Do unkempt stores offer better prices?

When Andrew Levermore, CEO at Hypercity talks about the 'myth' of consumers thinking a store offers better prices if it is dirty or unkempt, its not too difficult to guess who he is talking about.

But if the the 'unkempt' store is actually about great space utilisation that leads to greater effeciencies of operation, then its the consumer who stands to benefit. Prices in the store would be lower than its competitors due to the lowered cost structure at which it operates. At the moment, in India, consumers seem to value lower prices over ease of shopping within the store. The concept of 'organised chaos' that Big Bazaar swears by, for the moment, is working.

Also when the CEO at Hypercity dismisses the concept of a 'sale', I'm not too sure if he is on the right track. The Mass Retail consumer is on the hunt for a bargain. 'Sales' drive perceptions of 'better bargains'. Its also builds an image of 'lowest prices'. Big Bazaar has capitalised on this concept extremely well and powers on with an image of giving the consumer the lowest possible prices.


Jagannath said…
I agree, the "sale" drives down a perception of low prices, but i am not sure if the store has to be unkempt, just because one needs to utilise space. I have seen several japanese Hypermarkets like ODAKYU and i dont think Big bazaar has any better utilisation of space, but is much more hapazard. The dirtiness not only comes from things lying around on the floor... it's perfectly fine, but it need not go to the extent that some merchandise is so badly stored, no one wants to even touch it. Another problem with big bazaar, is that they seem to care very little on staff training. In a store like that, the customer does not expect great engagement or service, but the least the staff can do is to keep the merchansise in order. The staff are too busy in their own internal discussions, that they dont care about minimal house keeping rules.

If a star bazar gets its act right with the pricing and discounts, which is definitely not a function of its layout but more to do with scale and prudent sourcing strategies (like the walmart), then the big bazaars will have a tough time to stay in business with their current attitude to customer buying experience.

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