Non-food Categories Research Articles

The Internet as a Shopping Channel and Database Description: An Empirical Application to Online Grocery Shopping

This paper (Chapter 1 of a dissertation on online and multichannel shopping behavior) provides a comprehensive knowledge of the characteristics, circumstances and shopping behaviors around online shopping, and more concretely, online grocery shopping, what seems to be the first milestone for every retailer who attempts to operate across online and offline channels and therefore become a multi-channel retailer. The chapter primarily emphasizes the fact that online and offline channels have their own advantages against the other, that the profile of consumers who usually purchase from them differ, and that not all products are equally suited to be commercialized online. Multichannel retailers should consider these issues while designing their marketing strategies across online and offline channels to be successful at both of them. In this sense, some interesting business strategies to induce the use of the online channel and improve its profitability are proposed also in the chapter. We unique data set of online and offline grocery purchases from the same sample of consumers of a large multichannel grocery chain. This chapter has two clear parts. In the first part, we present an overview of the Internet and the electronic commerce, providing evidence of its current importance and potential. We analyze the unique characteristics of the Internet in comparison with the offline channel, what consequently shows its advantages and disadvantages as a shopping channel, and its a priori better or worse suitability to commercialize certain types of products. In addition, we characterize the profile of the typical online shopper and examine the increasing importance of commercial activities in the online channel all over the world. In the second part, we concentrate on the grocery industry. Grocery shopping accounts for an important share of consumer’s total spending and its purchase in the online channel represents an interesting opportunity for retailers. In this part, our aim is to analyze the purchase of groceries online from a theoretical and an empirical approach. On the one hand, we theoretically examine the reasons that may drive or stop consumers to purchase groceries online. On the other hand, we examine, by means of an exploratory study, the factors that influence consumers to purchase groceries online, when to shop groceries online and the type of grocery products bought in this channel. Meantime, we describe the dataset which will be used in the remaining chapters of the dissertation and which is also used to address these research questions. The chapter closes with a summary and the conclusions from the two parts. Regarding consumer characteristics, we find that that the younger the primary shopper in a household, the more adults in it, the further away it is to the closest offline store with parking and the further away it is to the closest offline store with home-delivery, the more intensively it purchases online. In addition, male-headed households are found to be more likely to shop online than female-headed households. Besides, households who got the grocer’s fidelity card after the opening of the online store are found to purchase more intensively online, than those who did it before. Finally, we observe a negative correlation between the number of trips the households do and their online shopping intensity. Regarding purchase circumstances, the analysis reveals that online shopping is better chosen when it is cold, during weekdays and when households purchase big baskets. Regarding product category characteristics, results show that a grocery category is more likely to be shopped online if it is a CPG (Consumer Packaged Good), it is a non-food category, it is bulky, it is a liquid, it is heavy and has an important share of private label sales. Chapter 1 provides a comprehensive knowledge of the characteristics, circumstances and shopping behaviors around online shopping, and more concretely, online grocery shopping, what seems to be the first milestone for every retailer who attempts to operate across online and offline channels and therefore become a multi-channel retailer. The chapter primarily emphasizes the fact that online and offline channels have their own advantages against the other, that the profile of consumers who usually purchase from them differ, and that not all products are equally suited to be commercialized online. Multichannel retailers should consider these issues while designing their marketing strategies across online and offline channels to be successful at both of them. In this sense, some interesting business strategies to induce the use of the online channel and improve its profitability are proposed also in the chapter.

Comparing Price and Loyalty Effects between Online and Offline Channels in the Grocery Industry: The Moderating Effect of Product Characteristics

This paper investigates online and offline consumer choice behavior. Empirical research comparing online and offline consumer behavior has traditionally been based on comparisons between different sets of consumers, and therefore has been unable to isolate the effect of the Internet on consumer behavior from consumer-specific effects. Using online and offline grocery shopping data from the same sample of consumers, we show that consumer choice behavior differs across the two channels. When shopping online, consumers are less price-sensitive, while displaying stronger brand and size loyalty. In addition, results show that product category characteristics play a role in these differences. The price effect differences are greater in sensory and food categories, whereas the differences in brand loyalty effects are stronger in sensory and, surprisingly, non-food categories. These results should help firms to design better online business strategies.

Do overweight youngsters like food more than lean peers? Assessing their implicit attitudes with a personalized Implicit Association Task

It has been theorized that overweight and obesity are related with a heightened (unhealthy) food preference. Until now both self-reports and indirect attitude measures offer little support for this hypothesis. Using a personalized version of the Implicit Association Task [IAT; Greenwald, A. G., McGhee, D. E., & Schwartz, J. L. (1998). Measuring individual differences in implicit cognition: The Implicit Association Test. Journal of Personality and Social Psychology, 74, 1464–1480], this study investigated (1) whether overweight youngsters ( n = 40) implicitly prefer palatable food to an attractive non-food category such as hobbies and (2) whether they implicitly prefer unhealthy palatable food to healthy palatable food, compared to a matched group of lean controls ( n = 40). Further, it was examined whether these implicit attitudes correlated with self-reported food and hobby attitudes. The results revealed no effect for food versus hobbies. Both groups implicitly preferred healthy to unhealthy food. Positive correlations between implicit and self-reported attitudes were only found for hobbies. Several interpretations of these findings are discussed.

Incentive Outlay Ratios in Fast Moving Consumer Goods Sector in India

Inflationary trends in the economy have led to increased media costs forcing many companies to increase their expenditure on sales promotion activities. It has been recognized that well-planned sales promotion activities have a strategic role to play in brand building and enhancing customer loyalty. This study examines the nature of schemes offered in the fast moving consumer goods (FMCG) category, finds out the ratio of incentive and outlay (which the consumer is expected to make/pay to avail sales promotion offers), explores the relationships, finds out the rationale behind these offers, and provides guidelines to managers designing sales promotion activities. Eight different product categories were selected for the study. Information on actual offers made in these categories in a quarter was compiled and tabulated through content analysis in terms of brand, maximum retail price (MRP), offer (size of the incentive offered), nature of the scheme, pack being promoted, and outlay. The following findings emerged from the data gathered and analysed: Variations in incentive outlay (I/O) ratios across product categories revealed that non-food category exhibits more variations (range) than food category. The level of incentive offered in non-food category was higher than that of food category. Bonus pack followed by free gift and price-offs were the popular tools used across product categories indicating use of similar type of schemes without much innovation. More often, medium to large pack-size was promoted in all categories except the toilet soap category indicating �load the consumer� as the main objective and thereby warding off competition temporarily. The findings suggest that managers need to be creative to create an impact; otherwise, consumers would tend to be less loyal to any brand in a category and drift from one promoted brand to another. They need to give careful thought as to what objectives need to be achieved from whom (loyal, competitive loyal, switchers or non-users). They also need to do a proper analysis by linking sales during promoted period to overall sales, baseline sales, competing brand sales, and impact on trade and consumer behaviour and evolve guidelines with respect to terms and conditions of the offer in terms of size of the incentive, terms, whether immediate or delayed incentive, what efforts are required on the part of the consumer, etc. Before determining the size of incentive to be offered to the consumers, managers need to consider several factors such as level of competition, available budget for the brand, reputation of the company introducing a brand, consumer behaviour, competitive promotional offers, and level of price of a brand vis-�-vis competition. A study of I/O ratios across product categories reveals interesting practices followed by companies. Exploring reasons behind such practices would give insights to managers as to why practices differ from theory and provide guidelines in managing these activities.

Should retailers adjust their micro-marketing strategies to type of outlet? An application to location-based store space allocation in limited and full-service grocery stores

Many retailers today operate strategically different types of sites: ‘limited-service’ stores—that offer all core products/services but only a shallow assortment of non-core services—and ‘full-service’ sites with deep lines of both core and non-core services. An important question for these retailers is whether and how to adopt a micro-marketing strategy in each of these formats. In a micro-marketing strategy, retailers tailor their marketing mix to the characteristics of the local market in which each store outlet operates—a central issue being whether the allocation of store space across product categories should be location-specific. This paper (i) examines the conditions for such micro-marketing to be beneficial, and (ii) in particular—how these benefits depend on store format. It also (iii) indicates how the pattern of space adjustments to local conditions should differ between formats. The propositions are tested in a grocery retail setting, for a retail chain operating limited-service supermarkets and full-service hypermarkets. Our results suggest that micro-marketing is beneficial in both types of format. Yet, the appropriate way of localizing space allocation patterns is format-specific. While supermarkets should primarily adjust the space shares of food (core) categories, hypermarkets should primarily adapt the space shares of non-food (non-core) categories to local market conditions. The outcomes of the study have conceptual as well as managerial relevance and may prove useful for multi-format retailers in a wide range of settings.

The structure of food demand in Japan: An application of the rotterdam system

This study investigates the demand relationships for 16 food commodities and a nonfood category in Japan through the estimation of the per household demand model of the Rotterdam system. It also attempts to assess the predictive power of the estimated model, and to inquire into recent trends in demand changes for food commodities. Estimates of total shift in demands were decomposed into average annual rates of shift in demands with respect to relative price, real income, family size and time. Policy implications of the results are discussed in detail. © 1993 John Wiley & Sons, Inc.

An Inverse Demand System for U.S. Composite Foods

AbstractThis article provides a theoretically consistent framework for estimating a complete price dependent demand system, where the concept of distance function and its related substitution and scale effects are used. The approach is applied to a U.S. demand system consisting of thirteen food and one nonfood categories.

Spatial differences in the cost of living

A method is described for constructing spatial indices of the cost of a basket of basic “requirements” of food and nonfood categories. The proposed index for nonfood items is built up from household expenditure, since their prices are unavailable in most developing countries. Using Peru as a case study, it is shown that the cost differences have significant implications for measures of real income and poverty across regions and between urban and rural areas.

Japanese Consumption, External Disequilibrium and their Statistical Measurement

Japanese statistics indicate domestic consumption levels to be sub? stantially above pre-war; yet, these statistics also indicate a continuing external diseqilibrium in the form of insufficient food imports, es? pecially of rice. This would appear to indicate that the statistics on the internal economy contradict those on the external economy. The present paper discusses these statistics on consumption against the backdrop of the continued shortage of Japanese foreign food avail? abilities, especially of rice, the principal staple food of Japan. Our conclusions, although perhaps somewhat inconclusive, are as follows: (1) Japanese statistics on consumption levels as derived from ratios of index numbers appear to have an upward bias, especially when comparison is made between the farm nad non-farm sectors. (2) These statistics appear to have an upward bias when comparison is made between the food and non-food categories of consumption. (3) Japan still has an external disequilibrium in not being able to import enough. (4) The fact that restrictions against Japanese trade have probably hindered Japan's correcting this disequilibrium sug? gests that U.S. commercial policy towards Japan might be altered in her favor by considering her general levels of consumption. The actual levels of consumption in Japan are somewhat below the levels suggested by ratios of index numbers. This disparity should be analyzed further and considered in the determination of U.S. commercial policy towards Japan. It is generally known that the level of food consumption in Japan, especially of rice, is below the requirements considered necessary for good health. This situation exists for many other countries throughout the world. In the case of Japan, however, the reason for the food deficit is insufficient imports rather than insufficient agricultural pro? duction or insufficient industrial production of exportable goods. Japan has the labor and capital resources to export manufactures at com