Hurry! Sale Ends Soon: The Impact of Limited Inventory Availability Disclosure on Consumer Responses to Online Stockouts

A prevalent challenge for online retail supply chain managers is maintaining and managing adequate inventory levels to support and fulfill consumer orders and purchases. Interestingly, this challenge is not only about maintaining inventory availability, but also how to effectively disclose and communicate inventory availability, particularly if a stockout occurs. This article investigates a conceptual model that explores the impact of online inventory availability disclosure on consumer perceptions in the context of a stockout. Based on expectation disconfirmation theory, the core of the model is the notion that limited inventory availability would stimulate expected consumer competition, which in turn, causes consumers to not be as negatively impacted by stockouts. Contrary to this prediction, however, the results of this experimental study show that consumers are actually more dissatisfied when low inventory availability items are out‐of‐stock. This is likely due to the combined impacts of a stockout encounter and a “loss” of a competitive shopping scenario. Thus, implications of these findings for future research and supply chain practice are offered accordingly.     

Supermarket suggested shopping lists (SSSL), promotions and grocery purchases

This study examines the effect of providing or not providing millennial consumers with a supermarket suggested shopping list (SSSL). At the same time, it tests the effect of providing consumers with a large number of in-store promotions versus no promotions. The study also assesses the moderating effect of price concerns on both expenditure and the satisfaction attained after a shopping trip. The results of an experimental design with 240 subjects in a simulated supermarket setting show that SSSL users spend less, and that heavy supermarket promotions increase purchases. However, if an SSSL is provided while products are highly promoted, this decreases consumer satisfaction. Offering consumer promotions to millennials without providing an SSSL results in the highest level of store sales. Findings of this study will be of interest to retailers willing to offer a shopping list service to supermarket customers with the purpose of increasing loyalty.     

Learning to navigate the American retail servicescape: Online forums as consumer acculturation platforms and consumer gift systems

With consumer mobility on the rise, marketers need to understand how to best serve the increasing number of immigrants, expatriates, and foreign nationals. We examine an independent (non-corporate, brand agnostic) online forum that operates as a consumer acculturation platform and a consumer gift system, where Chinese-speaking consumers assist one another with navigating and even exploiting the American retail servicescape. Forum participants bestow the gift of experience on the collective to enhance the market-oriented communicative competence of forum participants necessary to master the American retail environment. Consumers on the platform systematically employ American English to reference brands and describe retail marketing promotions in a forum dominated by Chinese language. Specifically, we find that code switching, typically expected in early stages of language acquisition, becomes a robust norm to communicate specifically about American retail phenomena (metaphorical code switching) and bridge the gulf between home and host cultures. We offer firms four tactical strategies to attract and retain Chinese-language consumers.     

Inclusive apparel shopping experiences for older consumers in China: product attributes and retail environment

ABSTRACT

The study explored apparel shopping experiences of older Chinese consumers, which integrate apparel product and retail environment aspects from an inclusive strategy perspective. Research questions include: What factors contribute to older Chinese consumers’ satisfaction and dissatisfaction? What are the major implications of older consumers’ (dis)satisfying shopping experience? What role can fashion practitioners play to make the retail environment and apparel products more accessible to the aging segment? Critical Incident techniques were used for data collection at a community park in Beijing. A total of 151 usable critical incidents from 84 older Chinese informants (55 years and older) were included in the data analysis. Content analysis with deductive qualitative data analysis method was used. Findings suggest that the older Chinese consumers assess their shopping experiences largely based on shopping outcome achieved (product purchased). This is in contrast to the movement toward more experiential focus in the developed markets in the recent decades. A significant number of tangible product attributes (including design/styling, comfortability/fit, and material) and intangible attributes (such as price and product assortment) contributed to the older Chinese informants’ satisfying or dissatisfying shopping experience. Aspects related to retail environment, including retail atmospherics and service quality were also important, but to a lesser extent than product attributes. This study represents an early attempt to explore how the tangible and intangible aspects of product attributes and retail environment contribute to the aging Chinese consumer’s shopping experience. Findings of the Chinese older consumers’ utilitarian, rather than experiential focus in their shopping experience evaluation provide insights on this market segment and valuable implications are developed.     

Omnichannel-based promotions’ effects on purchase behavior and brand image

This paper examines the effects of utilizing consumers’ digital shopping traces when designing in-store promotions on purchase behavior and brand image. In two experimental studies with 526 and 550 espondents, the authors examine the effects of omnichannel-based promotions (e.g. using digital shopping trace to offer a promotion when the consumer enters the physical store) in two different product categories (utilitarian vs. hedonic), spontaneous/planned purchases and two different retail industries (durable good vs. travel). The results show that retailers benefit from using digital shopping traces as it increases purchases and enhances brand imagery. The effects are moderated by product category and type of purchase.     

Why is Price Dispersion Higher Online than Offline? The Impact of Retailer Type and Shopping Risk on Price Dispersion

When physically similar products, of similar quality, are offered by retailers both online and offline, we often observe that the dispersion in prices of these products online is greater than the price dispersion offline. This observation runs counter to early theories that suggested price dispersion online would be smaller than that offline due to the ease of search and information availability online. This paper investigates and provides an explanation for this puzzling phenomenon by examining the impact of two important drivers of price dispersion: retailer type and consumers’ shopping risk. Retailer type refers to whether a retailer is a pure offline, pure online, or dual channel retailer. Shopping risk is defined as the product of consumers’ perceived risk of shopping and the transaction uncertainty related to shopping at different types of retailers.A game-theoretic approach is adopted to model consumers’ price search and product purchase, as well as price competition within and across retailer types in online and offline markets. Equilibrium pricing strategies are derived for different retailer types competing for different consumer segments with different levels of perceived shopping risk. The impact of retailer type and shopping risk on online versus offline price dispersion are quantified, and conditions when price dispersion is greater online than offline are identified.Results indicate that price dispersion is greater online when the number of pure online retailers is sufficiently large and is increasing in the number of pure online retailers. In addition, a reduction in online shopping risk may actually increase online price dispersion. Results further suggest that even without any online sales, dual channel retailers should maintain their online presence for the purpose of information dissemination, which justifies the importance for pure offline retailer to incorporate webrooming strategies, where consumers can search for prices online but purchase offline.     

A Multiple-discrete/Continuous Model of Price Promotion

Understanding the effect of temporary price reductions, or price promotions, on sales of consumer packaged goods is an area of ongoing interest, both in academia and in practice. Price promotions, however, are becoming an increasingly important method of managing consumer demand for fresh produce items. Modeling the impact of price promotions must take into account the differentiated nature of fresh produce and the fact that consumers tend to purchase multiple items of only a few of the products available to them. Neither a continuous nor a discrete model of demand is appropriate. In this paper, we apply a multiple-discrete/continuous model of fresh produce demand to study the impact of price promotion on retail apple sales. Our findings show that the brand switching/category incidence effect of promotion is closer to 65/35 than the more usual 80/20 rule (80 percent of the effect is brand switching and 20 percent purchase incidence) when the nature of the decision is appropriately taken into consideration.     

From Fatwallet to eBay: An investigation of online deal-forums and sales promotions

Sales promotions are an important part of retail advertising strategy. Traditionally, research on sales promotions has generally assumed that the buyers are end consumers who do not engage in reselling, in large part due to high transaction costs. However, the recent Internet related technologies have dramatically lowered the cost of transferring goods between consumers, leading to relative ease of reselling activity amongst individual consumers. Little is known about the impact of this phenomenon on retailer's sales promotion strategy. In this research we investigate the reselling activity in online auctions for products that active deal seekers can obtain at deeply discounted prices from retailers. We further investigate the role of deal-forums in the resale process. Data is collected from an online deal-forum (http://www.fatwallet.com/) and eBay to test various reselling-related hypotheses. The results show that there is a significant abnormal increase in the number of newly posted auctions of a product after the deal information of this product is posted on deal-forum website. We also find that there is a significant price incentive for individuals to resell. The implications for sales promotion research and practice are discussed.     

Can Consumers Forgo the Need to Touch Products? An Investigation of Nonhaptic Situational Factors in an Online Context

Touch is an important source of information for consumers, and there is much to learn about its role in an online purchase decision context where the ability to touch products is not (at least currently) possible. The present investigation examines three nonhaptic situation‐specific factors that moderate the relationship between haptic motivation and consumer responses. The results indicate that positive mood, price promotions, and level of situation‐specific product expertise are influential, yielding greater purchase intentions and product judgment confidence when touch is not available. Additionally, the findings of the investigation suggest that imagining a Web site is comparable to actually viewing a Web site. Several implications for consumer behavior research and online marketers are discussed.     

Influences of online store perception,shopping enjoyment,and shopping involvement on consumer patronage behavior towards an online retailer

Online apparel retailers have adopted various types of image interactivity technology (IIT), such as close-up pictures or zoom-in functions, mix-and-match functions, and 3D virtual models to enhance consumers’ online shopping experience. The purpose of the present study was to examine the influence of level of IIT on consumer perception of online retail environment, shopping enjoyment, shopping involvement, a desire to stay, and patronage intention. Significant structural relationships between these research variables were found, supporting a pleasure-oriented conceptual model of consumer patronage behavior in the online retailing environment. Theoretical and managerial implications are discussed.     

“I Love the Value From Shopping at Mass Merchants!” Consequences of Multichannel Shopping Value

The importance of consumer value-driven strategies is highlighted in the marketplace, especially with economic stagnation. The aim of this study is to shed light on the mechanisms underlying consumers’ value perception of, satisfaction with, and loyalty intentions toward shopping at mass merchants in a multichannel retail environment by using their shopping orientations as predictors. Findings based on a national sample online survey of 1,411 U.S. consumers revealed that multidimensional consumers’ shopping value perceptions regarding shopping at multichannel mass merchants had significant and positive effects on their consumer satisfaction with and loyalty intentions toward shopping at the multichannel mass merchants.     

Segmenting consumer decision-making styles (CDMS) toward marketing practice: A partial least squares (PLS) path modeling approach

The way consumers make decisions across online and offline channels according to their perceptions of retailers׳ marketing practices is not well understood in the current literature. A few empirical studies have examined consumer decision-making styles (CDMS) and marketing practice among online and shopping mall consumers. This research endeavors to understand CDMS as market segments on the perception of marketing practice across retail channels. A total of 315 online and paper–pencil-questionnaires were collected to conduct the statistical analysis for the measurement and structural model using the partial least squares (PLS) path modeling approach, a structural equation modeling (SEM) technique. Six consumers׳ characteristics–perfectionist, brand consciousness, price conscious, fashion conscious, recreational and impulsive shoppers–were assessed in respect of retail products, price, advertising and retailing across-channels. The study contributes to retailing management by enabling it to implement effective retail segmentation and cross-channel strategy according to CDMS. The study limitations and implications are discussed.     

Will they return? Getting private label consumers to come back: Price,promotion, and new product effects

Using a hazard model specification with two years of consumer panel data, this study simultaneously quantifies the effects of price gaps, non-monetary promotions, and new products on consumer switching from private labels back to manufacturer brands. The research focuses on the switching phenomena, rather than choice, such that time is a relevant variable. According to the results, non-monetary promotions and new products are more effective for recovering consumers than price gap reductions. These findings underscore the importance of understanding how consumers perceive the value of manufacturer brands.     

Untangling the relationships between consumer characteristics,shopping values,and behavioral intention in online group buying

This study examines the link among consumer characteristics (price-sensitive behavior, variety-seeking behavior, and compulsive buying behavior), shopping values (utilitarian and hedonic shopping values), and behavioral intention in online group buying (OGB). This study tests usable responses collected by means of mall-intercept systematic sampling from consumers who previously participated in OGB. Structural equation modeling was used to analyze data and test the hypothesized relationships. Findings suggest that price-sensitive and variety-seeking behaviors are significantly related to utilitarian shopping value, whereas price-sensitive, variety-seeking, and compulsive buying behaviors are significantly related to hedonic shopping value. Both utilitarian and hedonic shopping values significantly influence consumers’ OGB intentions. For a successful OGB strategy, Internet marketers and site operators should emphasize the utilitarian shopping value of price saving and selection and introduce the hedonic shopping values of promotions and sensory experiences. This study provides a link between two streams of prior research – that is, consumer characteristics and shopping values. Furthermore, it validates an empirical model whose results can help business practitioners make better-informed marketing management decisions for OGB and help academics and consumers better understand OGB behavior.     

Shopping orientations as antecedents to channel choice in the French grocery multichannel landscape

This paper investigates the influence of consumer shopping orientations on grocery channel attractiveness and choice. It extends the concept of shopping orientation (utilitarian and hedonic) to account for emerging motivations among French consumers: shopping in line with sustainable and ethical values. In doing so, it helps profile segments of consumers who choose to shop through new online channels (Drive through) and newly deployed store formats (city stores). A sample of 300 French customers, responsible for shopping in the household, was surveyed. Hypotheses were tested through Latent Class Analysis and Structural Equation Modeling with categorical outcomes. Our findings indicate that consumers shopping orientations influence the way consumers will combine the different channels and store formats for grocery purchase. In particular, our results highlight the importance of responsible retail practices and ethical assortments in consumers' choice of online formats whilst local product orientation influences the choice of city stores and market places.     

Customer Experience Management in Retailing: An Organizing Framework

Survival in today's economic climate and competitive retail environment requires more than just low prices and innovative products. To compete effectively, businesses must focus on the customer's shopping experience. To manage a customer's experience, retailers should understand what “customer experience” actually means. Customer experience includes every point of contact at which the customer interacts with the business, product, or service. Customer experience management represents a business strategy designed to manage the customer experience. It represents a strategy that results in a win-win value exchange between the retailer and its customers. This paper focuses on the role of macro factors in the retail environment and how they can shape customer experiences and behaviors. Several ways (e.g., promotion, price, merchandise, supply chain and location) to deliver a superior customer experience are identified which should result in higher customer satisfaction, more frequent shopping visits, larger wallet shares, and higher profits.     

Price Awareness and Consumers’ Use of Deals in Brand Choice

There is evidence that consumer knowledge of prices is limited, implying that, on occasions, consumers may not be fully informed of prices when making a brand purchase. On such occasions, how do consumers make their brand choice decision? One possibility is that consumers use their expectation of prices. This raises an interesting question. To what extent is brand purchase either a function of preferences and posted prices or, of preferences and expectation of brand prices? Another important issue relates to the role of displays and features in simplifying consumer brand choice. First, do promotions cause consumers to restrict their attention to only promoted brands? Second, do promotions affect the price aware consumers more than the price unaware consumers? Our study uses scanner data on ketchup and peanut butter categories to answer the foregoing questions. We find that between 40 and 50% of the purchases are made by consumers using expectations of prices rather than posted prices. Consumers using price expectations may be thought of as being “unaware” of prices. We also find that promotions cause some consumers to focus exclusively on promoted brands, and this effect is greater on the price aware consumers than on the price unaware consumers. Our findings have an important bearing on the rationality of consumer expectation of prices, especially of the promoted brands. Price aware consumers act as a check against firms promoting without accompanying price cuts.     

Retail Market Power in a Shopping Basket Model of Supermarket Competition

Supermarket retailers typically operate with relatively low margins, suggesting a highly competitive retail environment. However, despite the fact that consumers purchase an entire shopping basket at a time from supermarkets, this evidence is largely based on models of retail competition with single-category purchases. In this paper, we develop and test an empirical model of retail price competition that explicitly accounts for the effect of demand complementarity among items in consumer shopping baskets. Relative to the case where consumers purchase products with independent demands, we demonstrate that equilibrium prices are higher for all items when retailers take demand-complementarity into account. Our findings indicate that non-price strategies intended to encourage complementarity, such as co-merchandising, strategic shelf-positioning, or featuring complementary goods tend to soften price competition, and lead to higher equilibrium prices.     

Antecedents of flow in retail store shopping

“Flow” has been established as a critical determinant of an online shopping experience. Online consumers with flow experience tend to be less price-sensitive and to have favorable attitudes and high re-patronage intention. As retail stores account for 90% of retail sales, it is important to advance our knowledge of flow theory in physical retail stores. However, the antecedents (navigational challenge, web skill) derived from the extant online flow literature are not applicable to in-store shopping. To fill the void, the two objectives here are (1) to provide a theoretical foundation to develop the antecedents (challenges and skills) associated with in-store shopping, and (2) to examine their impacts on consumer flow experience (concentration, control, and enjoyment) and subsequent future shopping intentions. The results will advance the literature of flow and offer helpful suggestions to retail marketing.     

Online Repurchasing: The Role of Information Disclosure,Hope, and Goal Attainment

The emergence of online purchasing has changed the relationship between consumers and brands. Our research focuses on online information disclosure and consumer hope in an online shopping environment. Two studies are undertaken to test the theoretically derived hypotheses. Study 1 evaluates the causal relationship between information disclosure and hope via an experiment in an online shopping context. Study 2 involves an online survey to test the nomological network presented in this research. The models identify the moderating effect of consumer product knowledge on online information disclosure and consumer hope. For academics, this research advances knowledge of how consumers' confidence in sharing personal information develops hope, consequently enabling them to attain their goals and repeat their purchases. For practitioners, it offers a better understanding of how investments are successful in aiding consumers to attain their goals and generate repeat purchase intentions in an online shopping environment.