Visual Merchandising in Big Bazaar - Retail Management, Retail Marketing

Term Project
RETAIL MANAGEMENT
Term 6 | January - March 2018 | PGDM | RET 2 | FORE School of Management
To study & analyze the visual merchandising

practices adopted by Big Bazaar
& their impact on customers
Submitted by
Nikita Tada | 251100
Saurav Singh | 251117
Shubham Gupta | 251126
Avik Bal | 251147
Sonia Kataria | 251192
1
Retail Management | Group 4
About the Project

We have explored Vasant Kunj Square Mall and picked hypermarket Big Bazar as our
subject for this project. Big Bazar being a multi-category multi- product hypermarket
occupies the majority space (biggest store by floor area) of the mall and attracts the
maximum share of footfall. So we found it to be the best for our study and analysis of
Visual Merchandising and its impact on consumer Behaviour.
2
INDEX
1. Retail landscape in India ………………………………… P-3
2. Literature Review …………………………………………. P -8
3. Store Location and its Impact ………………………….... P-11
4. Store Design and Layout …………………………………. P-12
6. Store Visual Merchandising ……………………………… P-13
6. Primary Research to study impact of Visual merchandising on

Consumers …………………………………………………... P-22
7. Survey Data Interpretation & Analysis ………………… P-23
8. Conclusion ………………………………………………… P-30
9. References ………………………………………………… P-31
10. Annexure – Survey Questionnaire ……………………... P-32
3
1. Retail landscape in India

Evolution of retail in India
4
Retail formats in India
Source: Aranca Research
5
Competitive landscape in Indian retail sector
● The retail sector in India is emerging as one of the largest sectors in the economy
● The total market size was estimated to be around US$ 672 billion in 2016, thereby
registering a CAGR of 7.74 per cent since 2000.
● Retail industry is expected to grow to US$ 1.3 trillion by 2020.
● India will become a favorable market for fashion retailers on the back of a large young
adult consumer base, increasing disposable incomes and relaxed FDI norms.
● By 2020, food and grocery segment is expected to account for 66 per cent of the total
revenues in the retail sector, followed by apparel segment.
● Demand for Western outfits and readymade garments has been growing at 40–45 per
cent annually.
● After 2017 being a favorable year for herbal-Ayurveda brands, new Indian organic labels
in hair care, cosmetics, food and apparel are gearing up to establish an organic niche in
the growing herbal segment.
6
● Organized Retail Penetration (ORP) in India is low (7 per cent) compared with that in
other countries, such as the US (85 per cent). This indicates strong growth potential for
organized retail in India.
● The Indian retail market is in its nascent stage; unorganized players accounted for 7 per
cent of the market during FY 2016-17.
● There are over 15 million mom-and-pop stores
● The organized retail in India is growing at a CAGR of 20-25 percent per year.
● In 2020, it is estimated that organized retail penetration share would reach 10 per cent
and unorganized retail penetration would hold a major share of 90 per cent.
● The unorganized retail sector in India has huge untapped potential for adopting digital
mode of payments, as 63 per cent of the retailers are interested in using digital
payments like mobile and card payments.
● India is among the highest in the world in terms of per capita retail store availability.
India’s strong growth fundamentals, along with increased urbanization and
consumerism, offer immense scope for retail expansion for foreign players. With the
allowance of 100 per cent FDI in single brand retail investor sentiment will get further
push
● In October 2016, CapitaLand, a listed company in Singapore, announced plans to open
2 more malls in India by the end of 2019.
● World's largest private equity manager, Blackstone Group, entered India's retailing
sector by setting up a fully owned subsidiary, Nexus Malls. The new entity will own and
manage shopping centers in the country.
● With an aim to expand its store network, Walmart India Pvt Ltd, the Indian arm of the
largest global retailer, is planning to set up 30 new stores in India over the coming three
years.
● With an investment of US$148.74 million, Amway India plans to open 50 retail stores in
the country by 2018, for enhancing direct and online sales of its products.
● British luxury men's footwear and accessories brand, Harrys of London is going to enter
India and plans to open its first outlet in Delhi followed by Mumbai by early 2018. US-
based footwear company, Sketchers, is planning to add 400-500 more exclusive outlets
in India over the next five years and also to launch its apparel and accessories
collection, as it increases its operations in India.
7
● Bang and Olufsen, a Danish-based stereo system speaker maker, plans to set up its 1st
flagship store in Delhi and is planning to open 8-10 standalone stores in Chandigarh,
Hyderabad, Ahmedabad, Ludhiana and Kolkata in this fiscal year.
● Ikea Group to open its 1st domestic outlet in 2018 in Hyderabad, followed by more
stores in New Delhi, Mumbai and Bangalore. The company would double its sourcing
from India to US$ 667 million.
● Japanese low-cost retail chain, Miniso, opened its first store in India on July 18, 2017
and is targeting a revenue of Rs 10,000 crore (US$ 1.56 billion) over two years by
reaching a count of 210 stores by the end of 2018 and 800 by 2019.
● Indian fast-moving consumer goods (FMCG) company, Patanjali Ayurved Ltd, is
planning to foray into India's apparel market by launching its 'swadeshi' clothing line
by April 2018 and has set a sales target of Rs 5,000 crore (US$ 780.41 million) for the first
year.
● French beauty and cosmetics retailer Sephora is planning to bring 14 exclusive brands
to India in 2018 and will open 6-8 new stores in the country every year.
● India has occupied a remarkable position in global retail rankings; the country has high
market potential, low economic risk and moderate political risk
● In FDI Confidence Index, India ranks 8th (after U.S., Germany, China, UK, Canada, Japan,
and France)
● India is ranked first in the Global Retail Development Index 2017, backed by rising
middle class and rapidly growing consumer spending.
● Overall, given its high growth potential, India compares favourably with global peers
among foreign investors
● India’s retail market witnessed investments worth US$ 200 million by private equity
(PE) firms and wealth funds between January-June 2017.
Growth drivers for retail in India

● Easy consumer credit and increase in quality products
● Favorable demographics
● Brand consciousness
● Rise in income and purchasing power
● Change in consumer mindset
8
2. Literature Review
Literature Review for the project includes the past studies that have been carried out by
research organizations and independent Research Scholars. Studies referred by the
group while doing the preliminary research on the topic of project, provided with the
following insights:
Pritam Chattopadhyay and Dr. Ruchi Jain in their paper Prospects and Hindrances in
Retailing in the Promising Business milieu: Indian Context (2017) have highlighted the
dynamic nature of Indian retail industry citing that big players like Aditya Birla Group , Future
Group , Reliance etc have entered this industry due to growth of organized retailing in India, but
they have explained that there are heavy initial investments required to enter this segment
that’s why many of these ventures have not been able to make significant profits till now. They
have also explained the growing importance of visual communication done at the stores by
these companies. For example : Pantaloons has around 1000 stores across India(at the time of
publishing of paper) and in those stores it focuses on the visual communication being done to
the customer by taking care of the way mannequins are displayed to consumers.
Monica Grosso, Sandro Castaldo, Anjana Grewal in their paper How store attributes impact
shoppers’ loyalty in emerging countries: An investigation in the Indian retail sector they
have statistically analysed the difference between the customer loyalty towards Retail stores
in India as compared to the their behaviour in western countries. They have highlighted main
difference in the customer loyalty in Indian Retail Sector in terms in importance of two
parameters “ Customer Satisfaction” and “Value for money” they have proved through
analysis that store loyalty is more influenced by Customer satisfaction level and not by value
for money. The Goal of the study was to find out Growth Drivers for store loyalty in Indian market
and develop a comprehensive model for store loyalty for Indian Customer .
The core variable for the study were:
9
· Store loyalty
· satisfaction
· value for money
After that they deduced various hypothesis to check the impact of these variables on customer
loyalty.
Results of the study showed that loyalty of customers in Indian retail followed a path which
was different from the one showed by older studies. Moreover, main driver of customer loyalty
was variable –‘satisfaction’, it was much less directly related to value for money.
Scott C. Friend and Patricia H. Walker in their paper “New world of Merchandising” (2001)
have compared the evolution of Visual Merchandising. They explained how visual
merchandising has evolved over time and the growing importance of marketing at the point of
sale for consumers. They have also mentioned the general issues faced by merchandisers in
dealing with the demand and supply gaps. They have suggested use of software and
technology to deal with the demand and supply gaps and also to use analytics in order to
predict what kind of visual merchandising works better for the customer.
In the book “Visual Merchandising for small Retailers” written by Holly Bastow-Shoop,
North Dakota State University ,Dale Zetocha, North Dakota State University and Gregory
Passewitz, The Ohio State University , They have identified five critical issues for Rural
Revitalization
1. Level of Economic development of small communities.

2. Level of Innovation in the company, financing sources and quality of delivery of
community services.
3. Programs which are running for families
4. Rise of new income generating opportunities and promoting the rural Business
entrepreneurship.
5. Leadership development courses
In this book they have explained various methods of exterior and interior presentations which
can be used by small retailers in order to attract more customers in a complex market like that
of India
10
Vrechopoulos, O’Keefe,Doukidis, and Siomkos in their paper Virtual store layout: an

experimental comparison in the context of grocery retail(2004) illustrated that store layout
is an important determinant of store image. They focused on three major store layout types.
Grid layout dealt with the routine and planned shopping behavior, freeform layout deals with
the time which customers are willing to spend and Store Racetrack/boutique deals with the
movement of the customers throughout the store. It suggested Freeform was preferred by the
customer.
11
3. Store Location and Its Impact

Vasant Square at Vasant Kunj is strategically located on Mehrauli - Mahipalpur road. Set amidst
one of the largest cluster of affluent households in Delhi Vasant Square is designed to
unravel the possibilities of a brand new avenue for a population of approximately 4,200,000
residents in South Delhi and adjacent areas.
A 23,226 sq. mts. structure with 250,000 sq. ft. retail and office space, Vasant Square consists
of four floors tastefully and aesthetically designed with landscaped surroundings. Whereas on
the ground floor and lower basement one can do the shopping with an array of leading retail
brands and enjoy the hospitality of some of the most well- known restaurants & bars.
12
Google Map Link : https://goo.gl/maps/y1HgkDyC4mw
Following Factors which affect the long term profit generated by stores are being
considered: -
1. Economic conditions - Hyper local sales of daily use commodities like groceries and
household stationaries are high. A regular monthly shopping destination for the local
consumers.
2. Competition - Sole hyper market in Vasant Square mall. No other hypermarket are
present in Vasant Square mall which gives Big Bazaar a competitive advantage in sales
share. They don’t have to spend heavily in intra mall advertising. Vasant Kunj Mall has
multiple food outlets and notably Pizza hut and Dominos being of same category food,
spends the most in intra mall advertising. Big Bazaar being the sole hypermarket, dont
have the external threat of similar category competitors.
3. Strategic fit of the areas population with retailers target market - Large population.
High on purchasing power parity. No other mall on near vicinity with similar offerings.
13
4. Cost of operating stores - Comparatively lesser rentals than Ambience Mall. Logistics
ease. Geographically in an affluent residential area and at the same time closer to
procurement/sourcing markets.
Location Characteristics:
1. Good Visibility - Covers a significant portion of the mall providing easy visibility.
2. Adjacent Retailers - A lot of food outlets, office spaces and speciality stores like salons,
parlours and bookstores drew in customers.
3. Parking Area - Easily accessible and easy parking facilities.
Storefront: The main Entry
14
Store layout Design

The store is spread across three floors with entries from all the floors. Each floor is dedicated
to a particular segment - First floor comprises of Fashion section (textiles, footwear and
cosmetics), Second Floor stocks the household items like kitchenware, Third floor comprises
of food items (groceries, fresh fruits and vegetables, packaged foods).
Store Visual Merchandise
Interior Visual Ads cover prime locations like escalator side walls where customer is mostly free
to have a look around. The ongoing sales promotion ads and sponsored brand ads are put in
these locations.
15
16
Visually Appealing props and demos to attract shopper attention. The brands are given a
specific shelf space. Products are segmented in categories and further into brand specific
segments within the category.
Big bazaar as a hypermarket sales all kinds of consumer commodities. To provide brand
specific experiences that allow special sales promotion kiosks endorsed by a specific brand.
For experiential commodities like perfumes and deodorants or products of high involvement
like electronics gadgets they have salesperson guiding the shopper.
17
All the category segments are clustered and proper store labeling and direction guide sign
boards are used to provide the shopper a glitch free shopping experience by allowing ease of
navigation in and around the store layout.
18
Along with product labelling, it is also ensured that all products of same category are stocked
in the same location of the store.
Within the category, the product level segmentation ensures the shopper is offered all variants
in one place.
Brand specific shelf spaces are also designed. This helps brands get a special attention form
the target group, acquire new users and provide superior brand experience.
19
20
Acquiring self space is a costly affair in retail industry. All brands want to grab attention of the
shoppers and make a mark in the customer's mind by appealing the brand recall factor.
Products placed in eye level or in the mid to upper shelves are considered to be more attended
by the shoppers.
Brands with big pockets even try to occupy or sponsor a whole shelf area to make a definite mark in
attracting consumers. This helps in brand attention and also eradicates comparison points with
adjacent similar or complementary products.
Plano graph or shelf space design has a lot of impact on consumers buying decision. Big Bazaar has
allotted brand specific shelf spaces on sponsored or premium rental basis.
21
Many loose product categories are kept in the buying counter to appeal to the impulse buying
or last moment buying consideration set of the consumers while they wait in the que for the
billing of their cart.
22
4. PRIMARY RESEARCH
Objective of the Study
1. To study influence of visual merchandising on selection of the store.
2. To study impact of visual merchandising on buying behaviour.
Scope of the Study
The scope of this research is limited to the New Delhi NCR Region.
Research Methodology
The present study is descriptive cross sectional study in nature. The methodology is
designed is to study visual merchandise and its influence on buying behavior of consumer.
The focus was made upon examining the determinants of influencing the buying behavior
of consumer with focus upon modern food retail stores especially Big Bazaar outlets.
Explanatory study was made and was taken into consideration with the quantitative
research strategy. The results are based upon primary data.
Limitations of the study

1. The study has a very small sample size (only 42) which may result in not very biased
results.
2. The demographics of the sample are highly skewed towards students and younger age
group who may not be the complete target group.
23
5. DATA INTERPRETATION & ANALYSIS

Sample Description- Largely male dominated sample size (71.4 % male respondents as
compared to 28.6% female respondents), with most of them falling in the age bracket of 25-30,
hence the observations are heavily skewed to the preferences and buying behaviour of young
masses only.
Sample size is 42.
24
25
Majority of these people have less frequency of visit at Big Bazaar stores. The possible reason
could be that most people do bulk buying at Big Bazaar.
26
Only 16.7% people (take less than 30 minutes) quickly buy and checkout, other spend a
considerable amount of time buying at Big Bazaar. This question is one the basis of testing a
hypothesis, that whether customer spend time is related to Visual Merchandising elements at
that store. A general perception is that a better use of such elements would entice customers
to spend more time and have a good shopping experience at store.
27
Near about 75 percent (rating 3 and 4) of the respondents believed that arrangement of
products in Big Bazaar stores are not so good, which implies the rising importance of using and
refining such elements.
28
For choice of store two sets of store characteristics were given, one belonged to visual
merchandise category (Category 1) and other were not related to visual merchandise (Category
2).
Category 1 Category 2
Store Exteriors Product Availability
Ambience Staff (Courtesy and Availability)
Store Space and Layout Brand Name
Ease of Locating Product Distance from Work/Home
Store Offers and Discounts
29
These responses are again very important for hypothesis testing where we try to check whether
there is a relation between visual merchandising followed at a store and its popularity among
visitors are related or independent.
These observations are interesting to note, as a lot of elements of Visual Merchandise which
are designed to promote store experience do not even garner customer attention, a summary
of attention paid by customers is tabulated as follows-
Element Attention Paid
Store Entry /Exit Display Sometimes
Ambience Sometimes
Shelf Displays Often
POS Displays Sometimes
Promotional Displays Often/Sometimes
Hence it can be interpreted that a large set of these elements do garner customer attention
most of the times, but while shopping at a food retail store a customer is not likely to pay
attention to atmospherics unlike apparel store where it is expected that atmospherics are
closely related to customers’ shopping experience.
30
CONCLUSION
The study illustrates that visual merchandising influences the buying behavior of the
customers. From the review literature it has been clearly stated that store ambience has a
deep impact on influencing buying behavior of a customer. The study confirms the same
worldwide phenomenon.
Our research illustrates that visual merchandising impacts the time spend time by a
customer at a store. Visual merchandising promotes impulse buying through promotions,
signs, placement of objects. It also forces customer to buy more. We can also say that visual
merchandising does not majorly impact the customer’s choice of selecting a store. Colors,
banner displays, store location, product display plays a vital role in invoking customer to
make purchase. Ease of locating product and store layout also play a huge role in
customer’s buying behavior. These visual effects make a serious effect in consumer' mind
which makes a desire to purchase a product.
In gender behaviour, the research study suggests that women are more immersive in the
shopping experience including visual merchandising displays while men have to search for
the signs in a store as to where to find what they are looking for.
31
REFERENCES
1. Prospects and Hindrances in Retailing in the Promising Business milieu: Indian
Context (2017) by Pritam Chattopadhyay and Dr. Ruchi Jain
2. How store attributes impact shoppers’ loyalty in emerging countries: An investigation

in the Indian retail sector by Monica Grosso, Sandro Castaldo, Anjana Grewal
3. “New world of Merchandising” (2001) by Scott C. Friend and Patricia H. Walker
4. Book - Visual Merchandising for small Retailers” written by Holly Bastow-Shoop, North
Dakota State University ,Dale Zetocha, North Dakota State University and Gregory
Passewitz, The Ohio State University
5. Davies, Barry J., and Philippa Ward. "Exploring the connections between visual
merchandising and retail branding: An application of facet theory." International
Journal of Retail & Distribution Management 33.7 (2005): 505-513.
6. Kim, Jiyeon. College students' apparel impulse buying behaviors in relation to visual
merchandising. Diss. uga, 2003.
7. Parker, Ken W. "Sign Consumption in the 19th-Century Department Store: An

Examination of Visual Merchandising in the Grand Emporiums (1846-1900)." Journal
of Sociology 39.4 (2003): 353-371.
8. https://en.wikipedia.org/wiki/Visual_merchandising
9. Wanninayake, W. M. C. B., and Pradeep Randiwela. "The impact of visual

merchandising on consumer store choice decisions in Sri Lankan supermarkets." 7th
Global conference on Business & Economics. Vol. 10. 2007.
10. Kerfoot, Shona, Barry Davies, and Philippa Ward. "Visual merchandising and the
creation of discernible retail brands." International Journal of Retail & Distribution
Management 31.3 (2003): 143-152.
11. Diamond, Jay, and Ellen Diamond. Contemporary visual merchandising and
environmental design. Pearson College Division, 2004.
12. Lea-Greenwood, Gaynor. "Visual merchandising: a neglected area in UK fashion

marketing?." International Journal of Retail & Distribution Management 26.8 (1998):
324-329.
32
13. Khakimdjanova, Lola, and Jihye Park. "Online visual merchandising practice of
apparel e-merchants." Journal of Retailing and Consumer Services 12.5 (2005): 307-
318.
14. Law, Derry, Christina Wong, and Joanne Yip. "How does visual merchandising affect
consumer affective response? An intimate apparel experience." European Journal of
Marketing46.1/2 (2012): 112-133.
15. Mehta, Neha, and Pawan Chugan. "Visual Merchandising: Impact on Consumer
Behaviour (An Exploratory Study of Apparel Segment in Ahmedabad)." (2012).
16. Park, Hyun Hee, Jung Ok Jeon, and Pauline Sullivan. "How does visual merchandising
in fashion retail stores affect consumers’ brand attitude and purchase intention?." The
International Review of Retail, Distribution and Consumer Research 25.1 (2015): 87-
104.
17. Bhatti, Khurram L., and Seemab Latif. "The impact of visual merchandising on
consumer impulse buying behavior." Eurasian Journal of Business and
Management 2.1 (2014): 24-35.
33
ANNEXURE-I
Survey Questionnaire
34
35
36
37

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Term Project

To study & analyze the visual merchandising

About the Project

1. Retail landscape in India ………………………………… P-3

2. Literature Review …………………………………………. P -8

3. Store Location and its Impact ………………………….... P-11

4. Store Design and Layout …………………………………. P-12

6. Store Visual Merchandising ……………………………… P-13

6. Primary Research to study impact of Visual merchandising on

7. Survey Data Interpretation & Analysis ………………… P-23

8. Conclusion ………………………………………………… P-30

9. References ………………………………………………… P-31

10. Annexure – Survey Questionnaire ……………………... P-32

1. Retail landscape in India

Retail formats in India

Source: Aranca Research

Competitive landscape in Indian retail sector

Growth drivers for retail in India

The core variable for the study were:

1. Level of Economic development of small communities.

Vrechopoulos, O’Keefe,Doukidis, and Siomkos in their paper Virtual store layout: an

3. Store Location and Its Impact

Google Map Link : https://goo.gl/maps/y1HgkDyC4mw

Storefront: The main Entry

Store layout Design

Store Visual Merchandise

1. To study influence of visual merchandising on selection of the store.

2. To study impact of visual merchandising on buying behaviour.

Scope of the Study

Limitations of the study

5. DATA INTERPRETATION & ANALYSIS

Sample size is 42.

Store Exteriors Product Availability

Ambience Staff (Courtesy and Availability)

Store Space and Layout Brand Name

Ease of Locating Product Distance from Work/Home

Store Offers and Discounts

Element Attention Paid

Store Entry /Exit Display Sometimes

Shelf Displays Often

POS Displays Sometimes

Promotional Displays Often/Sometimes

2. How store attributes impact shoppers’ loyalty in emerging countries: An investigation

3. “New world of Merchandising” (2001) by Scott C. Friend and Patricia H. Walker

7. Parker, Ken W. "Sign Consumption in the 19th-Century Department Store: An

9. Wanninayake, W. M. C. B., and Pradeep Randiwela. "The impact of visual

12. Lea-Greenwood, Gaynor. "Visual merchandising: a neglected area in UK fashion

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