye+ has adopted is majorly a Free Form (Boutique) layout which provides convenience as far as shopping of an Eyewear is concern. The layout emphasizes on the fact that no matter wherever a customer is in a store, he can visually see all the display available. .
About Local Unorganized Eyewear Store
These stores were mainly specific to a city or region. These stores are located mostly in the NBD’s( Neighborhood business districts) but there can be exceptions also. They don’t really have a chain structure. Their main aim is to provide value added products to the customers. These stores work on the model of having less durable products but at the same time their prices are very low. These stores are providing a tradeoff to the customers to get the product in less prices as compared to big organized shop, but the customers have to compromise with the quality.
Retail Value Proposition of Organized and Unorganized Eyewear Retailers Page 8
A decade before ,these unorganized stores were considered as a small shop which helps in fulfilling the basic customer needs, but now a days due to the increased per capita income and higher impact of western culture, these stores have also become fashionable and thus they are providing a healthy competition to the Organized Eyewear stores
Trade area Profile
For the report analysis and comparison, I have studied a local Eyewear store Nagar Chasma Ghar, which is located at the C.G road. This store is quite a popular store in the city both because of its products range and value for money. The location of the store is also a big plus point for its increasing sales, because C.G road is amongst the most developed shopping area catering to the middle and upper middle class people of the city.
Store Layout
Normally the unorganized stores such as Nagar Chasma Ghar don’t have any other stores anywhere else in the country, so they don’t have to follow any specific standard while designing a store layout. They can follow any store layout they want pertaining to the customer’s convenience. But usually it has been observed in the Eye wear industry that Free Form Layout is mostly followed in both organized and unorganized sectors. In the Eyewear shops customers usually want to have a glimpse of the whole shop without compromising the convenience and thus boutique structure proves to be the most appropriative layout.
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Comparison of the Retail Value Proposition of the Organized Eyewear Store (Titan Eye+) with Unorganized Eyewear Store.
RVP =
SELECTION +CUSTOMER EXPERINECE+ CONVINIENCE PRICE
Selection
Selection basically means what value you are providing to the customers. Usually to have good customer relations the value should be real, unique and should meet with the offerings that a particular product promises. The Definition of selection varies for a branded store to a store which is locally located and has no brand name associated with it.
Titan Eye+
Talking about a store like Titan Eye+, which is nationally present and which offers a wide range of Eyewear products, the people have a perception that this store will offers a good quality but at the same time in a premium price. If a customer is highly quality conscious he will still prefer this store. Analyzing the store like Titan Eye + on the basis of selection shows that this store has much value to offer. Its assortment mix is quite wide. The varieties offered by Titan Eye+ are also quite broad and thus it proves to be a great destination for the variety seeking customers. The main factors that came under Selection are as follows:
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Merchandising Mix
Merchandising at Titan Eye+ is categorized into 3 broad categories:
•
Spectacle
• Goggles • Lenses. In each category there are several sub categories differentiated on the basis of price, latest trends, the form of material used etc. Stores like Titan Eye + are increasing because they offer a complete shopping value to the customer.
Display of Product
Talking about the display, all the products are displayed at eye level so as to facilitate display as well as trial. It has been observed that more than 80% of the purchases that are made are on the basis of display of merchandise.
Local Eyewear Store
In a local Eyewear store, the concept of selection doesn’t hold that much importance as was in Titan eye+ .In case of Titan Eye+ it’s the value and uniqueness of the products which differentiate it from the others where in case of Local Eyewear store its basically the pricing and the convenience which overpower all the other factors.
Merchandising Mix
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In a store like Nagar Chasma Ghar the merchandising mix is quite limited, their assortment is not wide and they don’t have that unique factor in their product. Categories in Local Stores are somewhat similar to Titan Eye+ i.e. • • • Goggles Spectacles Lenses
The difference arises in the sub categories. Local stores don’t have much sub categories to offer. There limited assortment restricts them in comparison to the branded stores. These local stores offers value only in terms of varied low level price range. Customers belonging to low middle class are highly related to these types of stores.
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Customer Experience
Talking about customer experience, there is a high diversity in between an organized eyewear store and an unorganized store
Titan Eye+
From the data collected through the questionnaire it is clear that the customers who prefer titan Eye+ over any other local eyewear store puts experience as their top most priority while buying any eyewear related product. Among the respondent almost 90% have the view that people visiting Titan Eye+ stores don’t have any money constraints, they visit these stores for the experience and quality.
This experience could be in variety of field such as • • Customer Service Quality of Product
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• • •
Ambience inside the store Premiumness of the Product Variety
Local Eyewear Store
For the Customers visiting the local Eyewear store, customer experience don’t hold that much important value. These customers were basically the low range customers who give less important to experience as compared to basic fulfillment of needs .These customer don’t need any special staff care assistance. They don’t have any special demand while buying an eyewear related product. These customers were also asked why they prefer going to NgarChasma ghar and the response was quite clear. These people prefer reasonable price over experience and quality. For some ,Location is also a factor while considering this store.
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Convenience
From the survey an interesting finding came out that the definition of Convenience varies differently for organized and unorganized sector.
Titan Eye+
For a store like titan Eye+ convenience plays a very important role. Normally convenience for the customers of Titan Eye+ includes everything. • The store location of Titan Eye+ is chosen in such a way that it adds to the convenience of the customer visiting the store. • Sales staff assistance in Titan Eye+ helps in adding convenience value to the customer. • In Titan Eye+ convenience also holds value for the good quality. Customer travels a long distance to buy only a Titan Eye+ product just because of its quality and in store experience
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Local Eyewear Store
From the survey it is clear that nearly all the customers who visits Local Eyewear store is because of its location advantage. These customers see convenience mostly in the form of distance travel to reach a shop. As these type of local shops are present in the vicinity and thus it add to the convenience of the customer.
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Price
This is the most important retail value preposition which helps in selection of a particular brand of a product. Price is the factor which could make customers to switch from their existing brand to the other reasonable brand. There are people who would make tradeoff on quality, convenience just because of price.
Titan Eye+
Stores like Titan Eye+ follows the Fixed Pricing Strategy, theses stores follow one price policy .There is no scope of bargaining in these shops .Normally in a normal shopping experience the customer tends to divert towards the other brand when offered a more attractive deal in terms of pricing. But in case of store like Titan Eye+, the scenario is totally different .Customer are loyal towards the brand and are not ready to switch on the terms of money. This concept is proved from the survey result as well, it’s been clear from the data that given a choice to the customer to switch from Titan Eye+ to a local store because of price, location Advantage and Quality. Almost 50% refused to switch and they wanted to remain loyal to titan Eye+
But there are some customers who could be tempted by giving some offers, thus we could generalize the customers of Titan Eye+ in two categories.
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1. Customer who are loyal to the brand and will not switch if given an attractive price offer by other store. 2. Customers who are not loyal and thus can switch if given an attractive price offer The second types of customers are less but they do matter for the overall sales of the store. These individuals rely heavily on the pricing structure of the product. These are the people who want to led a high profile life with all branded stuff but at the same time are also a bit prices conscious. These people will switch only when they will get an attractive offer where by compromising the quality a bit.
Local Eyewear Store
From the survey result, it could be inferred that the customers of such local stores are never loyal to the stores. These customers are buying from the local shops just because of location advantage or due to low reasonable pricing. Thus these customers could any time switch to other local store, if given attractive deals in terms of low prices or convenience on the basis of nearby location.
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Inferences & Suggestions
Suggestions for both the stores would be on the basis of total retail value proposition, considering all the factors (Selection, Customer Experience, Convenience, and Price) in mind. These suggestions are basically drawn by the study done taking questionnaire as the tool and also by the general observations taking into consideration while doing shopping at these types of stores.
Titan Eye+
Titan Eye+ is one of the leading brands in the field of organized Indian Eyewear retailing. Titan Eye+ is providing its customers an all time shopping experience by providing an extra value added services along with the product. The market share of Titan Eye + in Indian Eyewear Industry is increasing, but its progress is little slow. On an Overall analysis, all seems to be in favor of Titan Eye+ whether be the quality satisfaction from the customer’s side or the pricing structure or the overall experience, but according to my analysis there are certain grey areas where Titan Eye+ could work in order to increase its growth. Some of them are mentioned below • The online delivery of the product is the main hiccup in the smooth functioning of the store. There are incidences where delivery was done after the due date that too the product was not the same as it was ordered. This act as a main downfall on the convenience part towards the customers. • Titan Eye+ is known for its quality all over India, but there are cases where customers are complaining about the cheap material used while manufacturing the glasses, these instances are less but should be considered at utmost priority by the brand because quality is what that showcase Titan Eye+ as a brand. • Another main important factor in the retail value proposition is Price. Titan Eye+ has to work hard about its pricing structure. Due to cheap availability of fashionable Eye wear in Local Stores, the customers are diverting toward these stores because they are getting fashionable products in low prices and for this they are ready to compromise little bit with the quality.
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So the overall Retail Value proposition for Titan Eye + is: RVP= Selection (Good) +Customer Experience (High) +Convenience (Moderate) Price (Costly) So thus Titan Eye+ have to work on its pricing structure, try to cater the lower middle class people with attractive and low pricing schemes .Titan Eye+ also have to look into the efficient online delivery of products in order to increases the satisfaction level among the customers as far as convenience is concerned.
Local Eyewear Store
In the Indian Eyewear industry the maximum market is captured by these unorganized stores. Stores like Titan Eye+ etc are giving competition to these stores, but in a diverse country like India it will take time to switch customers buying habits and thus organized sector will take time to hold its foot in the market. In India as the per capita income of an individual is increasing, so the buying behavior of the customer is changing, they are ready to spend a little extra in order to earn some benefits. These benefits can be in the form of quality, services or experience. These are the parameters on which a local store lacks. These local stores are not able to provide these extra benefits to the customers. Talking about the retail value proposition for the unorganized Local Stores, there can be number of suggestions that could be given to a local store to increase its sales .Some of them are mentioned below • Today’s customer is price conscious, but at the same time for a product which is directly affecting your eyes, he will not compromise with the quality. So to get that extra edge over organized stores the local stores should start providing good quality along with a reasonable cost. This will also enhance their image from being a low quality store to more reasonable store to shop. • Convenience can be an important parameter as far as local stores are concerned. Now a day’s customers have become choosy and thus they demand
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convenience at every possible way they can and for that they are ready to pay a little extra. So local stores should start working on providing convenience to the customers while enhancing their prices a little bit. For providing convenience, what a local store can do is to make the ambience of the store customer friendly .Store location both in the form of distance as well area plays an important role in defining convenience for a customer, so local store should open their store in a more secure and customer friendly area. • One of the most important retail value proposition on which Local Eyewear stores lacks is the fulfillment of total customer experience. So Local stores should work on providing a customer experience at least in the form of quality and convenience. So the overall Retail Value proposition for Local Eye Wear Store (Nagar Chasma Ghar) is: RVP = Selection (Moderate) +Customer Experience (Low) +Convenience (Low) Price (Reasonable)
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Research Methodology:
Type of Research: Qualitative Research
Qualitative research aims to achieve an in depth understanding of a situation; it helps to portray people’s hidden interpretation, understanding and motivation. Qualitative research is designed to tell researcher how (process) and why (meaning) things happen as they do.
Nature of Sampling: Probability Sampling Sample Size: 50 Sampling Method: Simple Random Sampling
Here simple random sampling because sample size is small so there is no such need to divide people on the basis of clusters and subpopulation.
Method of Data collection:
Two methods would be used in the work of data collection. • Questionnaire: As the interaction was directly with the customers, so the source of data was primary in nature. The collection of data was basically through simple questionnaire, which mainly consisted of multiple choices, closed ended, ranking preferences, etc. These questionnaires would be filled by the past, current and future customers of the three different outlets.
•
Observation: Another important method would be observing the customer’s entering the three different retail outlets and then forming a conclusion about the buying habits of the customers.
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Conclusion
Both the stores whether Titan Eye+ or Nagar Chasma Ghar belongs to a different sector of retailing, one being in organized retailing and the other in unorganized retailing. Thus both the stores have their own way of working and both are performing well in their fields. But due to the changing face of Indian retail market there are certain parameters that are mentioned in the report where these two stores could work in order to increase their good run in future also.
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References
1. Randal Watson (2005),”Entry and Location choice in Eyewear Retailing” https://webspace.utexas.edu/rbw264/www/papers/GlassEntry2.pdf 2. Study on Entry and location choice by “Hass-Wilson (2005)” https://webspace.utexas.edu/rbw264/www/papers/GlassEntry2.pdf 3. John Sailer (March 5, 2012),The “Eyewear Industry Grapples with E-Tailers’
Impact” http://www.visionmonday.com/CMSDocuments/2012/3/cover_story_ VM0305.pdf
4. Delia Paunescu (March 5,2012) ,”Online Optical Retailers Talk Shop”
http://www.visionmonday.com/CMSDocuments/2012/3/cover_story_ VM0305.pdf
5. Study on Product Variety and Competition by “Randal Watson (May 19,2009)
http://onlinelibrary.wiley.com/doi/10.1111/j.14676451.2009.00381.x/full
6. Study on Small and Medium district Enterprises by “Alberto De Toni and Guido
Nassimbeni (May 19,2009)” http://www.emeraldinsight.com/journals.htm? articleid=849480&show=abstract
7. Netscribes Pvt.Ltd.(2010) report on Indian Eyewear Market.
http://www.news-medical.net/news/20100515/Netscribes-launchesreport-on-Indian-eyewear-market.aspx
8. Study on Indian Eyewear Market by D.S.Rawat (April10,2010)
http://www.thehindu.com/business/Industry/article3291483.ece
9. Study on Indian Eyewear Market
http://www.euromonitor.com/eyewear-in-india/report
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Annexure
Consumer Perception over Titan Eye+ & Local Eye Wear Stores
* Required Name of the Respondent * Age *
• • • •
Below 18 18-25 26-35 Above 35
Sex *
• •
Male Female
Employment Status *
• • •
Student Employed Unemployed
How often do you go for shopping *
• • • •
Once in a week Once in a month Once in 6 months Once in a year
Which store do you visit to buy eye wear related Products. *
• • •
Branded Showrooms(Titan Eye+) Local Eye Wear Stores Other:
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Titan Eye+
Kindly fill the information regarding Titan Eye + Where will you prefer the location of showrooms of Titan Eye+ *
• • •
In Malls Open Stand Alone Shops Other:
Which Eye Wear Product will you Shop from Titan Eye+ *
• • •
Goggles Spectacles Both
Kindly rate the store on the basis of following Parameters. * Excellent Store Location Store Ambience Quality of Products Customer Service Store Layout How do you consider the pricing structure at Titan Eye+ *
• • •
Good
Average
Below Average
Bad
Over Priced Reasonable Under Priced
What according to you is the customer Base of Titan Eye + *
• • • • •
Premium Quality Prone Price Conscious Fashionable Other:
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If given a choice to switch from Titan Eye+ to Local Eye Wear Store. What can be the probable reasons for switching *
• • • • •
Quality Reasonable Pricing Location Advantage You will never Switch Other:
Local Eyewear Stores
Kindly fill the information regarding any local Eye Wear Store Where will you prefer the location of the Local Eye Wear Store *
• • •
In Malls Stand Alone Shops Other:
Which Eye Wear Product will you shop from Local Stores *
• • •
Goggles Spectacles Both
Kindly rate the store on the basis of following Parameters. * Excellent Store Location Store Ambience Quality of Products Customer Service Store Layout How do you consider the pricing Structure of Local Eye Wear Stores *
• • •
Good
Average
Below Average
Bad
Over Priced Reasonable Under Priced
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What according to you is the customer base of Local Eye Wear Stores *
• • • • •
Premium Quality Prone Price Conscious Fashionable Other:
If given a choice to switch from Local Eye Wear Store to Titan Eye+ .What can be the probable reasons for switching *
• • • • •
Quality Reasonable Pricing Location Advantage You will never Switch Other:
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