Effects of retail organisation design on improving private label merchandising

Abstract

Purpose This paper aims to examine empirically whether and under what organisational design conditions retailers can benefit from private label (PL) merchandising improvement. Design/methodology/approach The study tests hypotheses using a structural equation model and data obtained from general merchandise managers at 190 supermarket retailers in Japan. Findings The results reveal that both centralised merchandising authority and store cooperation between merchandising and store divisions motivate PL merchandising improvement, which strengthens PL competitiveness. In addition, outcome-based merchandiser control strengthens the positive relationship between store cooperation and PL merchandising improvement. However, regarding centralised merchandising authority, it is found that outcome-based control had no significant moderating effect. Research limitations/implications To generalise the findings, it may be desirable to reflect data from store divisions for at least two constructs of interdepartmental structure and coordination. Also, it will remain a challenge to produce objective financial outcomes, such as sales, profits or market share, of PL merchandise to empirically test PL contributions to a retail store or company. Practical implications It is important for retail managers to understand their merchandisers’ efforts and behaviours to continuously improve PL merchandising activities. It is strongly recommended that retail managers continue to find ways to motivate their merchandisers. Originality/value Drawing on the philosophy of continuous improvement, this study suggests a novel approach to retail merchandising management that investigates how organisational design can influence better PL merchandising. To highlight the growing role of retail merchandisers, often ignored in the PL literature, this study advances this knowledge about the organisational design–strategic behaviour linkage by empirically testing interactions between different aspects of retail organisation design.