Customer reactions to self-checkout discontinuance

Self-service technologies (SSTs) increasingly permeate retail space. Yet, sometimes retailers decide to revert to human-delivered service mode by discontinuing their incumbent SST. In this study, we examine how self-checkout (SCO) discontinuance affects customers’ perceptions of SCO technology and purchase behavior. We conduct a natural field experiment by surveying two groups of customers pre- and post- SCO discontinuance: treatment group (who experience discontinuance) and control group (who do not experience discontinuance). Leveraging difference-in-differences analyses, we find that SCO discontinuance results in decreases in customers’ satisfaction with technology, intentions to use technology, perceived simplicity of technology, and basket size. Our results inform managers of the potential downsides of discontinuing SST and provide corroborating evidence of the technology’s benefits.     

How artificial intelligence will affect the future of retailing

Artificial intelligence (AI) will substantially impact retailing. Building on past research and from interviews with senior managers, we examine how senior retailing managers should think about adopting AI, involving factors such as the extent to which an AI application is customer-facing, the amount of value creation, whether the AI application is online, and extent of ethics concerns. In addition, we highlight that the near-term impact of AI on retailing may not be as pronounced as the popular press might suggest, and also that AI is likely to be more effective if it focuses on augmenting (rather than replacing) managers’ judgments. Finally, while press coverage typically involves customer-facing AI applications, we highlight that a lot of value can be obtained by adopting non-customer-facing applications. Overall, we remain very optimistic as regards the impact of AI on retailing. Finally, we lay out a research agenda and also outline implications for practice.     

Management of hybrid organisations: a case study in retailing

Hybrid organisations present important theoretical and managerial opportunities. We examine a large Finnish multichain retail organisation in order to identify and understand the challenges of hybrids in a retailing context. We are especially interested in how these complex firms try to maintain a balance between the centralised corporate control and the local autonomy and initiative of their retailers. The governance forms and processes identified in the case organisation are discussed with the help of a proposed conceptual framework. We believe that the identified governance problems and practices in the three different retail chains and especially our recommendations will facilitate the understanding of retail hybrid organisations and the management of hybrids in general.     

SERVCON: development and validation of a multidimensional service convenience scale

As customers have demanded greater convenience in service exchanges, researchers have responded by incorporating the convenience construct into their conceptual models and empirical studies, but a comprehensive, formally validated measure of convenience remains lacking. This study conceptualizes service convenience as a second-order, five-dimensional construct that reflects consumers’ perceived time and effort in purchasing or using a service. Service convenience dimensions are salient at different stages of the purchase decision process. Given this conceptualization, the study presents the development and validation of the SERVCON scale, a comprehensive instrument for measuring service convenience. The five dimensions are independent within a nomological network that illustrates distinct antecedent and consequent effects, and the results reinforce the multidimensional representation, offering insight into the distinctive relationships between each service convenience dimension and its antecedents, such as competitive intensity, and consequences, such as repurchase behavior. The findings help researchers and managers understand a fully conceptualized convenience construct and facilitate the measurement of convenience in future empirical studies.     

The effect of specific discount pattern in terms of price promotions on perceived price attractiveness and purchase intention: An experimental research

This study aims to investigate consumer perceptions and reactions in terms of specific discount patterns (fixed price, 40% discount, discount from 500 TL to 300 TL and 20% + 25% discount) in price promotion. According to the results, specific discount patterns in price promotion have a significant effect on perceived price attractiveness and purchase intention. When the specific discount patterns in price promotion and gender interaction were analyzed in terms of perceived price attractiveness, the scenario of the “discount from TL 500 to TL 300” significantly differentiated from both the control scenario (fixed price) and experimental scenarios for female. For males, no significant difference was found between the control and experimental scenarios. In terms of purchase intention, a significant difference was found between the fixed price scenario and the discount scenario from 500 TL to 300 TL and between the fixed price and 20% + 25% discount scenario. The theoretical managerial implications of the study were discussed, and future research suggestions were presented.     

Sensory expectations generated by colours of red wine labels

Since there is usually no sales assistance available in supermarkets, wine labels represent the pivotal source of information for consumers at the point of purchase. In particular, it is the colour of the label which largely influences consumers’ wine choice. The purpose of our study was to reveal customers’ sensory expectations in relation to the flavour of red wines based on their label colours. Moreover, our goal was to examine whether there are any differences in the consumers’ expectations according to their frequency of wine purchase and gender. A survey was carried out among respondents who were intercepted in the wine aisles of two stores of an Austrian supermarket chain. The results indicate that label colours have a strong influence on flavour expectations. While, for example, red and black are most likely to create tangy flavour expectations, red and orange are most associated with fruity and flowery flavours. In addition, it appears that frequent buyers have stronger expectations than infrequent buyers with respect to most of the colours analysed. Finally, the customers’ gender seems to have little influence on flavour expectations. The results may be considered by wine producers in their label design to create sensory expectations in accordance with the actual flavour of their wine and, hence, avoid any disconfirmation of consumers’ expectations when they taste the wine. This is of particular importance when wine is sold in retail stores and consumers cannot rely on their taste experience prior to their purchase.     

Retail career attractiveness to college students: Connecting individual characteristics to the trade-off of job attributes

This study examines how U.S. business college students evaluate the attractiveness of potential job opportunities by making trade-offs among important job attributes. Using a conjoint approach, we examine the relative importance of industry type, starting salary, five-year salary, training, benefits, and work-life balance in job choice decisions. We also examine the effects of job applicants' career expectations and core competencies on their job choice determinants. An analysis of 162 business students' evaluations of 27 job profiles indicates that five-year-salary outweighs all other attributes. Their career expectations and core competencies have a substantial influence on their ensuing job choice. We suggest recruitment strategies to target recent college graduates with consideration of individuals' different career expectations and core competencies.     

The demand for and the supply of distribution services: A basis for the analysis of customer satisfaction in retailing

This paper brings together two bodies of literature. One of them is a literature on the special role of the consumer in retailing. The other one is the literature on customer satisfaction. This joining of literatures is accomplished by identifying distribution services as outputs of retail firms and fixed inputs into the production functions of consumers and relaxing the standard assumption that the demand for these services is always equal to the supply of these services. The result is a new conceptual framework for the analysis of customer satisfaction in retailing. This framework extends the basic ideas on customer satisfaction developed for manufacturing in a homogeneous single product setting to the heterogeneous multi-product setting relevant for many retailers. The paper illustrates one approach to the implementation of this framework with data for a set of supermarkets in Pamplona, Spain, that measure distribution services by asking consumers questions explicitly identifying these services. The five main categories of distribution services identified by the conceptual framework and measured in the data are economically important and statistically robust determinants of customer satisfaction with supermarkets. These results are obtained controlling for other variables typical of the customer satisfaction literature and measuring customer satisfaction in a manner consistent with that literature. The results are robust to corrections for sample selection and alternative estimation methods. Perhaps our most interesting novel result is that the effect of the determinants of customer satisfaction on future purchase intentions in the supermarket case is different when measured directly in a one stage process than when measured indirectly in a two stage process through the attributes/satisfaction/ purchase intentions chain.

Retailing evolution research: Introduction to the special section on retailing research

This JBR Special Issue on Retailing includes several high quality research studies presented at the 10th and 11th Society for Marketing Advances Retail Strategy and Patronage Behavior Symposiums. The articles cover a wide range of interesting and important retailing topics including topics such as atmospherics, self-esteem and advertising. This introduction offers a few comments on the 2007 and 2008 Symposiums' content including a brief overview of each article.     

Selling Vertically Differentiated Products under One Roof or Two? A Signaling Model of a Retailer's Roof Policies

Retail firms commonly offer products of different quality levels to serve different consumer segments. In doing so, some firms adopt a “one-roof policy,” selling all of their products in one store, whereas others adopt a “two-roof policy” to better segment consumers, selling high-quality products in a high-end store and low-quality products in a separate, low-end store. Although roof policies are widely practiced and an important aspect of retail management, they are overlooked in the literature and thus not well understood. In this paper, we look at a multi-product retail firm and explore the implications of roof policy for its quality signaling strategies. In our model, the firm carries two vertically differentiated products to serve two consumer segments. We first demonstrate that when product quality is readily observable to consumers, a two-roof policy yields a greater profit than a one-roof policy if the benefit from segmentation outweighs the cost of an additional roof. Then, we assume that a proportion of consumers are uninformed about quality a priori. We show that under both policies, there exists an equilibrium in which the retailer uses both price and in-store services to signal quality. Surprisingly, now there are conditions under which a two-roof policy is outperformed by a one-roof policy, even if the cost of an additional roof is zero. This result sharply contrasts the conventional wisdom that segmentation is optimal as long as its associated marketing cost is low, and suggests the importance of quality information issues in roof policy decisions.