The effects of multi-channel assortment integration on customer confusion

Abstract

The effects of assortment strategy on customer confusion have been discussed for singular channels in the past. However, multi-channel retailers also have to coordinate their assortment across channels. Recent literature has started to investigate which assortment integration strategy is most favourable for retailers, but theoretical and empirical research is still scarce. Until today, customer confusion has not been considered in this discussion. This article seeks to identify the impact of a retailer’s assortment integration on customer overload confusion, assortment perception and their consequences. In an experiment, we manipulate assortment integration internally (online and offline channel of the focal retailer; full and asymmetrical integration) and externally (online channel of the focal retailer and a competing online retailer; full, asymmetrical and no integration). The results indicate that both internal and external assortment integration have an impact on overload confusion and assortment perception. Asymmetrical internal integration induces less overload confusion in terms of its cognitive and affective components and leads to superior assortment perception. Full and asymmetrical external integration evoke less confusion with regard to its cognitive component. Eventually, overload has detrimental short- and long-term effects for the retailer. Multi-channel retailers should consider our results when implementing an assortment integration strategy.     

Retail buyer segmentation based on the use of assortment decision factors

The purpose of this study is to provide detailed information about apparel retail buyers' buying behaviors based on their use of assortment decision factors. After interviews with five retail buyers and merchandisers, surveys were conducted in Seoul, South Korea for this exploratory study. Apparel retail buyers, merchandisers, and retail store owners, who are involved in assortment planning and buying, participated in the survey (N=378). Results of factor analysis created seven assortment decision factor groups. Based on the factor groups, four cluster groups were the best cluster result: (1) Least Factor Use Buyers, (2) Traditional Factor Use Buyers, (3) Consumer-Oriented Buyers, and (4) Most Factor Use Buyers. Because this study used convenience and snowball sampling methods in one country, the findings cannot be generalized to the general population of apparel retail buyers and merchandisers. However, the study provides researchers with planning factors and cluster information for retail buying behavior. The results offer insight to buyers for their decision-making by organizing assortment decision factors from the most to the least important, especially for younger buyers, who need guidance about assortment planning. Although assortment planning and trade-off decisions are known to be extremely important to retail success (e.g., Kok et al., 2008), no previous study identified a typology of retail buyers on the basis of their consideration of assortment decision factors. This study adds new information and confirms the application of traditional assortment decision factors from 1980s and 1990s to post-2008 era.     

Organizational climate for innovation and creativity – a study in Swedish retail organizations

ABSTRACT

Innovation in retailing is under-investigated in academia and yet a highly relevant concern given the current changes in the retail landscape. Although retailing is often characterized by a dynamic and highly competitive environment, retail organizations are not often considered as ‘innovative,’ at least when compared with manufacturing industries, or when using existing innovation frameworks in academic literature. There are many aspects of innovation discussed in literature and a need to consider different ways of looking into retail’s innovativeness. Among them, the importance of organizational climate on influencing creativity and innovation may help explain how to enable innovation in service organizations, such as retailers. The purpose of this study is to evaluate the climate for innovation and creativity and examine how retail organizations perceive it. We applied a mixed-methods approach using an established organizational climate survey and semi-structured, one-on-one interviews regarding the innovation climate and other aspects of innovation management in the companies. The study shows that despite retail organizations still struggling to incorporate innovation on a strategic level and move beyond incremental developments in their operations, retailers score positively on being innovative regarding certain dimensions of the organizational climate survey. This indicates that retailers (especially conventional ones) could benefit from challenging current practices and moving towards becoming more active and strategic innovators since their organizational climate to a certain extent allows for it. Respondents within the organizations also express a need for better innovation support, whether it is through established structures and processes or an improvement in the current conditions of the organizational climate. How retailers could enable themselves to become more active innovators – based on what we know that retailers look more towards entrepreneurship and continuous development as a driving force rather than formalized innovation practices per se – is a potential avenue for further research.     

Retail formations: tracing the fluid forms of an online retailer

ABSTRACT

Change has often been said to characterise retailing, and research on retail change is extensive. However, though much of that research has focused on retail formats, it has not sufficiently addressed the fluid nature of retailing and how its formats emerge. This paper offers a more dynamic conceptualisation of retail format change by introducing the concept of retail formation. Taking a constructivist market studies approach and drawing upon an ethnographic study of a Swedish consumer electronics retailer, the paper shows how retail formations are continually being made in a dynamic process that can be initiated by various actors, does not necessarily follow a logical order, and commonly produces unexpected results. The concept of retail formation allows us to better understand the increasing fluidity of retailing enabling us to trace complex market processes, examine multiple actors simultaneously, and taking into account the socio-historical and socio-cultural dynamics involved in shaping retail markets.     

Performance effects of category assortment and stock allocation decisions for a cash-and-carry wholesaler

This study develops and tests a model of how category assortment, category stock level and within-category stock allocation decisions might affect category sales and stock turnover and reflect category-varying levels of sales heterogeneity and sales volatility. In doing so, it addresses recent calls to consider multiple dimensions of assortment planning. It uses the cash-and-carry wholesaling setting to isolate non-space-related assortment planning and performance variables otherwise difficult to treat in a conventional retailing (e.g. supermarket) context. It develops a structural equation model of how category sales volatility and heterogeneity, as antecedents, might influence both category assortments and stock allocations and thus, in turn, influence category performance.     

Disentangling the respective impacts of assortment size and alignability on perceived assortment variety

Assortment size is considered to influence strongly perceived assortment variety, but this influence depends on assortment organization. We consider assortment alignability (i.e. the degree of comparability between products) and show how it interacts with size to influence perceived variety. When assortment is structured along a unique important attribute (e.g. flavor or format), alignability influences perceived variety but size does not (Study 1). When this attribute is not important, only size influences perceived variety (Study 2). When assortment is structured along several attributes (e.g. flavor and format), alignability positively influences perceived variety, and assortment size reinforces this effect (Study 3).     

The evolving role of hit and niche products in brick-and-mortar retail category assortment planning: A large-scale empirical investigation of U.S. consumer packaged goods

Long tail theory, the notion that the future of retailing could involve shifting product assortments to offer more product variety to precisely serve the unique needs of individual customers, has largely been proven true in the context of online distribution. However, it has been implicitly assumed that this theory does not apply to brick-and-mortar selling situations due to higher supply side inventory costs and higher demand side consumer search costs. Academics and practitioners alike have thus advocated for the use of Pareto rules to make category assortment planning decisions about product inventory breadth and depth in the brick-and-mortar channel. This research directly challenges this received wisdom by noting that the widespread prevalence and use of mobile technology is causing information flows to speed up for consumers even while performing traditional shopping tasks. Such information flows should theoretically favor the strategic importance of niche products in the long tail of the sales distribution. A large-scale empirical analysis of consumer packaged goods brick-and-mortar retailing data indicates that this alternative prediction is indeed true. This research contributes to a larger body of research as well that has documented how major environmental forces are shifting the nature of retail strategy, particularly in the brick-and-mortar channel.     

What constitutes a “good assortment”? A scale for measuring consumers' perceptions of an assortment offered in a grocery category

This research investigates how consumers form subjective judgments of what constitutes “a good grocery assortment”. By conducting three exploratory focus groups and a field study, we develop a multi-item scale that reflects consumers' cue utilization processes in forming perceptions of a grocery assortment. Our findings suggest that consumers use only a limited number of informational cues to form perceptions about four higher-level assortment dimensions: (1) the assortment's pricing, (2) its quality, (3) its variety, and (4) its presentation. In line with the attitude theory, we found that consumers integrate these higher-level assortment dimensions into a summary evaluation of the grocery category's attractiveness. Accordingly, we derive the grocery assortment perception (GAP) scale as a second-order construct composed of four first-order factors. Significant positive relationships between the GAP scale and customer satisfaction as well as loyalty intentions provide empirical support for the scale's predictive ability and nomological validity. In the last section of this article, we discuss how the GAP scale will support category managers in their assortment decisions and provide directions for further research.     

Determinants of international retail operation mode choice: Towards a conceptual framework based on evidence from French specialised retail chains

Abstract

More and more retailers have expanded internationally. Because of its impact on the success of a retailer's international operations, a critical aspect of an internationalisation strategy consists of choosing the appropriate entry and expansion modes. The phenomenon remains misunderstood as little research in international retailing has focused on this question and findings from international management literature find limited application to services.

This paper draws upon a literature review and six case-studies from French specialised retailers to provide an exploratory framework for examining key determinants of operation mode choice. It is found that retailers consider four underlying dimensions of operation modes. These dimensions are affected by situational, individual and marketing factors whose explanatory impacts are moderated by the motives for internationalisation and relationship networks.     

Planning of the cow milk assortment for large retail chains in North Italy: A comparison of two metropolitan cities

This research has assessed what large retail chains actually do, in terms of assortment depth and size of conventional cow milk, by comparing different retail formats and two metropolitan cities (Milan and Turin). The differences in the composition of the assortment were determined considering the milk categories according to their brand, origin, packaging, fat content and price. The differences in association between the milk categories and the retail formats were also analyzed. The results show differences in wide and deep of milk offer between the two areas and that retailers develop a composition offer that is not fully in agreement with the local preferences.     

Equity ownership and control of international joint ventures in the retail sector

Abstract

This study examines the relationships that exist between consumers' perceptions of a retail environment and their emotions, satisfaction and behavioural intentions with respect to that shopping setting. A model of these relationships is developed and then tested in two distinct retail settings—shopping centres and traditional retailing areas. The results show that, in general, positive perceptions of a retail environment have a positive influence on positive emotions, on repatronage intentions, and on the desire to remain longer in the shopping area in both retail settings. However, some interesting differences emerge between shopping centres and traditional retailing areas: (i) the internal environment has a stronger effect on emotions in shopping centres than in traditional retailing areas; and (ii) the internal environment has a negative effect in shopping centres on the disposition to pay more.     

Externalised vs. internalised consumption of luxury goods: propositions and implications for luxury retail marketing

This study conceptualises the dichotomy of luxury goods consumption (‘externalised luxury’ vs. ‘internalised luxury’) in terms of six dimensions: on the one hand ostentation, materialism and superfluousness (which refer to luxury as a social statement) and, on the other hand individual lifestyle, emotions/hedonism and culture (which refer to luxury as individual style). Through this literary framework, it presents a series of propositions that might be tested in future research, one for each dimension, about retail strategies and operations for fashion luxury brands. Implications for retail managers of luxury companies are discussed for each proposition, considering the main aspects of retailing strategies and tools (e.g. assortment, sales force, in-store experience and atmospherics) together with possible theoretical developments.     

The New Change Process

Abstract

This paper reports on the empirical testing of two key propositions using a study of apparel retailers in Eastern Australia. The first proposition states that small retailers have an advantage in personal service compared lo large retailers. The second proposition states that human resource capabilities contribute to a competitive advantage in personal service.

The key contributions of the research include the identification of the incidence of a competitive advantage in personal service among retailers; the testing of theoretical propositions, and the recognition of the implications of the research for the more successful management of retail businesses. The final contribution is the exploration of managerial implications. Employee training emerges as the key to improved performance in personal service.

The findings are significant for the survival of SME retailing as we know it and there is scope to test the status of the propositions in other industries and in other countries.     

Determinants of retail patronage: A meta-analytical perspective

The retail patronage idea includes such key concepts as store choice and frequency of visit. In this study, the authors synthesize previous empirical studies through a formal, critical review of retailing literature. The meta-analysis suggests that various predictors (e.g., service, product selection, quality) are strongly related to shoppers’ retail choice, whereas others (e.g., store attitude, store image) are important antecedents of shopping frequency. However, the relationships between the predictors and retail patronage vary according to the study characteristics (e.g., experimental vs. other designs). The authors offer implications for retailing research and practice.     

An Exploratory Framework for Analysing International Retail Learning

It is argued that international retail research has overlooked an essential component of the retail internationalization process, notably learning. This paper proposes an exploratory framework that enables the application of learning theory to the study of international retailing. The paper provides a meaningful starting point for developing an overarching framework which would represent one sort of re-conceptualization of the retail internationalization process, and arguably a new perspective for reinterpreting, re-evaluating and refining the existing literature on international retailing. Alongside this exploratory framework, we present a series of research propositions that might serve as an agenda for research into international retail learning. The paper concludes with a summary of the key themes and ways in which the area of international retail learning may be investigated.     

Crafting Integrated Multichannel Retailing Strategies

Multichannel retailing is the set of activities involved in selling merchandise or services to consumers through more than one channel. Multichannel retailers dominate today's retail landscape. While there are many benefits of operating multiple channels, these retailers also face many challenges. In this article, we discuss the key issues concerning multichannel retailing, including the motivations and constraints of going multichannel, the challenges of crafting multichannel retailing strategies and opportunities for creating synergies across channels, key retail mix decisions facing multichannel retailers, and the dynamics of multichannel retailing. We synthesize current knowledge drawn from the academic literature and industry practice, and discuss potential directions for future research.     

Towards a conceptual model of country market selection: Selection processes of retailers and C&C wholesalers

Abstract

International market selection is discussed in general, particularly in respect of decisions on evaluation stages, selection criteria and evaluation methods. The present analysis focuses on the configuration of country selection models, which has received little attention in international retailing research. In order to illustrate the special features of market selection in retailing, we have used an innovative approach. Following a review of general theoretical perspectives, a case study of the Metro Group addresses the process used, inter-country selection and country-specific selection, and also shows the role of corporate principles and firms' situational factors. Based on existing literature and the case study information, we propose a strategic approach in modelling country selection processes. Three steps in the construction of a selection model are discussed and related to corporate principles and situational factors of a retail firm. The analysis is a further step towards understanding the processes of retailing internationalization.     

Virtual store layout: an experimental comparison in the context of grocery retail

Interface design and the interaction between customer and computer are factors critical to business effectiveness over the Web. A key aspect of conventional retailing is store layout; an analogous aspect in virtual retail is virtual store layout. This paper reports on an experimental investigation into the use of three different layouts in online grocery retailing: freeform, grid, and racetrack. These three most common conventional retailing layout types were transformed into virtual layouts for computer-mediated interfaces. Subjects in Greece and the UK participated in a laboratory experiment: they were given a planned shopping task with money to spend, and performed their shopping through a virtual store with layout as the manipulated variable. The results show that layout significantly affects online consumer behavior, but that predictions generated from the literature of conventional retailing about differences in the outcome of layouts do not generally hold in a virtual setting. Some of the findings can be explained by reference to research in Human Computer Interaction (HCI).     

Bouncing back from a sudden-onset extreme event: exploring retail enterprises’ resilience capacity

ABSTRACT

A feature of recent decades has been the sudden and unexpected occurrence of catastrophic events seriously affecting people and territories. From an economic viewpoint, this has led scholars to pay increasing attention to factors and determinants taking enterprises face-to-face with extreme and catastrophic events, through the resilience lens. In this context, this study aims to contribute to the literature on resilience to natural disasters which is currently still limited in the business and management fields, both theoretically and empirically. This is particularly true as regards retailing, despite the key role played by retail in the aftermath and recovery periods following on from sudden-onset extreme events such as earthquakes.

The 2012 Emilia earthquake is a case in point with which to explore small retail enterprises’ resilience to sudden-onset disasters. Specifically, our empirical research consisted of administering a structured questionnaire to a sample of small retail enterprises which experienced an earthquake. The unit of analysis adopted was the retail enterprise. Data was processed applying Covariance-Based Structural Equation Modeling (CB-SEM). The structural model aims to verify the impact of sales capabilities, market orientation and networking capabilities on the resilience capacity of retail enterprises affected by an extreme event, controlling for certain financial indicators such as suppliers’ payment timeframes and the use of debt capital, as well as respondent age and gender. The findings show that all the antecedents analysed exert a significant and positive effect on small retail enterprises’ resilience capacity and ability to bounce back from natural disasters. Moreover, suppliers’ payment timeframes showed a direct relationship with retail enterprises’ resilience capacity, with lower use of debt capital equalling higher retail business resilience. Age and gender do not exert any significant effect. Scientific, managerial and public policy implications are derived.

Abbreviation: SEM     

Importance of location and product assortment on flea market loyalty

ABSTRACT

Recent trends in consumerism have highlighted the proliferation of the global flea market economy, which contributes significantly to the growing informal sector. Although a number of studies have explored the present topic within different contexts, few studies have addressed the factors that contribute to flea market loyalty among Millennial consumers. The purpose of the present paper is therefore to investigate the influence of market location and product assortment on market loyalty and the inter-construct relationships of market experience and purchase intention. By means of a quantitative study, 280 self-administered questionnaires were distributed amongst Millennial consumers. The data analysis was done using Structural Equation Modelling (SEM) in SPSS 23 and AMOS 23. The results indicated that all seven proposed hypotheses were significant. In other words, market location, product assortment and market experience positively influence consumer’s purchase intention and market loyalty. This paper is of paramount importance to brands and retailers who wish to expand their distribution network to the informal market economy, also known as the flea market economy. Marketers should realize the importance of the market’s location and the product assortment when investing in the flea market economy. The results of this paper contribute to literature in the informal market economy, which is rapidly expanding.