The Impact of Category Captainship on the Breadth and Appeal of a Retailer's Assortment

Category captainship is a collaborative channel arrangement wherein a retailer cedes control of category management decisions, such as developing a marketing strategy to grow the category and assortment selection, to one of the category's leading manufacturers. This paper studies the consequences of captainship practices on the breadth and appeal of a retailer's assortment. We consider a model where multiple manufacturers sell a product to consumers through a common retailer. In the benchmark, the retailer decides on effort to drive traffic into the category and assortment. Under captainship, the retailer delegates both of these decisions to a captain in return for target sales. The capability of the captain to stimulate demand is unknown to the retailer. We find that the breadth and/or appeal of the assortment at the retailer can increase or decrease under captainship relative to the benchmark. We identify three factors that play a role on the impact of captainship on the breadth and appeal of retailer's assortment: (i) the retailer's beliefs about the captain's capability, (ii) the captain's true capability, and (iii) product set heterogeneity. We find that the benefit to the captain sometimes comes at the expense of the non-captain manufacturers, but we also identify conditions where captainship can be beneficial for not only the retailer and the captain but also the non-captain manufacturers.     

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.     

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.     

Customer Relationship Stage and the Use of Picture-Dominant versus Text-Dominant Advertising: A Field Study

This research reports the results of two field experiments designed to help determine what format of email advertising is most effective with customers at different lifecycle stages. The experiments examine customer response to picture-dominant versus text-dominant advertising. Although the relative effectiveness of picture- versus text-dominant advertising has received some attention in previous research, the issue of which type would be most effective at different points in the customer's relationship with the brand and for different metrics has not been explored. The two field experiments were executed by a major fashion retailer that sells clothing and accessories for special events. The first experiment was conducted with prospective customers and focused on advertising for the retailer's primary product, which typically occurs first in the purchase cycle. The second experiment was conducted with customers who had already purchased the primary product and focused on advertising for an accessory typically purchased later in the cycle. The investigation was conducted from a customer relationship management perspective, examining the financial impact of each type of advertisement at different stages in the customer's relationship with the brand. At the aggregate level we find only minor differences in the performance of the picture-dominant versus text-dominant advertisements. However, we find that the retailer can greatly improve revenue by customizing ad format based on observed customer traits.     

Consistency and Recovery in Retail Supply Chains

Practitioners and researchers describe inventory service level with metrics that communicate the likelihood of demand fulfillment without considering the ongoing capabilities of the supplier, for example, in‐stock and fill rate. We develop a method for measuring inventory service level that incorporates such supplier capabilities, namely consistency (the ability of a supplier to fulfill orders repeatedly) and recovery (the ability of a supplier to fulfill orders after a lapse in service). Using data from two retail supply chains, we illustrate our approach. To demonstrate the impact of consistency and recovery on supply chain performance, we model a retailer purchasing from competing suppliers with different levels of consistency and recovery. The model incorporates the retailer's uncertainty about demand and the retailer's uncertainty about its suppliers' service levels. We characterize how the retailer's orders and profitability change with a supplier's delivery performance through numerical experiments calibrated with field data. We find notable differences in market share across suppliers with similar traditional inventory service level metrics but differences in consistency and recovery. Further, we observe that a retailer can increase its profitability by determining orders via consistency and recovery in lieu of common metrics like in‐stock. Given the influence of consistency and recovery on supply chain outcomes, we discuss implications for practice and future research.     

Do as You Say,or I Will: Retail signal congruency in buy-online-pickup-in-store and negative word-of-mouth

Buy-online-pickup-instore (BOPIS) services have become an increasingly important part of a retailer's omnichannel strategy. When service failures (e.g., stock-out) occur, consumers may resort to negative word-ofmouth (NWOM) to share their evaluation of the retailer's BOPIS service. While a retailer's service recovery policies (e.g., cross-channel substitution) may help to fulfill its service intent, the extent to which these two signals can improve consumer satisfaction and diminish their NWOM intent remains unknown. Drawing from both service recovery literature and signaling theory, we conducted a series of five experiments and find that the intradimensional congruity of the signal set communicated by the retailer during its BOPIS service process depends on both its operational capability and the consumer's own predilection regarding the product category. These insights collectively indicate that while a retailer's operations need to support service policies to provide a congruous BOPIS service process, substitution policies offered to consumers during the transaction need to consider the extent to which a consumer's purchase decision is hedonic or utilitarian. In turn, this finding suggests that a retailer's category management needs to consider BOPIS substitution in terms of both product assortment and inventory policies.     

How customers motive attributions impact intentions to use an interactive kiosk in-store

This study explores the effect of customers motive attributions that is, the motives customers ascribe to a retailer for introducing interactive kiosks into the store, on their expectations of the technology and usage intentions. We study two types of motive attribution: (1) to self-serve the retailer's own economic goals or (2) to better serve customers' needs. Data were collected at a do-it-yourself retailer that recently installed interactive kiosks. Empirical results demonstrate that customer-serving motive attributions improve intention to use, both via expected performance and via expected enjoyment. Our findings also demonstrate that customers expect the interactive kiosk to be less enjoyable when attributing self-serving retailer motives. Managerial implications are discussed along with direction for future research.     

Return policy,No joke: An investigation into the impact of a retailer's return policy on consumers' decision making

This study investigates the important role of a retailer's return policy in consumers' decision making. Utilizing signaling theory and the Cue Diagnosticity framework, this study posits that return policy, as a cue from a retailer, interacts with other cues (product, price, and product quality) to reduce perceived purchase risk and increases store image and patronage intention. Employing factorial experiment design, the authors conduct two studies and find support for several hypotheses. Results show that consumers value return policies depending upon the situation. A lenient return policy drives down purchase risk and leads consumers to have positive store images and higher patronage intentions. Both theoretical and managerial implications of the findings are provided.     

Chief stores officer and retailer performance

This research investigates the performance implications for retailers of having a chief stores officer (CSO) in the top management team (TMT). Using a matched sample consisting of 120 public retailers, we find that CSO presence is positively associated with 3 different performance metrics, namely, comparable store sales, profit per store, and Tobin's q. We also identify a partial mediating mechanism and find that CSO presence improves retailer performance through enhanced inventory turnover. Our results are robust to controlling for a series of TMT characteristics (such as chief marketing officer presence, chief operating officer presence, and TMT diversity), time-invariant unobservables at the retailer level, different measures of key variables, and alternate model specifications. As the first study that explores the phenomenon of CSO presence, our findings have important implications for public retailers on how to leverage marketing expertise in the TMT to improve performance.     

The Impact of Market Orientation on the Internationalization of Retailing Firms: Tesco in Eastern Europe

This paper investigates a Western retailer's market orientation levels in two emerging markets. We examine whether the market orientation-company performance link holds true for retailers in emerging economies, despite environmental differences. By using concepts from key studies we have assimilated a fully representative model - applied through interviews with top management from Tesco and its subsidiaries and affiliates in Hungary and Slovenia. Using this example, we find that the market orientation-business performance link is valid for Western retailers in emerging economies. Here, the retailer applied market orientation predominately through; the use of matching with suppliers of own brand goods; top management emphasis on market orientation and risk taking. Intelligence generation and dissemination was exercised via global processes such as brand review.     

The retailer's marketing mix and commercial performance

This paper concerns the management and organization of the marketing function within large multiple retail organizations. The elements of the retailer's marketing mix are identified and the hypothesis is developed that the breadth of control over the marketing mix by a marketing department should correlate positively with commercial performance. A postal survey of British retailers failed to demonstrate such a relationship, indicating that there is no obvious justification for a retailer to centralize most of its marketing in one large department. Instead, a positive correlation is found between there being strength in marketing in the retailer's buying department and commercial performance indicating that marketing that marketing expertise should not be concentrated into a specialist department.     

Cross-channel effects of omnichannel retail marketing strategies: A review of extant data-driven research

The authors review 50 empirical retailing research papers that have appeared over the last 20 years to take stock of what we know, need to know better, and do not know yet about within-retailer cross-channel effects of omnichannel retail marketing strategies on (a) consumer responses over their purchase journeys, i.e., online and/or offline search, purchase intention, frequency, amount, returns, loyalty, and (b) the retail firm's aggregate outcomes (e.g., sales, costs, profits, product returns) by channel and overall. Specifically, the authors focus on five strategies: (1) the addition of online channel by an offline retailer; (2) the addition (or subtraction) of offline channels by an online retailer; (3) addition of mobile shopping channel (website and/or app) by offline and/or online retailer; (4) cross-channel integration strategies; and (5) retail marketing mix strategies. The author/s integrate findings from empirical research on these strategies into a number of ‘insights’ about ‘what we know’. Prominent among these are the following: Adding a transactional online channel to an offline channel improves the retailer's overall sales even though offline channel sales can be cannibalized to some degree. Adding an offline channel by an online retailer, however, boosts online channel sales as well as overall sales of the retailer. Similarly, adding a mobile shopping channel usually increases customer purchase frequency and amount and overall sales of the retailer in the long-term. Strategies for greater cross-channel integration generally have a positive effect on a retailer's overall performance while online advertising has positive effects on offline channel consideration and sales as well as overall sales of a multichannel retailer. Other insights or findings that need further study or open questions are also identified. The paper closes with managerial implications of the derived empirical insights, and suggestions for future research.     

Digital coupon promotion and platform selection in the presence of delivery effort

In recent years, physical retailers have started selling products to consumers through either third-party or self-operated online platforms. Doing so, they face demand which depends on digital coupon promotions, delivery effort by the platform (i.e., deliver products from retailers to consumers), and channel preference. In this paper, we develop a game-theoretic model to examine the interactions between the physical retailer's distribution channel choices and coupon promotions. In normal operation, retailers prefer to pay lower fees to the third-party platform, but we find, counterintuitively, that when carrying on a digital coupon promotion, the retailer can be better off paying a higher participation fee to the third-party platform. We also identify the conditions under which the retailer prefers the third-party platform over the self-operated platform with and without coupon promotions. Furthermore, we show that digital coupon promotions and delivery effort boost the retailer's profits by price discriminating among consumers with differing purchase utilities.     

Optimal generic and brand advertising efforts in a decentralized supply chain considering customer surplus

While the previous researches of advertising efforts decisions focus on only the firms' profit target, no literature introduces corporation social responsibility target into advertising efforts decisions of a supply chain (SC). To fill this gap, we consider a two-stage SC with a manufacturer and a retailer where the SC members consider the customer surplus. Both the retailer and the manufacturer can invest in generic advertising efforts to influence and increase the products' sales volumes. This paper investigates the following four scenarios: (1) The retailer cares the customer surplus (Model I); (2) The manufacturer cares the customer surplus (Model II); (3) Both the retailer and the manufacturer care the customer surplus (Model III); (4) We then extend the model III to the case that the manufacturer invests in both the generic and brand advertising efforts (Model IV). The objective of this paper is to determine the optimal retail price, the optimal advertising efforts, and the optimal profits of SC members, and find the influence of customer concern level on the SC performance. Finally, numerical examples are conducted to investigate the influence of the customer concern levels of the retailer or the manufacturer on the profits of the SC members and the entire SC. We also study the joint impacts of the customer concern levels of the retailer and the manufacturer on the SC performance. We find that the SC obtains the highest profits when the retailer's customer concern level and the manufacturer's customer concern level are relatively high, and the best cooperative strategy for the retailer and the manufacturer is that they improve customer concern level simultaneously.     

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.     

The management of retail design: demystifying the activity

Abstract The activity of design within retailing has received only partial consideration within the literature, and there has been a tendency to speculate upon the possible impact of design upon market positioning, retailer store image development and consumer behaviour at the expense of any understanding of the actual process of design development and implementation within retailing. The aim of this paper is to examine the process of design, and in particular the interrelationships that ought to exist between retailer (as client) and the designer in order to ensure that the values, benefits and opportunities afforded by design are fully realized within the organization. Integral to the effective management of design is the design brief, which is examined here within a retailing context. The paper concludes by examining the particular role that the store exterior has upon the development of a retailer's image and argues that further consideration needs to be given, not only to the positive outcomes of design investment in retailing, but also to the mechanisms by which it is achieved.     

A study of the impact of Corporate Social Responsibility and price image on retailer personality and consumers' reactions (satisfaction,trust and loyalty to the retailer)

This study investigates the impact of a retailer's Corporate Social Responsibility (CSR) policy and its price image on retailer personality, along with the impact of these two variables on the consequences of retailer personality: consumers' satisfaction, trust and loyalty toward the retailer (measured by their attitude and future behavioral intentions). Data were collected on a convenience sample of 352 consumers of a French grocery retailer. Using Partial Least Squares analysis (PLS), we show that perceived Corporate Social Responsibility and price image have a significant positive/negative influence on retailer personality traits (“agreeableness” and “conscientiousness”/“disingenuousness”) and that Corporate Social Responsibility has also a significant positive influence on the “sophistication” personality trait. For the consequences examined (satisfaction, trust and loyalty to the retailer), we show that Corporate Social Responsibility, price image and retailer personality have a direct or indirect impact on these dependent variables.     

The relationship between retailer image and brand image

It is often assumed that retailers' and brands' images are affected by numerous factors. One factor affecting a retailer's image is the image of the brands being sold in the store. Brand image may also be affected by the image possessed by the selling retailer. By using Heider's formula for determining congruent relationships, an analysis of the reciprocal relationships existing between various retailers' and brands' images was conducted. Although retailers' images were affected by the brands' images and the brands' images were affected by the retailers' images, congruity often did not exist.     

Information Technology Use and Firm's Perceived Performance in Supply Chain Management

Purpose: This article proposes a theoretical model to investigate (a) a positive direct relationship between the specific use of ITs (applied to management) and the firm's performance as perceived by retailers and (b) a positive indirect relationship through information quality and information sharing.

Design/Methodology/Approach: The theoretical model proposed in this paper is contrasted using structural equation modelling of the retail distribution channel for home appliances.

Findings: The research shows that there is no positive direct relationship between the specific use of ITs and the retailer's perceived performance in the relationship with the provider. The results do, however, provide evidence for a positive indirect relationship through both information sharing and satisfaction obtained from the relationship with the provider.

Research Limitations: The analysis has been developed from the retail perspective. We suggest that future research focus on the retailer's and the provider's perspectives.

Practical Implications: In the context of SCM, the competitive advantages achieved through IT use derive from a better network of relationships between the firms involved as a result of greater information quality and information sharing. Specific use of ITs stimulates greater information sharing between retailer and provider and thus greater satisfaction and better perceived performance of the retailer in the relationship with the provider. However, the effect of IT use on information sharing occurs only through the quality of the information shared.

Originality/Value: The study shows that information quality is an antecedent of information sharing and that both information quality and information sharing act as necessary conditions for improving the retailer's perceived performance in the relationship with the provider. This article develops a measurement scale to evaluate the intensity of IT use. Finally, the research confirms that firm performance can be modeled as a second-level latent variable composed of three different dimensions (economic benefits, marketing benefits, and adaptation benefits).     

A Simulation Model Of Multi‐Echelon Retail Inventory With Cross‐Channel Product Returns

This study explores the relationship between a retailer's product returns processing structure and Multi‐Echelon inventory system performance under cross‐channel and same‐channel product returns policies with nonstationary demand. Our research contributes to the growing body of reverse logistics literature, offering insight into how a retailer's logistical returns management strategy can impact inventory effectiveness in cross‐channel retail environments. Adopting a contingency framework, we develop research hypotheses which we test through experimentation on a Multi‐Echelon retail inventory system within a discrete‐event simulation. Model parameters are derived from data collected from a large U.S. retailer of consumer durable and nondurable goods. We find an amplifying effect of a cross‐channel returns policy on the positive relationship between a decentralized returns processing structure and inventory effectiveness. Further, through our analysis of nonstationarity in demand and resulting returns, we uncover strong main and interaction effects that seasonal demand variation can have on inventory outcomes, even under only moderate levels of seasonality. Our results highlight the need for firms to align logistical structures for returns processing with the returns policy and the external environment, while also lending credence to calls within the logistics literature for improved modeling of nonstationary demand in inventory management research.