PROPUESTA SOCOECONÓMICA DE INTERVENCION ZONAL

A great deal of research focuses on how consumers shop, but the rationale behind their chosen behaviours remains unknown. This, in turn, makes it particularly difficult for retailers to establish an appropriate strategy to not only ensure customer loyalty, but also to lead and to increase business in a sustainable manner, within such a competitive environment. Retail exists as a result of consumer spending. Furthermore, in-store environment is a vital tool for differentiation on a market, and is recognised by many retail operators (Levy & Weitz, 2008). Nowadays, the ability to find a way to increase customer spending even by 1%, may determine a retailer’s overall success, or failure. Today’s retailers need to be able to balance a number of different critical components to create perceived value, which attracts customers and encourages them to spend more. Success depends on the optimal combination of elements creating the in-store experience. That is why promotional, merchandising and store design policies are all controlled by retailers in order to increase customer spend and their customer satisfaction, overall.

Many studies have been conducted concerning the effects of the in-store experience on customer decision-making models (Kumar & Kim, 2014). However, few have addressed customer spending at the level of the individual patron, or store level (Babin & Darden, 1996). Spending in general, and shopping in particular, carries considerable informative potential, as it illustrates an expression of people’s preferences (Otto et al., 2009). Customers are able to choose from many retailers selling similar products, driven by the desire to receive unique shopping experiences and products (Kumar & Kim, 2014). In such a competitive environment, retailers must define what is distinctive about their offer and what should be driving customer spending. Is it a particular product, service or perhaps specific perception of the in-store environment? From this perspective, all elements impacting customers’ behaviour are of great importance for retailers. To sustain a customer’s loyalty in the long term, retailers often find it valuable to focus on customer experience. But which experiences are most important for customers? And how likely are they to influence a change in behaviour? Which are the most profitable areas for retailers to focus on

and which are the least profitable? To answer these questions, there is a need to gain a deeper understanding of how the in-store experience impacts shoppers’ behaviour.

For consumers, grocery shopping is a frequently recurring shopping activity that provides both utilitarian and hedonic value (Babin et al., 1994). According to Verhoef et al. (2009, p. 21), the customer experience construct “…is holistic in nature and involves the customer’s cognitive, affective, emotional, social and physical responses to the retailer.” This experience is not only created by elements within the scope of control of retailers, such as: service interface, retail atmosphere, assortment, price. It is also composed of elements, which are usually outside the retailer’s control, such as traffic in and outside the store or even weather conditions. In my literature review, I highlighted many publications concerning atmospherics and the effects of the store environment on customer decision-making models, including spending (Eroglu & Machleit, 1990; Hui & Bateson, 1991; Kaltcheva & Weitz, 2006; Milliman, 1986; Park et al., 1989; Smith & Curnow, 1996). Many studies have been performed identifying key possible ways in which store atmosphere may influence customer satisfaction and shopping behaviour: directly, via goal-attainment and via mood-change. In all cases, the positive effect of a pleasant store atmosphere on customers’ reactions has been clearly demonstrated (Donovan & Rossiter, 1994; Spies et al., 1997). There are also studies proving that pleasure created by in-store environments can be an important reason for customers electing to spend extra time in a store and to spend more money than intended (Donovan & Rossiter, 1994). Some of the research also suggests that most the shoppers purchase on a portfolio basis, switching from store to store at will (Knox & Denison, 2000). There is also similar evidence to suggest that consumers mentally budget for shopping trips (Netemeyer et al., 2012). From this perspective, in-store experience, creating customer experience is the main force impacting customer behaviour and satisfaction.

The literature with regards to the atmospheric effects on consumer behaviour has evolved, and marketing researchers have realised its importance in creating an influential atmosphere at the point of purchase (Turley & Milliam, 1992). This type of atmospherics planning can mean the difference between a business’ success or failure (Bitner, 1992). In recent years, it has become increasingly difficult for retailers

location. However, the store itself can create a unique in-store environment and atmosphere impacting customers’ behaviour (Lam, 2001). Despite numerous studies on the in-store experience, research findings are not sufficient to provide a detailed understanding of a store’s environmental effects. The rationale, which is frequently raised in justifying the decision not to invest in delivering a great in-store experience is that it comes at a high cost. However, we should remember that delivering great in-store experiences actually makes the cost of serving customers lower. Unsatisfied customers are expensive as they are more likely to return products, or more likely to require support. That is why, there is a need to connect the right data, and to assess the impact of the difference between delivering a great experience and delivering a poor one in order to demonstrate the magnitude of the impact (Kriss, 2014).

Nowadays, all retailers attempt to build or modify existing in-store environments in order to become more competitive. Usually, they do this using their experience, however without exactly knowing the detailed impact of a specific design or change of atmosphere, on its users. This is mostly due to the fact that there isn’t much empirical research addressing the role of physical surroundings in consumption settings (Bitner, 1992). With an overarching question then, focusing on the roles of product, service and environment perceptions on customer satisfaction and behaviour, I designed my research project. Based on this, in my research thesis I described the final research model and key findings contributing to the identification the impact of product, service and in-store environment perceptions on customer satisfaction and behaviour, providing retailers with a clear indication as to which of the in-store experience constructs they should invest in, as a priority.