Final Footfall Paper

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CONVERSION OF CUSTOMER FOOTFALL TO PROSPECTIVE SALES

AT SELECT RETAIL OUTLETS IN BANGALORE

S.Manjunath, MBA (Research Scholar)

Canara Bank School of Management Studies

Bangalore University

Bangalore

Tel: 9901159460 (Off), 08026573435 (Res)

AND

Dr. Cynthia Menezes Prabhu, PhD

Canara Bank School of Management Studies

Bangalore University

Bangalore

Tel: 9902554503, 08022961977 (Off), 08025441037 (Res)

ABSTRACT: Retailing consists of the sale of goods or merchandise from a fixed location, such

as a department store, boutique or kiosk, or by post, in small or individual lots for direct

consumption by the purchaser. The field of retailing is both fascinating and complex. In retail,

footfall is the shopper‘s mechanism of non assisted magnetism; conversion comes from the

foreplay between the merchandise and shopper. With organised retail comprising just 3% of

India‘s retailing today, the whole world is looking at how to glamorize it to entice a billion plus

people to spend. There are just a handful of global brands that have the capacity to pull in

shoppers by their brand power. But that is not at all enough to get the footfall required to run

different categories of organized retail in India. This paper Studies the Retailing Footfall and

conversion of customer footfall into prospective Sales in Bangalore

Key words: Footfall, Retailing, Conversion, Bangalore



1. INTRODUCTION

1.1 RETAILING

Retailing consists of the sale of goods or merchandise from a fixed location, such as a

department store, boutique or kiosk, or by post, in small or individual lots for direct consumption

by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may

be individuals or businesses. In commerce, a "retailer" buys goods or products in large quantities

from manufacturers or importers, either directly or through a wholesaler, and then sells smaller

quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at

the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary

part of their overall distribution strategy. The term "retailer" is also applied where a service

provider services the needs of a large number of individuals, such as a public utility, like electric

power. Shops may be on residential streets, shopping streets with few or no houses or in a

shopping mall. Shopping streets may be for pedestrians only

1.2 RETAIL FORMATS IN INDIA

There is various kind of retail formats existent in the Indian retail market. The following are

the retail formats found in India:

Mom-and-pop stores: These are generally family-owned businesses catering to small sectionsof society. They are small, individually run and handled retail outlets.

Category killers: Small specialty stores have expanded to offer a range of categories. They have

widened their vision in terms of the number of categories. They are called category killers as

they specialize in their fields, such as electronics (e Zone) and sporting goods (Sport Authority).

Department stores: These are the general merchandise retailers offering various kinds of quality

products and services. These do not offer full service category products and some carry a

selective product line. Shoppers Stop is a good example of department stores. Other examples

are Lifestyle and Westside. These stores have further categories, such as home and décor,

clothing, groceries, toys, etc.

Malls: These are the largest form of retail formats. They provide an ideal shopping experience

by providing a mix of all kinds of products and services, food and entertainment under one roof.

Examples are Sahara Mall, TDI Mall in Delhi, The Forum, Sigma Mall, Garuda Mall in

Bangalore.



Specialty Stores: The retail chains, which deal in specific categories and provide deep

assortment in them are specialty stores. Examples are RPG's Music World, Mumbai's bookstore

Crossword, etc.

Discount stores: These are the stores or factory outlets that provide discount on the MRP items.

They focus on mass selling and reaching economies of scale or selling the stock left after theseason is over.

Hypermarkets/ Supermarkets: These are generally large self-service outlets, offering a variety

of categories with deep assortments. These stores contribute 30% of all food and grocery

organized retail sales. Example: Big Bazaar, More, Spencer‘s, Food World. Convenience stores:

They are comparatively smaller stores located near residential areas. They are open for an

extended period of the day and have a limited variety of stock and convenience products. Prices

are slightly higher due to the convenience given to the customers.

E-tailers: These are retailers that provide online facility of buying and selling products andservices via Internet. They provide a picture and description of the product. A lot of such

retailers are booming in the industry, as this method provides convenience and a wide variety for

customer. But it does not provide a feel of the product and is sometimes not authentic. Examples

are Amazon.com, Ebay.com, etc.

Vending: This kind of retailing is making incursions into the industry. Smaller products such as

beverages, snacks are some the items that can be bought through vending machines. At present,

it is not very common in India.

1.3 FOOTFALL

Footfall is the measure of number of people who walk into a store. Customer counting, also

known as footfall monitoring, is a measurement of the number of people entering a shop or

public space, serving as a key indicator of popularity. It captures the flow of potential customers,

and over time provides an indication of customer demand patterns and trends therefore

empowering businesses to better target their marketing efforts and move towards maximising

their sales potential. By understanding customer behaviour, you can increase your profits.

Counting customers by measuring footfall means that a retail business' decision-making is

noticeably more profitable and scientific, whether it's to do with individual promotions,merchandise, staff scheduling, point-of-sale material, window displays, refits, layout or TV

advertising. Measuring customer footfall answers some of the following questions of the retailer:

• What is actually driving our business: are changes in the volume of sales the consequence of a

rise / fall in footfall levels or changes in the percentage of shoppers that make a purchase?

• How do people shop our stores?



• Why do they behave in the ways that they do?

• What is happening down at the fixture level: are new displays effective in drawing the

shopper's attention?

By capturing the shopper's complete experience from store entry to exit, and analysing theirbehaviour patterns, the solution provides the retailer with facts and insight into the quality of the

shopping experience, and how it matches the intentions behind store design. The analysis can

drill down to fixture level, providing both qualitative and quantitative feedback on issues such as

what shoppers touch and try, how they navigate their way around the store and interact with

staff.

Simply put, sales=footfall X conversion ratio X average transaction value (ATV).

Retail space is priced on the basis of the footfall it receives. Malls price their shops on the basis

of the footfall they receive during weekdays and weekends. Even stand alone shops are sensitive

to accessibility by customers.

2. LITERATURE SURVEY

Footfall is the measure of number of people who walk into a store. Customer counting, also

known as footfall monitoring, is a measurement of the number of people entering a shop or

public space, serving as a key indicator of popularity. It captures the flow of potential customers,

and over time provides an indication of customer demand patterns and trends thereforeempowering businesses to better target their marketing efforts and move towards maximising

their sales potential. Consumers on foot, like drivers of motor vehicles, adhere to certain rules or

patterns. It helps to identify these rules when designing a store. A research conducted by noted

industry expert Paco Underhill called "Why We Buy, The Science of Shopping" has suggested

that, when given a choice, the vast majority of consumers will turn right after entering a store.

The research points to a psychological barrier that exists approximately 15 feet within the front

door of a box retailer. Also called ―the decompression zone,‖ in this space it is rare for an ad or

product to catch the eye of entering consumers. The area just beyond the decompression zone, on

the other hand, is a prime location for what Mr. Underhill calls ―speed bumps‖ — hot products

and cool displays that get the customer‘s attention and slow down their movement through thestore. Nowadays people live in time-compressed lifestyles. They are busy with their jobs,

families, friends & want a retail experience as quick as possible. Hence that calls for a traffic

pattern that allows them to get through the store as quickly as possible without them getting

frustrated. Just as drivers can face serious penalties if they disregard traffic regulations, retailers

who don‘t pay attention to shoppers‘ traffic patterns can wind up suffering. Retailers who don‘t

identify and act on shopper behaviour ultimately will lose rupees. Hence considering the store



layout is an important factor. Different categories have different defined purchase cycles: for

example, FMCG is day, week, monthly driven; automobiles have a purchase cycle of 3, 5, 7

years; for consumer electronics it‘s 3 to 5 years, and for fashion the purchase cycle is 6 to 12

times a year. The strategic brand promoter can totally control the purchase cycle of any category.

2.1 FOOTFALL CRISIS IN INDIA

It‘s not easy for organized retail to take India‘s unstructured human ocean from footfall to

conversion. Too many signs, colours and symbols contribute to the cacophony in the

marketplace. Sometimes billboards gets washed out in the rain and sun, often the

illumination lights are not lit; an electric transformer on the road hides them.

FAÇADE: Most shoppers enter an organised retail with an impulse mindset, apart from the need

based product they come to buy. If your store signage has some impulse exposure shoppers will

step in. We have seen this upside down billboard on a main road for 3 months. Any brand can

put up its billboard in front of mom&pop stores. Often new products are introduced but the old

illuminated billboard remains on top. International brands fall prey to such situations too. A

roadside quick print service store with sophisticated American machines exposes its totally

washed out billboard. You require a unique approach that breaks all disturbing factors to grab

your relevant shopper‘s attention in this jungle. Indian retail facade in prime area doesn‘t address

impulse purchase

Retail façade marketing is the most crucial factor in India. Retailers spend heavily for a prime

place but fail to make a hypnotic façade to facilitate footfall.

Present situation of Bangalore Retailer facade

The façade of the retail stores was highly need based with no sense of appeal to instantly attract

impulse customers, make them curious and change their mentality into a shopping mode. The

static façade failed to attract regular footfall despite the stores being in the prime locations. The

absence of the dynamism in the façade that‘s regularly changed has a big power to increase

footfall. The absence of the provocative character of the façade has failed to appeal instantly to

the impulse customers, make them curious and change their mentality into a shopping mode.

2.2 CONVERSION (CRISIS IN CONVERSION)

Merchandize display:

Conversion is like a jackpot; you may or may not get a share of the shopper‘s wallet. That‘s why

there has to be a difference between dumped stock and artistic magnification of product display

in the store. Shoppers do not buy on seeing a large pile of merchandize in premium retail.



In-store price segmentation:

Most retails in India do not divide the store into 3 price layers, entry, mid and high price. As

mass scale shoppers still come in an impulse motif with no clear idea of what they want to buy, if

they see high or mid priced items at the retail‘s entry, conversion will never happen.

Figure 1

In-store dumped stock displays plays Product at the retail‘s entrance could be a low priced piece

of the core product, or some accessory that has a token price. This area needs attractive displays,

with a variety of merchandise of different pricing. Foreplay starts here where products look like

vibrant offers.

Mannequin: In low profile fashion stores in India, there are several mannequins hanging hereand there without being customized as part of the selling proposition design.

Stop image: To empower different occasions, it requires strong visual impact which can be

flexibly changed from time to time to bring newness in the merchandize.

Visual merchandise:

The design has to be akin to an aquarium of whirling fish. From zone to zone the shopper can be

given a different ambience to whirl in.

Lighting: Lighting at the retail is a crucial element that can change the perception of the

merchandise. Flood lighting gives a discount retail appearance, while theatre-stage lighting

focuses on the active actor on the stage. To sell premium value products, the retail requires

theatre-stage lighting on the merchandize. Lights should not hit the shopper who, like the

audience, would be intimidated; instead the actor, which is merchandize here, should get the

prominence. Of course this definition changes when the shopper comes in front of the trial room

or any mirror in the store. Then the shopper becomes the actor who needs prominence.



The more they whirl inside the retail, the more time will they spend, and spending time is

another sign that will lead to conversion.

100% movable visual merchandize: All the visual merchandize in the store have to be totally

movable to give flexibility for changing the store plan at any time.

Strategic racks: As per the average height of Indian people, the hand movement reaches up 3.5

feet. In a 6 ft height rack, it is totally useless to put merchandize in the bottom 2 feet as it is

below eye level. Doing so would merely make it look like a stock yard. Displaying merchandize

above 6 feet is not friendly for shoppers to see and handle easily.

That‘s why the bottom 2 feet can be used as in-store inventory with different stop images pasted

on it to illustrate the variety of merchandize inside these drawers.

Illustrating mix-and-match product variety: In front of every occasion of wear, LCD screens

demonstrate the mix and-match criteria of the variety in each occasion. This helps the shopper

make up his/her mind. Totally movable independent racks with flexible shelf arrangement design

Intangible ambience: Music is needed as an intangible marketing tool. Playing jazz, rock or

blues in a very traditional shopping area is a dramatic mistake. Our research reveals that different

types of music are required for the morning, afternoon and evening as temperaments differ at

those times. If you know your target shopper, music has huge power in the foreplay between the

merchandise and shopper.

Alchemy of footfall to conversion requires high convergence of multi knowledge such as end-

customer understanding, branding, catchment science, architectural and engineering proficiency

with high sense of visual expertise. These are the 15 key areas which require micro detail work to get quick ROI in retailing irrespective of the retail category. These are all frontline activities

for retail business. Negligence of any one of these areas can create deficiency in ROI.

The research also throws light on some of the following findings:

• People do not see signs that are badly laid out and placed in wrong places. One has to place the

signs where people are waiting.

• It is always better to provide seating for support people (eg: husbands shopping with wives,

etc).

• Men are easier to up sell than women. Men are more likely to ignore price tags.

• Kids have an influence on what their parents would buy.

Thus it can be said that the right product with the right price & right place is what is necessary to

be successful. In other words "Retail is about following shoppers where they are going!"



3 Research Gap

The research gap is as follows:

Studies have been conducted on customer footfall in various parts of the world, especially in the

United States of America. But such kind of research has not been conducted in our country India,

where retailing is still in the nascent stage. The previous researches conducted are limited to

countries where retailing is in a much developed state. The behaviour of retail customers in India

is much different when compared to behaviour of the retail customers of rest of the world.

Hence to overcome this research gap, this project has been undertaken to understand the

consumer shopping behaviour. The purpose of the present study was to document the factors and

parameters that would increase customer footfall.

4. RESEARCH METHOD

For the present study, the researcher has based his theme on descriptive research. Descriptive

study or survey method is used by interviewing or asking questions to people who are believed to

possess the desired information. This research is both quantitative and qualitative. This study is

based on the data collected through questionnaire from customers visiting the selected retail

outlets in Bangalore city. The entire research work is done taking into consideration

select retail outlets in Bangalore. Data has been collected from various sources; there is a

combination of both primary and secondary data that has been used in this research. PrimaryData is the data exclusively collected for the research work by the researcher. It is the raw data

collected for research work that represents an official position or opinion. This kind of data is

always authoritative because the information collected has not been interpreted or filtered by a

second party. Primary data is collected afresh from the field for the purpose of conducting the

research. A structured questionnaire was designed & administered to the respondent. The

questionnaire was constructed as concise and simple as possible keeping the profile of the

respondent in mind. The data has been collected through face-to- face interviews with the help of

a questionnaire. It involved visiting select retail outlets in Bangalore & administering the

questionnaire to the customers who were willing to volunteer for the survey. Secondary data is

the data collected by the researcher from some other sources where the data would have alreadybeen collected and interpreted. Here it‘s not possible to get the data in its purest form because it

would have been used for some other purposes already. The primary data collected by one

researcher becomes secondary data for the other researcher. Secondary data is the refined form

of primary data. Internet databases & text books related to retail & Research Methodology have

been a major secondary source for the extraction of the expert‘s opinion. Also articles have been

sourced from magazines & journals.



A total sample of 100 customers was considered from the above mentioned retail outlets. From

each of the above retail outlets the sample size was 25 customers. A convenient sampling

technique (non – probability sampling) was used for the selection of the samples. The sample

selection was based on the cooperation of the study subjects, i.e., the customers visiting

the retail outlets. The primary data has been collected through questionnaires administered to

customers visiting the retail outlets of More, Spencer‘s, Reliance Fresh & Food World.

5. RESULTS AND DISCUSSION

Chi-square test was used to test the null hypothesis, whether it is significant or not. Two tests

were done

Test #1:

Null Hypothesis Ho: There is no difference in the factors (location, ambience, discounts,multiple brands & loyalty card) that motivate a customer to enter a retail outlet

Alternate Hypothesis HA: There is a difference in the factors (location, ambience, discounts,

multiple brands & loyalty card) that motivate a customer to enter a retail outlet

Test #2:

Null Hypothesis Ho: There is no difference in the factors (price, quality, brand, offers & visuals)

that influence the purchase decision of a customer from a retail outlet Alternate

Hypothesis HA: There is a difference in the factors (price, quality, brand, offers & visuals) thatinfluence the purchase decision of a customer from a retail outlet



Proposed Concept which provides overall factors influencing the Retail Footfall

Figure 2

6. CONCLUSION

This research indicates that there is still a sizeable market which needs to be tapped to attract it

towards organized retail outlets. It can be seen that advertisement and promotions are effective

methods to influence the shopping decision of buyers. Hence retailers can use this as an effective

tool in marketing their products/items. There are quite a number of customers who engage in

impulsive buying in the retail store. Location and Loyalty card of the retail store are the mainfactors which motivates the customer to enter the store. This research also indicates that Price

and Quality are the products are the main factors which influence the purchase decision of a

customer from a retail outlet. The customers engage in cherry picking, i.e., those who go from

store to store to pick the best-priced items and leave the rest, as they are extremely price

sensitive. The customers feel that the quality of service provided by the retail outlet is good,

nevertheless it is better that the companies differentiate themselves from the other by providing



special services. The leading concept which can express the retail identity to communication

which will lead for conversion of footfall into prospective sales would be all 10 factors

mentioned in figure no 2 above, Finally according to the survey we can conclude that we can

convert the footfall to maximum extent through (1) Right Brand/Category Mix- Location & Size,

(2) Enhanced Value Delivery, (3 )Proper customer services(4) Great Product with Excellent

Service is the key(5) Retail Service Quality ensure that to remove our faults in day to day

activity and convert the footfall.

7. LIMITATIONS AND FURTHER RESEARCH DIRECTIONS:

The competition can only get fiercer as organised retail grows. Retailers need precise tools in

hand that will allow them to target individual consumer bases and invest with greater confidence.

As this industry grows, it will become increasingly imperative for retailers to adopt the

‗analytics‘ approach. Radical innovation in IT processes helped India leapfrog to become one of the biggest IT destinations of the world. Given the current scenario, adaptation of a similar

attitude towards retail science could catapult India to the global leaders of retail too. Future

research needs to address this critical need before research into Footfall Analytics approach

through IT in Indian retailing can progress further.

First, this study was only conducted in supermarkets in Bangalore. Generalizability will

definitely be improved if other cities were included. Second, the results of this study may further

be validated by including other factor which may come for converting footfall into sales which

are controllable and uncontrollable factors may exist. Future research should consider factors

such as merchandise, culture, promotion policy, loyalty policy, culture impact etc. Lastly, onlylimitation of this study is the use of a relatively small sample and of the study being restricted to

the city of Bangalore. This could impact the extent to which these results can be extrapolated to

other retail formats, product types and cities. Future research in Indian retailing could examine a

wider respondent base across other cities of India. A larger sample size would also enable

separate analysis across different income groups, gender and age categories. Future research

should take into account of other types of retailers in Bangalore.

REFERENCES

[1] Baker, J, Grewal, D and Parasuraman, A (1994): "The Influence of Store Environment on

Quality Inferences and Store Image", journal of the Academy of Marketing Science 22 (Fall) :

328-339.

[2] Hart, CWL, Heskett, J L and Sasser Jr., W E (1990): "The Profitable Art of Service

Recovery", Harvard Business Review 68 (July-August), pp. 148-156.



[3] Mazursky, D and Jacoby, J (1985): "Forming Impression of Merchandise and Service

Quality", In Perceived Quality: How Consumers View Stores and Merchandise, Edited by J

Jacoby and J C Olson, Lexington Books, Lexington, M A, pp. 139-153.

[4] Oliver, R (1981): "Measurement and Evaluation of Satisfaction Processes in Retail Settings",

journal of Retailing 57 (Fall), pp. 25-48.

[5] Parasuraman, A, Berry, L L and Zeithaml, V A (1993): "Research Note: More on Improving

Service Quality Measurement", journal of Retailing, 69, pp. 140- 147.

[6] Reeves, C A and Bednar, D (1994): "Defining Quality: Alternatives and Implications",

Academy of Management Review, 19, pp. 419- 445.

[7] Sellers, P (1990): "What Customers Really Want", Fortune 121 (13), pp.58-68.

[8] The Economic Times (2003): Changing Gears: Retailing in India, An ET Intelligence Group

Report, ET Knowledge Series.

[9] Westbrook, R A (1981): "Sources of Consumer Satisfaction with Retail Outlets", Journal of

Retailing 57 (fall), pp. 68-85.

BOOKS

[1] Retail Management--A Strategic Approach' by Barry Berman and Joel R Evans, Pearson

Education Publications, Tenth Edition, 2006.

[2] Michael Levy and Barton A Weitz, Retailing Management.

[3] Retail Management by Rosemary Varley, Mohammed Rafiq- Palgrave Macmillan.

[4] Managing Service Quality: v. 3 (Quality Management in Services) by Dr Paul Kunst and

Professor Jos Lemmink.

[5] Retail Management by Uniyal & Sinha-Oxford Publications.

[6] Managing Quality Customer Service (Better Management Skills) by William B. Martin

[7] Managing Retailing by Piyush Kumar Sinha and Dwarika Prasad Uniyal

[8] Retail Management by Chetan Bajaj, Nidhi Varma, and Rajneesh Tuli Arya

[10] Businessworld, April 9, 2011



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