The Impact of Brand Delisting on Store Switching and Brand Switching Intentions

A tool retailers often use to improve their negotiating position with brand manufacturers is to delist - or threaten to delist - the manufacturers’ brand. Because brand manufacturers rely mainly on retailers to sell their products to consumers, a brand delisting will cause a sales loss for the brand manufacturer. Therefore, many brand manufacturers feel enormous pressure to give in and improve buying conditions to favor the retailer. The question thus emerges: Can a brand manufacturer resist a retailer's threat to delist its brand(s)? If a brand delisting severely hurts retail sales, it is easier for a brand manufacturer to resist. The authors study the impact of brand delistings on store switching and brand switching using a controlled online experiment and in-store shopper survey. They develop and test a conceptual model with several antecedents of consumers’ reactions to a brand delisting and conclude that brand equity, market share, and the products’ hedonic level drive store and brand switching.     

Reaching the boiling point: Consumers' negative affective reactions to firm-attributed service failures

While anger is the dominant affective reaction following service failure, little research focused on its potentially damaging effects. Our study examines the impact of anger and related negative affective states on evaluations and behavior following firm-attributed service failure. Gender's moderating role in shaping these consequences is also studied. Scenarios involving failures in a bank and a retail store are used. Overall, angry customers are less satisfied, give lower service evaluations, have higher perceptions of injustice, and give weaker ratings of corporate image. Angry customers also less likely spread positive word of mouth and more likely complain, exhibit negative repurchase intentions, and engage in third-party action. Related negative states differentially impact cognitive evaluations and post-purchase behavior with anger (rage) being the most important predictor in a bank (retail) setting. As the intensity of the negative affective state increases, customers more likely engage in effortful consequences. Gender of the customer and the service employee play minimal roles influencing evaluative and behavioral outcomes.     

Allocating a hybrid retailer's assortment across retail stores: Bricks-and-mortar vs online

This paper develops an IP model to determine item allocation for a hybrid retailer's store network, comprising bricks-and-mortar and online stores. Products with low carrying costs are distributed between the bricks-and-mortar stores and the online store. Products with high carrying costs can be withdrawn from the bricks-and-mortar stores and made available exclusively at the online store where the inventory carrying costs are comparatively lower. This strategy assists the hybrid retailer to not only improve the profitability of its bricks- and-mortar stores but also to retain the custom of the market segment that is loyal to the items withdrawn from the traditional stores. In this framework, the online channel complements rather than competes with traditional channels. This model is used to conduct an extensive simulation study to analyze the impact of important business factors on system profitability.     

Crowding in the time of COVID: Effects on rapport and shopping satisfaction

Decades of research in marketing has established that crowding (human and spatial) in retail contexts significantly affects shopping satisfaction. Prompted by the profound changes in retail supply and demand due to the Covid-19 pandemic, this study expands knowledge in two ways: uncovering new relationships and replicating some of the critical findings previously demonstrated in the pre-pandemic context. Two studies (Study 1 scenario and Study 2 actual shopping trip) show that higher levels of human crowding results in lower levels of shopping satisfaction, and this effect is mediated by a new construct introduced into the crowding literature, namely, customer rapport with employees, emerging as a significant factor in the pandemic era. Importantly, the results show that these relationships differ according to customers’: a) perceptions about the appropriateness of retailer precautions, b) beliefs about the severity of threat that the pandemic presents, and c) perceived vulnerability to Covid-19, all of them new to crowding dynamics during the time of Covid. Finally, with Study 2, we replicate and extend selected findings from prior research on crowding. Overall, the results expand our understanding of crowding effects and provide novel insights in the “new normal” retail context.     

Ad creativity in a negative context: How a thanking message frame enhances purchase intention in times of crisis

Traditionally, advertising relies on creativity to increase its effectiveness. However, little is known about the use of creativity in negatively-valenced situations. For instance, in times of crisis such as the COVID-19 pandemic, how should retailers engage in advertising? Should they strive to deliver creative advertising, or not? We investigate the role of ad creativity during times of crisis, based on 43,459 consumer responses to 49 retail and service brand ads. To do so, we investigate the separate effects of the two dimensions of ad creativity: originality and appropriateness. Results indicate that creativity works differently in a crisis context, with originality and appropriateness having different effects on consumers. Further, we find that originality and appropriateness trigger emotions in opposite ways. However, ads that engage thanking - be it of employees, customers, or frontline emergency workers - strengthen these effects.     

Does retail type matter? Consumer responses to channel integration in omni-channel retailing

A critical issue faced by marketing practitioners today is orchestrating strategies that provide a smooth consumer experience in an omni-channel environment. The extant literature offers limited guidance on managing the consumer journey in an omni-channel environment across different retail types. Using the S–O-R framework as its basis, this study generates novel insights by examining how different types of retailers influence consumer perceptions of channel integration (CPCI) as well as consumer empowerment, trust, satisfaction, and patronage intention. Data from 736 consumers was collected using purposive sampling to target those who interact with retailers from high-end specialty stores, department stores, and hypermarkets. The data was then analysed using partial least squares structural equation modelling (PLS-SEM). We find that consumers from high-end specialty stores, hypermarkets, and department stores have different perceptions when patronising the omni-channel retail business. The implications of the study are discussed and suggestions for future research are presented.     

Inclusive or exclusive? Investigating how retail technology can reduce old consumers’ barriers to shopping

This paper investigates older consumers in-store shopping experiences and the barriers that they face. The aim is to understand how new retail technologies (e.g., interactive in-store displays, self-service tills, robots etc.) can help seniors access satisfying, autonomous retail experiences, helping them to achieve a sense of inclusion in physical retail settings. Drawing upon the social inclusion/exclusion theory and information overload theory, the research employs a qualitative approach based on an inductive design, including face-to-face semi structured interviews with 36 consumers aged 75+. The findings highlight (i) old consumers have scarce interactions with in-store technologies (adding knowledge to motivations literature), (ii) the need to develop new technologies to support these consumers, and (iii) the extent to which these technologies are excluding rather than including old consumers (adding knowledge to the drivers of the field of exclusion). Results provide guidelines for retailers to enhance the sense of inclusion for old consumers through a better usage of new technologies.     

Using the Pack‐and‐a‐Half Rule to Eliminate Backroom Inventories in Retail Operations

In the retail industry, backroom inventories are typically associated with higher labor costs and greater operational complexity. Thus, retailers look for ways to eliminate backroom inventories. A heuristic used for this purpose is the pack‐and‐a‐half rule which suggests that the shelf space allocated for a product should be at least 50% larger than the case pack quantity in which the product is delivered. Despite its popularity among retailers, the pack‐and‐a‐half rule has been ignored in the academic literature. We introduce the pack‐and‐a‐half rule, assess its impact on a retailer's profits, identify cost, demand, and product characteristics driving this impact, and propose a modification. Based on an analysis of data obtained from a retailer on 1,986 SKUs in 20 categories, we find that the pack‐and‐a‐half rule decreases a retailer's profits, on average, by 10% when applied uniformly across all SKUs. Further, this decrease is significantly affected by product depth, product width, demand elasticity, case pack quantity, and inventory carrying cost. Finally, we develop a set of modifications based on these variables where the pack‐and‐a‐half rule is applied selectively and in a stepwise fashion. These modifications limit the decrease in a retailer's profits to a range between 6% and 7%.     

The shipping strategies of internet retailers: Evidence from internet book retailing

Managing the shipment of goods to consumers is one of the central aspects of retail competition on the internet. In this article, we analyze internet retailers’ shipping strategies using data from the internet book retailing industry. We find that, controlling for a variety of observable firm characteristics, firms with lower product prices offer lower shipping fees and higher quality shipping in terms of average delivery time, compared to firms with higher product prices. These patterns cannot be readily reconciled with a large class of models of competition under perfect consumer information. Theories based on imperfect consumer information can explain the findings better.

The 99 price ending as a signal of a low-price appeal

There is evidence that the rightmost digits, or endings, of retail prices can communicate meanings to consumers. To better understand how such meanings are formed, this paper addresses the question of how the 99 price ending can have a low-price meaning even though 99-ending prices tend to be higher rather than lower competitive prices. Analysis of two large samples of newspaper price advertising indicates that there is a strong and robust correlation between the use of the 99 price ending and the presence of a low-price appeal such as a claimed discount. It is suggested that the salience of price advertising leads it to dominate other sources of information in the consumer's learning of price-ending meanings.