An Empricial Study on Customer Perception towards Service Quality in Organized Retail Outlets

Abstract

The Indian retail industry has experienced high growth over the last decade with a noticeable shift towards organized retailing outlets.  The industry is moving towards a modern concept of retailing.  The size of India's retail market was estimated at US $435 billion in 2010.  Of this, US $414 billion (95% of the market) was traditional retail and US $21billion (5% of the market) was organized retail.  India's retail market is expected to grow at 7% over the next 10 years, reaching a size of US $850 billion by 2020.  Traditional retail is expected to grow at 5% and reach a size of US $650 billion (76%), while organized retail is expected to grow at 25% and reach a size of US $200 billion by 2020.  The Indian retail sector provides immense opportunity for large scale retailers to set-up their operations which results in a tread of organized retail outlets like departmental stores, hypermarkets, supermarkets and specialty stores and hence altering the retailing landscape in India.  Further, easy availability of Debit/Credit cards has contributed significantly to a strong and growing online consumer culture in India.

In India the retail sector accounts for 22% of the country's Gross Domestic Product (GDP) and contributes to 8% of the total employment.  The industry is experiencing exponential growth, not just in major cities and metros, but also in Tier-II and Tier-III cities.  According to a report by an industrial body, "India has a young, well-educated and professional population, core customers.  It has a very good market.  We choose to be in India before China,” as per Mr. Jonathan D Caplan, President and Chief Executive, Genesco Inc.  Based on the above backdrop, an empirical attempt has been made in this paper to study the customer's perception towards retailer service quality in organized retail outlets in Vellore city, Tamil Nadu. This study also try to find out the interrelationship between various retail service qualities dimensions, which will help the retailers to identify the steps needed to improve the overall quality of service.