WHEEL OF RETAILING

1. New retailers often enter the market place with low prices, margins, and status. The low prices are usually the result of some innovative cost-cutting procedures and soon attract competitors.
2. With the passage of time, these businesses strive to broaden their customer base and increase sales. Their operations and facilities increase and become more expensive.
3. They may move to better up market locations, start carrying higher quality products or add services and ultimately emerge as a high cost price service retailer.
4. By this time newer competitors as low price, low margin, low status emerge and these competitors to follow the same evolutionary process.
5. The wheel keeps on turning and department stores, supermarkets, and mass merchandise went through this cycles.

This is what is presently happening with Big Bazaars as they entered as the low cost stores but now things are going the other way.

Now there is one thought of changing the image of Big Bazaar of being a low cost quality store rather than being high discounting store. Now you might find lesser discounts as it is improving on the quality of the products available in the store for the customer.

But this theory could also be true here as Easyday is coming up with lesser prices in some products but customer is not aware that they are giving more discounts on few articles and covering the same from other articles whereas Big Bazaar works overall at low Net Margins.

CATCHMENT AREA ANALYSIS

Retail Analysis is an inherently complex and dynamic issue because of interactions that occur between different retail centers.  If all retail centers were alike, offering exactly the same shops and services with regards to price and quality then we could assume that the population within the catchment would spend all of its money in the nearest centre.  However, different centers are not the same and people’s mobility means that they will often travel to their preferred destination instead of their closest one. Changes in population, access and retailing also alter relative attractiveness. An important element of the study is therefore to provide a robust assessment of the current catchment area of the city, taking into account different types of retailing such as food and non-food, with the latter disaggregated into bulky and non-bulky goods. 

Factors that influence consumers’ decisions on where to shop include:

• Presence and strength of ‘anchor’ traders

• Volume, quality and mix of retail provision

• Additional services and facilities

• Leisure provision

• Accessibility

• Parking

• Shopping Environment

While differences between adjacent centers effect the distribution of expenditure in the present time, it is equally important to gauge how changes to supply and new development in competing locations will impact on a centre in the future.  Within 10 Kms of Ambience Mall, the population has a wide choice of retail destinations, including Sahara Mall, Metropolitan, DT City Center, then malls in Vasant Kunj & Saket and many more.  If Ambience fails to improve the above criteria while the surrounding centers make improvements then it effectively declines as a retail centre and people will drive further distance to reach locations that fit their preferences.