Retail Store Image

Retail store image is crucial in purchase decisions for products or services. “The image has been conceived as an intangible ‘something’, a vague, amorphous, virtually immeasurable phenomenon … the concept of ‘retail store image’ has often been imbued with the same qualities” (Kunkel & Berry 1968, p.21). Consumers have their own perception about retail store image based on their experience, references, knowledge, the brand image created by the retail store, pricing policy, service delivered, etc. According to the behavioural approach, image may be defined as discriminative stimuli for an action’s expected reinforcement. Specifically ‘retail store image’ is the total conceptualised or expected reinforcement that a person associates with shopping at a particular store.

Little retail store image research has been done in the academic arena. As globalisation has taken place, brands are becoming global and their presence and association is bonded emotionally with consumers globally. Whereas manufacturers formerly marketed products globally, today’s retailers are increasing and expanding their physical or virtual web presence all over the world. The monopolistic behaviour of manufacturers is being converted into relational orientation by retailers because of the growing powers of retailers in the marketplace. Today, retailers dictate their terms to manufacturers as to what they want to sell and the terms of sale they want. This dictating position is achieved by retailers expanding their presence all over the world and servicing their customers with ‘just in time’ (JIT) shopping pleasure.

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Similarly, an important facet of retail store image is the customer’s previous experience. Primarily, rewarding experiences within the context of a particular store give rise to a favourable store image which, in turn, induces customer loyalty. “The image is acquired through experience and thus is learned” (Kunkel & Berry 1968, p.24). The person who moves to another city doesn’t have any knowledge of the local market and the brands that the shops carry. This lack of knowledge further encourages consumers to start doing their own investigation using various sources. Once the need is established, consumers start their search either through friends, their social circle, advertisements, local radio, television, magazines etc., and filter their options before preparing an evaluation of the final few options. Based on their assumptions and analysis, consumers make their decision to purchase a product or services. In the case of laptops or technology products, once consumers have done their preliminary search and investigation they walk into retail store to decide finally on their purchase. Once the consumer enters the retail store, the immediate experience is a major deciding factor. If the store is well laid-out, smells pleasant, has good decor, good merchandising, well-groomed staff, a good product range, competitive pricing, assurance of post-purchase service such as delivery, warranties and repairs, the customer comes to the final stage of purchasing. This stage is called the pre-satisfaction stage of the purchasing ladder. Whether the consumer experiences reward or punishment or both when shopping in a store will depend on his stated variables, societal and sub-cultural norms, and his/her experiences associated with the store. For example, a consumer may like a particular laptop in a retail store (a rewarding experience) but may not like the quality of service extended by the salesperson or staff (an adversive experience).

The consumer develops an image of a particular store on the basis of the totality of his or her experiences when shopping there. The overall bundle of experience that the consumer takes will depend on the respective value that the consumer places on the store convenience, fashion, selection of merchandise, quality and quantity of salespersons in the store, and other such factors, plus the degree of reward and/or punishment incurred in connection with these factors (Kunkel & Berry 1968, p.24).

The concept of retail store image first came into the limelight when Pierre Martineau (1958) described the ‘personality of the retail store’. Since then, it has been

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acknowledged generally that, over time, consumers form thoughts and feelings associated with stores and that these overall impressions strongly influence their shopping and patronage behaviour. “Retail store image is an overall impression of a store as perceived by consumers” (Keaveney & Hunt 1992, p.1113). One commonly accepted formal definition of retail store image is “an individual’s cognitions and emotions that are inferred from perceptions or memory inputs that are attached to a particular store and which represent what that store signifies to an individual” (Baker et al. 1994, p.23) In addition to developing different definitions for retail store image, researchers have also identified multiple dimensions of the concept. The general concept of retail store image is described as a combination of a store’s functional qualities and the psychological attributes that consumer’s link to these. Though the exact dimensions have varied over the years, the well-known categorisations of image attributes have consisted of some combination of functional and psychological attributes. For example, some of the more common dimensions identified by researchers have been associated with fashion, selection and quality of merchandise;

customer services and sales personnel; and physical conditions and atmosphere of the store (Lindquist 1974–75; Martineau 1958; Zimmer & Golden 1988).

Dichter (1985) reinforced the idea that ‘image’ refers to a global or overall impression by describing both what an image is and is not. It describes not individual traits or qualities, but the total impression an entity makes on the minds of others — “an image is not anchored in just objective data and details but it is the configuration of the whole field of the object” (Dichter 1985, p.76).

Considerable efforts have been made by researchers in the area of retail store image.

However, the variables used for their studies are very limited or do not cover all the factors associated with retail store image. In the current study, a maximum number of characteristics of retail store image were used to understand the image per se in view of consumer perceptions. “Earlier study focuses on convenience, location, physical attributes, merchandising, sales, store service, value for price, congeniality of store and post transaction satisfaction” (Frisk, 1961, p.14) . However, in this study, a wider range of characteristic attributes which consumers associate with retail store image was taken into account. Forty-seven different closed-end questions representing the retail image variables were asked of respondents; e.g, the scale used was a Likert-type

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10-point scale. Respondents chose the appropriate option for all 47 questions by circling their answers. Respondents were asked to complete the entire questionnaire.

The questions about retail store image consist of variables included physical convenience, appearance, quality of service, merchandising, discounts, reputation, overall impression, deals, after-sales service, salesperson approach, salesperson dealings, handling of transactions by service staff, advertising, computer service, point of purchase, business dealings, complaints handling, friendliness of approach, relationship building by way of sending letters and cards on special occasions, mailers to regular customers and loyalty programs.

Figure 2.8: Part of Conceptual Model: Retail Store Image

A strong brand image offers an organisation several important strategic advantages. A brand distinguishes the goods and services of one seller from those of its competitors.

A powerful brand identity creates a major competitive advantage, that of a well-recognised brand which encourages repeat purchases. Thus, a brand acts as a signal to consumers regarding the source of the product and protects customers and manufacturers from ‘me too’ products that may appear identical. Brand image consists of consumer knowledge and beliefs, stored in the memory as associations, about brand attributes and the consequences of brand use (Peter & Olson 1994). These associations are usually organised in some meaningful manner (Aaker 1991).

Brand images are important because they create value for manufacturers in three ways (Aaker 1991). First, brand images help consumers retrieve and process information.

Second, brand images provide a basis for differentiation and positioning of a product.

Third, brand images involve product attributes and customer benefits that give consumers a reason to buy and use the brand. The value that brand images create for manufacturers is projected also onto the image of the retail stores that carry the

Retail Store Image

Relationship orientation

Involvement Trust

Purchase intent

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brands. One way consumers use to describe retail stores is in terms of their assessments of the brands carried.

A study by Baker et al. (1994) discovered that inferences that consumers made about merchandise quality were direct determinants of retail image. In other words, the merchandise inferences influenced consumers’ thoughts and feelings about a store.

Therefore, merchandise quality can be viewed as a key variable that influences retail store image. However, consumers do not always possess complete information about the merchandise quality of a store, nor are consumers the perfect information processors. Consequently, consumers with incomplete information use various informational cues to make inferences about merchandise quality (Monroe &

Krishnan, 1985).

According to Bitner (1992, p.67), “the dimensions of the store uniqueness act as a package, similar to a product’s package”. A store’s image resembles a brand’s image in its ability to symbolise quality and value (Solomon 1985). Such branding of a store helps differentiate it from its competition and facilitates segmentation and positioning strategies (Bitner 1992). According to Ray and Chiagouris (2009) store uniqueness is a competitive advantage; one which makes the store different from other stores in the category. Positioning stores as unique brands distinct from other stores is an important emerging practice in today’s consumption culture. Through advertising, promotions and placements at every consumer contact point, retail brands become central to a customer’s everyday existence. Ginsburg and Morris (1999) suggested that such

‘buying of experiences’ will become the norm rather than the exception (Pine &

Gilmore 1999). People shop not only for the fulfilment of a functional need but also because shopping in a particular store makes them feel good (Hirschman & Holbrook 1982). The first time you visit a new store, you seek a positive affective experience.

Over time, if you develop a favourable attitude toward the store based on its unique affective environment, a store’s uniqueness is posited to have a direct impact on the store’s effectiveness.

Most retail stores carry a wide range of products at different prices; for example, retailers who carry stocks of different brands of laptop such as HP, Compaq, Asus, Samsung, LG, Toshiba, and Sony. However, in the current study the focus is on people’s perceptions of general merchandise value rather than specific product values.

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Zeithaml (1988) describes value as the trade-off between ‘give’ and ‘get’

mechanisms; it is similar to the definition of value as “what you pay for is what you get” (Sirohi et al. 1998, p.228). This description is based on customers’ evaluations of benefits received over costs incurred. Such evaluations are derived mainly from an interaction between quality and price (Grewal, Krishnan, Baker & Borin 1998; Sirohi et al. 1998). Based on these definitions, valued perceptions are regarded as high-quality merchandise providing good value for money. Several studies have shown that perceptions of value have a positive affect on purchase intentions and behaviours (Baker et al. 2002; Dodds, Monroe & Grewal 1991; Grewal, Monroe & Krishnan 1998; Zeithaml 1988). These evaluations of value have been assumed to directly cause purchase intentions. A very good example of ‘you get what you pay for’ is Monsters HDMI (High-Definition Multimedia Interface) cables; the latest generation of cable used in a compact audio/video interface for transmitting uncompressed digital data. It represents a digital alternative to consumer analog standards — they replace the old red, yellow and white analogue cables connected to the television through Digital Video (DVD). These ordinary cables don’t give high performance to high definition/full high definition quality of pictures through Blue Ray discs. HDMI (high-definition multimedia interface cables is extensively used on TV and Laptop.

There are many cheap brands available in the marketplace ranging from AUD $30 to AUD $50. However, Monsters sell these HDMI cables with a 24K gold separate jacket fire- and interference-proof covering with 16 individual cables in one cable for prices ranging from AUD $150 to AUD $390 in the market with the warranty mission statement of ‘Cable for life’ whereby customers can get a brand new cable if it is faulty in the future. These cables are sold in retail outlets all over Australia. The whole perception of consumers in buying these expensive cables over cheap cables is

‘you get what you pay for’.

When retailers are closer to the ‘tangible-dominant’ end of Shostack’s (1977) continuum, merchandise quality becomes an important value driver (Mazursky &

Jacoby 1986; Wolfinbarger & Gilly 2002). The current study focusses on merchandise quality as part of the customer’s overall quality perception of merchandise and variety provided by the retail store. Merchandise quality consists of number, quality and composition of alternatives (Berry 1969). Prior research has found a positive relationship between perceptions of product quality and perceived value (Monroe

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1990; Dodds et al, 1991). Several authors (Kerin et al. 1992; Sirohi et al. 1998; Baker et al. 2002) have extended this finding to retail settings and used the term

‘merchandise quality’ as a predictor of perceived value. The rationale behind this is that with higher merchandise quality consumer needs will be met more easily, not only because of the wide selection and availability of merchandise, but also because these selections are likely to contain products of higher quality (Szymanski & Hise 2000), which is likely to increase the decision to purchase. Apart from the indirect effect of perceived value on purchase intentions, other studies have also found a direct link between merchandise quality and intentions (Sirohi et al. 1998). Merchandise quality has consistently been found to be important in the retail industry (Baker et al.

2002; Berry 1969; Lindquist 1974; Reardon & Miller 1995; Samli et al. 1998).

Consumers most heavily access brand names as a store information cue when evaluating merchandise quality (Mazursky & Jacoby 1986). Brand names communicate a great deal of information to the potential customer because they have become associated with a bundle of information generated by advertising, word-of-mouth communication, and previous usage of the brand (Stokes 1985). The merchandise, whether perceived favorably or unfavorably, projects an image not only of the brand itself, but also of the store as a whole. Empirical findings imply that retail store image could be improved by linking it with brands that are evaluated favorably, and damaged by association with brands that are evaluated less favorably (Jacoby &

Mazursky 1984). Conversely, brand images may not be as readily influenced by association with retail images. Brand images can be negatively influenced by association with retailers having less favorable images. However, when brand images are associated with retailers having more favorable retail images, there is little change or influence to the brand’s image (Jacoby & Mazursky 1984). This suggests that brand image plays a major role in the development of a consumer’s perception of retail image (Zimmer & Golden 1988). Furthermore, this indicates that brand image, as a construct, is more stable than retail image across various situations. This stability may be attributable to the fact that marketing specifically creates or positions a brand’s image using a rather limited number of congruent dimensions (quality, price and sales communication activities). Thus, brand image may be able to stand on its own as it calls to mind a list of desired attributes and associations that provide value

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to a consumer in a variety of ways regardless of the retailer carrying the brand (Aaker 1991; Ward et al. 1992).

On the other hand, retail image appears to be a more complex construct and, therefore, is less stable than brand image. While merchandise quality and brand are major predictors of retail image, they are not the only predictors (Baker et al. 1994;

Mazursky & Jacoby 1986). This may help explain, for instance, the success of off-price retailers and manufacturers’ outlets. The value provided to the customer in terms of the dimensions of low prices and favorable brand names creates a retail image that is positive in the consumer’s mind. Based on the premise that brand image as an informational cue is heavily accessed by consumers when evaluating stores, the current study considers whether merchandise quality inferences based on brand image will directly influence retail store image. While a few studies have recognised the importance of brand image as an informational cue of merchandise quality, brand image generally has been studied by manipulating the presence or absence of brand names. As pointed out by Stokes (1985), this is a purely academic exercise because few products are marketed without brand names in today’s marketplace.

Consequently, few retail stores carry non-branded merchandise. To remedy this methodological issue, the presence of an anchor brand and the number of recognisable brands a store carries can be considered rather than the mere presence or absence of brand names can be used to examine customers’ perceptions of a store’s image.

Research shows that store image is an important component of a consumer’s store choice and use of a store environment. Most of this research ignores how store image might vary across different consumer segments. The impact of age on the consumer’s final perception of retail store image reveals that shopper’s age significantly affects perceptions of store image. Younger consumers feel more positive about both store characteristics and salesperson attributes than do older shoppers. Retailers employing store image research should be mindful of how the age of different consumers could affect their findings in retail store image (Joyce & Lambert, 1996, p.24).

Trust in an organization refers to the customer’s reliance on the organization’s image before bestowing trust in the salesperson. This factor may be important because, generally, trust does not manifest itself on short notice (Milliman & Fugate 1988), nor are salespeople an inherently trusted occupational group (Rotter & Stein 1971). Thus,

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customers are likely to seek substitutes from which they can derive the confidence to bestow trust. For example, when choosing among car repair facilities, many people base their decisions on recommendations of family or friends in whom they have confidence. These trusted parties substitute the trust gap that exists between the customer and the service provider. By extension, if customers can place their trust or confidence in the organisation represented by the salesperson, it should serve as a trust substitute and facilitate their willingness to trust the salesperson. Conversely, if the organisation does not have a trustworthy reputation, customers will not be willing to bestow trust in its salespersons. Swan and Nolan (1985) suggest that trust in a salesperson is a function of the image of the organisation that the salesperson represents; the organisation’s image can reflect a shadow of the past to attenuate or enhance customer trust depending on its past trust-earning behavior.