Store Entry Research Articles

The Influence of Store Environment Factors on the Purchase Intentions of Mongolian Customers

The entry of foreign franchise stores and shifts in customer preferences pose significant challenges for Mongolian retail establishments, potentially resulting in a loss of customers, decreased revenue, and even market exit. Consequently, it is essential to explore opportunities for market protection by offering services that align with customer preferences. This research aims to identify the environmental factors of retail stores that influence Mongolian customers' purchasing intentions and to examine whether these factors vary by age and gender. The findings indicate that women tend to focus more on various aspects of the store environment than men, while younger customers demonstrate greater attentiveness than their older counterparts. Additionally, the amount of time and money spent in stores influences customers' priorities during their shopping experiences. Understanding these differential effects can give retailers insights into optimizing the shopping experience and tailoring marketing strategies to enhance customer engagement and drive sales. Based on these insights, it is recommended to enhance the store environment to better accommodate these preferences. The results of the research can be fully utilized in the development of store employees and the ongoing research about the store environment in this field.

Assessing the Multichannel Impact of Brand Store Entry by a Digital-Native Grocery Brand

For digital-native fast-moving consumer goods (FMCG) manufacturers that sell through their own online channel and have made headway into supermarkets, brand stores can represent the next step in a multichannel distribution strategy. In this research, the authors investigate the impact of introducing a brand store on a digital-native FMCG brand's sales in its existing company-owned online channel and in independent supermarkets, as well as on the brand's supermarket distribution. By incorporating brand store sales and operational costs, this research also specifies the entry effects on the brand's top-line total brand sales and bottom-line operating profit. Based on before-and-after-with-control-group analyses of the entry of ten brand stores by a digital-native FMCG brand, the authors show that brand store entry boosts supermarket sales, partially driven by a brand store's positive effect on the number of supermarkets listing the brand. Although they cannibalize company-owned online sales, brand store entries generate an influx of own brand store sales that offset online channel losses. Still, accounting for brand stores’ operational costs reveals that top-line growth is not always enough to preserve the bottom line.

Dollar store expansion and independent grocery retailer contraction

AbstractThis paper examines the effects of dollar store entry on independent grocery retailers in the United States between 2000 and 2019. We utilized an establishment‐level dataset comprising all grocery retailers and dollar stores in the country. Our findings indicate that dollar store entry is associated with a 5.7% decrease in sales, a 3.7% reduction in employment, and a 2.3% rise in the likelihood of independent grocery retailers quitting the business. These adverse entry effects are three times larger in rural than urban areas. Event studies indicate that the negative impact on sales and employment disappears gradually in urban areas but persists in rural communities. We document differences in treatment effects of dollar store entry across regions, retail formats, and time.

Dynamic model of entry: Dollar stores

AbstractDollar stores have become the fastest‐growing retail format in the United States. However, there is considerable controversy regarding their entry, particularly into markets without grocery stores, and concerns that dollar‐store entry decisions are motivated by preemptive incentives. In this paper, we aim to study the market entry of dollar stores as an equilibrium phenomenon and to examine their impact on competing store formats in a dynamic environment. We use census‐tract level data and develop a dynamic model of oligopolistic competition to estimate the impact of dollar store entry on the equilibrium entry decisions of other retailers of the same format and other formats. We find that supermarkets and other large‐format owners thrive as dollar‐store expansion removes their “competitive fringe” in shared markets, whereas other small‐format stores (other dollar stores, convenience stores, and superettes) do not. Our findings have broad implications for the effect of dollar store entry on consumer welfare, as dollar‐store entry is not associated with grocery‐store exit but rather the exit of other small‐format stores.

Multinational Factoryless Goods Producers and Expansion of the Wholesale & Retail Industry in Korea

This paper studies the role of Multinational Factoryless Goods Producers (MFGPs) in the recent expansion of the wholesale and retail industries in Korea. We empirically investigate the impacts of the industry-level store entry rate of the MFGPs on labor productivity growth and store-entry and exit probabilities of Non-MFGPs which are the majority of firms in the industries. Our main results are as follows. First, the industry-level store entry rates of MFGPs are positively associated with increases in labor productivity growth of Non-MFGPs. Second, the industry-level store entry rates of MFGPs are positively related to the store-entry decision of Non-MFGPs. These findings may imply that the entries of MFGP stores contribute to the growth and expansion of the wholesale and retail industries as a whole.

Does expanding access to cannabis affect traffic crashes? County-level evidence from recreational marijuana dispensary sales in Colorado.

This article examines the effect of recreational cannabis dispensary sales on traffic crashes by employing difference-in-differences model that exploits the variation in the timing of recreational marijuana dispensary entry across counties within Colorado. Using marijuana-related hospital discharge as a measure of marijuana abuse/misuse, the results indicate a sizable rise in marijuana-related hospital discharges after the entry of retail cannabis stores. However, there is a lack of evidence that traffic crash incidents are affected by the entry. The preferred estimate suggests that, at 90% confidence level, a large increase in traffic crashes by more than 5% can be ruled out.

Retail store entry and online consumer search: the role of cognitive versus physical search costs

PurposeRelatively little research explicitly considers how a firm’s channel decisions affect consumer tradeoffs between the cognitive costs of online search and the physical costs of visiting a retail store. This study aims to argue that opening a new retail store affects both cognitive and physical search costs, but that the magnitude of these effects depends on the location of the consumer relative to the new store. In addition, individual differences in consumers’ cognitive costs that should moderate these effects.Design/methodology/approachThis study takes the opening of multiple retailer stores on the same day as the nature experiment. Combining with data from other sources, this study tests the hypotheses using conditional logit for the correction of incidental problem in the traditional fix-effect logit model. Endogeneity issue is tested with the control function approach.FindingsThis study finds that opening a new store leads to a 136% increase in the odds of online visiting by consumers who live in the broader metropolitan area of the new store, while it leads to a 43% decrease in the odds of online visiting by consumers who live in the nearby shopping region. However, the effect of store entry on increasing website search is weaker for consumers who are more loyal, and the effect of store entry on decreasing website search is weaker for consumers who are more efficient in searching online.Originality/valueThis study adds to prior research by identifying when, and for which consumers, opening a physical store has complimentary versus substitutive effects on online search behavior.

The Impact of Organic Specialist Store Entry on Category Performance at Incumbent Stores

Premium organic retailers are specialist retailers that exclusively offer organic products. Prior literature has not studied their entry, focusing instead on the impact of generalist store entry. This study examines the impact of premium organic specialist store entry on category performance at incumbent generalist stores for 47 packaged food and beverage categories. The results indicate that incumbent stores lose sales after a local organic store entry and that the impact of price on sales at generalist stores becomes stronger. The authors postulate that incumbent stores can reduce sales losses by reducing the relative distinctiveness of the entrant along three dimensions: variety, price–quality, and authenticity. Empirical results show that more variety in organic products, as well as more organic feature and display advertising, protect generalist stores from premium organic specialist store entry. Assortments composed of premium organic products are harmed less, whereas assortments in which organic products are subject to more frequent and deeper price promotions are harmed more. Furthermore, including products from an organic specialist brand in generalists’ organic assortments offers additional protection.

Impact of the COVID-19 Social Distancing Policy on the Exit and Entry of Stores in South Korea

This study investigates how social distancing policy to curb the COVID-19 pandemic control affected the survival of stores in Korea. Using a Difference-in-Difference approach, we find that an increase in exit and a decrease in entry was more severe for stores in sectors and regions that faced stricter social distancing policy. In the district level analysis of Seoul, we find that high rent districts had a statistically significant drop in store entry while de facto mobility lessened a decrease in store exit. The results confirms that the vulnerability of stores and sectors is highly associated with social distancing and mobility.

The Impact of a Grocery Store Closure in One Rural Highly Obese Appalachian Community on Shopping Behavior and Dietary Intake.

Research has examined how the entry of grocery stores into neighborhoods influences dietary outcomes, yet limited evidence suggests a direct correlation between opening a store and changes in dietary intake. A factor that might influence individuals’ behavior more directly is the closing of a grocery store where residents shop. This study aims to examine how a grocery closure in a rural Appalachian high poverty county is associated with dietary intake. A cohort of n = 152 individuals were recruited to participate in a longitudinal study examining purchasing habits and dietary intake. At time point two, one year later, n = 74 individuals completed the survey via phone. Results indicate those that switched from shopping at a local grocery store to a supercenter significantly increased their dietary intake of fruit (0.2 ± 0.8), fruits and vegetables (1.4 ± 2.7), alcohol (grams) (17.3 ± 54.1), and tomato sauce (0.1 ± 0.3). A local grocery store closure was associated with a change in shopping behavior and dietary intake. Community-level interventions targeting dietary behaviors must account for neighborhood food environment influences, including grocery store availability. Policy aimed at improving food access in rural communities need to consider approaches to improving a variety of food venues with affordable healthy food, while addressing the evolving grocery shopping behaviors of consumers.

Demand Expansion and Cannibalization Effects from Retail Store Entry: A Structural Analysis of Multichannel Demand

In this paper, we investigate the demand response of a firm’s existing customers to retail store entry and which aspects of the response are demand-expanding and which cannibalize online sales. The empirical goal of the paper is to separately identify the effects of customer-to-store distance on purchase frequency, channel choice, and expenditure per purchase, using transaction-level data from a multichannel apparel brand. Our identification strategy exploits within-customer variation in distance resulting from store entry during a period of rapid retail expansion. We establish retail distance effects using descriptive regressions before developing a unified structural model that affords rich counterfactual analyses and further controls for product category preferences. We find material effects of decreasing retail store distance on purchase frequency and retail channel choice but not expenditures per purchase. Our structural model ascribes mechanisms to these effects in the form of increased brand consideration, higher retail utility from nonmonetary factors (e.g., reduced driving times), and infungibility of monetary transportation costs with budgets for apparel. Our estimates imply that a 10% reduction in retail store distance increases retail channel expenditures by 1.9% and decreases online channel expenditures by 1.2%, resulting in a 0.4% increase in total expenditures. Through counterfactual experiments, we demonstrate that retail expansion can ultimately limit the ability of the firm to price discriminate across channels because reducing transportation costs weakens the firm’s ability to enforce channel-based segmentation schemes. This paper was accepted by Matthew Shum, marketing. Supplemental Material: The online appendix and data are available at https://doi.org/10.1287/mnsc.2022.4308 .

How location-based messages influence customers' store visit attitudes: an integrative model of message value

PurposeThis study aims to develop an understanding of how customers of a physical retail store valuate receiving location-based mobile phone messages when they are in proximity of the store. It proposes and tests a model relating two benefits (personalization and location congruency) and two sacrifices (privacy concern and intrusiveness) to message value perceptions and store visit attitudes.Design/methodology/approachThe study uses a vignette-based survey to collect data from a sample of 1,225 customers of a fashion retailer. The postulated research model is estimated using SmartPLS 3.0 with the consistent-PLS algorithm and further validated via a post-hoc test.FindingsThe empirical testing confirms the predictive validity and robustness of the model and reveals that location congruency and intrusiveness are the location-based message characteristics with the strongest effects on message value and store visit attitude.Originality/valueThe paper adds to the underexplored field of store entry research and extends previous location-based messaging studies by integrating personalization, location congruency, privacy concern and intrusiveness into one validated model.

Winning Big: Scale and Success in Retail Entrepreneurship

This paper uses lottery allocation of retail store entry licenses as a natural experiment to understand the size and source of returns to scale in retail.

Comparison of the Efficiency and Theoretical Hardware Consumption of Four Different Dynamic and Static Branch Predictors

When CPU enters the era of instruction level parallelism, the execution cycle of instructions has become shorter and shorter. Meanwhile, the processing speed of CPU has become faster and faster. However, only from the execution process of CPU instructions, there is a key factor that limits the speed of CPU processing instructions, namely, the branch instruction processing. The branch predictor is used to predict the execution result of the current branch instruction (taken/non-taken), which can make the program counter get the target instruction to continue to execute according to the prediction result before calculating the target jump address. If the prediction is correct, it will greatly improve the execution efficiency of CPU. This paper starts from the two basic categories of static branch prediction and dynamic branch prediction. Then analyse their prediction principle, prediction accuracy and component consumption used for prediction. For static branch predictor, its hardware consumption is less than that of dynamic branch predictor, and its accuracy is also lower than that of dynamic branch predictor. Moreover, their shortcomings are pointed out in this paper. At last, based on the original branch predictor, better branch predictors developed in recent years are introduced. In the future, considering the hardware consumption, I think the development of branch predictor will continue to optimize the branch predictor combining global history and local history, from the number of stored entries, the correlation between branch instructions and so on. On the premise of executing a large number of instructions, every little improvement in the efficiency of the predictor will bring huge benefits.

Inter‐Retailer Channel Competition: Empirical Analyses of Store Entry Effects on Online Purchases

This study empirically examines the effect of offline store entry on a competing online retailer in the footwear industry and investigates how this effect depends on the relative product assortment and price between the offline store and the online retailer. Using transaction data from a large online footwear retailer and offline store entry data from 19 major shoe retail chains and 3 department store chains, we quantify the entry effect of offline stores. Categorizing offline stores by assortment and price, we find that the entry of regular‐price narrow‐assortment stores generates a complementary effect that increases online purchases, while the entry of discount wide‐assortment stores leads to a substitution effect that reduces online purchases. The store entry of other types has no significant effect on online purchases. We further find that the complementary effect is mainly driven by the mechanism of unsatisfied product exploration due to a narrow assortment in stores, rather than the mechanism of product uncertainty reduction due to overlapping products with lower prices online. Therefore, the complementary effect not only increases the online purchases of store‐brand products but also creates spillovers to other brands. Moreover, the substitution effect driven by the reduced transportation cost is mitigated primarily by consumers’ proximity to pre‐existing stores.

Window Design of Fashion Storefronts: Its Impact on Consumer Behavior

This article provides an overview of the literature examining the influence of window design of fashion storefronts on consumer behavior, like store entry propensity. While research has shed light primarily on the impact of store-interior cues (e.g. sound, color, scent, or design features) on consumer behavior, research on the influence of store exterior cues (wall-mounted flags, entrance, or parking) on consumer behavior, has only recently built up momentum. In view of storefront windows, not only design elements, such as mannequins, verbo-visual relations, and the number of products displayed, have been investigated, but also conceptual models have been devised. Future research should keep focusing on the store exterior, and especially, storefront windows. The use of smart technologies in storefront windows needs particular attention.

Dollar stores and food deserts

The purpose of this study is to examine the relationship between dollar store expansion and food access. We begin by documenting the growth of dollar stores over time and comparing dollar store expansion between areas with and without poor food access. Using a time-varying measure of food accessibility, we identify areas with persistent food access challenges, where supermarket and large grocery stores have been absent for the entire study period (2000–2017), and track dollar store expansion into these areas. We use a combination of geocoded food retail establishments from Nielsen's TDLinx dataset to identify the precise location and years of entry for dollar stores and create yearly measures of food accessibility. We find that dollar stores are most prevalent in non-metro areas, regardless of food access status. We find that both the presence and entry of dollar stores are not more likely to be associated with areas categorized as “low-income and low-access”; however, we do find evidence that once a dollar store enters a food desert, that area is more likely to remain without access to a supermarket. Our results indicate that dollar stores are similar to other profit-seeking food retailers in that they are more likely to locate in areas where supermarkets exist and competition is high, suggesting that dollar stores are becoming key players within the food retailing environment. Yet, unlike traditional retail formats, dollar stores could be filling a gap in food access in places where no other food retailer will enter.

Does Restricting the Entry of Formula Businesses Help Mom-and-Pop Stores? The Case of Small American Towns With Unique Community Character

Communities worldwide are increasingly introducing regulatory measures to protect independent businesses from chain stores, but the efficacy of these attempts is largely debated. Moreover, effects are likely to vary by the characteristics of the local economy, a consideration overlooked by existing studies. Using a sample of U.S. cities with unique community characteristics, the authors examine Formula Business Restrictions (FBR), a type of an American land use regulation that restricts the entry of “formula businesses.” The authors find that the passage of FBR led to a higher number and percentage of employees working in mom-and-pop businesses, which was primarily achieved by protecting existing ones from downsizing. This positive effect occurred over time with increasing magnitude. The authors also find heterogeneous effects on different sectors: FBR had strong positive effects on the retail sector, but not on the service sector. Findings suggest that chain store entry barriers can be beneficial for mom-and-pop businesses when designed carefully.

Randomized Trial Testing an Online Responsible Vendor Training in Recreational Marijuana Stores in the United States

An online training in responsible marijuana vendor (RMV) practices was evaluated for effects on compliance with ID checking regulations. A random sample of state-licensed recreational marijuana stores (n = 175) in Colorado and Washington State was selected in 2016-2017 and was enrolled in a randomized pretest-posttest controlled design. After baseline assessment, 75 stores were randomly assigned to a usual and customary training control group, stratified by state and region. The remaining stores (n = 100) were invited to use the RMV training. Stores were posttested at 3 and 9 months postrandomization. The primary outcome was refusal of sale measured with pseudo-underage patrons who attempted to enter stores and purchase cannabis without a state-approved ID. There was no difference by treatment group in refusal of pseudo-underage patron buyers (baseline: 92.5% intervention vs. 94.7% control; 3-month posttest 94.8% vs. 97.5%; 9-month posttest 97.5% vs. 97.1%, p = .286 [one tailed, adjusted for covariates]). The use of training increased refusals at store entry (trained: 65.9% baseline 82.5%, 3 months 79.9%, 9 months; not trained: 82.6%, 83.1%, 84.5%, p = .020 [two tailed, adjusted for covariates]). This difference was especially evident in Washington State (trained: 40.3%, 65.1%, 60.4%; not trained: 57.9%, 68.5%, 72.3%) but not in Colorado (trained: 95.2%, 101.0%, 101.4; not trained: 95.7%, 98.6%, 99.2%, p = .033 [two tailed, adjusted for covariates]). When used by store personnel, online RMV training increased refusal of buyers who appeared young and did not provide a state-approved ID. However, it did not improve refusal rates overall. Stores that had lower refusals at baseline and used the training may have benefited from it.

If You Build Them… Will it Matter? Food Stores' Presence and Perceived Barriers to Purchasing Healthy Foods in the Northeastern U.S.

AbstractPolicies incentivizing store entry or store improvements are aimed at increasing access to healthy foods; however, findings about their effectiveness to improve diets are mixed. Similarly, little is known about whether food stores' presence affects consumers' perceived barriers to purchasing healthy foods, which reflect the subjective hardships experienced by shoppers to purchase and consume healthier foods. In this study, we assess the relationship between the two most widely studied perceived barriers to purchasing healthy foods (price and availability) and the local retail food environment using individual‐level survey data collected across the northeastern US and census data on the numbers of grocery stores and warehouse clubs and supercenters. Our results indicate that unobserved heterogeneity plays an important role in determining the sign and magnitude of the relationship between store presence and perceptions. The likelihood that an individual cites price or availability as a perceived barrier depends upon the barrier considered, whether respondents live in the zip code where they shop, and the method of controlling for unobserved heterogeneity. Thus, policies focusing on improving access to a given store type may only mitigate some of the negative perceptions associated with one's food environment.