The Magnitude of Change Effect in Store Remodeling |
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| Institution: | 1. Department of Marketing, Monash University, Australia;2. Department of Marketing, Faculty of Business and Economics, Monash University, Caulfield, Melbourne, Victoria 3145, Australia;1. Univ Lyon, GATE Lyon Saint-Etienne UMR CNRS 5824, F-42023 Saint-Etienne, France;2. Research Institute of Economics and Management, Southwest University of Finance and Economics, Chengdu, Sichuan 610074, China;3. Escuela Politécnica Nacional, Quito, Ecuador & GATE Lyon Saint-Etienne, UMR CNRS 5824, France;1. Auburn University, Raymond J. Harbert College of Business, Department of Marketing, 405 W. Magnolia Ave., Auburn, AL 36849, United States;2. Virginia Commonwealth University, School of Business, Department of Supply Chain and Analytics, P.O. Box 844000, Richmond, VA 23284-4000, United States;3. Florida State University, The College of Business, Marketing Department, Rovetta Business Annex, Room 420, P.O. Box 3061110, Tallahassee, FL 32306-1110, United States;1. Innovation, Technology Entrepreneurship & Marketing Group, Eindhoven University of Technology, De Rondom 70, 5612 AP Eindhoven, The Netherlands;2. Faculty of Economics and Business, KU Leuven, Naamsestraat 69, 3000 Leuven, Belgium;1. Insper Education and Research Institute, R. Quatá, 300, São Paulo, Brazil;2. Jones Graduate School of Business — Rice University, 6100 Main Street (MS 531), Houston, TX 77005, United States;1. Konkuk University, 120 Neungdong-ro, Gwangjin-gu, Seoul 05029, Republic of Korea;2. Syracuse University, 721 University Avenue, Syracuse, NY 13244, USA;3. Korea University, 145 Anam-ro, Seongbuk-gu, Seoul 02841, Republic of Korea |
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| Abstract: | While store remodeling can increase customer sales, not all remodeling efforts are successful. In this study, two treatment stores from a large national retailer are matched with control stores in a field experiment. Even though the cost of remodeling the treatment stores was the same, and the remodeled stores had identical layout, color, furnishing and interior design, one store had a 12% lift in sales while the other had only 1%. We show that a key determinant of remodeling success is the perceived magnitude of change between the initial and final condition of the store. Indeed, customer psychological and sales responses are greater when the perceived magnitude of change between the condition of the store prior to remodeling and the store after remodeling is larger. Importantly, these positive effects continue for as long as 12 months after remodeling. We further find that the profile of customers drawn to the remodeled stores differs based on the perceived magnitude of change, as do the environmental attributes that contribute to customer perceptions of the remodel. |
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| Keywords: | Store environment Store remodeling Field experiment Satisfaction Loyalty Reference points |
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