Date of this Version
Journal of Retailing
The allegiance of a particular customer, and the distribution across customers of strength of affiliation to a store are important indicators of store health. It is therefore important to understand the extent and determinants of shopper mobility among competing retailers. While shoppers often patronize many stores, they typically have a primary affiliation to a “main store” that captures the majority of their purchases. We examine, in detail, the tendencies of shoppers to transition away from the current main store and adopt another in its place. That is, rather than study all types of store switching behavior, we focus on the decision to change primary allegiance. The model is established in a discrete time hazard framework and estimated as random-effects probit. Data from 548 households taking 88,945 shopping trips among five stores are used to calibrate the model. We find that state dependence is prevalent with nearly three quarters of the shoppers showing progressive attachment to their current main store. Interestingly, this finding is not simply driven by location (i.e., because shoppers are captive to a single store based on geographical distance). More likely, shoppers are unwilling to give up the benefits of store-specific knowledge of assortment, layout and prices. Second, the decision to transition from a current main store is not influenced by temporary price promotions on a common basket of items: Shoppers will cherry-pick, but this alone does not cause them to change primary allegiance. The majority of transitions occur across competing stores of the same price format, which suggests “format loyalty” is an important aspect of shopper behavior. After controlling for unobserved heterogeneity, we find little relationship between observable demographics and the transition probability. We do, however, find that shoppers who spend more per trip are less likely to change main stores, as are less frequent shoppers. Implications for retail management strategy are discussed.
Originally published in the Journal of Retailing © 2002 Elsevier
This is a pre-publication version. The final version is available at http://dx.doi.org/10.1016/S0022-4359(02)00099-4
shopping behavior, retail competition, store loyalty
Rhee, H., & Bell, D. R. (2002). The Inter-Store Mobility of Supermarket Shoppers. Journal of Retailing, 78 (4), 225-237. http://dx.doi.org/10.1016/S0022-4359(02)00099-4
Advertising and Promotion Management Commons, Applied Behavior Analysis Commons, Behavioral Economics Commons, Business Administration, Management, and Operations Commons, Cognition and Perception Commons, Cognitive Psychology Commons, Marketing Commons, Organizational Behavior and Theory Commons, Sales and Merchandising Commons
Date Posted: 15 June 2018
This document has been peer reviewed.