How artificial Intelligence will affect the future of retailing. Guha, Grewal, Kopalle, Haenlein, Schneider, Jung, Moustafa, Hedge & Hawkins


Artificial intelligence (AI) will substantially impact retailing. Building on past research and from interviews with senior managers, we examine how senior retailing managers should think about adopting AI, involving factors such as the extent to which an AI application is customer-facing, the amount of value creation, whether the AI application is online, and extent of ethics concerns. In addition, we highlight that the near-term impact of AI on retailing may not be as pronounced as the popular press might suggest, and also that AI is likely to be more effective if it focuses on augmenting (rather than replacing) managers’ judgments. Finally, while press coverage typically involves customer-facing AI applications, we highlight that a lot of value can be obtained by adopting non-customer-facing applications. Overall, we remain very optimistic as regards the impact of AI on retailing. Finally, we lay out a research agenda and also outline implications for practice.

Evolution of retail formats: Past, present, and future. Guarin, Jindal, Ratchford, Fox, Bhatnagar, Pandey, Navallo, Fogarty, Carr & Howerton. 2021. Journal of Retailing.

In this paper, the authors review current literature on retail formats and propose a new customer-centric framework for retailers to focus on as they continue to innovate and evolve. Specifically, they review the literature on how formats compare in their attributes and compete with each other; the role of customer behavior in format choice; and developments in multichannel and omnichannel retailing. They propose a framework for retail formats suggesting two paths – either reduce friction in the customer journey or enhance customer experience. They discuss the challenges faced by offline (physical store-first) and online (digital-first) retailers and elaborate on strategies each type of retailer is pursuing to address these challenges. Finally, they offer directions for future research in this domain. They conclude by calling for newer digital-first and physical-first players to continue coming up with different customer-centric formats, which they predict will slowly morph into integrated retailers, leaving space for newer players to enter the market and hence keep the wheel of retailing spinning.

Ep. 18 - Going Online for Groceries: Drivers of Category-Level Share of Wallet Expansion. Campo, Lamey, Breugelmans & Melis, 2021. Journal of Retailing

Some grocery product categories may be more successful than others in terms of stimulating consumers to increase their share of wallet (SoW) when they start buying through the online channel of a grocery chain. This study explores the circumstances in which online and multichannel marketing mix instruments determine the extent of category-level SoW expansion. To do so, the authors use U.K. household scanner panel data, covering online and offline purchases by 3,311 households in 59 categories of four multichannel retail chains. The results indicate that the effectiveness of online and multichannel marketing mix instruments for stimulating expansion is moderated by category characteristics, such that a selective approach to making decisions about the online price, online assortment breadth, online/offline assortment integration, and online national brand proliferation, tuned to account for category differences, can increase category-level SoW for the online-visited chain.

Understanding retail experiences and customer journey management. Grewal & Roggeveen, 2020. Journal of Retailing.


Customer journey management (CJM) and understanding the role of customer experiences at each stage of the journey is of paramount importance to retailers and manufacturers to survive and thrive in this technology intensive environment. In this special issue we have focused on the following themes: the role of technology, the importance of social, cultural and political factors, and the role of retail environment, numeric information, merchandise, and packaging. We also highlight that the customer journey can be both looping and nonlinear in nature and involves cognitive, emotional, and behavioral responses.

As emerging markets open, they attract large domestic and international retailers, which compete with traditional local small stores. This study investigates whether this influx of large stores is inevitable, by focusing on consumers' motivation for selecting a retail store, and the association between these motivation dimensions and the shopping patronage. The results from an empirical study conducted in Mexico indicate that consumer's preference for small stores is positively motivated by functional benefits and familiarity with small stores; and negatively associated with the functional benefits offered by large stores. These motivational dimensions are also positively associated with the share of wallet spent at small stores. While gender exhibits mixed effect on preference for small stores and the share of wallet, women do feel that large stores provide better functional benefits and support for the local economy. Finally, the study details the research and managerial implications of the findings.

In Sapiens, Professor Yuval Noah Harari spans the whole of human history, from the very first humans to walk the earth to the radical—and sometimes devastating—breakthroughs of the Cognitive, Agricultural, and Scientific Revolutions.

Coffee shop consumers’ emotional attachment and loyalty to green stores: The moderating role of green consciousness. Jam, Kim & Lee, 2014. International Journal of Hospitality Management.

This study examines the effects of green practices on the development of consumers’ store attachment in coffee shops and the role of consumers’ store attachment in predicting loyalty to green stores and green products. This study further investigates whether consumers with a high degree of green consciousness respond more positively to green practices than other consumers do. The researchers administered a survey to U.S. coffee shop customers and collected data from web-based online panel members using an online survey. This study employs structural equation modeling to test the hypothesized relationships. The findings showed that green practices had a significant influence on consumers’ attachment to a store. In addition, consumers’ attachment to green stores had a positive effect on store loyalty, and store loyalty was significantly associated with product loyalty. Further investigation of the moderating effects of green consciousness showed that in contrast to less green-conscious consumers, highly green-conscious consumers responded more positively to stores’ green cues, showing stronger store attachments and exhibiting greater loyalty to green stores and green products. The theoretical and managerial implications of these findings are discussed.

Ep. 13 - Creating consumer attachment to retail service firms through sense of place. Brocato, Baker & Voorhees, 2015. Journal of the Academy of Marketing Science.

Fostering attachment between consumers and organizations is developing into a cornerstone of relationship marketing strategy. However, little is known about how an organization can develop strong emotional ties with consumers. Our research addresses one aspect of this gap by showing that in atmosphere dominant service firms, sense of place leads to place attachment, which in turn plays a critical role in driving desirable customer behaviors. In Study 1 we demonstrate that sense of place influences the strength of consumers’ attachment to a service location, which ultimately has positive effects on consumers’ behaviors. In Study 2, we identify characteristics that influence the sense of place dimensions and extend the model to better account for the dynamics of social relationships that develop within a service firm. This research provides an initial investigation into how organizations can better manage the service place and provides a rich framework for future research on managing attachment with service consumers.

Loyalty formation for different customer journey segments. Herhausen, Kleinlercher, Emrich & Rudolph, 2019. Journal of Retailing.

The proliferation of new touchpoints empowers today’s customers to design their own journey from search to purchase. To address this new complexity, we segment customers by their use of specific touchpoints in the customer journey, investigate the association of several covariates with segment membership, consider the rise of mobile devices as potential “game changers” of existing segments, and explore how the relationships among product satisfaction, journey satisfaction, customer inspiration, and customer loyalty differ across segments. Based on anticipated utility theory and using latent class analyses on large-scale data from two samples of 2,443 and 2,649 journeys, we identify five time-consistent segments―store-focused shoppers, pragmatic online shoppers, extensive online shoppers, multiple touchpoint shoppers, and online-to-offline shoppers―that differ considerably in their touchpoint and mobile device usage, their segment-specific covariates, and their search and purchase patterns. The five segments remain unchanged in the two data sets even though the usage of mobile devices has increased substantially. Furthermore, we find that the relationships between various loyalty antecedents and customer loyalty differ between the segments. The insights from this paper help retailers develop segment-specific customer journey strategies.

Place Attachment in Commercial Settings: A Gift Economy Perspective. Debenedetti, Oppewal & Arsel, 2014. Journal of Consumer Research.

Place attachment is one's strong emotional bond with a specific location. While there are numerous studies on the topic, the literature pays little attention to commercial settings. This is because they are seen as too insipid to rouse attachment. Consumer research, however, suggests otherwise. To address this disparity, the authors investigate how people develop, experience, and act on place attachment in commercial settings. Findings from consumer in-depth interviews and self-reports conducted in France reveal that place attachment develops through perceptions of familiarity, authenticity, and security and evolves into experiences of homeyness. Consumers find these encounters of homeyness extraordinary and respond by engaging in volunteering, over-reciprocation, and ambassadorship toward the place. The authors further theorize these findings through a gift economy perspective and identify a tripartite exchange between the consumer, the proprietor of the place, and selected people from the consumer's social network.

Ep. 10 - Marketing-Mix Response Across Retail Formats: The Role of Shopping Trip Types. Jindal, Zhu, Chintagunta & Dhar, 2020. Journal if Marketing.


The authors study differences in the effects of prices, nonprice promotions, and brand line length on brand shares at different retail formats. Their conceptual framework rests on the presence of trip-level fixed and category-level variable utility components and shows how the trade-off between these components results in (1) different formats visited on different types of shopping trips and (2) differential marginal sensitivities of brand shares to changes in marketing-mix variables across trip types. Together, these provide predictions on how marketing-mix variables differentially affect brand shares at various retail formats. The authors use Nielsen Homescan and store-level data from 2011–2014 and analyze the top ten spending product categories across four retail formats—convenience stores, drugstores, supermarkets, and mass merchandisers—in over 200 Nielsen markets. Implications for brand manufacturers managing the marketing mix across different formats are offered.

Multi-channel shopping: channel use among rural consumers. Johnson, Yoo, Rhee, Lennon, Jasper & Damhorst, 2006.


The research purpose was to identify whether changes occurred between 2000 and 2003 in the retail channel use of rural consumers for searching product information and for purchasing food and fiber products and to investigate whether differences existed between channel use groups (i.e. store only shoppers, store and catalog shoppers, and multi‐channel shoppers) concerning perceived time property, satisfaction with local offerings, community attachment, shopping criteria, and financial security.
Design/methodology/approach
Survey methodology was used. Questionnaires were mailed to participants living in non‐metropolitan statistical areas of the USA with populations less than 12,500. In 2000, 2,198 participants returned the questionnaire. Follow‐up questionnaires were mailed to the same participants during 2003 and returned by 847 participants. The analysis is based on the responses of the 847 participants.
Findings
To search for information on apparel, food, or home furnishing products, internet use increased slightly as did use of the internet to purchase apparel and home furnishings. Multi‐channel shoppers rated themselves as time‐pressed, dissatisfied with local offerings, unattached to their community, and unconcerned with financial security while shopping.
Practical implications
Rural consumers are slowly increasing their use of internet even as they report their satisfaction with shopping with local brick and mortar stores increased during the time period studied. The time is right for rural retailers to enhance both personal and professional relationships with their customers. Rural retailers can capitalize on consumer satisfaction and provide outstanding value and service to keep local customers in local markets.
Originality/value
The paper provides information on new and different retailing practices that satisfy rural consumers in the USA.

Ep. 8 - Importance ratings of grocery store attributes. Nilsson, Garling Marell & Nordvall, 2015. International Journal of Retail & Distribution Management

The purpose of this paper is to develop a comprehensive set of grocery store attributes that can be standardized and used in empirical research aiming at increasing retailers’ understanding of determinants of grocery store choice, and assessing how the relative importance of the attributes is affected by consumer socio-demographic characteristics and shopping behaviour.
Design/methodology/approach
An internet survey of 1,575 Swedish consumers was conducted. A large set of attributes was rated by the participants on seven-point scales with respect to their importance for choice of grocery store. Principal component analysis (PCA) resulted in a reduced set of reliably measured aggregated attributes. This set included the attractiveness attributes price level, supply range, supply quality, service quality, storescape quality, facilities for childcare, and closeness to other stores, and the accessibility attributes easy access by car, easy access by other travel modes, and availability (closeness to store and opening hours).
Findings
The results showed that accessibility by car is the most important grocery store attribute, storescape quality and availability the next most important and facilities for childcare the least important. It was also found that socio-demographic factors and shopping behaviour have an impact on the importance of the store attributes.
Originality/value
A comprehensive set of attractiveness and accessibility attributes of grocery stores that can be standardized and used in empirical research is established. The results are valid for the Swedish-European conditions that differ from the conditions in North America where most previous research has been conducted. The results reveal the relative importance grocery-shopping consumers place on controllable attractiveness attributes compared to uncontrollable accessibility attributes as well as the relative importance of the attributes within each category.

Ep. 7 - Consumers’ cross-format behaviour in an emerging retail market: Multiple discriminant analysis. Jayasankaraprasad, 2014. Journal of International Consumer Marketing. - - The evolution of store formats and the resultant consumers’ cross-shopping behavior has been the prevalent trends in Indian food and grocery retailing. More recently, however, the growing incidence of cross-format shopping—defined as consumers shopping regularly at each of two or more types of grocery retail outlets—has become a subject of research, as it is regarded as a necessary evil associated with concentric retail growth. The aim of the article is to identify factors influencing consumers’ cross-format shopping in relation to four retail formats—kirana stores, convenience stores, supermarkets, and hypermarkets. Furthermore, it investigates the impact of identified factors on repatronage behavior relative to four types of retail outlets. The mall intercept survey method was used to collect data from 1,040 adult food and grocery consumers. Results from exploratory factor analysis and zero-order correlation matrix indicate that value for money, value for time, shopping situations, shopping motives, and store attributes are significant and positively correlated with cross-format shopping. The multiple discriminant analysis provides empirical support, suggesting that value for money, task definitions, value for time, shopping trip pattern, basket size, price-conscious and local shopping motives, price promotions, customer service, store environment, distance to store, and monthly household income are not only the significant predictors but also able to discriminate repatronage intentions toward four types of retail outlets in an emerging retail market. The present study provides useful information on consumers' intertype cross-shopping (e.g., crossing from kirana store type to supermarket type and vice versa) between four types of grocery retail outlets.

Recent decades has seen continued rationalization in the retail sector and the growth of ‘big-box’ or ‘category-killer’ store formats leaving the small business struggling to compete and at a loss to determine how it can ‘win’. We propose that a segment of shopper exists that shop at small businesses for specific reasons. Using a choice experiment approach to investigate the reason consumers choose where to shop amongst small, independent and large scale retailers we see this different segment of consumers appear. Best:worse is a choice method that forces choice amongst a range of variables, designed to uncover ‘actual’ reasons for decisions made. This paper finds consumer choice for retail stores types identifies a segment that may assist in the sustainability of smaller stores if they cater to the attributes their target consumers seek. This is a contribution to small business researchers and small business strategy and practitioner effort in the marketing and design of small retailer offering.

The objective of this study is to consider how symbolic acts, such as those emphasized by Wal-Mart, affect retail store choice. Acts with much symbolic meaning include support of community charities, frontdoor greeters, and patriotic displays. In logit analyses of survey data from low-priced department store shoppers in the Atlanta, Chicago, Indianapolis, Dallas/Fort Worth, and Kingston, Canada markets, it was found that being identified as having a strong community reputation not only directly affected store choice, but also moderated the effect of the other determinant price, value, and location attributes.

We study the state of food retail system serving an ethnic minority community. This group, Israeli Arabs, enjoys a relatively high standard of living but continues to make many food purchases in a variety of small, specialized retail food formats. In contrast, the surrounding Jewish population is mostly shopping in supermarkets.Data from a survey of consumer shopping behavior across formats of different product lines are used to identify the barriers to the advancement of the supermarket format in this minority sector. Our study shows that socioeconomic factors, found in earlier supermarket diffusion studies to be the main barrier, have no impact in this case. We identify the tendency to purchase perishable food items in traditional outlets and the geographical diffusion barrier (distance of supermarket formats) to be the main limitation on supermarkets’ market share growth. Further, we find that both these factors are influenced by underlying cultural and ethnic factors characterizing the study population.

Retailers have always worked to establish close relationships with customers through the retail marketing mix. Thus, the literature has a long tradition of testing the effects of various instruments on retail patronage. This meta-study synthesizes prior research into one comprehensive framework. We use 14,895 effect sizes reported by more than 239,000 shoppers from 41 countries extracted from 350 independent samples, to test the impact of 24 marketing-mix instruments on retail patronage. Specifically, we investigate the direct and indirect effects of these instruments on store satisfaction, word of mouth, patronage intention, and behavior. Product and brand management related instruments display the strongest effects on most outcome variables, whereas price, communication, service and incentive management instruments affect only selected outcomes. Distribution management turns out to be of secondary importance. However, the effectiveness of these instruments depends on the specific shopping context (food/non-food, shopping frequency, single store/agglomeration, hedonic/utilitarian), the retail environment (gross domestic product, country innovativeness, retail sales share, retail employment, Internet era), and the employed method (participant type, study design, data source). Specifically, we reveal most differences for hedonic shopping environments and developed countries. Also, the store’s advertising and atmosphere have gained importance in the Internet era, while purchase incentives, in-store orientation, and store location have lost relevance. This study contributes to a synoptic understanding of the comparable effectiveness of retail marketing instruments on retail patronage. It offers insights into the effectiveness of marketing-mix instruments and provides guidance on whether and when to invest in them. It also presents an agenda for future research on marketing-mix instruments.

Factors contributing to rural consumers' inshopping behavior: Effects of institutional environment and social capital. Jiyoung Kim & Leslie Stoel, 2010. Journal: Marketing Intelligence & Planning. Purpose - The purpose of this paper is to examine how shopping behavior of rural consumers is affected by perceptions of local retailers' social norm-based activities and task-oriented actions, and social capital within the community. Design/methodology/approach – A mail survey is distributed using a modification of Dillman's method; 524 usable surveys are collected. Multi-group analysis in structural equation modeling is employed for the data analysis. Findings – The findings of the paper reveal significant relationships between institutional action and legitimacy, legitimacy and support, and value and support. The moderating effect of social capital on the relationships between institutional action and legitimacy, legitimacy and support, and value and support are significant. Research limitations/implications – This paper extends previous research by including both social environmental factors (social capital), and retailers' social actions in explaining consumer support. Limitations of the research design are discussed and directions for future research are suggested. Practical implications – This research provides rural retailers with ideas for marketing solutions that use socio-norm related (i.e. institutional action) and task-oriented (i.e. performative action) factors to attract local shoppers. Originality/value – This research adds to the current stream of rural research by integrating institutional theory and social capital theory to propose a conceptual framework. This research is significant as the study results provide implications to rural retailers and further to the community, as the sustainability of the rural sector is closely related to the well-being of the entire community.

A categorization of small retailer research? - Runyan & Droge, 2008. Journal of Retailing.

This paper presents an extensive review of 20+ years of research on small, independent retailers. For each of 134 articles, the focus, theory, analysis, methodology, and key findings were tabled. The articles were classified into distinct streams: strategy; structure; channels; patronage; and labor. Each stream is discussed, separate themes within a stream are identified, and directions for future research within that stream are offered. Directions for future research are also suggested for the small retailing field as a whole. In particular, we address the lack of construct development and the dearth of theoretical underpinning to much of the research.