Store equity: reformulation of store equity dimensions

ABSTRACT

With the growing importance of retailers and the realization that brands are among retailers’ most valuable assets, store equity has become a management priority. Store equity has been recognized as a key element that helps retailers build a sustainable competitive advantage. In this context, this study presents a conceptual model of store equity and identifies key dimensions that contribute to its formation. A comprehensive review of studies within the area of store equity was conducted to compare and analyze the dimensions of store equity as discussed in the existing literature. The findings show that store equity consists of two main dimensions: store awareness and store image, which comprises merchandise, atmosphere, and convenience. In addition, important areas for future research on store equity and related topics are highlighted.     

Store brands and retail differentiation: the influence of store image and store brand attitude on store own brand perceptions

Store's own brands can provide important opportunities for retail differentiation if they are considered by consumers to be uniquely associated with store image. A survey of shoppers measured attitudes toward individual stores’ images and store brand perceptions, as well as general attitudes toward store brands. A regression analysis demonstrates a positive relationship between consumers’ perceptions of individual store own brands and their associated store's image dimensions and attitudes toward store brands in general.     

Store Brand Quality and Retailer’s Product Line Design

This study analyzes a retailer’s store brand quality decision in vertically differentiated product categories. We analyze a game theoretic model composed of one or two national brand manufacturers and a retailer, who strategically chooses the quality level(s) of its store brand(s) relative to the well-established national brand position(s) to maximize its category profit. Our analysis reveals that the nature of a retailer’s store brand quality positioning is quite different from the manufacturer’s national brand positioning decision, and that the best position for a store brand is not “as close to a national brand as possible” as previous studies suggest. Instead, the optimal quality position of each store brand is remarkably sensitive to the distribution of consumers’ willingness-to-pay. In particular, the relative proportions of quality sensitive consumers and price sensitive consumers determine the balance of three key strategic forces — the market expansion force, the retail margin force, and the consumer profitability force, leading to different optimal product line designs for store brands across different category environments. Interestingly, against multiple incumbent national brands, the retailer’s optimal product line design includes a store brand positioned at the highest quality level in the category only if most consumers are moderately quality conscious. We also analyze the implications of national brands’ brand equity for retailers’ store brand strategy.     

Identifying and examining the role of pop-up store design: A mixed-methods study

Pop-up store design has become critical in achieving marketing-motivated and sales-motivated goals. Nevertheless, a lack of holistic and systematic research on pop-up store design prevents retailers from evaluating and leveraging the value of design. This paper uses a mixed-methods investigation combining qualitative and quantitative approaches to classify the pop-up store design factors and examine their effects on consumer behavior. The results suggest that three dimensions of pop-up store design, namely sign, style, and layout elements, positively affect brand attitude and purchase intention through the mediating effect of store image. This research offers theoretical and managerial implications for pop-up retailing.     

Drivers of the synergy between price cuts and store flyer advertising at supermarkets and discounters

Despite retailers’ intense use of both price cuts and store flyer advertising, it is still unclear whether and when it is beneficial for retailers to combine the two promotion tools at the same time as opposed to using them separately. We systematically investigate synergies between price cuts and store flyers for a broad set of 488 brands from 44 consumer packaged goods categories across six leading German retailers. We find that a clear majority of the brands benefit from positive synergies and hence, combining price cuts and store flyer advertising is recommended, especially at supermarkets. This synergy can be strong. For instance, a 15 % price cut without store flyer support at a supermarket, on average, increases sales by 11 %, and medium spending on store flyers for the brand at its regular (non-promoted) price results in a sales lift of 8 %. The combined use of both tools, however, increases sales by 52 %, much more than the sum of their separate effects (11 % + 8 % = 19 %). Yet, there is also substantial variance in the synergy, which we explain with retailer format (supermarkets versus discounters) as well as various brand and category characteristics. Our findings have important implications for the coordination of promotion activities by retailers.     

How category characteristics affect the number of store brands offered by the retailer: a model and empirical analysis

Our research examines why retailers offer, not one, but multiple store brands in some product categories. More specifically, we are interested in how certain product category characteristics affect the number of store brands. We model a product category consisting of two incumbent national brands that may differ in strength. The retailer may introduce one or two store brands depending on which maximizes category profits. Our analysis suggests that the retailer is likely to carry two store brands in categories where (i) the national brands are similar in strength; and (ii) the price sensitivity between the national brands is low. Interestingly, the conditions that support the introduction of more than one store brand are quite different than the conditions that would facilitate the introduction of additional national brands. We provide empirical evidence that support our model-based predictions.     

Store brand and store loyalty: The moderating role of store brand positioning

Despite extensive research, the relationship between store brand loyalty and store loyalty remains uncertain. Recent research suggest a nonmonotonic relationship between store brand loyalty and store loyalty: positive up to a certain store brand loyalty level, after which it becomes negative (inverted U). However, existing arguments suggest this relationship may relate to the competitive positioning of store brands, especially their price?Cquality positioning. The more quality-oriented the store brand positioning, the more favorable the effect of store brand loyalty appears to be on store loyalty. An empirical study, focused on retailers that simultaneously offer several store brands with different price?Cquality positions, corroborates this proposition. The store brand loyalty level at which store brand loyalty induces a negative effect on store loyalty occurs earlier when the store brand positioning stresses price instead of quality.     

Understanding retail branding: conceptual insights and research priorities

With the growing realization that brands are one of a firm's most valuable intangible assets, branding has emerged as a top management priority in the last decade. Given its highly competitive nature, branding can be especially important in the retailing industry to influence customer perceptions and drive store choice and loyalty. We integrate lessons from branding and retail image research to provide a better understanding of how retailers create their brand images, paying special attention to the role of the manufacturer and private label brand assortment. We also highlight some important areas that deserve further research in the form of three sets of research priorities.     

Creation of consumer loyalty and trust in the retailer through store brands: The moderating effect of choice of store brand name

Within the current economic context, store brands play an important role in differentiation strategies based on assortment and positioning in terms of distributor prices. To begin with, this study identifies three determining aspects of retail loyalty and trust: satisfaction with price levels, the perceived image of the assortment and loyalty to the store brands (SB). Secondly, this study proposes a theoretical relational model among the aforementioned aspects. Finally, this study analyzes the moderating role that the strategy of choosing SB name (umbrella brand label vs. brands different from the label brand) plays in the relationship between loyalty to SB and loyalty to and trust in the retailer. By including this moderating variable, we seek to contribute to current academic research and to provide insights into the importance that SB strategy (label vs. own name) has for the effect of loyalty to SB on the relative results of the retail company. Our research results show that making the umbrella SB name the same as the label brand name increases the positive effect of customer loyalty to SB on loyalty to the retailer, but not the effect of trust on this loyalty compared to chains that use SB names different from those of the label. These results have important implications for management.     

Money-back guarantee and pricing decision with retailer's store brand

This paper investigates the money-back guarantee (MBG) choice problem in the presence of store brand introduction in a two-echelon supply chain consisted of one manufacturer and one retailer. Game-theoretic models with different MBG policies regarding the national brand and the store brand are examined. We found that the MBG policy could be a strategic tool to help the retailer developing its store brand even when a fairer policy is chosen by the retailer and the store brand is considered by consumers as a low-end substitute for the national brand. The presence of MBG is beneficial to the retailer while unfavorable to the manufacturer, even though the retailer provides a fairer MBG policy, i.e., MBG for both two brands. Although the national brand has advantages over the store brand, MBG will increase the competition and cause customer shifting from the national brand to store brand and thus bring a profit loss for the manufacturer. Moreover, we have found that the manufacturer could provide coordinate contracts for the retailer to improve its performance with which a win-win outcome could be reached for both the manufacturer and the retailer.     

Impacts of product,store and retailer perceptions on consumers’ relationship to terroir store brand

This research shows that consumers’ relationship to terroir store brand, measured through attachment and two facets of brand loyalty (attitudinal and behavioral) is respectively influenced by their perceptions of the product, retailer and store. More specifically, the perceived authenticity of the products of the terroir store brand and its perceived value have a positive and significant influence on the attachment and behavioral loyalty of the regular buyers of this store brand and a positive and significant influence on the attachment of its occasional buyers. Trust in the retailer has a positive and significant impact on the behavioral loyalty of the regular buyers of this terroir store brand while perceived image of the store has only a positive and significant impact on the attitudinal loyalty of its occasional buyers.     

Do Store Image and Price Perception Matter to Store Brand Equity?

Store brands account for 41% of the Spanish market share in 2011, and a further increase is expected in the next year due to the economic crisis, which makes up an increasingly competitive market. Previous literature suggests that price and store image are antecedents with a relevant influence on store brand equity. Our study aims to analyze if the store image and price perception matter to store brand equity. A quantitative study was carried out obtaining a total of 362 valid responses. Results show that both variables have a positive influence on store brand equity, store image being the more relevant factor. The study is of great interest for retailers who wish to increase the value proposition.     

Using product sampling to augment the perceived quality of store brands

Two experiments test the ability of in-store sampling to enhance a store brand's perceived quality (Study 1) and whether such an outcome is contingent on quality level (Study 2). Study 1 revealed for two distinct grocery products that the perceived quality of store brands benefited significantly when participants tried these brands prior to judging their quality, but that no such benefit accrued to national brands. Study 2 found that sampling enhanced quality perceptions of a store brand only when the brand was of high (vs. low) quality. Implications for retailers’ store brand practices are discussed and suggestions for additional research are offered.     

The impact of selected store image dimensions on retailer equity: Evidence from 10 Chinese hypermarkets

Building retailer equity increases revenue and profitability by insulating retailers from competitors. Store image is the basis of retailer equity, but extant literature offers little insight into the empirical research which takes store image dimensions as antecedents of retailer equity. This paper establishes a theoretical and empirical basis that shows the impact of selected store image dimensions on retailer equity. The authors propose a conceptual framework in which store image dimensions are related to three dimensions of retailer equity, i.e., retailer awareness, retailer associations, retailer perceived quality. These dimensions are then related to retailer loyalty. The empirical tests using a structural equation model support the research hypotheses. The results indicate the positive effect of convenience, perceived price, physical facilities, employee service, and institutional factors on retailer equity dimensions as antecedents of retailer equity.     

The importance of retail brand equity and store accessibility for store loyalty in local competition

Previous research shows that the success of a retailer depends on strong retail brands and attractive, easily accessible store locations. However, little is known about the relative importance of retail brand equity and store accessibility for store loyalty in different local competitive contexts. To provide insight into this issue, we conduct on a cross-sectional study of 4151 interviews and objective data on 30 stores of a focal retailer and its local competitors. We find that store loyalty benefits more from a strong brand than from a conveniently accessible location and that location can benefit from a strong brand. We also find that competitor’s brand equity has an especially negative influence on store loyalty towards a focal retailer and that the strength of the effects of brand equity and location accessibility on store loyalty depends on the local competitive context.     

Interplays between manufacturer advertising and retailer store brand introduction: Agency vs. wholesale contracts

In retail supply chains, manufacturers' advertising for national brands and retailers' store brand introduction may relate to each other, and two types of contracts, i.e., agency contract and wholesale contract, are widely used. This paper uses game-theoretic models to investigate the strategic interaction between a manufacturer's advertising strategy and a retailer's store brand introduction strategy. We derive the equilibrium outcomes, including wholesale price, retail price, market demand, retailer's and manufacturer's profits under different contract forms. We find that when the product cost is small relative to the perceived value of the store brand, the introduction of a store brand will benefit the retailer. The retailer is more likely to introduce store brands under the wholesale contract than under the agency contract. In addition, compared with the wholesale contract, the agency contract may increase both the manufacturer's and the retailer's profits and lead to Pareto improvement for them.     

The impact of store flyers on store traffic and store sales: a geo-marketing approach

This paper analyzes the impact of the composition of a retailers’ weekly store flyer on store performance. The paper presents and tests propositions on how a store flyer’s size, its average discount size, and the allocation of store flyer space to category and brand types, affects store traffic and sales. The moderating impact of location variables—socio-demographics of trading area inhabitants, characteristics of the store and competition—is also discussed and empirically tested. The outcomes provide key insights for retailers with regard to the financial ramifications of store flyer competition.     

Understanding the impact of store flyers on purchase behaviour: An empirical analysis in the context of Spanish households

The purpose of this paper is to analyse how Spanish consumers are really influenced by store flyers. The present study examines decisions of households regarding: (i) incidence (using a binary logit model); (ii) brand choice (using a multinomial logit model); and (iii) quantity (using a Poisson model). The models described above are applied to scanner choice datasets of the purchases made by Spanish households in two product categories (olive oil and coffee) over 53 weeks. The study finds that the main effect of such flyers is brand switching, rather than acceleration or stockpiling. However, consumers are not homogeneous in these responses to store flyers. Price sensitivity is found to be a more important driver of flyer-proneness than brand loyalty; moreover, the study finds a strong relationship between price-sensitive, flyer-prone consumers and decisions on incidence, choice, and purchase quantities. In contrast, the influence of the presence of brands in store flyers on incidence of purchases is not more prevalent among brand-loyal consumers than among non-brand-loyal consumer; however, such flyers are able to induce loyal users to stock up on their preferred brand. The managerial implications underline that manufacturers and retailers should be aware that the inclusion of a brand in store flyers (without necessarily offering a price discount) can simultaneously cut promotional costs and increase sales profits. In addition, managers should use other types of promotions (such as in-store displays) to encourage consumers to stock up on the brand.     

Does store image influence demand for organic store brands?

This research examines the effects of store image on the demand for store brand organic brands. We conduct an empirical study using a unique dataset that combines households' organic product purchases and their ratings of the same stores' images. We find that the type of images consumers develop about a store influences the demand for organic products from that store. In addition, the influence of store image on the demand for store-brand organic products depends on the store brand branding strategy. Although own brands are accepted in stores with quality produce and with quality store brands, they are less likely to be adopted in stores with varied selections. Furthermore, the own-brand strategy (the use of the retailer's own name) is not always an effective branding strategy for organic products, except in some stores.     

Factors that influence manufacturer and store brand behavioral loyalty

This study examines the factors that are linked to consumer goods brands having unusually high or low behavioral loyalty, after controlling for the association between brand size and loyalty that occurs due to the ‘double jeopardy’ effect. Behavioral, or repeat-purchase loyalty is measured as the brand's average share of category requirements (in volume) among its buyers over a 12-month period. We examine a range of factors that theory or past evidence suggests are associated with higher or lower behavioral loyalty, including brand type (store brand/manufacturer brand), price level, promotion intensity, as well as average brand volume per occasion and pack size. Using extensive US panel purchasing data, we find that store brands exhibit relatively higher behavioral loyalty than manufacturer brands. We explain the theory behind this result. We also find that the brand's average pack size and volume bought per occasion has a markedly positive association with behavioral loyalty. Finally, we find that the effect of low price on excess loyalty is moderated via a positive association with average volume purchase per occasion. These findings add to the body of knowledge relating to patterns in behavioral brand loyalty for both manufacturer and store brands, as well as the marketing-mix factors that influence it.