Haggling, bargaining and fixed price policies
The changing face of Indian retail
Piyul Mukherjee & Damodar Mall
Abstract
While language, religions and consumer preferences may differ from one Indian region to the next, the ‘desire to milk the most out of the last rupee spent’ is one of the unifiers of this diverse nation cutting across income levels, cultures and genders.India has over 12 million retail outlets : more than the rest of the world combined - for 200 million households. The Organized Retail sector is in its infancy – while consumers continue to throng the highly fragmented ‘traditional’ retailers and road side hawkers, in search of variety, customized service & rapport, and in haggling over the items individually purchased that is more for the pleasure of bargaining than the best price. The psychological satisfaction is in having got the better of the ‘other’ – the retailer, the neighbour who can be boasted to, about the bargain obtained; the mother-in-law, who is traditionally a rival to her son’s affections, the other consumers ahead and behind you.
In the West, Paco Underhill has spoken of the ‘Butt Brush Factor’ (shoppers are spooked by too-close quarters, and don’t like being brushed from behind), but Indians subconsciously gravitate towards the most crowded parts of a bazaar in the belief of the best bargain being available. With the spatial accommodation a billion Indians constantly participate in, the small joys are gained in the fiercely guarded ‘elbow room’ made for oneself, in day to day transactions.
The route to success lies in a deep understanding of the Indian mindset, her aspirations, needs and her perceived place in the new emergent India. It is all about rebuilding traditionalism even while seemingly dissolving it. The paper will throw light on some of the successful ‘discount’ and ‘bargaining’ strategies adopted by organized retailing, that have aided in this gradual transformation of belief.
Piyul Mukherjee
Director of Proact Research
Ms. Mukherjee has been interacting with Indian consumer audiences for nineteen years, tracing their relationship with almost the entire gamut of categories & concerns. She is currently doing her doctoral studies at IIT Bombay on “The Changing Social Dynamic in India.” Her paper ‘No Goodbyes for Tata’ received the Best Paper Presented award at the biennial AQR-QRCA qualitative research conference held at Dublin, in 2005.
Damodar Mall
President & CEO, Food Business, at Pantaloon Retail
India’s largest and fastest growing organized retail company that has been hugely successful by constantly innovating, based on the Group’s solid understanding of ‘how Indians shop’. As part of the core team at Pantaloon, he features extensively in a recent case study at the Harvard Business School on the Big Bazaar (May 2006) that details the unique strategies being adopted by the Group, in its march to the future.