Store Choice Research Articles

A practitioner’s guide to Bayesian estimation of discrete choice dynamic programming models

This paper provides a step-by-step guide to estimating infinite horizon discrete choice dynamic programming (DDP) models using a new Bayesian estimation algorithm (Imai et al., Econometrica 77:1865–1899, 2009a) (IJC). In the conventional nested fixed point algorithm, most of the information obtained in the past iterations remains unused in the current iteration. In contrast, the IJC algorithm extensively uses the computational results obtained from the past iterations to help solve the DDP model at the current iterated parameter values. Consequently, it has the potential to significantly alleviate the computational burden of estimating DDP models. To illustrate this new estimation method, we use a simple dynamic store choice model where stores offer “frequent-buyer” type rewards programs. Our Monte Carlo results demonstrate that the IJC method is able to recover the true parameter values of this model quite precisely. We also show that the IJC method could reduce the estimation time significantly when estimating DDP models with unobserved heterogeneity, especially when the discount factor is close to 1.

Typology of Fashion Product Consumers: Application of Mixture-model Segmentation Analysis

Proper consumer segmentation is receiving more attention from industry professionals as markets become more diverse and consumer-centered. Researchers have recognized the limitations of the traditional cluster analysis technique and this research study analyzes market segmentation using Mixture-model or latent-class segmentation. This study used a questionnaire to determine the characteristics of clothing shoppers using a new technique that proved its superiority over traditional techniques. Questions included items measuring fashion shopping behavior, store choice criteria, apparel consumption styles, price perception by product type, and demographic characteristics. Data were collected from 1074 males and females in their 20s and 30s through an online survey. SPSS 16.0 and Latent GOLD 4.0 were used to analyze the data. The ideal typology of clothing shoppers using the Mixture-model were: `brand loyalty orientated group`, `group of conservative late 30s`, `group of pleasure-emotion early 20s`, `value oriented consumer product with high-income group`, `group of eco/symbol oriented consumer`, and `group of utility/goal oriented male consumer`. This study showed differences in fashion product purchasing behavior by conducting market segmentation for clothing shoppers using the Mixture-model.

Understanding ethical grocery shoppers

The growing importance of ethical shopping motives offers a major advantage to retailers who understand their significance in store choice decisions compared with other conventional store image influences, particularly with regard to any variations that exist between different shopper types. This study uses an exploratory two-phase integrative qualitative and quantitative research design to identify a preliminary classification of ethical shopper types. Three ethical and three store image factors emerge as relevant to the decision-making of ethical shoppers through the development of appropriate scales. Building from these factors, subsequent cluster analysis defines four distinct ethical shopper types: demanders, mavens, dissenters, and apathetics. The degree of emphasis given to ethical and other store choice factors exemplify differences among these segments. The article discusses the utility of the resultant classification in terms of research and retail strategy including opportunities for targeting through adjustment of the retail offer.

Perceived Risk As A Factor In Store Choice: An Examination Of Inherent Versus Handled Risk

Perceived risk as an influence on consumer behavior has been well documented. Despite the popularity of the topic, only a few studies have examined the risks consumers perceive when selecting a retail patronage mode. The study uses Bettmans concept of inherent/handled risk to isolate the risk attributable to specific retail patronage modes. The results indicate varying amounts of handled risk are associated with purchasing products from different retail m odes. The study also provides evidence that risk attributable to a specific retail mode tends to differ among product categories.

A Poisson mixture model of discrete choice

In this paper, we introduce a new Poisson mixture model for count panel data where the underlying Poisson process intensity is determined endogenously by consumer latent utility maximization over a set of choice alternatives. This formulation accommodates the choice and count in a single random utility framework with desirable theoretical properties. Individual heterogeneity is introduced through a random coefficient scheme with a flexible semiparametric distribution. We deal with the analytical intractability of the resulting mixture by recasting the model as an embedding of infinite sequences of scaled moments of the mixing distribution, and newly derive their cumulant representations along with bounds on their rate of numerical convergence. We further develop an efficient recursive algorithm for fast evaluation of the model likelihood within a Bayesian Gibbs sampling scheme. We apply our model to a recent household panel of supermarket visit counts. We estimate the nonparametric density of three key variables of interest–price, driving distance, and their interaction–while controlling for a range of consumer demographic characteristics. We use this econometric framework to assess the opportunity cost of time and analyze the interaction between store choice, trip frequency, search intensity, and household and store characteristics. We also conduct a counterfactual welfare experiment and compute the compensating variation for a 10%–30% increase in Walmart prices.

A Study on the Effects of Store Choice Criteria of Mass Merchandisers on Store Loyalty with Customer Emotions as Moderating Variables

A Study on the Effects of Store Choice Criteria of Mass Merchandisers on Store Loyalty with Customer Emotions as Moderating Variables

Customer-to-noncustomer interactions: Extending the ‘social’ dimension of the store environment

Retailers find themselves in a state of constant evolution and transformation. In recent years, the Internet has changed many aspects of the industry, from the way products are distributed to how retailers connect with consumers. More recently, social media has been changing the way retailers engage with consumers (and vice versa), and today, affords the ability for retailers to implement social media within the store, for instance allowing customers to solicit opinions on product choices from their peer group beyond store boundaries (i.e. customer-to-noncustomer interactions). We propose these customer-to-noncustomer interactions are a third dimension of the store environment’s social characteristics (as defined by Baker, 1986), which traditionally encompassed customer-to-customer and customer-to-staff interactions. Through two phases of research, we investigate how stores that allow customers to engage with their peers in this manner, impacts on store choice and value perceptions. We present findings from a discrete choice experiment and an experimental shopping scenario, and also vary the type of platform (self-service kiosk or smart-phone application) of social media delivery. We find that this form of interactive social media can be successfully employed within the store environment to encourage store choice and influence consumer perceptions of the shopping experience.

Consumer agency and food retailer choice in an American urban neighborhood

This study examines the issue of consumer agency within the food system as manifested by food secure and food insecure households in an urban neighborhood in the United States. Using a self-administered mail survey this study examines food retailer perception and shopping behaviour of food secure and insecure households in Lansing, Michigan. Food security represents a useful lens through which to examine the issue of agency since food, while a necessary part of life, is nonetheless something that is difficult to access for a large sector of the population. By examining both food secure and food insecure households, light is shed on some of the factors that lead to the relative ability of each group to successfully and reliably obtain food. In particular, this study focuses on the perception and behaviour of consumers in relation to the decision to shop, or not to shop, at various food retailers. Some theories of consumer behaviour tend to focus either on class related cultural elements which determine taste preferences while other theories focus on structural elements of the food system which force a limited selection onto various social groups. While certainly class culture influences taste preference to some extent, results from this study suggest that structural elements of the food system and economic differences between food secure and food insecure households have a larger influence on store choice than cultural preferences. In fact, both food secure and insecure households indicated similar sets of criteria used in determining store choices. However, in examination of actual shopping behaviours, this study found that food insecure households are more likely to shop at deep discounters and more likely to travel farther to obtain food. These results suggest that structural elements such as food retailer locations limit the range of shopping options of food insecure households when compared to food secure households.

Consumer agency and food retailer choice in an American urban neighborhood

Abstract This study examines the issue of consumer agency within the food system as manifested by food secure and food insecure households in an urban neighborhood in the United States. Using a self-administered mail survey this study examines food retailer perception and shopping behaviour of food secure and insecure households in Lansing, Michigan. Food security represents a useful lens through which to examine the issue of agency since food, while a necessary part of life, is nonetheless something that is difficult to access for a large sector of the population. By examining both food secure and food insecure households, light is shed on some of the factors that lead to the relative ability of each group to successfully and reliably obtain food. In particular, this study focuses on the perception and behaviour of consumers in relation to the decision to shop, or not to shop, at various food retailers. Some theories of consumer behaviour tend to focus either on class related cultural elements which determine taste preferences while other theories focus on structural elements of the food system which force a limited selection onto various social groups. While certainly class culture influences taste preference to some extent, results from this study suggest that structural elements of the food system and economic differences between food secure and food insecure households have a larger influence on store choice than cultural preferences. In fact, both food secure and insecure households indicated similar sets of criteria used in determining store choices. However, in examination of actual shopping behaviours, this study found that food insecure households are more likely to shop at deep discounters and more likely to travel farther to obtain food. These results suggest that structural elements such as food retailer locations limit the range of shopping options of food insecure households when compared to food secure households. Keywords: food desert, food access, food security, consumer, food retailer

Impact of radio advertisements on buying behaviour of urban commuters

Purpose – This study aims to analyze the impact of radio advertisements on urban commuters towards buying behaviour in retail stores and attempts to determine the role of radio advertising on dissemination of information on the sales promotions. The impact of radio advertisements on the store choice and buying preferences are analyzed based on empirical investigation.Design/methodology/approach – This study is based on the empirical investigation of urban commuters who acquire information on sales promotion by listening radio advertisements during travel time. The sample respondents selected for the study frequently commute to their workplaces from the residential areas located in the southern, northern and suburban habitats in Mexico City. Data were collected by means of personal interviews during 2007‐2009 in different festival seasons broadly categorized as three seasons: April‐June (Spring sales following the occasions of Easter vacations, Mother's day and Father's day), July‐August (Summer sales) and...

Fashion Store Personality: Scale Development and Relation to Self-Congruity Theory

Abstract Over five decades ago, Martineau (1958, p. 47) introduced the notion of store personality (SP), which he defined as “the way in which the store is defined in the shopper’s mind, partly by its functional qualities and partly by an aura of psychological attributes”. The strategic role of these symbolic, humanlike attributes that can be attributed to stores, has been empirically demonstrated, with respect to customer satisfaction and perceived retail differentiation (Chun & Davies, 2006), as well as with respect to store patronage and loyalty behavior (Sirgy & Samli, 1985; Zentes, Morschett, & Schramm-Klein, 2008). A potential and reasonable explanation of the power of associations with humanlike personality, can be found in the self-congruity theory. This theoretical framework argues that if retailers can position their stores in such a way that the store’s personality is congruent with that of target shoppers, they are likely to succeed in attracting and retaining these consumers (Bellenger, Stein...

The nested consideration model: Investigating dynamic store consideration sets and store competition

The nested logit model has been widely used to study nested choice. A typical example of such nested choice is store patronage and brand choice. An important limitation of the nested logit model is that it assumes that all alternatives at both levels of the nest are available in the choice set of the consumer. While there is a wide literature on the incorporation of restricted choice sets into the logit model, the logical extension of this analysis to nested restricted choice sets has not been pursued in the literature. In this study we develop a nested consideration model that integrates store choice and brand choice incorporating the formation of dynamic restricted choice sets of both stores and brands. We term the model the nested consideration model and derive the related probabilities in a manner analogous to the well-known nested logit model. In an empirical illustration, we find that the nested consideration model shows better prediction than nested logit models (with the same explanatory variables). We find that it is important to account for dynamic store consideration sets rather than static sets or store loyalty measures. We also conduct simulations to demonstrate the importance of the nested consideration set model for correct pricing and store location decisions of business managers.

Consumer responses to price discrimination: Discriminating bases, inequality status, and information disclosure timing influences

This study broadly explores consumers' perceived unfairness, negative emotions, internal reference price, and store choice under five common methods of price discrimination using two experimental studies. Study 1 investigates the interaction between discriminating bases and inequality status. Results reveal that discriminating bases only influence perceived unfairness for advantaged consumers, but affect all four responses for disadvantaged consumers. For disadvantaged consumers, direct discrimination that complies with social norms evokes the weakest unfavorable responses, whereas direct discrimination against social norms triggers the highest perception of unfairness and negative emotions but has similar effects on internal reference price and store choice to indirect discrimination. Study 2 examines the effect of information disclosure timing by comparing pre- and post-purchase disclosure policies. Results show that post-purchase disclosure of discrimination information elicits higher negative emotions for indirect discrimination involving coupon and purchase quantity, but is rather inconsequential for direct discrimination or indirect discrimination through membership.

Consumer decision making and store patronage behaviour in Traditional Chinese Medicine (TCM) halls in Singapore

This paper examines who patronises Traditional Chinese Medicine (TCM) halls in Singapore and for what purpose. A quantitative study of 400 respondents identifies that TCMs are used primarily for the improvement of health and well being rather than the treatment of more serious medical conditions. While the patronage of TCM stores is not restricted to the Chinese population, traditional Mom-and-Pop outlets have come under increasing pressure from new market entrants. When choosing a TCM outlet, customers consider price and quality to be important factors while trust in the store keeper was also identified as a key determinant of store choice.

Multi-Objective Lot-Sizing and Scheduling Dealing with Perishability Issues

The recent evidence demonstrating the importance of perishables in terms of store choice and shopping experience makes these products a very interesting topic in many different research areas. Nevertheless, the production planning research has not been paying the necessary attention to the complexities of production systems of such items. The evidence that consumers of perishable goods search for visual and other cues of freshness, such as the printed expiry dates, triggered the development of a multi-objective lot-sizing and scheduling model taking this relevant aspect into account by considering it explicitly as an objective function. A hybrid genetic algorithm based on NSGA-II was developed to allow the decision maker a true choice between different trade-offs from the Pareto front. Computational experiments were based on a case study, reported in the literature, concerning a diary company producing yogurt.

Shopping Behavior Of Supermarket Consumers In Kuwait

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt; unicode-bidi: embed; direction: ltr;"><span style="font-family: Times New Roman;"><span style="font-size: 10pt; mso-bidi-font-style: italic;">This study determines the product selection processes from Kuwaiti nationals based on their shopping habits in the Co-Operative Supermarkets (A government owned grocery stores).<span style="mso-spacerun: yes;">  </span>This paper expands the concept of Consumer Satisfaction and includes an evaluation of the post purchase affective response. It presents the development of a consumer typology based on affective response, basically broken into two groups. The first group is formed by consumers who face grocery shopping as their duty the second group considers grocery shopping as their pleasure. The paper also presents the implications of such typology in the Co-Op operation itself. </span><span style="font-size: 10pt; mso-bidi-language: AR-KW; mso-bidi-font-style: italic;">The literature on consumer behavior and store choice suggests that consumers make decisions to patronize a particular store on the basis of a set of attributes that they view as important. This study attempts to explore the determinant attributes that influence the patronage decisions of supermarket consumers in Kuwait. Based on a descriptive analysis of data collected via an accidental sampling procedure, fourteen store attributes were identified. These attributes were factor analyzed, generating four image dimensions intuitively labeled merchandise, personnel, accessibility and promotion. A stepwise regression showed that merchandise image was the most salient in determining the frequency of supermarket shopping. None of the demographic characteristics of consumers did seem to have an impact on the perceived importance of the promotion image. Most of the differences among the categories of the consumers' demographic characteristics were found in the accessibility image, providing possible explanation for why the rank of the importance of accessibility elements varies considerably from one study to another. <span style="mso-spacerun: yes;"> </span></span></span><span style="font-size: 10pt;"></span></p>

Influence of store brands on variety-seeking behaviour of consumers in Mexico

The variety-seeking behaviour and the store choice among the consumers have been discussed extensively in the previous research contributions from the stochastic point of view. This study argues that although consumers are seeking novelty and unexpectedness in a store that they have not bought before, their purchase will be selective, in reference to the empirical investigation. This study has been conducted in Mexican retail business environment with a focus to explore the tendency of decision-making of consumers towards buying unfamiliar stores in considering the importance of store name. The discussions in this paper have been woven around the issues of perceived risk, perceived store difference, association of store name and customer values as major influencing factors in making buying decisions towards unfamiliar stores. This study reveals that the perceptions on store name in reference to store risk and store differences have been the prime factors in making buying decision for new stores among the consumers. Consumers also ascertain the store name associated with the unfamiliar stores as they feel high risk averse and entangle in decision-making with perceived store differences.

Contribution de la qualité relationnelle à la fidélité des consommateurs et au choix du point de vente

AbstractThe evolution of the retailing sector and the proliferation of supermarkets have made consumers more and more demanding. Store managers are trying to make strategies that retain customers and have a favourable position in the market. So, this communication allows us to show the importance of relationship quality in explaining customer loyalty and store choice. Then, we will propose a conceptual model which integrates all these variables. The validation of the causal model can explain the strategic implications and propose appropriate recommendations given to the store manages.

An agent-based model of consumer mobility in a retail environment

In a retail environment it is nowadays crucial to take into account recent trends and evolutions in consumer mobility behaviour in order to align the actual implementation of operations management decisions with the company's consumer-centric strategy. We aim to bridge the discrepancy between the assumptions behind the analysis for supply side decisions and the modelling of the demand side mobility behaviour that still exists in theory. With an agent-based approach to consumer spatial behaviour we study the impact of increasing mobility of consumers on the logistical strategy of retailers.In an artificially generated world imitating the spatial configuration of a big city, we study different scenarios about consumer mobility. We focus on the impact of commuting behaviour and on the resulting effect of different cognitive maps that influence a consumer's store choice. We do not only study the model's numerical results but also throw a look on the spatial outcome.The main result is that we provide greater insight in emerging retail location patterns as a result of changing consumer spatial behaviour and that this interplay between consumer mobility and location strategies can be thoroughly studied with an agent-based modelling and simulation approach.

Which household attitudes determine the store type choice for meat?

Store choice decisions in the food retailing industry have been widely discussed in the literature. The importance of pricing, quality and assortment is known, and the influence of sociodemographic variables is small. In this paper, a mixed multinomial logit model is used, to study the relationship between specific attitudes of households and their store type choice for meat. The mixed logit model includes a random intercept for the different store types and therefore allows for individual taste variation. Household attitudes are about quality, freshness, environment, advertisement, organic food and prices. Additionally several sociodemographics and interaction terms are included. Household attitudes and the actual point of purchase show, which of these attitudes influence store type choice, and assuming there is a true relation between these choices, an implied image order of store types can be established.