Academic journal article South Asian Journal of Management

Measuring Retail Service Quality: An Empirical Study in a Developing Country

Academic journal article South Asian Journal of Management

Measuring Retail Service Quality: An Empirical Study in a Developing Country

Article excerpt

The success of organized retailing in India mainly depends on delivery of services through quality improvements. In service organizations, customer-perceived service quality is considered one of the key determinants of business performance. This paper deals with the application of Dabholkar's (1996) retail service quality instrument in measuring the gap between the customers' expectations and their perceptions about the service quality of retail stores in India. Our analysis approved the reliability of the instrument under Indian Retail Environment. The analysis of the data indicates that the reliability (one of the five dimensions proposed) of retail stores is perceived to be the most important dimension among all the dimensions. Further, the analysis of gap scores indicates that highest perceived service gap lies in the policies of the retail stores particularly parking facilities provided by them. Apart from this, all other statements show a significant negative gap implying the need for considerable improvements in retail service quality.

INTRODUCTION

Retailing in India is gradually inching its way toward becoming the next boom industry. ETIG (Economic Times Intelligence Group) estimated the size of the organized retail industry at about Rs. 16,000 cr in 2001-02 (Table 1) and estimates that the retailing industry will cross the Rs. 37,000 cr sales mark by year 2007. The industry is growing at the rate of about 18-20% per annum. The retail arena today is very different-the opportunities are incredible but exploiting them is extremely tough. A successful retail enterprise must have a vast network of people and error-free processes in place.

Shoppers know all rules of the game. They can instantly sense a good buy and lap it up or sniff out a bad product and dismiss it. Their expectations are tough to meet but for retailers aiming to make a big sale, there is not much of a choice but to find ways to win customers over and keep them permanently happy. ETIG analysis of the NRS data over the last two years shows that the urban consumer is definitely becoming more discerning and demanding as far as lifestyle is concerned. Urban Indian household income is on the rise (Table 2). The graph clearly shows that the purchasing power of urban India is increasing. This would create opportunities for organized retail-as increase in purchasing power would mean higher demand for better shopping ambience, superior quality products and improved service. Increase in education and exposure to the latest trends through various media has led to an increase in demand for lifestyle goods. The Indian consumers, like their international counterparts, are becoming increasingly demanding and knowledgeable. They are tough critics, savvy purchasers, value driven spenders and practical thinkers when it comes to shopping. The demands for their time at work and home have made consumers extremely selective about how they will spend their limited and precious leisure hours. Shopping today is much more than just buying material. It is an experience in itself. To best utilize the available time, the Indian consumer is on the lookout for avenues that give him the maximum value for his money and time spent.

The retail environment is changing more rapidly than ever before (Dabholkar, 1996). It is characterized by intensifying competition from both domestic and foreign companies, a spate of mergers and acquisitions, and more sophisticated and demanding customers who have great expectations related to their consumption experiences (Sellers, 1990; Smith, 1989). Consequently, retailers today must differentiate themselves by meeting the needs of their customers better than the competition. There is general agreement that a basic retailing strategy for creating competitive advantage is the delivery of high service quality (e.g., Berry, 1986; Hummel and Savitt, 1988; Reichheld and Sasser, 1990).

In this paper, the application of Dabholkar's (1996) retail service quality scale in measuring the gap between the customers' expectations and their perceptions about the service quality of retail stores in India is analyzed. …

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