Buying: Behaviour and Promotion in Textile Retailing in Kerala
Active In SP
Joined: Jun 2009
14-06-2009, 09:22 AM
Buying: Behaviour and Promotion in Textile Retailing in Kerala
Retail outlets are the main source of purchase for consumers. Around 80 percent of the customers buy goods
from retailers, while 20 percent goes to the wholesalers and manufacturers. Textile retailing in Kerala used to be a
business that earned huge profits with leas investment. But today the situation has changed. To earn a meager profit
huge investment is needed. Earlier the customers were not bothered about the ambience of the shop and display of
goods, but now the urban customer considers these facts and the retailers are forced to give importance to these, and
huge investments are needed for this. Also, the preferences of customers are changing rapidly. Thus retailing has
become a difficult task,, as they have to keep changing their product lines and modify products according to the
changing trends. ,; : ..Ã‚Â¦;<Ã‚Â¦.
Nowadays retail business is not an easy job. The shops are trying hard for surviving, and sustain the same
turnover every year. The main problems the retailers face today are financial crisis, lack of investment, less margin
and competition. This is a vicious circle. Due to financial crisis the retailers are not able to invest more into their
business as the customers are going for cheaper goods. And cheap products are available in plenty. So margins are
very low due to stiff competition. Earlier, customers used to give high importance to the quality of their products.
But now customers are very price conscious and are willing to pay only less for more. So the new generation
retailers stock more of low quality goods to give goods at low prices. But still there are some people who go for
quality goods. Traditional shopkeepers are trying to gain from that segment by not compromising on quality: Also
the customers are more demanding now regarding the selection and variety of goods. The retailers are left with no
option but to stock more goods in their inventory to attract and retain customers. Customers demand discounts even
though the retailer has put only less margin and it has become a habit of the customer to ask for discounts and free
gifts from the retailer. In that way also the retailer suffers a setback in the profit margin.
The retailers are facing competition in various ways. New shops open very often and in order to grab the
customers they reduce the margin thus forcing the existing retailers to do the same. So the retailers reduce their
margin to attract more customers and try to gain profit by increasing their turnover.
In someparts of Kottayam district, textile business is the favorite of Gulf returnees. They start business with
what they earned in Gulf countries, some survive, but the majority disappears after some time. In Ernakulam, a few
dominant players capture major share of business. The wholesale market in Ernakulam is also a reason for the
downfall of sales in retail shops. Many customers from the semi-urban parts of Ernakulam come to the wholesale-
retail shops to buy their goods.
The other competitions the retailers face today are from installment businessmen, small units, pavement
vendors and seasonal stalls. Semi-urban customers find it easy to pay monthly, even though at a higher price, than
going for cash purchase. Small units like ayalkootam and kudumbasree (both neighborhood initiatives) affected the
business only in very few places, that too of only small shops. Sellers on the pavement and stalls have affected the
shops mainly during festival seasons like Onam and Ramzan.
BACKGROUND OF THE STUDY
Clothing gs.a basic necessity has transformed into a product that also reveals the person's personality and
status. So tlie-textile retailers are compelled to change their way of doing things in a more customized manner.
Purchasing goods according to the changing trends and customer preferences is the most important and most
difficult problem the retailer is facing.
The .retailer should be aware of the latest fashion, designs and material and must put those goods in their
inventory at the right time. So he is forced to be in the buying market to know the latest trends and price fluctuations.
Due to stiff competition, installments, wholesale-retail concept and more players in the market, the retail merchants
are forced to reduce their margins and procurement of stocks at competitive rates has become all the more important.
*Reader, School of Management Studies, Cochin University of Science and Technology, Kochi - 682 022, Kerala,
**Textile wholesaler, Ramakrishna Textiles, Ernakulam, Kerala.
Indian Journal of Marketing Â¢ July, 2007 37Page 2
The study is aimed at understanding the textile retailing business. The specific Objectives are as foltows :
Â¢ To get an insight of the textile retail sector in Kerala.
Â¢ To understand the purchasing behaviour of textile retail owners.
Â¢ To understand the important strategies the retailers adopt to bring in customers.
Discussions with proprietors and salespersons of the textile retail shops were held in order to get an insight
about retailing; their purchasing behaviour, strategies adopted and customer preferences. A pilot study was
conducted to finalize the method and questionnaire for primary data collection.
A sample of 75 retailers was taken based on judgments. This included 40 retailers from urban areas and 35
from semi-urban areas (urban areas include cities, towns and corporations whereas semi-urban areas include mu-
nicipality, panchayath and village areas). The study was conducted in Ernakulam district, the leading industrial and
commercial centre of Kerala, and some parts of the adjacent districts viz., Thrissur, Alappuzha and Kottayam, ill of
which come under central Kerala.
Data collection :
The data required for the study has been collected through questionnaire and personal interviews, Dichoto-
mous, multiple choice and open-ended questions were used.
The sample size for the survey was 75, which may not be the true representation for a place having more
than 1000 shops. Shops with annual sales turnover of Rs.l million to 15 million were taken as sample. Hence
generalizations should be made with caution.
The sample turned out to be 29 traditional retailers, 40 modern retailers (traditional retailers mean retailers
whose businesses are being carried out for generations and modern retailers mean new shops) and 6 others.
Location of Shops
About 87% of the shops are located at main road, 8% at textile market and 5% at pocket roads. As such, the
retail textile shops don't have any distinct textile market except in a few places.
As the survey was conducted concentrating on the middle segment shops, about 60% of the customers who
purchase mainly from these shops are middle class people.
Table 1 : Customer segments
Class of customers
Type of Customers
Most of the customers of shops in the semi-urban area are local people. But retailers in urban area have
customers from local as well as the surrounding areas. The retailers also have business purpose customers (factory,
film shooting etc.) and also sales to travelers if they are located in toucjst spots.
Table 2: Type of customerÃ‚Â» of Shops
Tvpe of Customers
Age of the customer
Majority of customers for both segments are middle aged, and then comes the young adults. The youth
seldom come to these all-goods textile shops. The youth, and to an extent young adults, are inclined to branded
goods, exclusive shops and the fashion shops. The old people rarely shop as other family members do most of their
38 Indian Journal of Marketing Â¢ July, 2007Page 3
Table 3 : Different Classes of customers
Group of Customers
Young Adult (25-34)
Old age'Above 55)
T^pe of Goods
Table 4 : Items for sale
Proportion of Items
Although there is a trend towards mill goods and handloom goods, demand for readymade garments is still
high and gives a good margin to the retailers. Only a few retailers keep goods other than clothes that too, limited to
umbrellas, school bags, and rexin and rubber sheets.
Source of Purchase
Table 5 : Source of procurement
Proportion of stock
Ã‚Â¦n oto S
Â¢O -o -g -o
3 3 3 3
S S S S
As the respondents were mostly retailers with turnover less than 15 million they mainly depend on
wholesalers. The retailers buy readymade, branded and highly competitive items directly from manufacturers and
use agents only for procurements from North India. Buying from wholesalers help these retailers avoid dead stock
and offer variety and selection.
Frequency of Purchase
Twenty eight percent of the retailer's purchase weekly, 3% purchase fortnightly, 24% purchase monthly
and 45% purchase as and when required. ***Ã‚Â¦
Table 6: Frequency of Purchase
Location of shop
When Need Comes
'Data in percentages
Urban retailers mostly go for weekly purchases and when the need comes (about 80%), as the competition
and change in trend is severe here. Semi-urban retailers purchase monthly (43%) or when the quantity needed for
goods is large (51%), considering the transportation cost.
Mode, of Purchase
People from urban areas mostly go for credit purchases as they get it easily from the supplier. Retailers from
semi-urban areas mostly go for cash purchases, as they want the quantum of purchase to be less and cash purchases
earns those discounts, and they cannot charge a premium from their customers. Also the suppliers are little hesitant
to give credit to retailers in semi-urban areas. There are some retailers who go for 100% cash purchases to get the
advantage of discounts.
Table 7: Urban shops ^ Table 8: Semi urban shops
Around 25 %
In about 80% of the shops the owner is involved in the purchases either alone or along with the staff.
Transportation of Goods.
The urban retailers depend more on logistic providers as they have more goods and ease of availability, whereas,
semi-urban people depend mainly on taxis and own vehicle as they have less goods and the logistic provider's difficulty
to access remote places. Those who supply directly are mainly handloom producers of Kerala and Tamil Nadu.
Indian Journal of Marketing Â¢ July, 2007 39Page 4
Table 10 : Logistics
' Total .
Criteria for choosing the Supplier
Urban / Semi-Urban
While choosing the wholesale supplier the urban shop owners give priority to salesman's behavior and quality
of goods. This is followed by price of goods, availability and selection and goodwill Of the supplier. Then in order of
importance comes vendor behaviour, genuineness of vendor, credit facility; ambiente and display of shop and perking
facility. Discount facility, transportation cost, quick delivery and hassle-free bitegtae not considered important.
In case of semi-urban customers the most important factors for purchase are salesman behavior and price of
goods. This is followed by vendor behaviour, availability and selection; discount facility and goodwill of the
supplier. After that, quality of goods, quick delivery and billing, parking facility. aj|d transportation cost are
considered important. Credit facility, display and ambience of shop are not considered tobe significant.
It is through the salesman that the retailers come to know about the product's features. So both the retailers
consider salesman behavior a very important factor irrespective of being urban or semi-urban.
Urban retailer also look for quality in their products as they have got more quality conscious customers and
they want to avoid the risk of returning the goods or loosing the customer. DÃ‚Â»ey_giye least importance to discount
facility, as they are more credit oriented. They give less importance to delivery and billing as most of them do not
waitfor it, as the logistics providers do most of their transportation. r. ud ,.',}
Semi-urban retailers are more price conscious than quality when conapared to urban retailers because their
customers are more price conscious. They are more discount conscious as they want;the productto be the least
priced and they give less priority towards credit facility as most of them go for cash purchase to get maximum
discount. They give more importance to transportation cost and delivery/billing when compared to urban customers
as most of them use their own vehicle or taxis. ,. .
Traditional / Modern
While choosing the wholesale supplier the traditional retailer gives importance to vendor behavior,
genuineness of vendor, salesman behavior, quality of goods, availability and selection; and goodwill of the supplier.
This is followed by price of goods and credit facility, display, ambience of shop and quick delivery/billing. They
don't seek discount facility or parking space. /. f
Modern customers consider salesman behaviour, price of goods and display /ambience of shop very
important. Genuineness of vendor, vendor behaviour, quality of goods and discount facility are also considered
important. Availability and selection, quick delivery/billing and goodwill of the supplier follow these factors. Credit
facility, parking space and transportation cost are not considered important.
Traditional retailers give more importance to quality, selection of goods and vendor behaviour because they
give more weightage to trustworthiness and good quality things, as they want to maintain their goodwill gained over
the years. They are ready to give a premium price for quality products but are more credit conscious than discount
facility, as they would like to play with the supplier's money. ' "''Ã‚Â¦
Modern retailers give priority to price than quality, as they want to make quick money by attracting the
customers, looking for cheaper goods. They give more importance to ambience of the shop, as the modern
generation wants everything to be colorful and pleasant. They give more importance to discount facility than credit
facility, as they want the product to be the least priced.
Retailers give high importance to salesman's behavior irrespÃƒÂ¨ÃƒÂ§tivÃƒÂ«'pf being traditional or modern.
Strategies employed by retailers to attract customers
Urban / Semi-Urban
To attract customers the urban retailers give top priority to salesmanship, goodwill, price of goods, display
of goods and selection/variety. Also important are factors such as, quality of goods, ambience of shop and
convenience for the customer to come. Third place collectively goes for parking facility, quick delivery and building
a relationship with the customer. Discount facility is not considered to be important.
In case of semi-urban retailers salesmanship, goodwill, price of goods, selection/variety are considered to be
the most important factors along with building a relationship with the customers. Display of goods is considered to
be important following the preceding factors. Third priority is given for quality of goods, ambience of shop; discount
facility, convenience to reach and quick delivery. They give least importance to parking facility as they seldom have
that type of facility.
40 Indian Journal of Marketing Ã‚Â» July, 2007Page 5
Urbanas well as semi-urban retailers consider salesmanship as the most important factor, because once the
customer comes to the shop they do the promotion and service of the product. They are the ones who communicate
with the customer. They understand the present trend, preference and tastes of customers and act accordingly. Both
the category gives equal importance for goodwill, price and selection of goods.
The urban shops give more importance to quality, ambience and convenience for customers to come to
shop than the semi-urban shops, as the customers here demand more of this luxury. The urban customers mostly
do not ask for discounts and the retailers also try to dissuade them to spare for other expenses. The semi urban
retailers give more importance in building a relationship with the customer as most of their customers are local
people and arekoowbto them whereas in urban area, customers of diverse backgrounds come to the shop. Quality
of the goods arid Ã‚Â«mbienceof shop are not as important to the semi urban retailers as it is for the urban shops, as
their customers prefer cheaper goods.
Traditional/ Modera .
In caseiof traditional retailer the first priority goes to salesmanship, goodwill, quality and price of goods and
selection/variety;i8eoondpriority is given to ambience of shop, display of goods, and convenience for customer to
come and to build a relationship with customer. Third priority is given to quick delivery and parking facility. They
give least priority Ã‚Â».discount facility.
In cstseof modem retailer the first priority goes to salesmanship, ambience of shop, goodwill, price of
goods, selection/variety and to build a relationship with customer. Second priority is given to display of goods and
discount facility.- Third priority is given to quality of goods, quick delivery, convenience for customer to come and
Both the traditional as well as modern retailer gives equal importance to salesmanship, goodwill and
The traditional retailer always tries to keep a balance between price and quality of goods, as he wants to
keep both his goodwill and business steady whereas the modern retailer is ready to compromise on quality and give
cheaper goods to the customer in order to make quick fame and money.
The traditional retaier does not like the discount concept, as they believe the textile business has some
genuineness and it Should not degrade to pavement business whereas the modern retailer thinks it as a promotional
strategy to bring thÃƒÂ© customer in.
SeasonalSales J- ii
All the retailers increase their inventory during the business seasons. They stock more during Onam, the
peak season*ff8jÃ‚Â«itelraiHhg. Next in line comes school reopening and wedding season. Ramzan, Christmas and
Vishu festivals ÃƒÂ©ffeflPinefÃƒÂªased Sales according to the demographic characteristics of different areas. There is a slight
increase in the business during pilgrimage and festival seasons in temples and churches, according to the locality.
One product the retailers now have reduced from their product lines is school uniform cloth, as major part of
this business is-taken over by the school authorities themselves.
Type of Display 'Ã‚Â¦"'Â¢ Â¢
Most'of the retailers display their products with the customers in mind. Only about 5% of the retailers do not
display the g<^ssignfficanrly. Most of them display the goods in their racks and the latest items are hanged on walls.
Softe retailers hang latest fashion sarees, churidhars, frocks, midis etc. outside the shop to attract female
customers..SiJrrÃƒÂ®ÃƒÂ© paste posters in their shops that prompt the customer to enquire about it. Some others put the price
tag on the Tatest fashion dresses, at lower prices to bring in customers. Twenty percent of the respondents use
mannequinsHrXfis^rlaiftht goods. Window dressing is done by 80% of the retailers.
Only around10% of the retailers display goods in super markets, where the customer could search and pick
the clothes, due to shortage of space.
Mode and SourcÃƒÂ©of purchase
Retailers prefer to make cash purchases from wholesalers as it can bring discount to them and go for credit
purchases from the manufacturers. As goods from the wholesaler have an added margin on goods, the retailers' profits
are affected. So the cash discount is an advantage to them.
Mode of payment i'/^;' '"
Cash payment is,made if the owner does the purchasing. Credit purchase is preferred to avoid cheating
when salesmen make purchases.
Sales turnover and transportation
Retailers whp,have turnover of more than Rs.3 million per year depend mostly on logistics providers. This
saves them from dealing with 4he sales tax officers and cost also is minimized. Retailers with less turnover use own
vehicles or taxis to procure their stock thus economizing the operations.
Indian Journal of Marketing Â¢ July. 2007 41Page 6
In urban areas the retailers select employees who have experience, basic education, conversation skills and
good references whereas in semi-urban area employees are selected from the surrounding areas and from poor
families to give them a living. The salary a salesperson gets in urban areas ranges from 1500-3500 plus some
allowances, whereas in a semi urban area it ranges from 1000-2000 plus allowances. In most shops 65% of the
salesperson is female. The training is mostly on the job training given by senior salespersons.
Majority of the shops design their layout in such a way that the customers could see and select the goods, the
salesperson could easily reach out and it avoids robbery as well. Only urban retailers do colour combinations in their
walls, separate counters, light arrangements and so on and so forth.
Most of the shops limit their advertisements to plastic carry bags, school labels and festival notices. Some
prefer banners during the business seasons. Only around 5% go for calendars, diaries, purses etc. Shops in
semi-urban areas prefer ".hoatre slides in their local theatres. The amount spent on advertisement and other means of
promotion is around 1%-1.5% of their annual turnover.
During seasonal sales in semi-urban areas the retailers tap their customers by issuing handbills, bringing in
fresh stocks, announcing sale, so on and so forth. In urban areas they go for banner advertisements listing their goods
and discounts, bringing in new stocks, appointing new employees etc. Both the retailers try to add cheaper and
medium range products during the seasons except during wedding season. Around 25% of the respondents do not
take any extra effort except bringing in more goods.
Most retailers who had growth in their business had added newer products to their product line but at the
same time they had reduced the stock of some of their earlier products due to the change in dressing habit of
Earlier retailers used to stock a large quantity of printed lungies, check lungies, shirting, suiting, sarees,
single dhoti and all but as the men moved to Bermudas, T-shirts, Jeans, Designer clothes and as the women moved to
churidar and nighties the sale of former goods declined.
Most of the retailers don't want to increase their product line, as they want to do the existing things more
efficiently rather than mixing up the things. Some retailers say that their sale for printed and check lungies, single
dhotis, and low priced cotton sarees reduced when they renovated their shop to a bigger one as the customers do have
a feeling that for those items small shops are ideal.
Readymade sales are more than mill goods for the past 3-4 years but from last year there is a trend for
shirting and suiting, as customers prefer to stitch according to their body shape and the latest trend. Also the price of
readymade had become costlier.
Some retailers are planning to add baby products to their product line. The only segment that grows rapidly
is the children segment; customers are ready to buy dress for their children even if they don't buy for their own use.
So this is prompting the retailers to add baby oil, baby soaps, napkins and all to their product line.
Earlier during festivals and occasions there was a custom of giving dresses as gifts. Now the custom still
prevails but the customer goes for cheaper goods. Earlier if dresses were given to all members of the family as gifts
now it is limited to the seniors and sometimes children. Most respondents said that customers listen to their
suggestions and recommendations regarding the material and fashion. Only few customers reject the suggestions of
salespersons. In semi-urban areas, the customers mostly listen as they are local people and have a good relation with
the person in the shop. Around 60% of the retailers sell umbrellas in their shop as they think it is an added advantage
to their business. Around 10% of the urban retailers keep plastic sheets, rexins and furnishing materials. In semi-
urban areas around 10% of retailers do have stitching units for stitching shirts but in urban area it is only 5%. Some
retailers do curtain work for the houses, some do tour operations and some have financing operations.
Some suggestions regarding textile retailing : -
Â¢ Increase in turnover should be achieved by reducing the margin in this competitive era to survive in
the long run. This is in tune with what Peter Drucker (1995) considers the worship of high profit
margins and of "premium pricing" as one of the five deadly business sins.
Â¢ Vendor selection should be done after careful evaluation.
Â¢ Keep updates about the price fluctuations and new fashions in the supplier market.
Â¢ Always be in a receptive mood to know the preference and taste of customers.
Â¢ Bring in changes in the shop as well as in the product line according to the changing times.
(continued on page 54)
42 Indian Journal of Marketing Â¢ July, 2007Page 7
Hasty, Ron and Reardor, James (1997), "Retail Management", The McGraw-Hill Companies Inc. New York,
International Edition, pp-7-44,120-160.
Pradhan, Swapna, (2004), "Retailing Management-Text and Cases", Tata McGraw-Hill Publishing Company Limited,
New Delhi, pp-207-222.
Panda, Tapan K and Sahadev, Sunil (2005), "Sales and Distribution Management", Oxford University Press,
New Delhi, First Edition, pp 622-658.
Gayathri, H, Vinaya, M.C. and Lakshmisha, K,(2005-06) "A pilot study on the service quality of Insurance companies",
'Journal of Services Research', Volume 5, No 2 (Oct-March), pp 123-138.
Vannirajan, Dr. (2006) "Impact of Service Quality on customer satisfaction in Banking-A comparative study",
'ACRM Journal of Business and Management Research', VolumeM, No 1, February, pp 50-54.
Tripathy, Nalini Prava, (2006) "A Service Quality model for customers in Public Sector Banks", 'The ICFAI Journal of
Bank Management', May, pp 77-82.
Rao, Subbs S.R Pr, (2005-06) "FDI and the Retail Sector in India: A study of opportunities and threats", "The
Alternative', Vol. V, No 1 (Oct-Nov), pp 23-36.
Madhavan Kutty G, (2003) "FDI in Boon or Bane". 'ICFAI Reader', November, pp 19-28.
(continued from page 42)
Â¢ Foresee the requirements, and stock ideally.
Â¢ Add more-products to me product line other than clothes to attract customers.
Â¢ Build a relationship with the customer, enquire their requirements and complaints
Â¢ Work hard to earn goodwill among the customers.
The textile retailers are facing stiff competition and find it very tough to keep up with the changing tastes
and preferences of the buyers. Competition from the unorganized sector and too many players to compete with,
make the struggle of the retailers difficult. According to a famous jeweler who has business in other countries also,
running a textile retail business is far more difficult than having a jewelry business. In order to succeed in textile
retailing, retailers should be able to offer good quality, variety in the latest trends and value for money, keeping a
good image of the outlet all the time.
Drucker Peter F., Managing in a lime of Great Change, Truman Tally Books/Duttori,
New York, 1995, pp.45.