Outlet Selection

Outlet Selection

Consumers’ selection of outlets is important to managers of retail establishments and also to consumer goods marketers. According to J.J. Stoltman, J.W. Gentry, K.A. Anglin, and A.C.

Burns, a consumer can follow three basic sequences when making a purchase decision (1) brand first, outlet second (2) outlet first, brand second, and (3) brand and outlet at the same time.

Frequently, consumers select the brand first and subsequently decide about the outlets. But for many consumers and product categories, retail stores constitute the evoked set rather than brands.

For instance, our consumer of the laptop computer example might be familiar, let us say, with a retail outlet named Hindustan Business Computers. She/he may decide to visit this store and choose a brand from the ones available there.

Using the third approach, the consumer visits a computer retail outlet in her/his evoked set and evaluates the brands in her/his consideration set in the store. In this approach, the consumer evaluates the attributes of stores and brands at the same time.

In such a situation, the friendly behavior of sales personnel and excellent service facilities might shift the consumer’s preference to the second-best laptop computer against a favorite laptop at an impersonal store with few or no service facilities.

Outlet Image

Whether a consumer chooses a specific retail outlet before or after brand choice, she/he evaluates alternative outlets based on predetermined evaluative criteria. Retail outlets may be thought of as having “personalities.”

Some stores have very clearly defined images (good or bad) and some others that tend to blend into the crowd. They may not have anything distinctive about them and maybe overlooked for this reason.

Store image refers to consumers’ perceptions of all the attributes associated with a retail outlet such as its location; merchandise availability and the knowledge as well as congeniality of sales personnel etc. This image is similar to the concept of brand image.

J. D. Lindquist has reported the following nine dimensions of store image involving twenty-three components of these dimensions.

MerchandiseQuality, selection, style, and price
ServiceLayaway plan, sales personnel, easy return, credit, and delivery
Physical facilitiesCleanliness, store layout, shopping ease, and attractiveness
ConvenienceLocation and parking
Store atmosphereCongeniality, fun, excitement, and comfort
InstitutionalStore Reputation

Consumers often evaluate stores using a general evaluation and this overall feeling may have to do with intangibles. Besides functional attributes such as price and merchandise selection, consumers also view retail outlets as a pleasant, unpleasant, active, or sleepy place to shop.

As a result, some retail outlets are likely to consistently be in consumers’ evoked set, whereas others will never be considered. According to J. E. M. Steenkamp and M. Wedel, marketers make extensive use of image data in developing marketing strategies and in determining an outlet’s image to match the target market’s expectations.

Retailer Brands

Traditionally, retail stores carried only manufacturers’ brands. In the current retail store scenario, some stores carry their own brands supposedly as low-price alternatives to expensive national or international brands. Shoppers’ Stop, for example, carries its own store brands.

Such brands become an important attribute of an outlet and also provide attractive margins for such outlets. A. K. Jam and A. Dick reported that the traditional pattern of providing reasonable quality at a low price is no longer necessarily optimal.

An emphasis on quality over price may be particularly advantageous for the outlet if the brand carries the store name.

Location of Outlet and Size

Retail outlet location has an obvious impact on store patronage and consumers’ outlet choice often depends on its location. If the differences in other attributes are not significant, consumers generally will choose the store that is closest.

Similarly, the size of the store is also an important factor that influences consumers’ outlet choices. Consumers tend to prefer larger stores compared to smaller ones with cramped spaces.

Customer Attribute and Outlet Selection

For convenience items or minor shopping goods, consumers are unwilling to travel very far. However, for high-involvement purchases, consumers do not mind traveling to distant shopping areas. Distance is not relevant for Internet retailers but the ease of searching the site is.

Consumer Shopping Orientation

Orientations are closely related to general consumer lifestyle and are subject to influences such as stage in the household lifecycle and household income etc.

Consumers often don’t shop simply to buy something they need. They also go shopping for more complex reasons such as sensory stimulation, diversion from routine, social interactions, and acquiring information about new trends. There are two distinct approaches to classifying consumer shopping orientation:

  • Psycho graphics-based orientations describe seven types:

    • Inactive shoppers can best be described by their lack of activity. They have extremely confined lifestyles and shopping interests and do not engage in outdoor or do-ityourself activities. They do not exhibit any joy or interest in shopping.

      They are also not particularly concerned about shopping attributes such as price, service, or product selection. They may favorably respond to home delivery service.

    • Active shoppers are viewed as “tough” shoppers and their lifestyles are demanding. They are fond of outdoor activities and undertake do-it-yourself projects. They derive pleasure from shopping and their major concern is the price in their search for the desired item.

      Active shoppers’ orientation is more of an expression of their demanding lifestyles and they tend to balance price with quality, fashion, and selection in their search for value.

    • Service shoppers are focused on demanding substantial in-store service when they shop and usually visit conveniently located stores with friendly, helpful personnel. They are inclined to become impatient if they have to wait for help from store personnel.

    • Traditional shoppers like outdoor activities, but lack enthusiasm for shopping. They are likely to be less price sensitive and do not insist on store personnel help or attention.

    • Dedicated fringe shoppers seem to be risk takers, enjoy do-ityourself activities, and are inclined to try new products. They have almost a compulsion to exhibit to others that they are different.

      True types in this category are not interested in extensive socializing, not much interested in TV or radio commercials, and show little brand or store loyalty.

    • Price shoppers are extremely price-conscious and are willing to make extensive search efforts to meet their price requirements. They are avid consumers of all types of advertising to learn about the lowest prices.

    • Transitional shoppers are consumers in the early stages of the family lifecycle and show practical interest in a number of outdoor activities. Transitional shoppers display a low level of interest in searching for low prices and are more inclined to try new products.

      Once they are interested in a product, they tend to make up their minds quickly in buying it.

  • Using projective research techniques to ascertain the ways that college students shop has identified motivation-based shopping orientations. Six shopping orientations have been uncovered:

    • Chameleons are those whose shopping styles change to suit a particular situation. Their shopping approach is based on the type of product, how rushed they feel for shopping, and the importance of the purchase.

    • Collectors/gatherers tend to have the propensity to stockpile products or buy large quantities either to save money or lessen the need for frequent shopping. They bargain to get the best price and take advantage of retailer guarantees.

    • Foragers specifically buy only the desired products and are willing to get involved in extended searches. They are not particularly loyal to any store and prefer to go shopping alone.

    • Hibernates show a significant degree of indifference towards shopping and will often postpone buying products even when required. Their shopping patterns are opportunistic rather than based on need.

    • Predators are speed-oriented and shop with a purpose. They carefully plan their purchases in advance and prefer to shop alone. Predators do not enjoy shopping activities and tend to select retail outlets where they are confident of getting the required products quickly.

    • Scavengers enjoy both the shopping activity and making purchases. They prefer going to sales events and view shopping as a means of entertainment. They tend to make many impulse purchases.

Point-of-purchase Displays

According to the Point-of-Purchase Advertising Institute (Supermarket Consumer Buying Habits Study, 1987), more than 80 percent of supermarket shoppers make their final purchase decisions inside the retail store this makes POP activities have become very important.

By creating an effective combination of attractive store layouts and displays, the retailer can change an unexciting retail environment into one that is exciting and results in enhanced sales turnover.

Several studies have been conducted on the effectiveness of displays in supermarkets and drug stores. Two findings mentioned below are representative of such studies:

  • Howard Stumpf reported that 2,473 supermarket shoppers were interviewed and 38 percent of the respondents had purchased at least one item or brand they had never before bought. The reason given for this first-time purchase was that the product was displayed.

  • A study by the Point-of-Purchase Advertising Institute (Awareness, Decision, Purchase, 1961) of 5,215 shoppers in supermarkets, variety stores, liquor stores, hardware stores, and service stations reported that one-third had purchased at least one of the displayed items.

It is clear that POP displays have a significant influence on consumers’ in-store purchase behavior. The sales impact of displays varies widely by product type and location and between brands within a product category; there is generally a strong increase in sales.

Deals and Discounts

Price discounts and other promotional deals that offer same-for-less or more-for-the-same are generally associated with POP displays and evidence suggests that in-store price reductions influence brand decisions.

The sharp increase in sales at the start of the price reduction is followed by near-normal sales over time or when the deal ends.

The increase in sales comes from four sources in response to price deals:

  • Those consumers, who do not normally visit the store announcing a price deal, may come to buy the brand.

  • Current brand users may buy in advance of their anticipated needs. Ready availability in excess often leads to increased consumption of the brand.

  • Those consumers, who otherwise use competing brands, may switch to the brand available at a reduced price. A percentage of such brand-switching consumers may become regular users of the brand.

  • Non-product category buyers may buy the brand because it is now a better value to substitute products.

K. Sivakumar and S.P. Raj note that brands perceived as being of higher quality tend to benefit more by price deals than brands with lower-quality images. D.R. Lichtenstein, S. Burton and R.G.

Netemeyer reported that consumers differ in their deal proneness to deals across product categories and younger and less educated consumers are more likely to respond to sales promotional deals.

Retail Outlet Atmosphere

The layout, fixtures, lighting, colors, sounds, odors, and the dress and behavior of its personnel affect a retail store’s atmosphere. An uncontrollable yet important component of store atmosphere is the number of customers present in the store, their characteristics, and their behavior.

The outlet atmosphere produces a significant effect on customers’ mood and their willingness to visit and shop around in the store. The atmosphere also influences consumers’ assessment of the quality of the store and the store image they form.

As a result of the positive mood induced by the store atmosphere, consumers are more satisfied and this increases their willingness to visit the store again. This may help in building store loyalty.

Many elements of store design can be cleverly controlled to attract customers and produce positive effects on consumers. For example, light colors impart a feeling of spaciousness and serenity, and signs in bright colors create excitement.

Charles S. Areni and David Kim reported that brighter in-store lighting influenced shoppers to examine and handle more products.

In the case of service businesses such as banks, hospitals, beauty parlors, or restaurants, the term service space refers to the atmosphere. Marketers use the process of atmospherics to manipulate the physical retail or service environment with the objective of inducing specific mood responses in consumers.

Internet retailers attempt to create an atmosphere with the help of graphics, colors, layout, content, interactivity, etc.

Music in the store environment can have a major effect. J.D. Herrington and L. M. Capella found that music could influence the time consumers spend in retail outlets or restaurants, the mood of the customer, and the overall impression of the outlet.

Slow music appears to relax and slow down the consumers and they tend to spend more time in the store.

Studies indicate that odors can positively influence the shopping experience. Odour preferences vary across consumers. Retailers should use caution in using aromas in the store environment, as some aromas can be offensive to certain consumers.

In addition to this, many consumers dislike anything artificial or unnecessary to the air that they breathe. The appearance of store employees and the way they behave and also other shoppers in the retail outlet influence the store environment in a major way.

Sales Personnel

Sales personnel are considered one of the most important in-store factors that influence consumers. This influence can be understood in terms of exchange theory, which emphasizes that every interaction involves an exchange of values.

Each participant gives something to the other and hopes to receive something in return. The salesperson, for example, might offer expertise about the product to make the consumer’s choice easier.

Or the customer may be reassured because the salesperson is likable; his tastes are similar and he is perceived as someone who can be trusted. Several research studies in this area conclusively attest to the impact of a salesperson’s appearance on sales effectiveness.

Peter H. Reingen and Jerome B. Kernan report that in sales, as in much of life, attractive people seem to hold the upper hand. In addition, more effective sales personnel usually know their customers’ traits and preferences better than ineffective ones. This allows them to adapt their approach to meet the needs of the specific customer.

In the case of services, customers and service personnel often form fairly warm personal relationships, termed commercial friendships. Commercial relationships are similar to other friendships and have a substantial impact on customer satisfaction, loyalty, and positive word-of-mouth.

  • Berman Barry, Retail Management: A Strategic Approach, Pearson Education

  • K. V. S. Madaan, Fundamentals of Retailing, Tata McGraw-Hill Education

  • Arpita Mukherjee and Nitisha Patel, FDI in Retail Sector, India, Academic Foundation

  • Tapan K Panda, Marketing Management, Excel Books

  • Nitin Mehrotra, Indian Retail Sector – A Primer, ICFAI Books

  • http://www.iamwire.com/2013/11/indian-retailers-coping-changing-environments/21612

  • http://www.retaildesignworld.com/news/article/53a83cc114c3e-opinion-indian-retail-is-a-balancing-act-says-raviraj-deshmukh

  • http://knowledge.ckgsb.edu.cn/2013/11/05/policy-and-law/fdi-in-retail-in-india/

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