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Full Project – EFFECT OF EMERGENCE MODERN RETAILING ON NIGERIAN SHOPPING HABIT USING SHOPRITE IN LAGOS STATE

EFFECT OF EMERGENCE MODERN RETAILING ON NIGERIAN SHOPPING HABIT USING SHOPRITE IN LAGOS STATE

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CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Emergence modern retailing is an upcoming area in the field of management research. Though, retailing is a concept which has been since the existence of the mankind, but the concept of unorganized retailing turning to organized modern retailing is the newest emerging market in the world today, which Nigeria is not left out (Howard, 2014). The emergence modern retail marketing has been perceived to have changed the shopping habit of buyers. The fast development in the telecommunication specially in the Global System for Mobile (GSM) since 2001 has brought about diverse development in many facets of developmental areas in Nigeria specifically in modern retailing activities, such as encouraging on-line retail marketing and buying, cashless payment system of retailing using point of service (POS), automated teller machine (ATM), Phone Banking transfer, retail products delivery system to buyers to their door steps, on-line order delivery services, among others.

 

There are many different fast emergence modern retail market organizations in Nigeria today such as Shoprite, Justrite, Domino Stores, Jumai, etc. The emerging retailing organizations in the emergence modern retail market in Nigeria are making the market more competitive by adjusting to the current world retail market development and transformation of the shopping habit of customers (Chidozie and Olarewaju, 2014). For instance in Nigeria, many informed customers no longer feels that the big retail supermarkets are for the wealthy people alone, both the wealthy and poor can buy as small and as much as they could from the emerging modern supermarket paying by cash, credit card, ATM, POS, or telephone bank transfer payment. Also, the rich or poor buyers according to their wish may decide the means of their purchase delivery to their destinations. Furthermore, the emerging modern retailing tends to provide comforting  facilities for customers, such as ample parking space, security within the environment, convenience payment facilities within the environment, sales’ products arrangement/display on the shelves, clear price tag on each product, assorted/varieties of products, centrally and conspicuous location for easy outreach among others (Eze & Ozo, 2015). The above characteristics of the emerging modern retail market in Nigeria tend to show that the emerging modern retailing accommodates all classes of buyers, creating a classless society and making retail marketing customer-oriented.

Consumer has been the most important factor for any retailing activity. In other words, retailing is always consumer centric and studying the consumer behavior is of utmost importance for the retailers, marketers and the researchers (Agbaje & Ikeji, 2012). Retailing has provided researchers with a lot of key areas to study right from the behavioral aspects of the customer including consumer expectations, perception, personality, attitude, lifestyle, preferences, patronage behavior, shopping motives, shopping experience and entertainment aspect of shopping to the retailers functional attributes like retail store attributes, store formats, merchandise management, assortments, variety, vendor management, display and visual merchandising, ambience and atmospherics, service quality, store layout and location, store image, branding and promotion, private labels, retail market strategies, store operations, information technology in retailing, customer relationship management (CRM), and a lot more areas pertaining to the retail research (Agbaje & Ikeji, 2012; Howard, 2014).

Another aspect of emergence modern retailing that has aroused the interest of researchers is the growing concept of the malls as shopping destinations, online retail shopping. Recent changes in the peoples’ technological advancement in Internet facilities, such as Facebook, instagram, Whatsup, Cashless payment system,youtube, etc.  have further facilitated the growing emergence modern retail marketing in Nigeria. Social media offer different values to firms, such as enhanced brand popularity (de Vries, Gensler & Leeflang, 2012), facilitating word-of-mouth communication (Chen, 2011), increasing sales (Agnihotri, 2012), sharing information in a business context (Lu & Hsiao, 2010) and generating social support for consumers (Ali, 2011; Ballantine & Stephenson, 2011). In addition, the networking of individuals through social media provides shared values, leading to a positive impact on trust. Today, with the expansion of social media, a study of consumer behaviour on these platforms is a research agenda (Liang & Turban, 2011) because social media are likely to develop marketing strategies in firms through trust-building mechanisms and affecting customers’ intention to buy online products, thus encouraging the development of the emergence modern retail marketing.

The modern era of retailing is defined as the period from the industrial revolution to the 21st Century (Johansson, 2015). In major cities, the department store emerged in the mid to late 19th Century, and permanently reshaped shopping habits, and redefined concepts of service and luxury. The term, “department store” originated in America in 19th Century. In England, these stores were known as emporia or warehouse shop (Koot, 2011). Many of the early department stores were more than just a retail emporium; rather they were venues where shoppers could spend their leisure time and be entertained. Some department stores offered reading rooms, art galleries and concerts. Most department stores had tea-rooms or dining rooms and offered treatment areas where ladies could indulge in a manicure. The fashion show, which originated in the US in around 1907, became a staple feature event for many department stores and celebrity appearances were also used to great effect. Themed events featured wares from foreign shores, exposing shoppers to the exotic cultures of the Orient and Middle-East (Howard, 2014).

However, the emerging modern retail market in this study refers to the increasing transformation of large departmental stores as a result of the modern technological development across the world today such as in communication, payment system, delivery system, increase consumer awareness, among others. This makes the emergence modern retailing stores more accessible and far reaching to all categories of buyers and making the world a Global village for effective retail market management. However, in Nigeria despite the fast increasing awareness of the fast developing of the emergence modern retail marketing, many retail organizations are yet to adjust to this new era of marketing to influence buyers’ shopping habits. Also some of the buyers are not social media compliance to benefit from cashless paying system, online shopping, and some are still living with the past knowledge that modern big retailing supermarkets are for the wealthy people. Furthermore, there has not been adequate attention given this area of research by academic researchers, thus there exit a research gap, hence this study is focused on examining the effect of modern retailing on Nigerian shopping habit.

 

1.2  Statement of the Problem

In the recent years to the present Nigeria has experienced tremendous transformation in several areas of development particularly in the transformation of retail marketing resulting from the fast development in the communication technology.

Oyadiran and Akintola (2013) argue that despite the belief that retail sales are an important economic indicator because consumer spending drives much of the economy, but the foreign domination in emerging modern retail stores is very evident in Nigeria and all across Africa. Third World countries bear the brunt, instead of gaining in the process; they lose in a system where multinational corporations (MNCs) are making direct foreign investment to benefit just themselves but not the peripheral sphere of the globe where the Third World countries belong. Ngugi (2011) maintains the view that we are driving ourselves out of business and further into dependence because the modern retailing system encourages easy capital flight of the profits and easy foreign control by the parent supermarkets. Oyadiran and Akintola (2013), therefore recommend “that for the Third World to benefit immensely from globalization, particularly in the emerging modern retail marketing, needs strong governments, through which the positive aspects of globalization can be actualized. Onwuka and Eguavoen (2014) also agree that the Nigerian government can benefit from this experience if the country pursues development within the context of globalisation, particularly in providing regular electricity and strengthening National Communication Commission’s (NCC) regulations to ensure service providers effectiveness.

The above views of researchers show that there has been considerable development in the emerging modern retail marketing in Nigeria. However, the research problem in the development of emergence retail marketing in Nigeria is poor awareness of the buyers of the ample retail services opportunities which could enhance their shopping behaviour. This problem perceived to be due to the following factors:

  1. buyers poor knowledge of the use of cashless payment system (POS, ATM, telephone payment transfers, etc.) which the emerging retail marketing provided;
  2. inadequate use of the social media retailing and buying by sellers and buyers;
  3. lack of adequate awareness of the buyers that large modern retailing stores are both for the poor and the wealthy buyers;
  4. lack of retailers’ commitment to providing comforting facilities (such as security within the environment, effective convenient payment facilities, ample parking spaces, competitive pricing system, etc.).

1.3 Objectives of the Study

The broad objective of this study is to examine the effect of emergence modern retailing on Nigerian shopping habit using Shoprite in Lagos State for the case study. The specific objectives are to:

  1. examine the extent to which customer perception towards the emergence modern retailing stores influences the Nigerian shopping behaviour;
  2. determine the influence of buyers knowledge of the use of cashless payment system (POS, ATM, telephone payment transfers, etc.) on Nigerian shopping behaviour;
  3. examine the influence of social media retailing on Nigerian shopping behaviour;
  4. determine the relationship between emerging retailing sector product assortment and consumers changing buying habits

 

1.4 Research Questions

The following research questions were raised to elicit information for the study:

  1. What is the extent to which customer perception towards the emergence modern retailing stores influences the Nigerian shopping behaviour?
  2. What is the influence of buyers knowledge of the use of cashless payment system (POS, ATM, telephone payment transfers, etc.) on Nigerian shopping behaviour?
  3. In what ways can social media retailing influences Nigerian shopping behaviour?
  4. What is the relationship between emerging retailing product assortment and consumers’ buying habits?

1.5 Research Hypotheses

The following research hypotheses were stated in null form and tested for this study:

  1. Ho1: Customer perception towards the emergence modern retailing stores has no significant influences on the Nigerian shopping behaviour.
  2. Ho2: Buyers knowledge of the use of cashless payment system has no significant influence on Nigerian shopping behaviour.
  3. Ho3: Social media retailing has no significant influences on Nigerian shopping behaviour.
  4. Ho4: Emerging retailing product assortment has no significant relationship with consumers’ buying habits.

 

1.6   Significance of Study

This study will be useful to the management of organizations, especially Shoprite in Lagos State, as the study will provide added knowledge on evaluating and improving emerging modern retail marketing in Nigeria that will positively influence customers’ shopping behaviour towards patronising modern retail stores in Nigeria.

It will encourage the customers and organizations to imbibe the Knowledge of involving the entire marketing process in deciding the choice of retail outlets which will enhance the market performance of their products.

It will enhance customer perception towards the emerging modern retailing stores as it will create adequate public awareness of the customer-oriented benefits from patronizing modern retail stores.

It will be useful to customers in improving their shopping by improving their buying decisions through provision of buyers’ knowledge of the use of cashless payment system which the modern retail stores provide for customers.

It will enhance retailers’ sales volume and wider customer base as the study will provide useful knowledge on the uses and relevance of social media retailing to improve customer shopping behaviour, wider coverage and sales volume of the modern retail stores in Nigeria.

 

It will be useful to customers as the study will provide useful knowledge of improving buyers’ awareness that large modern retailing stores are both for the poor and the wealthy buyers. That is the services of the emerging retail market cut across all facets of income earners. In other words everyone can buy from the emerging modern retail stores even as low as sweet costing ten Naira (N10).

It will provide useful knowledge to management of emerging modern retail stores on the usefulness of retailers’ commitment to providing comforting facilities such as ample parking space, convenient payment system, provision of after-sales services, security among others, which could positively influence buyers shopping behaviour.

It will encourage the organizations to consider socioeconomic factors such as level of income of the consumers, the level of education among others on the choice of retail outlet.

The study will be highly relevant to government as the improvement of the emerging modern retail store will first influence buyers shopping behaviour to buy and further improve market performance of the modern retail stores in their level of sales and profitability which in turn will improve the government revenue through profit income tax payable by the modern retail stores.

The study will provide a useful reference point for other researchers who may be carrying out similar researches as the findings of the study will add to the existing knowledge on improving the decision on retail outlets in Lagos State.

 

1.7   Scope and Delimitations of Study

The study covers investigation of the effect of emergence modern retailing on Nigerian shopping habit using Shoprite in Lagos State for the case study. Hence the study is limited to the use of Shoprite in Lagos State.  The study is also delimited to examining the influence of customer perception towards the emerging modern retailing stores, buyers knowledge of the use of cashless payment system, social media retailing, buyers’ awareness of that large modern retailing stores are both for the poor and the wealthy buyers, and retailers’ commitment to providing comforting facilities on Nigerian shopping behaviour.

 

1.9   Definition of Terms

The following key terms are defined according the meaning of their usage in this study:

Customer Loyalty: Customers being faithful and committed to buying of a product or service.    

Customer Retention: Making a customer to keep buying the products of the organization for a long time period.

Emerging Modern Retail Stores: Modern supermarkets or departmental stores or very large retail stores which make uses or adjust to the uses of the modern technological development facilities to enhance customers’ shopping decision such as the use of cashless payment system, social medial marketing of products, online marketing and sales, customer oriented after-sales services among others.

Marketing process: Stages involve in carry out marketing activities which include in sequential order- situation analysis, marketing strategy, marketing mix, decision, implementation and control.

Retailers: Modern Supermarkets or departmental stores selling assorted products directly to the end users (customers or consumers).

Shopping behaviour: The way the customers perceive a product and the processes of making decisions to buy or not. It demonstrates intention of buyers to buy goods or services.  Consumer’s decision is based on a complex set of factors such as quality, value, and satisfaction, which can directly influence customer shopping behavioral intention to buy or not.

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