Product adoption by small retailers in India

Abstract

PurposeOwning to the influence small retailers have on the customer’s final choice, the purpose of this paper is to investigate the factors that dominate small retailer’s assortment planning decisions. Drivers of product adoption by small retailers are the focus of study. Earlier research works have primarily focused on the profit oriented factors of retailing. It is a multidimensional approach of understanding the decision making of small retailers.Design/methodology/approachThe study is an exploratory in nature, using a mixed method approach that involves both qualitative and quantitative methodology. In the first stage of the study, grounded theory has been adopted that helps in building a conceptual model, which is further validated using SEM. Rural areas of Jammu and Punjab have been targeted to collect data.FindingsThe study provides a conceptual model of product assortment planning for small retailers. The results indicate retail margin, which is the most important criterion toward product selection. Small retailers understand the customer profile and their catchment before selecting a product for their store. Store design is an important variable which impacts the number of categories kept in the store as the shelf space is limited. While determining the assortment planning for the store the retailers need to think in advance about buyer, supplier, environmental and the surplus oriented factors while determining the assortment planning for the store.Research limitations/implicationsIn developing economies like India, major population (customers) lie in the rural areas of the country and prefer small retailers to shop their daily necessities. The study proposed that the manufacturers need to maintain good and healthy relationship with the associates of the channel and the retailers that are in connected with the end consumer. Marketing managers of firms with target audience as small retailers can draw many inferences from the present study. They may devise rural strategies keeping attributes like localization of supplier, doorstep delivery, supply frequency, etc., on the basis of product demand and attribute.Originality/valueThis paper fulfills an identified need to explore the assortment planning criteria of BOP retailers in India. Also the mixed methodology is attractive and new in the retail domain.