The explosive growth of the Internet has enabled technological platforms that have created empowered and informed consumers who know what to shop, when to shop and where to shop. Social media platforms have facilitated this evolution by fundamentally transforming the way consumers interact and share information. Consumers are more tech-savvy than ever and motivated towards delving deeper into researching products and prices before making their purchases. For their part, firms are devoting more and more resources into engaging customers in the online retailing environment, redefining the way they connect with their customers. This chapter provides an organizational framework on social media marketing and retailing activities that can help gain deeper insights into social media research, and guide future research into social media marketing-related topics and issues. It describes factors that potentially influence the effectiveness of social media efforts of a firm, and discusses the consequences of these activities.
Rishika Rishika and Ramkumar Janakiraman
Jeffrey R. Parker and Anthony R. Koschmann
In addition to the challenges of choosing a store’s assortment, managing promotions, optimizing prices, and ensuring a stable supply chain – retailers also need to consider how product presentation influences consumers’ preferences. After all, having what the consumer wants when and where they want it may not be enough if the products are not presented in a manner consistent with how the consumer shops. As it is often the literal touch-point between the consumer and the product, this chapter focuses on how shelf layout plays a vital role in consumers’ preferences. It considers both traditional physical shelves and online/menu-based displays and discusses how manager-controlled shelf-layout variables can influence both information gathering and, crucially, consumers’ choices. The chapter closes with a discussion on opportunities for future researchers in the area of shelf layouts.
Bart J. Bronnenberg
Retailing is an important sector of the economy: it is roughly equal in size to the manufacturing sector, and still expanding in many countries. Why do economies have such a large retail sector and what does it produce? The chapter explores this question by looking at the retail sector through the lens of household production theory. It discusses how structural changes in consumers’ time allocation impact retail strategy, and conversely, how retail innovations that make purchasing and home production more convenient impact the purchasing habits and time use of consumers. In so doing, it connects the marketing literature on retailing to the economic literatures on household economics and on time use. The chapter also provides suggestions for future research into the role of consumer time use on innovation in retailing, and vice versa.
Retailer promotions are sales promotions that retailers offer to consumers. They include price promotions, like temporary price reductions (TPR) and coupons, as well as non-price promotions, like features and displays. The effectiveness of retailer promotions is interesting to both retailers and manufacturers. At the same time, the use of retailer promotions is not trivial. While they typically increase sales quickly and strongly, they come at high costs, especially when price promotions reduce margins, so that the profitability of promotions for retailers is not obvious. This chapter provides a summary of what is known about retailer promotions. It describes instruments available for retailer promotions, discusses how promotions work, and presents empirical findings on promotion effectiveness. Even though research on retailer promotions to date has already produced many results, the chapter identifies still open questions that wait to be answered.
Retailers have become the gatekeepers to shoppers, the end users of CPG products. A relative handful of retailers now controls access to enormous numbers of consumers. This situation is a far cry from the 1960s and 1970s, when big CPG manufacturers bossed around much smaller retailers. This chapter provides an overview of why retailers are in the driving seat. It distinguishes between two sources of retailer power: growing retailer scale, and growing retailer sophistication. Retailers have grown in scale through internationalization, a consolidating wave of mergers and acquisitions, and buying group membership. However, the playing field is tilted further in favor of large retailers than is indicated by their sheer size. Retailers have grown into sophisticated businesses, that are growing organically through multi-channel operations and that have become competitors to their suppliers by selling private labels.
Óscar González-Benito, Mercedes Martos-Partal and Álvaro Garrido-Morgado
Store formats distinguish types of stores. From a demand perspective, they can be defined as broad, competing store profiles that provide benefits to match the needs of different types of consumers in varied shopping situations. This chapter reviews the competitive role of store formats and their implications for retail marketing strategy. The core challenge for research into store formats is gaining a better understanding of the role of store formats in the competitive structure, including the match between the available portfolio of store formats and the heterogeneity of consumers’ shopping needs and benefits sought. By providing insights into these issues, the chapter can help retailers to configure store format portfolios, manage store formats to deal with changes in the competitive environment, configure a retail marketing plan that is congruent with existing store formats, and manage growth through new store formats or through the adaptation of current formats to new markets.
Brian Ratchford and Dinesh K. Gauri
Changes in retail productivity (i.e., the ratio of outputs to inputs) can have a substantial impact on the general performance of the economy. Also, since differences in productivity between retail firms can create important competitive effects, retail managers need to understand how their firm’s productivity compares to the productivity of their competitors, and they need to be able to pinpoint areas of strengths and weakness. For both of these reasons retail productivity has a long history of research. Since the Internet and information technology have triggered major changes in the nature of retailing, understanding retail productivity has become especially important in recent years. This chapter presents and compares different approaches to measuring productivity. Next, it discusses the drivers of productivity change, and highlights the trends in retail productivity over time. Finally, by summarizing previous empirical studies, it benchmarks productivity between different retail firms and stores.
Zhiling Bei, Katrijn Gielens and Marnik G. Dekimpe
The landscape of the retail industry has witnessed dramatic changes, both globally and locally. Some retailers are thriving, adding more and more stores to their portfolio, while other retailers are struggling to keep pace with their competitors, and even have to shut down their business. Extant literature does not provide a systematic review on entries and exits in the retail industry, leaving managers with little guidance on how to assess the impact of such decisions on their own performance, on competitors, on consumers, and on society at large. This chapter summarizes recent insights on entries and exits in the retail sector. Focusing on brick-and-mortar operations, it discusses four phenomena in the global retail industry: (i) local entry, (ii) international/regional entry, (iii) local exit, and (iv) international exit. It also identifies new trends related to online retailers that are in need of more research.
Els Breugelmans, Els Gijsbrechts and Katia Campo
Product unavailability is a frequently occurring and universal issue, and a major concern for retailers and manufacturers alike. In this chapter, the authors focus on product unavailability within a consumer packaged goods context, taking the perspective of the retailer. They distinguish between four types of unavailability based on their timing (temporary versus permanent) and scope (narrow versus broad): out-of-stocks, permanent assortment reductions, brand delistings and conflict delistings. These four product unavailability types significantly differ not only in their nature and underlying causes, but also in the (prevalence of) response options available to consumers, and the ensuing sales losses for the retailer. Building on extant literature, the authors discuss the factors that moderate the sales implications of different unavailability types, and the managerial actions that may mitigate their negative impact. Finally, the authors also highlight several substantive and methodological issues that remain currently unaddressed and constitute a fruitful future research agenda.
Alexander Chernev and Ryan Hamilton
Price image reflects customers’ perception of the overall level of prices at a given retailer. The authors propose a conceptual framework delineating price image antecedents and consequences, and discuss factors that are likely to influence the formation of price image. In doing so, the authors challenge the conventional wisdom that price image is determined solely by the prices of the items carried by a particular retailer and, consequently, that managing (lowering) price image merely involves managing (lowering) this retailer’s prices. Simply lowering prices without managing the other price image drivers might not be sufficient to produce a significant change in a retailer’s price image. To effectively manage price image, retailers must also optimize non-price factors, such as the dispersion of prices across the different offerings carried by the retailer, the rate and magnitude of price changes over time, price-related communications, the physical characteristics of the store, the level of service offered, and the retailer’s policies. In addition, the authors delineate two basic ways in which price image can influence consumers: by influencing consumer beliefs about the competitiveness and fairness of a retailer’s prices and by influencing such consumer behavior as which store to patronize, whether to make a purchase from a given store, and how much to purchase.