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.     

Consumer adoption of No Junk Mail stickers: An extended planned behavior model assessing the respective role of store flyer attachment and perceived intrusiveness

Although store flyers play a crucial role in retailer communication, their environmental burden has raised a public debate, fostering No Junk Mail sticker adoption by a growing number of households. This study proposes and tests a planned behavior model of consumer intentions towards adopting a sticker that extends to the sticker adoption alternative (i.e., receiving store flyers) by introducing store flyer attachment and perceived intrusiveness as two potential intent determinants. While confirming the relevance of the extended model, the findings support a typology of store flyer consumers that enlighten retailers on possible shifts in their audience.     

Directing store flyers to the appropriate audience

Grocery shoppers were questioned about the frequency of purchasing items that were featured in the store's flyers. This measure was used as the dependent variable in a multinomial logit model with the independent variables being various aspects of shopping behaviour, usage of store flyers, age and employment status. Since only one threshold parameter was significant, the four-level dependent variable was then collapsed and a binary model was estimated. This study evidenced that less than half of the respondents looked forward to receiving unsolicited flyers. Most shoppers read the flyers only to be informed of price specials that the store has to offer. The odds ratio of responding to store flyer deals among those who look forward to sales flyers is more than double the odds ratio of those who do not await the flyers, across every category of shopping frequency. Retailers could employ direct marketing to target specific audiences who look forward to receiving store flyers.     

Modelling the effect of store flyers on supermarket sales: An application to olive oil demand

In this paper we study the effect of store flyers on supermarket sales while controlling for other promotional strategies. We use a dataset of weekly sales of 16 olive oil products from a Spanish supermarket chain during the year 2017. We estimate a dynamic panel data model by GMM which allows us to examine both the short- and long-run effects of displaying products in store flyers. Our estimates show that products being featured in a store flyer exhibit 85 percent higher sales in the short-run, being the effect in the long-run of 109 percent. We also provide evidence that olive oil is a highly price-elastic product. Our estimates also indicate that placing the products on the end-of-aisle increases olive oil sales. Conversely, multibuy promotions are negatively related with sales.     

The effects of store brand loyalty on store loyalty: evidence from the Spanish market

This article studies the impact of retailers' store brands on store performance. Specifically, we analyze the extent to which store brands contribute to store loyalty. On the one hand, a positive relationship between customers' familiarity with and loyalty to the retailer's own brand and customers' loyalty to the retailer should result from the potential of the store brand to differentiate the retailer. On the other hand, an negative relationship between customers' familiarity with and loyalty to the retailer's own brand and customers' loyalty to the retailer may result from store brands' association with more price-sensitive customers, who have a higher propensity to buy at different stores that offer the best bargain. The empirical analysis, conducted with a sample of customers of leading retailers in the Spanish detergent market, shows no relationship between store brand loyalty and loyalty to the retailer. Although the purchase of store brands relates positively to higher loyalty to the retailer, this relationship deteriorates with the degree of exclusivity of store brands within the customer's shopping basket.     

Assessing the relationship between loyalty program attributes, store satisfaction and store loyalty

After a decade of research there is still much to understand about the relationship between loyalty programs and whether they deliver on their promise of building customer loyalty towards a store and understanding the mediating role of store satisfaction. Our results suggest that loyalty program as a summary construct, explains a significant proportion of the variance in store satisfaction and store loyalty. However, disaggregation of the construct into hard versus soft attributes, promotes greater specificity, precision and accuracy in uncovering the differential impact on store satisfaction and store loyalty.     

Market disequilibria and their influence on small retail store pricing

In this paper a quantitative model is developed to explain differences in average store price levels. We assume that stores may operate under different economic regimes, that is, under excess capacity or excess demand. Prices are expected to the higher than average in case of an excess demand regime and lower in an excess capacity situation. Actual information regarding the regime that applies to each individual store is not available. Therefore, we propose to use a so-called switching model with endogenous regime choice to analyse the store price differences. The model developed in the paper is estimated using four largely differing types of stores from the Dutch retail trade. These samples consist mainly of small stores.     

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.     

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.     

Re-thinking the relationship between store brand attitude and store brand loyalty: a simultaneous approach

Academic attention to the relationship between store brand attitude and store brand loyalty is insufficient. Our paper fills this research gap by proposing and testing a theoretical model that demonstrates a reciprocal and mutually-reinforcing relationship between store brand attitude and store brand loyalty. The literature review identifies independent variables as potential predictors of both characteristics. We apply a two stages least squares model to data that come from a survey of Spanish households. The findings corroborate some of the propositions of the conceptual model: the reciprocal relationship between the two dependent variables; the influence of risk, deal proneness, price and value consciousness and extrinsic and intrinsic cues on store brand attitude; and the influence of exploration, deal proneness, store loyalty, store brand trust and store brand affective commitment on store brand loyalty.     

Retail relationships and store loyalty: A multi-level perspective

An important factor in retail store loyalty is interpersonal relationships between retail salespeople and customers. However, relationships can also exist at the person-to-store level. This paper examines the linkages between trust in a salesperson, trust in the store, and repeat purchase intention. A model of store loyalty which includes relationships at both the person-to-store as well as person-to-person level is tested. The findings reveal that for those with an interpersonal relationship, trust and commitment to the salesperson are directly linked with purchase intention as well as indirectly through store attitude. For customers without a salesperson relationship, trust in the store leads to loyalty indirectly through store attitude, but does not have a direct impact on purchase intention. The results illustrate the existence of multi-level relationships between customers and stores and how those relationships link to store loyalty. The research adds to our understanding of the complexity of relationship retailing, while providing further evidence of the value of generating and maintaining interpersonal relationships as a retail strategy.     

The effects of wait expectations and store atmosphere evaluations on patronage intentions in service-intensive retail stores

Many factors, both obvious and subtle, influence customers’ store patronage intentions. Using videotape technology that enabled us to experimentally manipulate the number of visible store employees, number of customers, and music, we test the relative importance of wait expectations and store atmosphere evaluations on patronage intentions. These constructs are found to be critical antecedents of store patronage intentions in the context of the service-intensive retail store at which the model was tested. We also find support for the direct effects of gender on wait expectations and store atmosphere evaluations. We discuss some implications for retailing research and practice.     

Effects of store loyalty on shopping mall loyalty

The key purpose of this paper is to bridge a research gap in shopping mall literature by investigating the relationship between store loyalty and shopping mall loyalty. The paper also examines the effects of perceived store value and store relationship commitment on store loyalty en-route to loyalty towards the shopping mall hosting the stores. The study shows that store loyalty influences shopping mall loyalty under certain conditions and that such an influence is moderated by the geographic distance between the consumer and the shopping mall. Further, the study found that distance has a moderating effect on the relationship between perceived store value and store loyalty, but not on the association between relationship commitment and store loyalty. The insights provided by this study offer academics, retailers and shopping mall managers a richer understanding of the relationships between store loyalty and its antecedents, customers' distance from the mall, and shopping mall loyalty.     

The kinetic quality of store design: An Exploration of its influence on shopping experience

Kinetic quality of store space is the appreciation of the store with regard to the movements and gestures that can be performed during the shopping trip. Few researches have studied this concept despite its potential influence on shopping outcomes. In this paper, we show that the kinetic quality of the store has an impact on hedonic and utilitarian shopping values and on purchase. The impact on shopping value is similar in magnitude to that of atmospheric quality. Music and visual esthetics positively influence kinetic quality.     

How storefront displays influence retail store image

The image of retail stores offers an important means for differentiation in highly competitive retail markets. Storefront displays generally function to increase attention to the store or generate unplanned store visits, whereas their impact on store image remains unknown. This study therefore investigates perceived image differences between commonly used types of storefront displays and tests whether an image transfer takes place from the display to the retail store. The results show that more innovative displays achieve better image valuations and that store image benefits from the presence of a storefront display. Spillover effects from the display to the store even occur in the face of some resistance, such as in familiar stores and among consumers who have negative attitudes toward such displays.     

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.     

Effects of neighbourhood characteristics on store performance supermarkets versus hypermarkets

We investigate the impact of neighbourhood characteristics on the relative attractiveness of product categories within a store, with special attention for the differences between hypermarkets and supermarkets. We consider two questions. Firstly, is the impact of neighbourhood-specific factors on attractiveness of product categories smaller for hypermarkets than for supermarkets? Secondly, is there a difference in relative attractiveness of product categories between supermarkets and hypermarkets and to what extent is this difference dependent on kind of neighbourhood? For the impact of store and trading area characteristics on category and store performance, we use a framework that was originally presented in Campo et al. (J. Int. Res. Market 17 (2000) 225). Empirical application to national stores of a European retail chain confirms the differential impact of neighbourhood characteristics on supermarkets and hypermarkets. The research proves that geomarketing analysis can be useful for developing micromarketing strategies.     

Price-matching guarantees as signals of low store prices: survey and experimental evidence

Many retailers offer a price-matching guarantee that promises to pay consumers the difference if they find a lower price elsewhere. This article proposes that the effectiveness of a price-matching guarantee as a signal of low store prices depends on individuals’ beliefs about the degree to which other consumers in the market engage in price search, enforce price-matching guarantees, or both. Consistent with signaling theory, results of a survey and two experimental studies demonstrate that market level factors affect consumer beliefs about the extent to which others engage in price search and thereby the effectiveness of price-matching guarantees in lowering perceptions of store prices. The implications of the findings for retail strategy are discussed along with directions for future research.     

Bargain effectiveness in differentiated store environments: The role of store affect,processing fluency,and store familiarity

Two main types of value have been established in the retail literature: merchandise value based on the quality and price of a store's offerings and differentiation value based on the extent of atmospheric cues in the environment. However, it is not clear what happens when a store offers both types of value to a high degree. We investigate how offering a bargain (or price cut) affects consumer responses for high and low differentiation store environments. In two studies, using a simulated store environment in a behavioural laboratory, we find that the presence of bargains in a highly differentiated store environment negatively influences store affect and, in turn, approach behaviour. This effect, however, only holds true for low familiarity stores and can be explained by processing fluency theory. Consequently, retailers focusing on store environment differentiation should reconsider their use of bargains.