Retailing of Books: An Empirical Study of Customer Buying Behaviour

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1 57 Retailing of Books: An Empirical Study of Customer Buying Behaviour Dr. Sindhu, Associate Professor, School of Management Studies, Jawaharlal Nehru Technological University, Kukatpally, Hyderabad ABSTRACT The retail industry is changing rapidly with changing consumer behavior. The existence of any retailer is primarily dependent upon the customer. Consumers and their behavior towards retailers is a key factor for the success of business. India has emerged as the fifth most favorable destination for international retailers. The present is an empirical study on the customer buying behaviour of books and the factors which are influencing the customers in buying books, buying behavior, mode of purchase and others arrangements customers expect from the retailers. The study is focused to analyse the buying behavior with reference to age group and occupation of the respondents. The category of books preferred by the customers and also their mode of delivery of book in the physical and in the form of e-book is studied. Keywords: Books, Customer Buying Behaviour, Retailing, Ambience, Layout, arrangements INTRODUCTION The retail industry is changing rapidly with changing consumer behavior. The existence of any retailer is primarily dependent upon the customer. Consumers and their behavior towards retailers is a key factor for the success of business. Marketers are being exposed to new generation of customers. These new generation customers can be classified on the basis of individual difference in expectations, preferences for wider choice, extent of brand loyalty and willingness to try competing brands so as to perceive higher value satisfaction. Traditionally in India, shopping for books has always been thought of as a book-lover s hobby. The changing nature of the bookstore chains like the Mumbai-based Crossword, the Chennai-based Landmark and Higginbotham s and Oxford Bookstore of Kolkata, have been able to change all that. Positioned as a lifestyle bookstore, these are large, spacious, well laid out stores, with bright cheerful interiors that encourage people to stay and browse. A welcoming cafe, reading tables and chairs and toilets within the store, some of the innovations pioneered by Crossword Bookstore, and soon replicated by several others. These have helped in ensuring that customers are able to browse in comfort for several hours. India has emerged as the fifth most favorable destination for international retailers, outpacing UAE, Russia, Indonesia and Saudi Arabia, according to A T Kearney's Global Retail Development Index (GRDI) "India remains a high potential market with accelerated retail growth of per cent expected over the next five," highlighted in the report. While releasing a report on emerging trends in retail (Reference: The Indian retail industry is pegged at US$ 500 billion and is expected to reach US$ 1.3 trillion by In addition, the organized retail is expected to reach 25 per cent by 2020, as per the report. With the aim to study the customer perception on books retailing, this research is conducted to bring the components to surface, where profit will be maximized through addressing the customer demands. RESEARCH METHODOLOGY Objectives:To study the opinion of consumers about the books purchase. To determine the factors influencing the customers preference to Buy books Buying behavior Purchase through any specific mode, and Other arrangements that customers expect from retailers Scope : The present study is empirical and has been carried out at Hyderabad, India. For studying the customers perception about the books purchases selected demographic of customers (like employees, businessmen, students, retired and home-makers). The study was conducted to analyze the customers perception about the books reading, purchase behaviors, modes of purchase and other arrangements that customer look for; and the factors influencing their perception, the quality of service, other arrangements that impacts the sales. Sampling & Data Collection: Convenient Random sampling method is used to select the desired sample of 80 people from the existing population. This population includes professionals, students, home-makers and elderly

2 58 retired people who have the interests on book reading. Data collection is done through Questionnaire. Hypotheses: Hypothesis1: There is no significant association between age group and a) their preference of alternatives instead buying new books. b) their preference of ambience with in the book stores c) their preference for the kind of layout within the book store. d) and other arrangements expect in book store. Hypothesis2: There is no significant association between Occupation and a) their preference of alternatives instead buying new books. b) their preference of ambience with in the book stores. c) their preference for kind of layout within the book store. d) other arrangements(place to sit and read, music shop, coffee shop, internet connection, others) expect in book store. Statistical Tools: Chi-square test, Factor Analysis, Ranking methods are used for the study. DATA ANALYSIS The field survey results is to understand the opinion of customers about the services offered by retailers on various attributes; as well, to identify the factors considered for buying books by different customers and the dependencies. Hypothesis 1a): There is no significant association between age group and their preference of alternatives instead buying new books. Crosstab Alternatives Old books Rental Borrowing Others Age Group Count % within Age Group 52.6% 15.8% 15.8% 15.8% 100.0% Count % within Age Group 39.2% 37.3% 17.6% 5.9% 100.0% Count % within Age Group 50.0% 10.0%.0% 40.0% 100.0% Count % within Age Group 43.8% 28.8% 15.0% 12.5% 100.0% Pearson Chi-Square a Likelihood Ratio Linear-by-Linear Association cells (50.0%) have expected count less than 5. The minimum expected count is From the above analysis, chi square is significant (sig. value is less than 0.05), hence reject the null hypothesis. It means that there is a significant association between age and their preference of alternatives instead buying new books. In the age group 15-20, 52.6% of people prefer old books ; in 25-45, 39.2% prefers oldbooks and 37-3% prefer rental books ; in 45-65, 50% prefer old books & 40% prefer other alternatives of reading books like online, digital version of books. Hypothesis 1b): There is no significant association between age group and their preference of ambience with in the book stores

3 59.Crosstab Age Group Ambience Visual Lighting colors Music Others Communications Count % within Age Group 26.3% 31.6%.0% 26.3% 15.8% 100.0% Count % within Age Group 37.3% 41.2% 5.9% 13.7% 2.0% 100.0% Count % within Age Group 20.0% 20.0% 50.0%.0% 10.0% 100.0% Count % within Age Group 32.5% 36.3% 10.0% 15.0% 6.3% 100.0% Pearson Chi-Square a Likelihood Ratio Linear-by-Linear Association cells (60.0%) have expected count less than 5. The minimum expected count is.63. From the above analysis, chi square is significant (sig. value is less than 0.05), hence reject null hypothesis. It means that there is a significant association between age and their preference of ambience with in the book stores. In the age group of 15-25, 31.6% people prefer Lighting ; in 25-45, 41.2% prefer Lighting and in 45-65, 50% prefer Colors in the book stores ambience. Hypothesis 1c): There is no significant association between age group and their preference for the kind of layout within the book store. Age Group Store fixtures Crosstab Display racks Layout Furniture Creative Displays Display Other retail supplies for sale Count % within Age Group 21.1% 52.6% 5.3% 21.1%.0% 100.0% Count % within Age Group 13.7% 60.8% 2.0% 17.6% 5.9% 100.0% Count % within Age Group.0% 40.0%.0%.0% 60.0% 100.0% Count % within Age Group 13.8% 56.3% 2.5% 16.3% 11.3% 100.0%

4 60 Pearson Chi-Square a Likelihood Ratio Linear-by-Linear Association cells (60.0%) have expected count less than 5. The minimum expected count is.25. From the above analysis, chi square is significant (sig. value is less than 0.05), hence reject null hypothesis. It means that there is a significant association between age and their preference for the kind of layout within the book store. In the age group of 15-25, 52.6% people look for display racks ; in 25-45, 60.8% prefer the same and in 45-65, 60% look for display of other retail supplies for sale. Hypothesis 1d): There is no significant association between age group and other arrangements expect in book store. Crosstab Other Arrangements Place to sit and read Music- Shop Coffee Shop Internet Connection Others Age Group Count % within Age Group 47.4% 10.5% 5.3% 36.8%.0% 100.0% Count % within Age Group 47.1% 9.8% 27.5% 11.8% 3.9% 100.0% Count % within Age Group 10.0%.0% 50.0%.0% 40.0% 100.0% Count % within Age Group 42.5% 8.8% 25.0% 16.3% 7.5% 100.0% Pearson Chi-Square a Likelihood Ratio Linear-by-Linear Association cells (73.3%) have expected count less than 5. The minimum expected count is.75. From the above analysis, chi square is significant (sig. value is less than 0.05), hence reject the null hypothesis. It means that there is a significant association between age and other arrangements expected in book store. In the age group of 15-25, 47.4% people prefer place to sit ; in 25-45, 47.1% prefer the same and in 45-65, 50% prefer coffee shop within the book stores. Hypothesis 2a): There is no significant association between occupation and their prefer alternatives instead buying new books.

5 61 Crosstab Alternatives Old books Rental Borrowin Others g Occupation Employed Count % within Occupation 47.6% 31.0% 7.1% 14.3% 100.0% Business Count Home Maker % within Occupation 50.0%.0%.0% 50.0% 100.0% Count % within Occupation 31.3% 18.8% 50.0%.0% 100.0% Student Count % within Occupation 44.4% 38.9% 5.6% 11.1% 100.0% Count % within Occupation 43.8% 28.8% 15.0% 12.5% 100.0% Pearson Chi-Square a Likelihood Ratio Linear-by-Linear Association 9 cells (56.3%) have expected count less than 5. The minimum expected count is.50. From the above analysis, chi square is significant (sig. value is less than 0.05), hence reject null hypothesis. It means that there is significant association between occupation and their prefer alternatives instead buying new books. In the employed group, 47.6% people prefer old books ; in business group, 50% prefer old books and 50% other alternatives than buying new books. In home-makers, 50% prefer borrowing books and among students group, 44.4% prefer old books. Hypothesis 2b): There is no significant association between occupation and their prefer ambience with in the book stores. Crosstab Ambience Visual Lighting colors Music Others Communications Occupation Employed Count % within Occupation 38.1% 35.7% 9.5% 14.3% 2.4% 100.0% Business Count % within Occupation 50.0% 25.0% 25.0%.0%.0% 100.0% Home Count Maker % within Occupation 18.8% 43.8% 12.5% 12.5% 12.5% 100.0% Student Count % within Occupation 27.8% 33.3% 5.6% 22.2% 11.1% 100.0% Count % within Occupation 32.5% 36.3% 10.0% 15.0% 6.3% 100.0%

6 62 Pearson Chi-Square 7.878a Likelihood Ratio Linear-by-Linear Association cells (65.0%) have expected count less than 5. The minimum expected count is.25. From the above analysis, chi square is not significant (sig. value is greater than 0.05), fail to reject null hypothesis. It means that there is no significant association between occupation and their prefer ambience with in the book stores. Hypothesis 2c): There is no significant association between occupation and their prefer kind of layout within the book store. Cross tab Layout Store fixtures Display racks Furniture Creative Displays Display Other retail supplies for sale Occupation Employed Count % within Occupation 14.3% 52.4% 2.4% 21.4% 9.5% 100.0% Business Count Home Maker % within Occupation.0% 75.0%.0%.0% 25.0% 100.0% Count % within Occupation 6.3% 68.8%.0%.0% 25.0% 100.0% Student Count % within Occupation 22.2% 50.0% 5.6% 22.2%.0% 100.0% Count % within Occupation 13.8% 56.3% 2.5% 16.3% 11.3% 100.0% Chi Square Value df Asymp. Sig. (2- sided) Pearson Chi-Square a Likelihood Ratio Linear-by-Linear Association cells (75.0%) have expected count less than 5. The minimum expected count is.10. From the above analysis, chi square is not significant (sig. value is greater than 0.05), fail to reject null hypothesis. It means that there is no significant association between occupation and their prefer kind of layout within the book store. Hypothesis 2d): There is no significant association between occupation and other arrangements expect in book store.

7 63 Crosstab Other Arrangements Place to sit and read Music- Shop Coffee Shop Internet Connection Others Occupation Employed Count % within Occupation 50.0% 9.5% 28.6% 11.9%.0% 100.0% Business Count % within Occupation.0%.0% 75.0%.0% 25.0% 100.0% Home Maker Count % within Occupation 31.3% 6.3% 25.0% 6.3% 31.3% 100.0% Student Count % within Occupation 44.4% 11.1% 5.6% 38.9%.0% 100.0% Count % within Occupation 42.5% 8.8% 25.0% 16.3% 7.5% 100.0% Pearson Chi-Square a Likelihood Ratio Linear-by-Linear Association cells (75.0%) have expected count less than 5. The minimum expected count is.30. From the above analysis, chi square is significant (sig. value is less than 0.05), hence reject null hypothesis. It means that there is a significant association between occupation and other arrangements expect in book store. In the Employed group, 50% of people prefer a place to Attributes [Null Hypothesis: No significant association between the below attributes] sit and read in a book-store. While in the Business group, 75% look for a coffee shop within book-store; in the Home-Makers group, 31.3% prefer a place to sit and read; in the Students group, 44% also seek the same. Conclusion of Chi-Square Test Significant Value Conclusion [H0x Hypothesis#] Age Group * Alternatives Rejected H01 Age Group * Ambience Rejected H02 Age Group * Layout Rejected H03 Age Group * Other Arrangements Rejected H04 Occupation * Alternatives Rejected H06 Occupation * Ambience Accepted H07 Occupation * Layout Accepted H08 Occupation * Other Arrangements Rejected H09

8 64 By analysis, it is identified that there is a significant association between age and their prefer alternatives instead buying new books, age and their prefer ambience with in the book stores, age and their preferred kind of layout within the book store, age and other arrangements expected in book store. Customers prefer a place to sit and read books within the book stores, a coffee shop to relax and internet connection alongside for their personal needs. Factor Analysis Factor Analysis is a data reduction technique. Before proceeding for factor analysis first the researcher tests the eligibility of the data by checking KMO- Bartlett's test which is a measure of sampling adequacy (KMO test also tests for multivariate normality among the variables). The KMO value is.585 which is >0.5 indicates multivariate normality among variables. KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity Approx. Chi-Square df 21 Sig..000 Variance Explained Component Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings % of Variance Cumulative % % of Variance Cumulative % % of Variance Cumulative % Extraction Method: Principal Component Analysis. Factor: The initial no. of factors is the same as the no. of variables used in the factors analysis however not all 07 factors will be retained, in this only the first 03 factors will be retained since their Eigen value is greater than 1.

9 65 Component Matrix a Component Books Purchase Frequency Alternatives Ambience Layout Other Arrangements Recommend Books Purchase Gift Books Extraction Method: Principal Component Analysis. 3 components extracted. Rotated Component Matrix a Component Books Purchase Frequency Alternatives Ambience Layout Other Arrangements Recommend Books Purchase Gift Books Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 6 iterations. The PRINCIPAL COMPONENT MATRIX gives the component matrix which is rotated using the VARIMAX rotation technique which gives the ROTATED COMPONENT MATRIX.Rotation of factors helps in the better interpretation of factors. Since the first factor in the ROTATED COMPONENT MATRIX is heavily loaded with Alternatives. (Factor loading Value of which is the highest for the first factor) the first factor represents Alternatives. The second factor is heavily loaded with Other Arrangements (0.655) hence factor 2 represents Other Arrangements and thus the subsequent factors can be interpreted based on their Eigen value. The final list of 03 factors which collectively account for 64 % of the variance in the data is shown below:

10 66 S. No Factor name Factor loading 1 Alternatives Other Arrangements Ambience Hence, the most influential factors in our data and project are 1. Alternatives as preference instead buying NEW books. 2. Other Arrangements in book stores (i.e., facilities other than just books sale) 3. Ambience that customers expect within the book stores. E-Books There is a good some of people prefer electronic reading. This opens up a new markets and shall influence in the sale of hardcopy of books. Electronic / Online Reading Prefer Electronic Reading Yes No Respondents % 47% 53% From my survey, 47% of respondents prefer electronic method of reading Online. The retail still shall have an upward growth for the reasons like similar business model and licensing attached to it. Many publishers have already forayed into e-books and are in the process of converting more titles into e-books. Ranking of Preferences: Books Ranking Weighted Scores Science & Technology 2 Literature & novels 3 Spiritual Children Business & Mgmt Sports Automobiles Fashion Politics Ran k In the ranking exercise, on the weighted scores based on the customer survey results, the above table shows the kind of books that customer read largely. This is as well provides customers interest for various subjects. The Top-3 ranks goes as below in the order of their weighted scores: Rank 1 is Literature & Novel Rank 2 is Science & Technology Rank 3 is Spiritual

11 67 S. No Customer Preference Ranking Weighted Scores Rank 1 Home Delivery Online Order Book Store Shopping Center Others Similarly based on the customer survey, the above tables shows the Customer s preference on the mode of books purchase. The most preferred mode of purchase is by visiting Book Store as that scores Rank 1. The other preferred mode of purchase in the order of their scores are as below: Online Order, Shopping Center, Home Delivery and Other modes of purchase FINDINGS AND RECOMMENDATIONS: The study focused towards the age group 15-65, covering all the demographic range, including various qualifications, and occupations who have the interests in book reading, and buyer through various modes. Their interests spread across various subjects with preferences associated with multiple attributes. There were around 80 customers participated in the survey, the analysis and results depicted a whole new perspective understanding about the customers. The most influential factors on books sale as realized through this study are Alternatives as preference instead buying NEW books, Other Arrangements in book stores (i.e., facilities other than just books sale) and Ambience that customers expect within the book stores. In the ranking, the top-3 ranks in the kinds of books read goes as follows in the order of their weighted scores; Literature & Novel, Science & Technology and Spiritual. As well, on the Customer s preference with respect to the mode of books purchase, the most preferred mode is by visiting Book Store as that scores Rank 1. The other preferred mode of purchase in the order of their scores are as follows; Online Order, Shopping Center, Home Delivery and Other modes of purchase. The market for electronic books is at a nascent stage in India but there are signs of growth. Customers have an inclination towards e-books or audio books; the market of tablet PCs in India cause a turning point for e-books. Nearly 50% of respondents in our survey prefer electronic method of reading. Customers perceive a growing trend and options to fulfill their book reading interests and preferred mode of purchases. Based on the survey on type of books, Novels and Literature ranks first in customer preferences, Science & Technology the second, Spiritual, Business Management and Children ranks next in the order. On Purchase mode, the customers prefer to buy books from Books Stores, then Online, and visiting Shopping Center or Home Delivery respectively in the order. By research and hypothesis, it is identified that there is a significant association between age and their prefer alternatives instead buying new books, age and their prefer ambience with in the book stores, age and their preferred kind of layout within the book store, age and other arrangements expected in book store. Customers prefer a place to sit and read books within the book stores, a coffee shop to relax and internet connection alongside for their personal needs. While these, customers also prefer a great level of information about exclusive information about books and shopping assistance; a good service by retailers and books price, all these become a deciding authority in the minds of the customers. However, there is large potential in the growth of this segment that benefits both customers and retailers. As well, with growing trend, in a matter of time, a huge capacity of customers may supplement their bookshelves at home with cloud libraries online. The market condition reflects that e-books are unlikely to edge out retail stores in near future. E-books will only be an additional source

12 68 of revenue. When compared, the sales of books through online channels (E-Retailing) being an additional source of revenue to that of retail book stores. The lifestyle of urban Indian population and one of the highest daily commute time in world has also helped in making Audiobooks popular in the region. This is because Audiobooks are primarily seen as an avenue for selfimprovement and education, rather than entertainment. RECOMMENDATIONS: Electronic books to hit the book business was inevitable, but it is coming faster than almost anyone expected, spurred on by the proliferation of devices that carry books, such as Amazon.com's Kindle and Apple Inc.'s ipad. Indian consumers are more secure transacting with a retailer who is present in both formats. Hence to cater the needs of customer Retailing of books need to be in hybrid model - in which the business has both a physical and virtual presence (both the book store and online).the study shows Novels and Literature ranks first in customer preferences, Science & Technology the second, Spiritual, Business Management and Children ranks next in the order. Book stores are the most preferred place or mode for customers to buy books as per our study. Books stores housing all the categories or subjects of books that customers demand will fulfill their need to visit the stores and becomes one stop-shop. Creating a soothing stores ambience, visible display of the new arrivals & provide recommendations, inquire expectations of different age-groups in the layouts by feedbacks. Book retailers need more focus on customer experience. Provision coffee shops and provide a librarylike atmosphere where customers can sit and read, while sipping coffee. Provisioning internet access to customers will enable them with a freedom to access external world for references, price comparisons and as well, activate them for specific asks in subjects they are interested in and expands the book stores horizon. Book retailers must expand the offerings within the book stores like provisioning coffee shops, place to sit and read and internet access Sale of Music CDs and Stationary items will include customers for a visit and influence the overall sales.develop new marketing strategies for book retailing, especially introduce value-added services. Though this is proven a last category of customers ask as per the study, the convenience that customers gain will increase the demand. Introduce value added services like home delivery, with Dial-a-book, Fax-a-book and -a-book programs. Another defined strategy to draw people to books and to its outlets is innovative events, which include book launches, interactive discussions with authors, book reading sessions, children s hour, Dictionary contests, book reading, quizzes, slide shows etc. By focusing on these areas, the retailers will certainly get better customer base and their sales volume will grow. The way to stay in the book business is to find the ability to integrate the book offerings and other products or conveniences that customers would value. BIBLIOGRAPHY [1] Md. Sanuwar Rashid, Sep 2011, The Structured Frame Of Category Management For Optimization Of Retail Business, Indian Journal of Marketing, pg [2] Dr. Shivani Gupta, Feb 2012, Allowance of FDI up to 51% in Multi Brand Retailing, The Management Accountant, pg [3] Dr. Sailesh K. Kaushal, Dr. Sanjay Medhavi, May 2011, To Identify The Prominent Factors Of Shopping Mall Behaviour: A Factor Analysis Approach, Indian Journal of Marketing, pg [4] Technopak Advisor, Oct 20, 2009, KIT-Book Retail in India, [5] Story, Jun 21, 2003, Books Retailing: Turning Over A New Leaf, [6] Sangeetha Devi Dundoo, Sep 04, 2012, Read on your tablet, ece [7] PTI, Mar 28, 2012, Online bookstores getting popular, [8] Section Industry/Retail, Sep 2012, Retail, [9] IBISWorld, Dec 07, 2012, Books Retailers in the UK Industry Market Research Report, ok-retailers-in-the-uk-industry-market- Research php [10] Wire reports, Jul 19, 2011, Longtime book retailer Borders heading toward liquidation, /retail/ borders-bankruptcy_n.htm [11] Sree Rama Rao, Nov 08, 2009, Books, Music and Gift Retail, books-music-and-gift-retail.html [12] SiliconIndia, aug 04, 2010, Indian book retail industry goes online; book e-tailing to take off, ook_retail_industry_goes_online_book_etailing_ to_take_off-nid cid-2.html