Buyer Power,Transport Cost and Welfare

Manufacturers produce substitute products and sell to consumers in a linear city through competing retail stores. A low cost store obtains large market share by selling at low prices. Assume that a big retailer may exert buyer power by demanding wholesale discounts from manufacturers. The model identifies exclusionary effects of buyer power against competing retailers. It is also found that certain level of buyer power of a discount retailer may maximize social welfare, while that of a regular price retailer may maximize total consumer surplus. Nevertheless, excessive buyer power hurts both consumers and society.     

Retail Image as Seen through Consumers' Eyes: Studying International Retail Image through Consumer Photographs of Stores

Abstract

The aim of this article is to explore how retail store image is perceived by consumers from different cultural backgrounds and with different degrees of awareness and experience of the retailer. The subject is IKEA, a retailer recognized as having a global approach to the markets in which it operates, resulting in a highly standardized approach to store branding. However, rather than employing traditional methodologies to elicit consumer perceptions of store image, we attempt to capture consumer perceptions through interpretations of the visual images generated by the participants themselves. The photo-elicitation method employed captured the different interpretations and meanings attached to commonly identified elements of store image and reinforced the central role played by the store itself in retail image formation.     

Retailer Categorization: How Store-Format Price Image Influences Expected Prices and Consumer Choices

Prior research indicates that consumers may base their retail decisions (e.g., store choice, purchase quantity) on price image, which has been defined as consumer perceptions “of the aggregate price level of a retailer” (Hamilton and Chernev 2013, p. 2). The present research shows that consumers associate different price images not only with specific retailers, but more broadly with various store formats — such as grocery stores, convenience stores, and specialty stores. Six studies provide evidence that store-format price image exerts influence on consumer price expectations and store choice decisions, and that these retailer categorization effects are distinct from the effects of retailer price image.     

The influence of a retailer's corporate social responsibility program on re-conceptualizing store image

The construct of retail store image is typically built based on a variety of the store's functional attributes. This conceptualization fails to consider the role of corporate social responsibility (CSR) polices and practices in forming store image. Results from a study of 460 consumers indicate CSR influences consumer store image. CSR is particularly effective at influencing store image when the retailer experiences a positive performance perception among its customers. Consumers shopping at such stores are more receptive to CSR programs, and experience significant increases in their level of satisfaction and loyalty to the store through the addition of these programs.     

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.     

Consumer–retailer love and attachment: Antecedents and personality moderators

Because loyalty to services remains elusive and unpredictable, there is a need to study consumer relationships with firms apart from the established satisfaction–loyalty chain approach. To that end, the present paper investigates feelings of attachment and love through two empirical consumer studies of two different grocery retailer brands. The findings of the current study imply that retail store image, perceived transactional value, and corporate social responsibility (CSR) associations positively influence consumer–retailer love levels. Furthermore, we find that for consumers scoring low on the value of warm relationships with others and for consumers characterized by an avoidant attachment style, the effect of consumer–retailer love on re-patronage intentions is less salient. Interestingly, in the case of highly avoidant individuals, the effect of consumer–retailer love is negative. Managerial implications for building consumer-firm love in the context of grocery retail, as well as future research perspectives, are provided at the end of the paper.     

Brand personality appeal in retailing: Comparing fashion- and grocery retailing

In a mature retail market, branding can offer retailers opportunities for setting themselves apart. This study examines the construct ‘brand personality appeal’ (BPA; Freling et al., 2011) in retailing. Two consumer surveys are administered, on fashion retailing (n = 104) and grocery retailing (n = 101), focusing on (1) store personality, (2) BPA, and (3) retailer brand equity. A SmartPLS estimation shows that ‘enthusiasm’ is a personality trait that appeals to consumers regardless of the retail context, whereas ‘sophistication’ matters more in fashion retailing and ‘unpleasantness’ in grocery retailing. BPA is a significant driver of retail brand equity, regardless of the retail context.     

Reflections on Consumer Sophistication and Its Impact on Ethical Business Practice

This paper investigates consumer sophistication and its role in the development of proactive public policy. Consumer sophistication is examined in light of several historical shifts in market structure and consumer lifestyles. These shifts create market conditions that foster the emergence of a “Corporate Dilemma” in which unsophisticated consumers reward unethical business practices and punish ethical business behavior. To reduce unethical business practices in the market, this paper proposes that the optimum level of interim government intervention should be based on the level of consumer sophistication in the market.     

Identifying factors affecting consumers purchase incidence at retail trade shows

The purpose of this article is to examine variables influencing purchase incidences at retail trade shows. To this end, retailer and consumer related antecedent variables are proposed. The retailer related variables are represented by store environmental cues of sales staff services, store atmosphere and product assortment. The consumer related variables are represented by impulse buying tendency and perceived time pressure. Drawing on relevant literature, hypotheses are developed to link each of these variables to purchase incidence. Data were collected using questionnaire from shoppers (N=95) at a large retail trade show. The hypotheses were tested using partial least square path modeling. The findings indicate that consumers’ favorable evaluation of retailers’ sales staff services, store atmosphere and product assortment led to more purchase incidences. The findings about the consumer related variables indicate that impulse buying tendency led to more purchase incidences whereas perceived time pressure led to fewer purchase incidences. Drawing on these results, several implications for practice and research are suggested.     

Brand and quality effects on introduction of store brand products

This paper considers a supply chain with a single manufacturer selling a national brand product via a single retailer. The retailer has the option to introduce a product under his own brand into the market with the same functionality as the national brand product. We simultaneously consider the consumer bases of the national brand and store brand along with consumers' willingness to pay for quality and the supply chain control (centralized vs. decentralized). By analyzing the game-theoretic models, we offer managerial insights about the influences of brands' consumer bases on the quality and pricing decisions of the retailer, and on the manufacturer's willingness-to-collaborate when the retailer introduces the store brand product. We find that, although it is usually easier for the retailer to introduce a product under a store brand with a large consumer base, doing so with manufacturers of well established national brands can be difficult, when the retailer often has to greatly mark down his store brand product's quality and price. We also find that a store brand product with a small consumer base shall be launched only when the supply chain is switched to a centralized control and when the manufacturer's national brand has a large consumer base. These important findings offer guidance to both national brand manufacturers and retail store managers regarding the launch of store brand products.     

Examining the role of store design on consumers’ cross-sectional perceptions of retail brand loyalty

This paper compares new and established store design prototypes of the same retailer to examine the role of consumers’ cross-sectional perceptions of retail brand loyalty. In-store surveys were administered to capture consumers’ store-level perceptions towards a new store prototype and an older established prototype of the same fast fashion retailer. The data was subjected to multi-group analyzes with structural equations modeling. The findings suggest that store novelty and complexity promote both store design pleasure and retail brand loyalty outcomes. The different store designs do not, however, account for differences in brand loyalty perceptions at the overall retailer level when multi-group comparisons of both store designs are made. Consumers of newer store designs are found to possess a heightened sensitivity to price perceptions. Managerial implications of the effects of store novelty and complexity on retail brand loyalty are also presented.     

Consumer reasons for store ‘walkouts' and the impact on future store patronage

This study addresses ‘walkouts’, one of the major issues identified by the Skaggs Institute of Retail Management for 1990–1993. Walkouts are dissatisfaction responses of consumers who enter a store with the intention of making a purchase but who eventually leave without doing so. A more severe situation occurs when the consumer becomes a store defector, one not willing to patronize the store in the future. Results of this study indicated that customers walked out three times more often because of poor merchandise assortment than for lack of, or discourteous, service. However, the consequences of poor merchandise assortments were less detrimental to the retailer/consumer relationship than poor service. Findings revealed that half of the consumers who walked out because of poor service indicated they would not shop in the store in the future - store defectors.     

Managing a Global Retail Brand in Different Markets: Meta-Analyses of Customer Responses to Service Encounters

This study investigates how retailers can leverage their brand to shape customers’ satisfaction with service encounters. It develops and tests hypotheses about how brand, store, and consumer factors moderate customer responses to experience clues during retail service encounters. Six meta-regression analyses synthesize and compare results from 842 satisfaction equations describing customers’ encounters with a global retailer operating 400 stores in 32 countries. The results show how customers weigh their perceptions of service encounters differently depending on brand, store, and consumer factors. In markets where customers believe the retailer has high holistic brand quality, they place less weight on experience clues within the store. In markets where customers believe the retailer’s service brand promise, they place more weight on in-store experience clues. In markets where the retailer promises utilitarian value, customers weigh functional experience clues more heavily. In markets with an online purchasing channel, the effect of experience clues common to offline and online store environments is magnified, and unique clues are diminished. In addition, customers heavily weigh experience clues that fit their goals. In general, retail success factors include high brand quality (which makes customers more forgiving), a service brand promise that is mirrored in the store image (which makes customers attend to the experience clues aligned with them), and the careful monitoring and managing of retail touchpoints (to customize experience clues to each market). In this way, retailers can use customer-based strategies to effectively design and manage their global retail brand in different markets.     

Gatekeepers to consumer markets: the role of retailers in international trade

This study explores how recent developments in the retail sector affect trade in consumer goods. It focuses on three developments in the retail sector: (i) internationalization; (ii) market structure; and (iii) the growing market share of retailers' private labels. Using gravity model estimation techniques it is found that the foreign operations of a retailer are positively related to imports from the host to the home country of the retailer. Imports are negatively related to ownership concentration, while the market share of private labels is negatively related to imports of food and positively related to imports of non-food consumer goods. For both product categories private labels shift sourcing towards poor countries. The trade response to trade liberalization is higher both at the extensive and intensive margin in countries with lower retail concentration.     

Google or BizRate? How search engines and comparison sites affect unplanned choices of online retailers

Recent trends in online retailing suggest that “33% of buyers often or sometimes make unplanned purchases” [Annual Retail Consumer Survey Report. Jupiter Research 2003.]. Findings based on online retailing trends also suggest that both search engines and infomediaries are beginning to play a strong role in leading consumers to online retail sites. Additionally, some practitioner studies find that about half of online consumers use comparison shopping sites before choosing a retailer. Retailers therefore need to understand whether search engines or infomediaries play a stronger role in bringing unplanned consumers. This is the issue that we investigate in this research. Our results indicate that, retailer and consumer factors, category characteristics and the consumer's past relationship with the retailer do play a role in the store choice decisions of online consumers. Between search engines and infomediaries, however, search engines play a far stronger role than infomediaries. The effect is, in fact, more than twice that of infomediaries.     

Factors affecting Indian shoppers׳ attitude and purchase intention: An empirical check

The objective of this study was to examine affecting factors that influence Indian consumers׳ attitude toward retailers and purchase intention from the retailers. A questionnaire was used to collect data using systematic sampling from department store shoppers of age 18 years and above in Kolkata, a metropolitan city of India. Structural equation modelling (n=355) was used to examine the impact of affecting factors on consumers׳ attitude toward retailers and the impact of consumers׳ attitude toward retailers on purchase intention. Results indicated that the factors namely self-congruity, retailer awareness, retailer associations and retailer perceived quality have significant positive impacts on consumer׳s attitude toward retailers. The results also indicated that consumers׳ attitude toward retailers positively influences purchase intention. Arguably, this paper was the first to explore such linkages between the affecting factors that influence consumers׳ attitude toward retailers and purchase intention in Indian context.     

Understanding unethical retail disposition practice and restraint from the consumer perspective

This research expands marketing's knowledge regarding unethical retail disposition (URD). URD is a type of consumer fraud, whereby consumers purchase an item of merchandise with the intent of using it and returning it to a retailer for a refund. The authors first employ grounded theory methodology to develop an original framework illustrating why consumers engage in either URD participation or restraint; next, they demonstrate empirical support for the framework. The authors support and augment previous URD research by reporting that URD offenders employ eight neutralization techniques to remedy personal guilt associated with committing the fraudulent behavior. This research also takes a novel approach by illustrating that consumers describe six motivations underlying URD restraint. Most concerning for retailers is that four of the six reasons for restraint are tenuous. Thus, consumers who refrain from URD may be easily swayed to participate in this illicit behavior. The authors posit that URD may represent a means by which consumers express disdain and mistrust for contemporary retailers, contributing to the societal discrimination that retail organizations owned by “middlemen minorities” engaged in trade and commerce often experience. © 2010 Wiley Periodicals, Inc.     

The brand architecture of grocery retailers: Setting material and symbolic boundaries for consumer choice

This article discusses how the brand architecture of grocery retailers set material and symbolic boundaries for consumer choice, thus limiting consumer sovereignty. The article first discusses previous work on store atmospherics, servicescapes and brand architecture. It is argued that work based on these concepts has taken an internal management perspective on how retailers can manipulate aspects of the retail setting to serve their own interests. Then, we develop an alternative conceptualisation of retailer brand architecture that takes into account that consumers (and other constituents) are active co-constructors of material and symbolic aspects of retail settings. It is discussed how consumers participate in constructing retailer brand architecture and how this concept differs from previous research. Implications for both research and practice are discussed.     

“Showrooming” in Consumer Electronics Retailing: An Empirical Study

The present study focuses on multichannel retailing strategies and describes the state of consumer behavior regarding “showrooming” (the practice of examining merchandise or products in a retail store and then buying it online). Founded on the theory of planned behavior (TPB), the authors examine the antecedents of showrooming using data collected from a sample of 176 retail consumers. Based on their results, they define perceived control, website compatibility, and subjective norms as the main antecedents of consumer attitudes toward online purchases. Additionally, they state that previous experience and reasons against purchasing online are directly associated with consumers’ intention to purchase on the retailer’s website. Finally, some theoretical conclusions and practical implications for retailers are discussed.     

Heterogeneous consumers,search and retail formats

This paper proposes a model featuring the heterogeneity of consumer preferences and analyzes the multiple equilibrium of retail formats by building a map of the relationships between consumer heterogeneity and retail formats. The key questions analyzed in this paper are how the retailer adjusts its combination of marketing elements through repositioning and how innovation in retail formats is implemented to match consumers’ heterogeneous preferences in a market with consumer search costs. Unlike recent research, our model, by taking different consumer preference structures into account, introduces consumer psychological costs into the Ehrlich-Fisher model and deduces the existence of different retail formats and their multiple equilibriums. We find that consumer heterogeneity, retailers’ diversified transfer costs and economies of scale are endogenous drivers of prosperous retail formats. Accordingly, diversified retail formats with complementary functions and differentiated services can be described as the horizontal extensions and interface changes of the retailing industry.