The impact of location factors on the attractiveness and optimal space shares of product categories

In this paper, we investigate the impact of location characteristics on the relative attractiveness of product categories within a store, and formulate micromarketing implications for the allocation of store space to categories. We present a framework for the impact of store and trading area characteristics on category and store performance, which integrates and extends previous geomarketing research. Building upon this framework, we propose a tractable and flexible procedure for assessing location influences, and derive optimal space allocation rules for different location profiles. Empirical application to national stores of a European retail chain confirms the differential impact of location characteristics on categories' attractiveness. Tailoring the allocation of store space to these location-based differences in category appeal leads to a significant increase in overall chain profitability.     

Should retailers adjust their micro-marketing strategies to type of outlet? An application to location-based store space allocation in limited and full-service grocery stores

Many retailers today operate strategically different types of sites: ‘limited-service’ stores—that offer all core products/services but only a shallow assortment of non-core services—and ‘full-service’ sites with deep lines of both core and non-core services. An important question for these retailers is whether and how to adopt a micro-marketing strategy in each of these formats. In a micro-marketing strategy, retailers tailor their marketing mix to the characteristics of the local market in which each store outlet operates—a central issue being whether the allocation of store space across product categories should be location-specific. This paper (i) examines the conditions for such micro-marketing to be beneficial, and (ii) in particular—how these benefits depend on store format. It also (iii) indicates how the pattern of space adjustments to local conditions should differ between formats. The propositions are tested in a grocery retail setting, for a retail chain operating limited-service supermarkets and full-service hypermarkets. Our results suggest that micro-marketing is beneficial in both types of format. Yet, the appropriate way of localizing space allocation patterns is format-specific. While supermarkets should primarily adjust the space shares of food (core) categories, hypermarkets should primarily adapt the space shares of non-food (non-core) categories to local market conditions. The outcomes of the study have conceptual as well as managerial relevance and may prove useful for multi-format retailers in a wide range of settings.     

The importance of atmospherics in the choice of hypermarkets and supermarkets

Are the atmospheric variables equally relevant for supermarket and hypermarket customers? As a contribution to the customers' choice of the store format, firstly this work aims to determine the perception of differences between hypermarkets and supermarkets in terms of store attributes. Second, it sheds light on the role played by atmospherics in the customers' decision process. This study uses a logit approach to model the probabilistic choice of the customers' store format using atmospheric and other marketing variables as important attributes of the grocery store. The model's estimation is based on personal interviews conducted during the shopping process in urban supermarkets and hypermarkets belonging to the same retail chain. The findings show that although the atmospheric variables are significantly important for both store formats, the customers perceive differently the importance of each retail atmospheric cue and other marketing variables, when buying in a hypermarket or in a supermarket: the choice of buying in hypermarket is explained by the significant importance given to the latent variables named pleasant atmosphere and accessibility and responsiveness; in contrast, the choice of buying in supermarkets is explained by the significant importance given to the latent variable nice decoration and empathy with the staff. The other latent variable designated by other marketing variables is only significantly important in the decision of choosing supermarkets.     

Japanese Supermarket Chains and Labour Costs- Part 1:

Japan is often alleged to have an outdated and inefficient retail system. Detailed studies are needed to underpin these allegations. In this paper we do this for the retail sector of supermarkets. We study 18 Japanese supermarket chain store corporations. Characteristics of Japanese supermarkets are given in an historic overview. A labour cost relationship is estimated with data of 918 establishments. This relationship has already been established, tested and confirmed in many studies on European retailing. In part 1, we show that Japanese chain store corporations diversify in assortment composition as well as in service level. In part 2, labour costs of Japanese supermarkets are studies in more detail. We find statistical support for higher labour costs by more use of part-time employees, higher service level and village based stores. Furthermore, we compare labour costs of Japanese supermarkets with labour costs of French variety stores, supermarkets and hypermarkets. We find no differences in labour costs between Japan and France.     

The impact of retail store format on the satisfaction-loyalty link: An empirical investigation

Maintaining and improving customer loyalty is an important strategic goal for businesses as competition has intensified in almost all sectors of the economy. Retailers, in particular, feel the need to invest in customer loyalty more than ever before as channels and store format alternatives available for consumers to shop at have proliferated. However, current research in marketing provides little guidance to retail managers about developing and sustaining shopper loyalty across different store formats. Toward filling this gap, the present research examines the shopper satisfaction-loyalty link in two different store formats (supermarkets and hypermarkets). Using data from surveys of 505 Spanish shoppers at both types of retail formats, we examined how shoppers' attitudinal and behavioral loyalty develop differently. Our results reveal important differences and offer directions for the pursuit of different strategies by supermarkets and hypermarkets. The specific strategies, and the implications of this research for theory and practice are discussed.     

Environmental factors and satisfaction in a specialty store

Given the intense competition experienced in the sector, retailers have been designing strategies to create an environment conducive to consumer satisfaction and purchase, particularly in supermarkets and hypermarkets. This paper develops a conceptualization of customer satisfaction based on field data collected in a specialty store, focusing on the relative importance of the environmental factors on satisfaction. The results show that the most important environmental determinant of customer satisfaction is the variety of products. The help from employees, lighting, layout and design also stand out from the set of stimuli considered.     

Fundamental patterns of in-store shopper behavior

This research confirms empirical patterns about in-store behaviors based on a large number of shops and store visits, specifically 654,000 transactions in 40 supermarkets, hypermarkets, convenience and specialty stores in the USA, UK, China, and Australia. Integrating new data with past findings highlights that: (i) many shopping trips are short; (ii) shoppers typically only cover a small proportion of the store on any trip, and (iii) the heterogeneity of key behavioral measures (store coverage, number of items bought, and trip length) is generalizable across countries, most store formats, and store size. These patterns can help retailers and manufacturers benchmark and predict behavior and provide a base for further theoretical developments.     

Beyond presence: Creating attractive online retailing stores through the cool AR technology

Augmented reality (AR) is increasingly coming into the spotlight for its potential to improve the consumer experience through the creation of presence. This research aims to explore the theoretical mechanisms through which AR-based product presentation influences online store attractiveness and whether the effects differ in the purchasing contexts of hedonic and utilitarian product types. From the perspective of consumers' bidimensional experience, we find that AR increases online store attractiveness by creating perceived coolness (intrinsic attribute) and spatial presence experience (extrinsic attribute), which would further have a positive impact on consumers' purchase intention. The mediating mechanisms are different in purchasing contexts of various product types: for hedonic products, perceived coolness and spatial presence are parallel mediating factors leading to the improvement of online store attractiveness; while for utilitarian products, only the mediation effect of spatial presence presents. Our findings enrich the literature on AR marketing by proposing an insightful mediating force (i.e., perceived coolness) to complement the effect of presence, and explore the different purchasing contexts. We also provide managerial guidance for e-retailers to differentiate AR interface design for diverse product types to apply AR technology effectively.     

Store and store format loyalty measures based on budget allocation

In highly competitive environments, such as retail markets, characterized by a growing heterogeneity of demand and the proliferation of new retail formats, cross-shopping behavior between stores and formats is becoming increasingly common. This process makes customer loyalty a key strategic challenge for retailers that want to consolidate their position within the market. To contribute to the analysis and comprehension of this reality, the authors propose and assess different objective indicators of store loyalty, store format loyalty, and intra-format store loyalty based on budget allocation. Specifically, they analyze the role of retail format in observable loyalty patterns in a market. Through an empirical analysis of grocery purchase patterns of a sample of 580 Spanish households, the authors find that diverse objective loyalty indicators based on budget allocations provide very similar information from a practical point of view. They also find that consumers' regular use of various formats (specifically, supermarkets, hypermarkets, and discount stores) for their purchases explain observed disloyalty better than does purchasing in several stores within these formats. The observed patterns reveal that retail formats define differentiated store profiles that relate to the benefits sought in different purchase situations.     

购物效用影响消费者对超市选择的实证研究

不同形态的超市,如大卖场、中型超市、便利店给消费者提供的购物效用具有较大的差别,超市消费者的购物效用影响其择店决策,而不同群体的消费者之间也具有显著的需求差别,超市可以据此制定竞争策略。     

Drivers of the synergy between price cuts and store flyer advertising at supermarkets and discounters

Despite retailers’ intense use of both price cuts and store flyer advertising, it is still unclear whether and when it is beneficial for retailers to combine the two promotion tools at the same time as opposed to using them separately. We systematically investigate synergies between price cuts and store flyers for a broad set of 488 brands from 44 consumer packaged goods categories across six leading German retailers. We find that a clear majority of the brands benefit from positive synergies and hence, combining price cuts and store flyer advertising is recommended, especially at supermarkets. This synergy can be strong. For instance, a 15 % price cut without store flyer support at a supermarket, on average, increases sales by 11 %, and medium spending on store flyers for the brand at its regular (non-promoted) price results in a sales lift of 8 %. The combined use of both tools, however, increases sales by 52 %, much more than the sum of their separate effects (11 % + 8 % = 19 %). Yet, there is also substantial variance in the synergy, which we explain with retailer format (supermarkets versus discounters) as well as various brand and category characteristics. Our findings have important implications for the coordination of promotion activities by retailers.     

An Assessment of When,Where and Under What Conditions In-Store Sampling is Most Effective

In-store product sampling is a commonly used promotional technique designed to give prospective consumers an opportunity to experience a product prior to purchase. While prior research has documented a positive relationship between short-term sales and perceptual measures of the customer shopping experience, little is known about the long-term impact of sampling or factors that moderate its success. In this paper, we develop an empirical approach that allows us to study the short-term and long-term effects of in-store sampling on both own and competitive products. We apply our approach to six store-level scanner data sets across four different product categories and show that in-store sampling has both an immediate (short-term) and sustained (long-term) impact on sales. We also show that the impact of sampling on sales is moderated by the characteristics of the store conducting the event, and that repeated sampling for a single product leads to a multiplicative increase in its long-term sales performance. We find that, unlike many types of in-store promotion, sampling results in a category expansion effect as opposed to a pure substitution effect. We contrast the immediate and long-term sales patterns for in-store sampling to those of product displays and discuss managerially relevant differences. Finally, we demonstrate incremental profit implications and store selection scenarios for different incremental costs of conducting the in-store events using constrained optimizations.     

Customer satisfaction's key factors in Spanish grocery stores: Evidence from hypermarkets and supermarkets

The marketing literature has shown how certain attributes of the store are key for grocery retailers to differentiate themselves in the final markets. From this preliminary consideration the present work proposes a step forward by ascertaining the main factors that underlie the attributes of the store which have already been identified in the literature. All of this is taken into account with the object to examine which of these factors presents a greater influence on customer satisfaction. To test the proposed analysis, a sample of 358 Spanish customers that had carried out their purchase in different types of grocery stores (in particular, hypermarkets and supermarkets) has been analyzed considering a key variable of retail patronage behavior: the store format in which the purchase had been carried out. This study has enabled us to obtain interesting conclusions about the variables that have the most influence on customer satisfaction, providing useful managerial recommendations for decision-making in grocery retailing.     

Store-, Market-, and Consumer-Characteristics: The Drivers of Store Performance

Four factors have traditionally been identified in influencing store performance: store-, market-, and consumer characteristics and competition. Given partially conflicting and, in some cases, dated findings in the literature we want to re-assess the effects. In particular, past research has usually considered only two out of the four constructs at any time, which is likely to result in erroneous interpretation of results. We draw upon a unique cross-sectional sample of grocery stores with a wide array of store characteristic, store performance, trade area, and consumer demographic variables. Using structural modeling, our prime interest is to assess the differential impact of store attractiveness, market potential, and socio-economic status on two different store performance measures, while controlling for competitive effects. We find that the market potential of a store is by far the most important driver of store sales performance and sales productivity performance. With one exception, the model and the data support the hypothesized relationships about the direction and the strength of the impact of a store's attractiveness, market potential and socio-economic characteristics of the trade area on a store's performance.     

How category characteristics affect the number of store brands offered by the retailer: a model and empirical analysis

Our research examines why retailers offer, not one, but multiple store brands in some product categories. More specifically, we are interested in how certain product category characteristics affect the number of store brands. We model a product category consisting of two incumbent national brands that may differ in strength. The retailer may introduce one or two store brands depending on which maximizes category profits. Our analysis suggests that the retailer is likely to carry two store brands in categories where (i) the national brands are similar in strength; and (ii) the price sensitivity between the national brands is low. Interestingly, the conditions that support the introduction of more than one store brand are quite different than the conditions that would facilitate the introduction of additional national brands. We provide empirical evidence that support our model-based predictions.     

Generalizing patterns of store-type patronage: an analysis across major Chinese cities

A systematic, analytical study is presented of patterns of patronage across store types (including hypermarkets, supermarkets, grocery stores and free/wet markets) in urban China. Using consumer panel data collected from a cumulative sample of almost 5000 households, results are generalized across 8 major cities (from the North, South, East and West of China) and 6 packaged goods categories (including traditional Chinese items like soy sauce and more contemporary items such as packaged laundry detergent). Analyses show that there are definite patterns of store-type patronage in urban China, most of which are predictable from the NBD–Dirichlet model (e.g. double jeopardy and the duplication of purchase rule). These patterns generalize across all the city/category combinations studied in this paper, although some important deviations are also identified (e.g. an excess loyalty premium). It is shown how retailers and planners can make use of the observations and theoretical predictions to assess key measures of patronage.     

Buying Norwegian Salmon: A Cross-Cultural Study of Store Choice Behavior

This article examines antecedents of store choice behavior in a cross-cultural context (i.e., 1.296 consumers in Sweden, Italy, and China). Chinese culture has a significant downward impact on choosing super-/hypermarkets and an upward impact on choosing fish shops when buying salmon. Italian consumers have a positive impact on the fish shop option, but a negative impact on the street market option. If consumers prefer salmon and think it is luxurious and sophisticated and not a “value for money”-item, the probability of choosing super-/hypermarkets increase. Opposite scores, increase the probability of choosing fish shops. Research and managerial implications are drawn.     

Public policy and the establishment of large stores in Belgium

Belgian public policy towards retailing has been viewed as being politically motivated and frustrating the ambitions of large retailers by being biased towards independent retailers. This paper analyses the impact of the Business Premises Act on the development of supermarkets and hypermarkets. It concludes that the Act has had an impact although this may have been an unintended one in that retailers have changed behaviour to surmount the Act.     

The impact of weather on consumer behavior and retail performance: Evidence from a convenience store chain in China

Despite extensive use of weather data to adjust replenishment and inventory strategies in the retail industry, these companies do clearly know the effect of weather on consumer behavior and retail performance. How does weather affect consumers' purchasing behavior and thus retail performance? We study empirically these questions by analyzing more than 6 million transactions made by more than 1.62 million unique consumers at 146 convenience stores in a convenience store chain in China. We choose sun, rain, temperature, and air quality index as the main weather variables. We use the average number of items per order and the average price of each item in each order as indicators of consumer behavior, and use store daily sales as an indicator of retail performance. We found that under rainy weather, people will buy more products with higher item prices in one order. When temperature rises, people will buy fewer products with a lower item price in one order. In addition, sunny weather and rainy weather have a positive impact on daily sales than cloudy weather. Air quality has a negative impact on daily sales, while temperature has a positive impact on sales. Finally, we study the impact of weather on different product categories. We find that the results depend on the product category characteristics.     

Retailing institutions in developing countries: Determinants of supermarket patronage in Istanbul,Turkey

The extent to which supermarkets can provide solutions to the shortcomings of a developing nation's food retailing system depends on their success in increasing store patronage. This study was designed to identify the determinants of supermarket patronage in Turkey. Consumers who primarily patronized supermarkets were compared with consumers who primarily patronized other food stores in terms of their socioeconomic and demographic characteristics, grocery shopping habits and characteristics, and life-style orientations. Some differences between the two groups emerged with respect to their patronage motives, life-style orientations, and product purchase patterns.