Ambient Encounters in Retail “Discounters”: How Store Environment Drives Customer Satisfaction

Ambient Encounters in Retail “Discounters”: How Store Environment Drives Customer Satisfaction

Cristina Calvo-Porral (University of La Coruña, Spain)
DOI: 10.4018/978-1-7998-2220-2.ch001

Abstract

Cheap prices are the central positioning criterion of discount stores and the key variable explaining the intention to shop in discounters. Accordingly, discounters design their stores to maximize their efficiency. However, price may explain only a part of customer satisfaction. The purpose of this study is to delve into the environmental factors affecting discount retail store satisfaction. A conceptual model is empirically tested on the influence of discount store environmental attributes of customer satisfaction. Data are analyzed through partial least squares-structural equation modeling (PLS-SEM) on a sample of 381 customers. Findings show that factors, different from low prices, influence satisfaction with discount stores. Despite customers seek for low prices, the store personnel positively influences customer satisfaction, followed by a convenient product assortment and an attractive product layout and a convenient store location. Discount store managers may use the store personnel as a way to differentiate from other retail competitors in a cost-service tradeoff.
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Introduction

In a context of overabundance of retail choices, discount stores have emerged as an important type of retailer and nowadays could be considered the prevailing retail format. For this reason, the understanding of the discounter phenomenon is quite important and marketing researchers have mostly examined the success of retail discounters from a strategic and positioning perspective (Morschett et al., 2006), but only few of them focus on the motivations for shopping at discounters (Schmitz, 2009). Further, academics and practitioners have traditionally characterized discount store customers as individuals who seek low-cost products, since the core of the discount retail format selling proposition are cheap prices. In fact, price image of discounters is the key variable explaining the intention to shop in discounters, and an increased number of consumers have come to patronized discounters to save on their grocery budget. However, one question that remains unanswered is whether low prices explain only a part of customer satisfaction with these retailers.

Retailers acknowledge the importance of store environment as a tool for consumer satisfaction and for market differentiation; and for this reason, retailers design store environment in a manner that will enhance customers’ pleasant feelings, assuming that it will lead to a higher willingness to purchase and to longer stays inside the store (Mano, 1999). More precisely, customers may experience store shopping as favorable or unfavorable -or even delightful or terrible-, depending on both the enduring aspects of the store environment such as store ambience or design, and more transient aspects like merchandise layout and interactions with the store personnel (Esbjerg et al., 2012). However little is known about the environmental cues that influence customers’ satisfaction with discount stores.

In this context, the present research examines the influence of the environmental attributes of discount stores on customer satisfaction. More precisely, the objective of this study is to analyze the influence of the external and internal store environment, merchandise layout and assortment and store personnel on customers’ satisfaction, in order to answer the following question: “Does price explain only a part of customer satisfaction with discounters?”. Further, in the present study it is hypothesized that customers expect benefits from the discount shopping experience beyond the strictly utilitarian benefit of low prices. Therefore, the major contribution of the present research is the empirical research on the influence of the discount store environmental attributes on customer satisfaction.

Key Terms in this Chapter

Store Environment: The store environment (or store atmospherics) describes the effort to design environments in order to produce specific emotional effects in the customer that enhance his/her purchase probability ( Kotler, 1974 ).

Customer Satisfaction: It is a measure of how products and services supplied by a company meet or exceed customers’ expectations. In addition, customer satisfaction could be understood as the overall happiness that the customer feels when using a company’s products or services.

Merchandise Assortment: The store merchandise or product assortment is the different types of product lines and products that the retailer offers for sale.

S-O-R Model: The S-O-R (stimulus-organism-response) theoretical framework explains how store environmental cues influence consumers’ responses and behavior in the retail setting.

Store Personnel: The store personnel are the individuals ultimately responsible for the daily management and operations of a retail store. Further, the store employees play a major role in creating a positive shopping experience for customers, because they are responsible for satisfying customers’ needs and expectations.

Store Layout: The store layout is the strategic use of space and the placement of items within the store to influence the customer experience.

Discounter: A discount store could be defined as a retailer that offers a limited assortment of products, with limited service at very low prices (Levy & Weitz, 2009 AU41: The citation "Levy & Weitz, 2009" matches the reference "Lévy, Weitz, 2009", but an accent or apostrophe is different. ).

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