Digital Technology in Retail: Impact on Shopper Satisfaction

Digital Technology in Retail: Impact on Shopper Satisfaction

Tan Jing Pei (Anglia Ruskin University, Malaysia) and Omkar Dastane (FTMS College, Malaysia)
DOI: 10.4018/978-1-7998-6477-6.ch011
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Industrial Revolution 4.0 has initiated digital transformation in Asia and resulted in Retail 4.0 forcing shopping malls to upgrade themselves digitally to remain competitive. The purpose of this research is to investigate the impact of upgrading shopping malls with digital retail technology (digital up-gradation) on shoppers' satisfaction mediated by operational performance. This study adopted explanatory, quantitative research by collecting empirical data from 212 shoppers at a famous shopping mall in the city of Kuala Lumpur using convenience sampling. The normality and reliability assessment was carried out followed by confirmatory factory analysis, validity assessment, and structural equation modelling. Findings reveal that digital up-gradation has a direct impact on shopper satisfaction, and operational performance has full mediation effect between them. The chapter then discusses implications, limitations, and future research avenues in this context.
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Smart malls combine retailtainment and technology to deliver a new and improved shopping experience. Today, shopping malls are more multi-functional, tech-savvy, and flexible than before. Malaysia is known as a genuine shopping paradise having almost 700 shopping malls with a total net lettable area of 170 million sq ft hosting many famous international brands having their stores (Asian Cities Report, 2019; PPKM, 2018). While some malls recording footfalls of over 3 million visitors per month, malls that fail to adapt to the changing retail trend face a gloomy future as the biggest challenge is to fill up space amid the current economic backdrop. Kuala Lumpur, the capital and the most cosmopolitan city of Malaysia, has especially witnessed a rapid growing of shopping malls of different size and scale, primarily because of the improved economic situation and ever-increasing demand from the urban dwellers and tourists. The city was voted the 4th best shopping city in the world behind London, Tokyo, and New York. It is then essential to highlight that the mall occupancy rate recorded a drop in average. As compared, the prices of 2018 are 79.3%, which is down from 81.3% in 2017 (EdgeProp, 2019; NAPIC, 2018). The malls are losing shine as vacancies increase and low footfall in the majority of malls.

On the other hand, change in shopping behavior and lifestyle further dampen the situation. Online shopping through electronic as well as mobile commerce has made an adverse impact on shopping malls revenue as this converted shopping malls just a place for socializing and validating various offers before actually making the purchase using online portals. Consumers find additional value elements while shopping from mobile commerce (Dastane, Goi, & Rabbanee, 2020; Goi, 2016). Although there are several risks of online shopping (Tham, dastane, Johari and Ismail, 2019), E-commerce is offering better value propostion (Satar, Dastane, & Ma’arif, 2019). In Malaysia, the shopping mall has become the favourite social place (CNN, 2014). Besides, a report quoted about 20% of the Malaysian urban population spent their weekends in shopping centres (The Sun, 2019; Thiagarajan, 2018). Shopping complexes will continue to struggle in the future, dogged by the opening of more shopping malls at a time when consumers are abandoning these establishments and choosing online purchases, turning these massive structures into deserted buildings (Balaji & Roy, 2017). It forces the mall owner to re-think the key factors to make them survive in today's business landscape.

To respond to such challenges, many shopping malls called for their digital transformation as it presents new opportunities for malls to engage consumers throughout their decision journey. First, they are extending their relationships with customers before and after the mall visit. Secondly, malls are using technology to transform mall usability as a means of improving customer satisfaction. Technology, for instance, can be used to address one of the biggest challenges shoppers faces at the mall – finding parking. Sensors located in parking lots detect how many spots are available on each level and give visual indicators to drivers. Once within the mall, mobile apps can offer quick, easy guides to help shoppers find what they're looking for at today's increasingly large and multi-level malls.

Studies in the past examine the factors impacting shopping mall attractiveness, viz. the attributes of conveniences (location, number of car park bays, etc.), malls concept (design, layout, ambiance, tenant mix, product offering, etc.) and operational performances (cleanliness, security, facilities management and maintenance, etc.) (El-Adly, 2017; Wong & Yu, 2003). Besides, a large number of empirical studies can be found in investigating customer satisfaction and experience in today's retail industry (e.g. Jallow & Dastane, 2016; Lee & Lim, 2017; Rodríguez, Paredes & Yi, 2016). However, there is not much investigation on the dimension of technology adoption or digital up-gradation in the shopping mall and its possible impact on shopper's satisfaction. From a literature perspective, the technology acceptance model and the perceived value, as well as customer satisfaction, have been widely discussed in different industries (Animashaun, Tunkarimu & Dastane, 2016; Tham et al., 2019). Also, limited studies have been found on the importance of technology and its role as a factor in the shoppers’ satisfaction. To fill this literature gap, the examination of the impact of technology usage on shoppers’ satisfaction needs to be investigated.

Key Terms in this Chapter

Artificial Intelligence (AI): Based application approach get customer for betterment in getting information and engagement than before. AI enable video surveillance detects people and improve the level for people tracking, counting and searching. The staff has to realign or reorganised in order to facilitate them with high level of information that stored in AI application.

Mobile Application (MobileApp): In the shopping mall context, MobileApp is the mobile phone application developed for shoppers to create engaging experience with key features such as showing the direction of the retail shops, accessing loyalty programs, downloading vouchers, announcing on mall initiate activities and in-store deals of the tenants. Such apps are of utility to shoppers and in tern useful for shopping malls to understand shopper’s behaviour in driving footfall.

Digitalized Media Board: These are electronic or digital advertising boards a continuous advertising loop and editorial material. The advertising content can be changed in real time and can display different messages at different times of the day. It also enable a personal or individual interaction, once integrated QR code system in the visual. It improves information dissemination and enhance the image quality with high resolution.

Augmented Reality (AR) and Virtual Reality (VR): The aim of AR is to create immersive experiences, interactive marketing campaigns, and innovative product experiences for consumers Beyond consumer engagement, AR technology can be used to measure event, advertisement and campaigns by tracking user behaviour, location, and interaction patterns in real. VR allows consumers to experience products in a realistic environment, as well as collect efficient information prior to visiting a physical store. The use of VR is enabling 360-degree view, both AR & VR application enable greater user experiential. It is getting popular to see retailer adopt AR & VR in their store.

Quick Response Code (QR): It enables easy reading of information and used to store various form of information such as images, videos, web-links and a lot more. The information that mall revealed upon scanning the QR code include directory (shop’s location), car park bay location, discounts, promotion, etc. From a shopper’s point of view, it provide convenience, and provide efficient shopping experience.

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