The Impact of Shopping Orientations on U.S. Consumer’s Retail Channel Choice Behavior toward Luxury Goods Purchases*

Abstract

The revenues generated by the luxury goods industry is estimated to reach $1 trillion by 2010 (Luxury Institute, 2007; Silverstein & Fiske, 2005). According to the Bain & Co., the luxury goods spending in the U.S. itself is projected to reach approximately $275 billion in 2011 of which is eight percent growth from the expenditure in 2010 (Lamb, 2011). In 2011, it is expected that the U.S. trend in increased market shares in the luxury goods industry will be mirrored in the global luxury economy and industry. Despite of the continued worldly economic stagnation in the first decade of 21st century, the growth of the luxury goods market has been observed in the emerging markets throughout the world especially China (Global Luxury Retailing, 2011; Lamb, 2011; The Luxe Groupe of Range Online Media, 2010). In this paper, we conceptualize luxury goods as those that have premium brand image, provide pleasure as a central benefit and utility or functional benefits as peripheral benefits based on the previous research (Kapferer, 1997; Vigneron and Johnson, 2004). With the technological advancement in the retailing sector, many luxury brands and retailers launched the multichannel retailing strategies to reach their target market through various retail formats and to provide more convenience of access to the brands and/or retailers. That practice resulted in the fact that many luxury brands have online presence of their luxury brand image. The aim of this study was to investigate the effect of consumer shopping orientation on repeat purchase behavior of luxury goods occurred via various online and offline retail venues in the U.S. multichannel retail environment. We examined the influences of six consumers’ shopping orientation factors on their repeat purchases of luxury goods made via eight different retail channels. Using a national purposive sampling technique, a total of 1,422 U.S. consumers whose annual household income is greater than $150,000 provided responses to our online survey. A self-administered questionnaire was developed based on the previous literature. The questionnaire consisted of three sections: 1) shopping orientation, 2) frequencies of luxury goods purchases made via various channels, and 3) demographic information. Multivariate data analyses including principal factory analysis and multiple regression analysis were employed to examine the research questions. The findings showed that various shopping orientation factors explained each channel in a unique manner. For instance, hedonic shopping orientation was significantly positively influenced the repeat purchase behavior in all eight retail channels. Bargain shopping orientation negatively impacted the repeat purchase behavior of luxury goods made via upscale-image retailers, while positively influenced the behavior via discount-image retailers. Fashion/brand conscious shopping orientation positively influenced the repeat purchase behavior via all four upscale image retailers as well as online and offline off-price retailers. In-home shopping orientation positively predicted the repeat purchase behavior via online retail channels for both upscale- and discount-image retailers. Convenience shopping orientation positively predicted the repeat purchase behavior via official websites of the brands, off-price retailers, and consignment stores. Utilitarian shopping orientation negatively predicted the repeat purchases via off-price retailers and consignment stores. For the luxury goods industry, this paper offers pragmatic knowledge about the relationships between consumers’ shopping orientation and their repeat purchases of luxury goods made via various retail channels, which may assist developing its marketing strategies. By shedding light on the U.S. affluent consumers’ repeat purchase behavior regarding luxury goods in the multichannel retail environment, this paper contributes the valuable insights regarding strategic directions to the luxury goods industry and theoretical understandings regarding the consumer shopping orientation to the academia.