Inward retail internationalization and exogenous – based outshopping on the US-Mexico border

Abstract

PurposePrevious research on the internationalization of retailing typically focused on retail companies crossing borders to enter other countries. Yet, a large number of people cross country borders to outshop in neighboring countries. This form of inward retail internationalization has received little attention in the literature. To address this void, the purpose of this paper is to investigate the strategies of retailers in a border zone setting.Design/methodology/approachThe authors collected data from 109 US retailers on the USA–Mexico border. The survey instrument included questions that captured the participants’ opinions regarding the importance of Mexican consumers, retail mix strategies, performance issues and overall retailer characteristics.FindingsThe findings show that US retailers perceive cross-border consumers as important to their performance. Interestingly, the findings also suggest that border zone retailers do not adapt their retail mix strategies with this target market in mind.Research limitations/implicationsThe research was conducted at one particular border zone with its own unique characteristics. It is not clear whether the authors’ findings would apply in other inward internationalization contexts (e.g. medical tourism) or border zones. Future research should delve much more deeply into understanding outshopping motivations in border zones, but also the reasons why retailers do not actively engage in marketing their establishments to this target market.Practical implicationsThe authors’ findings have interesting implications for retail managers in border zones. While exogenous and uncontrollable advantages on one side of the border may attract customers away from the other side of the border, retail mix customization under the control of retail managers may actually stimulate similar or better results. Border zone retailers are encouraged to engage in efforts to understand the border zone consumer and engage in programs directly targeted at them.Originality/valueThe study is grounded in theory and empirically assesses the retailers’ own contributions to enhancing their inward internationalization performance. By using the model of secondary boundary effects developed by Clark (1994) as their theoretical prism, the authors have put forward hypotheses, which address the aforementioned issues.