Retailing ensures that customers derive maximum value from the buying process, relative to the cost of acquiring the merchandise. This involves crucial activities and stepsbreaking bulk, assortments, merchandising and category managementbefore the merchandise is placed in the hands of consumers for retail consumption. Retail solutions aim at providing the last mile of connectivity that link brands with their consumers while delivering value at the most critical point of delivery: the ‘last-three-feet-of-sale’ at the store.
The store environment has a significant impact on shopper behavior, which propels retailers to make considerable investments in store design, atmospherics and merchandise presentation. Atmospherics and floor space management are central to all retail formats and assume significant importance in the context of modern retailing as there is a positive correlation between shopping behavior and the physical store environment. The point of purchase settings and design elements of a store such as space, lighting, acoustics, air quality, decor, comfort and cleanliness, impact on a shopper’s mood to influence shopping behavior. The layout and architectural design of a store varies in accordance with the type of store merchandise. In this context, the hypermarket format of a store is positioned as a market game changer in modern retail.
The hypermarket not only stocks and retails food and groceries but apparel and general merchandise as well a store format essential for generating volumes and economies of scale for retailers. For example, HyperCITY, the Raheja group promoted hypermarket, differentiates itself from other hypermarkets brands (such as Big Bazaar) by offering different product assortments and quality merchandise, which include international brands, imported home ware and apparel. Private label merchandise categories in apparel are major margin drivers for the store as the supplies are sourced directly from vendors, which allows for better control over the costs of production and logistics. HyperCITY is confident of seeking profit margins in the range of 55 per cent on private label apparel and in creating distinct target markets for premium products but in limited shoppers’ catchments
For example, while HyperCITY has been able to gain unmatched market traction and success in trading areas such as Mumbai (Malad), Hyderabad and Bangalore (Whitefield), the consumer acceptability of the hypermarket brand is relatively evasive in cities such as Jaipur, Thane and Bhopal, which do not offer great catchments. The flagship tenant-store of HyperCity in Bangalore is located in Royal Meenakshi Mall, which is situated in the southern suburb of the city and offers attractive trading areas that are well populated with upper income shopper catchments. Spread over 60,000 sq. ft. and merchandising over 44,000 stock keeping units, the store is accessible from two locations in the mall: the upper ground floor level faces the main entrance and the lower ground floor of the mall enables shopper traffic direct access to the basement parking areas. The store architecture is shopper friendly and is planned out in distinct department-type merchandise arrays: the lower ground floor displays grocery and home needs while the upper ground floor retails general merchandisecategories that include electronics, toys, apparel, furniture and sport equipment. The lower ground level draws strong shopper crowds as it retails the core categories for which shoppers travel to the destination: perishables and staples (grocery, fruits and vegetables) and household items. The store is typified by a lavish and spacious space area planned in an asymmetrical pattern for merchandise display that is heightened by the lack of a false roofing, utilitarian decor, basic tiling covering the floor and florescent tube lights that are fastened to the roofrunning through the length and breadth of the storeand spotlights that focus on the merchandise display.
The store relies on reinforcing the store image of ‘hyper’ convenience, experience, quality and cost savings for consumers. The hypermarket format as manifest in HyperCity is fast emerging as the next level of interactivity and the destination of choice for the value shopper.
The author Sudarshan Seshanna is a professor in marketing at the Alliance University School of Business.
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