Journal of Retailing and Consumer Services 10 (2003) 193200

Linking consumer perception to preference of retail stores: an empirical assessment of the multi-attributes of store image
Doreen Chze Lin Thanga, Benjamin Lin Boon Tanb,*
b a National University of Singapore, Singapore Nanyang Technological University, Nanyang Business School, Nanyang Avenue, Singapore 639798, Singapore

Abstract Using a stimulus-organism-response (SOR) framework, this study examines the SR relationship of consumer retail behavior. In particular, we focus on how consumer perception of the attributes of store image affects their preference for the stores. The stimuli that pertain to store attributes include merchandising, store atmosphere, in-store service, accessibility, reputation, promotion, facilities and post-transaction service. Consumers preference is based on their post-visit ranking of the stores. Eight hypotheses were developed and tested with data collected from a survey using a random sampling approach. Results from a polychotomous regression analysis identied the following attributes as signicantly inuencing consumer preference: merchandising, accessibility, reputation, in-store service and atmosphere of the stores. Applicability and implications of the ndings as well as suggestions for further research are discussed. r 2002 Elsevier Science Ltd. All rights reserved.

1. Introduction The extant literature on the attractiveness of retail stores has focused predominantly on the critical inuence of store image. Past research have cited the importance of location and size (Huff, 1962; Christaller, 1966; Vandell and Carter, 1993; Ownbey et al., 1994; Eppli and Benjamin, 1994), the effects of agglomeration (OKelley, 1981; Eppli and Shilling, 1996) and the physical aspects of retail outlets (Donovan and Rossiter, 1982). An area that has generated a great deal of interest among researchers is consumers emotive response to store image. Here, the conceptualization of consumers retail behavior is based on a stream of information about store image that enters their cognition and affects their perception (Martineau, 1958; Bettman, 1979; Bagozzi et al., 1998: Hayes, 1998). The study of the attributes representative of a stores image that inuence its patronage has evolved to reect the tangible and intangible aspects of consumer perception (Lindquist, 1974; Moeli et al., 1991; Erdem et al., 1999; Alexander, 1983; Logue, 1986). While the determinants of store image have been extensively covered in the literature (Lindquist, 1974; Nevin and Houston, 1980; Bitner et al., 1994; Erdem et al., 1999), most of the analyses are
*Corresponding author. Fax: +65-792-4217. E-mail address: albtan@ntu.edu.sg (B.L.B. Tan).

largely based on relationship among the variables. Although much of this past research has helped our understanding of the critical inuence of store image, little attempt is made to examine its impact on the outcome of consumers decision that is reected by their choice of the stores. In this paper, we focus on another aspect of store image: its inuence on consumer preference of stores. Cast into a stimulus-organism-response (SOR) framework, our conceptualization extends beyond consumers perception of a storeto a comparative consideration of a cluster of stores that falls within their cognitive set. This consideration typies the retail behavior of consumers who are often exposed to the images of several stores and as a result develop an attraction or inhibition to patronizing them.

2. Customer preference and store image Consumer preference refers to the consumers hierarchical prioritization of the stores as a result of their patronage of the stores. In essence, it is the proclivity of consumers for certain stores over others. Earlier works by Mehrabian and Russell (1974) conceptualize such emotive response as a process. Their framework considers the attributes of the environment as antecedents that affect the intervening emotional state of the

0969-6989/03/$ - see front matter r 2002 Elsevier Science Ltd. All rights reserved. PII: S 0 9 6 9 - 6 9 8 9 ( 0 2 ) 0 0 0 0 6 - 1

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D.C.L. Thang, B.L.B. Tan / Journal of Retailing and Consumer Services 10 (2003) 193200
STIMULUS ORGANISM RESPONSE

consumers, and this eventually leads to taxonomy of outcomes that are depicted by approach or avoidance. The sequential logic embraced in this framework has been observed in some studies. For example, Oxenfeldt (1974) suggests that consumers will have both opinions and feelings toward certain stores that will inuence their perceptions. Another study by Moeli et al. (1991) investigated the relationship between consumer perception and patronage in the context of marketplace variables. They held that a store that was not liked or incompatible with the values or the beliefs sought by the target consumers might inhibit attraction. The environmental psychology approach by Mehrabian and Russell (1974) has spawned a number of research studies. Donovan and Rossiter (1982) formulate the approach into a SOR framework. They suggest that the stimuli (as antecedents) affect the consumers emotional states whose response may be observed in their retail behavior such as patronage, store search and in-store behavior. The SOR framework has been extensively elucidated (Bagozzi, 1986) and tested in past research with promising results (Sherman et al. 1997; Sherman and Smith, 1986; Anderson, 1986; Baker et al. 1994). In the SOR Framework, the stimuli emitted by the stores are characterized a set of attributes that affect the perceptions of the consumer (Berry, 1969; Mazursky and Jacoby, 1986). These attributes act as stimuli that are external to the person (Bagozzi, 1980, 1986) and they are the starting point of the consumer behavioral process. They are cues that enter a consumers cognition and rouse or incite him (as a recipient) consciously or subconsciously into action (see, e.g., Belk, 1975). The organism refers to the intervening internal process between the stimuli and reaction of consumer. It is a process in which the consumer converts the stimuli into meaningful information and utilizes them to comprehend the environment before making any judgment or conclusion. Essentially, it consists of the perceptual, physiological, feeling, and thinking activities (Bagozzi, 1986, p. 46) and causes a change in the emotional state of the consumer. A status quo in the emotional state could mean that the stimuli are either excluded from the consumers cognition or, when included, are inert (see, for examples, Donovan and Rossiter, 1982; Donovan et al., 1994; Sherman et al. 1997). The response is the nal outcome or nal action toward or reaction of the consumers, including psychological reactions such as attitudes and/or behavioral reactions (Bagozzi, 1986). Depending on the organism process, the resultant emotional state can inuence consumers inclination to continue, curtail or cease his retail behavior in the store. Donovan and Rossiter (1982) and Sherman et al. (1997) suggested several responses that represent approach or avoidance; these are reected by consumers duration of

Store Images Merchandizing Store atmosphere In-store Service Accessibility Reputation Promotion Facilities Post-transaction

. . . . . . . .

Consumer Percept ception

Pr eference eference for Stor ores es

Fig. 1. A SOR Model of consumer retail purchase behavior.

visit (prolonged or transitory), volume of purchase and so on. The SOR framework adopted in past studies largely focuses on the relationship among the variables. This study proposes a different angle of enquirythe linkage between store image and consumers decision outcome. In particular, we recast the SOR framework to examine consumers store preference decision in the light of their exposure to the different stimuli emitted by the various stores. Some of the store attributes that have been suggested as stimuli in the literature include merchandising, store atmosphere, in-store service, accessibility, promotion, reputation, facilities and post-transaction service. Stores with stimuli that enhance the favorable perception of consumers are likely to increase their preference for the stores. The contrary is expected for stores with stimuli that produce adverse consumer perception. Our conceptualization parallels the typical shopping behavior of consumers whose diverse emotional states, derived from their past visits to multiple retail stores, translate into a situation where consumers choice of stores is based on their varying level of preference for them (see Fig. 1 below).

3. Hypotheses A chief attraction of a retail store centers on its merchandising. The components of merchandising are the quality, selection or assortment, styling and fashion of merchandise (Lindquist, 1974; Nevin and Houston, 1980). A strong merchandise mix provides consumers with a wider choice of products and services and enhances the ability of the stores to fulll their needs and wants (Golledge et al., 1966; Hanson, 1980). This reduces the possibility of their subsequent visits to other competing stores to satisfy any unfullled needs (OKelley, 1981; Beatty et al. 1996). For this reason, larger-sized stores have an advantage over the smaller ones in providing the retail agglomeration and reducing disutility or cost to the consumers in their search effort (Huff, 1962). Thus, stores that are perceived as

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having superior merchandising are likely to be preferred by the consumers. We posit that: H1: The more favorable the consumer perception of the merchandising of the store, the higher will be the consumer preference for the store. Studies have also pointed to the importance of store atmosphere. Store atmosphere refers to the environment that is brought about by a coordinated visual display of merchandise and the ease of mobility within the store (Ghosh, 1994; Bearden, 1977; Lee, 1998). Donovan and Rossiter (1982) found that the emotional reaction triggered by the physical surrounding directly inuenced the shopping behavior of consumers. A well-planned store atmosphere provides a favorable environment that blends layout with piped-in music, color, decorative features and lighting. The store atmosphere enhances the desirability of its merchandise to the consumers (Nelson, 1958). In sum, store atmosphere works on the pleasure and arousal domain of consumer perception and stores with favorable atmosphere are likely to increase consumer preference. Our hypothesis is thus: H2: The more favorable the consumer perception of the store atmosphere, the higher will be the consumer preference for the store. Consumer patronage of retail stores often extends beyond the purpose of acquiring merchandise. To a certain extent, consumers visit to retail stores often takes the form of a recreational activity whose worthiness is reinforced by the level of service provision within the store (Bitner et al., 1994; Westbrook and Black, 1985). Hence, the quality of in-store services is likely to have a strong impact on consumers purchasing behavior (Shycon, 1992). In-store service includes providing information on merchandise, responding to consumer query, guidance to merchandise location, attendance by sales personnel, and so on (Lindquist, 1974). The aim of in-store service is to strengthen storeconsumer relationship, increase consumers pleasure of shopping in the store and encourage their repeat visits (Reynolds and Beatty, 1999). Based on these arguments, we hypothesize that: H3: The more favorable the consumer perception of the quality of in-store service of the store, the higher will be the consumer preference for the store. Accessibility is another factor that attracts shoppers to the stores. Good accessibility means ease of transportation that is coupled with a short travel time to the store. All things being equal, stores that are easily accessible are likely to be preferred by consumers (Huff, 1962; Eppli and Shilling, 1996). Vandell and Carter

(1993) and Ownbey et al. (1994) assert that a retail stores location could determine its success or failure since the size of its catchments is related to its accessibility. Stores that are located near a bus interchange or mass rapid transit station are likely to enjoy more exposure and draw greater trafc volume than stores that are not easily accessible. Lindquist (1974) refers to accessibility as having a convenient location and this includes parking facilities. Hence, better accessibility implies fewer impediments and consequently less displeasure to consumers making a trip to the store. Our hypothesis is: H4: The more favorable the consumer perception of the accessibility of the store, the higher will be the consumer preference for the store. The reputation of the stores refers to the impression of the stores in the minds of the consumers. Components that form the reputation of a store include its heritage, location and past record of reliability. Depending on the strength of their historical background, stores project themselves as either being up-market, average or basic (Lindquist, 1974; Erdem et al., 1999). Reputable stores are better able to secure consumers trust and afliation as they confer a psychological assurance of quality or worth. This afliation also extends to the pride of ownership of the products and a sense of premium, thereby augmenting the pleasure domain of consumer perception. We thus posit that: H5: The more favorable the consumer perception of the reputation of the store, the higher will be the consumer preference for the store. Retailers are constantly engaged in promotional efforts that include incentives such as sales and discounts, to attract shoppers to their stores. Consumers have to be lured to the stores with good buys and latest arrivals. Promotions help to create public awareness of the activities of the stores (Bagozzi et al., 1998) and increase the likelihood of patronage. They exposes consumers to the offerings of the store, prime them with knowledge of the availability of merchandise that could cater to their future needs and encourage their repeat visits (Alexander, 1983; Logue, 1986). Hence, a well-managed promotional strategy attracts consumers to the store (arousal) and builds a value-formoney mindset in them (pleasure). We posit that: H6: The more favorable the consumer perception of the promotions of the store, the higher will be the consumer preference for the store. Stores endowed with good facilities are more likely to secure a favorable consumer perception. Facilities refer

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to the provision of infrastructures in the stores that enhance the comfort of shopping (Nevin and Houston, 1980). A study by Chan (1996) found that availability of resting seats improves store patronage. Other examples of such facilities include refreshment kiosks, child-care corners, clean washrooms, nappychanging areas, and even water fountains. By reducing the fatigue and discomfort of mobility, facilities increase the consumers pleasure of being in the store and indirectly prolong the duration of their visit. Our hypothesis is thus: H7: The more favorable the consumer perception of the facilities of the store, the higher will be the consumer preference for the store. Finally, a shopping experience does not necessarily end when a sales transaction is effected and when the consumers physically leave the premises of the store. The post-transaction service offered by the store builds credibility and inuences the favorable perception of the consumers (Lindquist, 1974). Examples of such services include delivery of merchandise to consumers homes, installation, offer of merchandise warranties and exchanges or refunds for defects. We hypothesize that: H8: The more favorable the consumer perception of the post-transaction service of the store, the higher will be the consumer preference for the store.

All the stores were located along the central shopping belt in the heart of the city. By focusing on a specic type of retail outlet, i.e., departmental stores, our analysis controls for the variation due to the type of the retail business. Further, the comparison of these stores along a specic central district area allows for minimization of other intervening factors that may be accrued to the centrality of location and retail clustering (see Eppli and Shilling, 1996). 4.2. Variables and measures Consumer preference of the store is based on their ranking of the stores in an ascending order of preference. Since there are six stores in our sample, they are ranked from 1 which corresponds to the store most preferred by the consumers to 6 as the one least preferred. The ranking provides comparability and shows the relative standing of the stores in an ordered sequence of preference. As this preference is based on actual store visits, it is important that they have visited all the stores in our sample and are thus able to provide a fair assessment of their attributes. To avoid complication in our analysis, responses with ties in the ranking of the stores are excluded. In line with our conceptualization, the attributes of store image comprise merchandising, store atmosphere, in-store service, accessibility, reputation, promotion, facilities and post-transaction service. These attributes are composite measures and are evaluated on a vepoint Likert scale, with 1 corresponding to least favorable and 5 the most favorable. Table 1 shows a summary of the variables depicting consumer preference and the composite measures of attributes of store image. 4.3. Model specication In view of the categorical nature of consumer preference, an appropriate statistical method of estimation is the polychotomous regression analysis cast in an ordinal framework (Maddala, 1993; Green, 1990). Unlike probit and logit methods which will only enable us to consider the differences in attributes contributing to preference between two stores, the polychotomous method allows for multiple preferences to be considered simultaneously and therefore depicts consumers decision choice more precisely. In the analysis, the dependent or response variable, CPref, is the various stores that are ranked in the values of 1; 2; y; j according to the number of stores j in the decision set: CPref Ranking of Store 1; 2; yto j The independent variables are the factors of store choice decision and may either be categorical or continuous. If the consumer preferences are treated as being ordinal,

4. Methodology 4.1. Sample of stores To test our hypotheses, we collected data from a survey of the Big Six departmental stores in the city of Singapore. The stores were Takashimaya, Lane Crawford, Metro, Tangs, Robinsons, and Isetan. The selection of the stores was based on two broad denitions found in the literature. One denition, by Berman and Evans (1995), describes a department store as a large retail unit with extensive assortment (variety and range) of goods and services that are organized into separate departments for purposes of buying, promotion, consumer service, and control. It has a wide selection of any general merchandise, and often serves as the anchor store in a shopping center or district. The other denition, by the US Bureau of the Census, requires a departmental store to employ at least fty people, has non-durable accounting for at least 20 percent of the total sales. It should carry an assortment of merchandise that includes furniture, home furnishing, appliances, apparel for the family and household linens and dry goods.

D.C.L. Thang, B.L.B. Tan / Journal of Retailing and Consumer Services 10 (2003) 193200 Table 1 Variable and measures Variables Consumer Preference (CPref) Measures and composites Ranking of the stores (Ascending order of 1 indicating most preferred to 6 indicating least preferred) Merchandise mix Value for money Availability Decorations Layout Ease of movement Display of merchandise Congeniality Advice on purchase Gift wrapping Convenience of payment Ease of travel Parking Duration of travel History Value for money Reliability Word-of-mouth Advertisements Promotions Special events Try-out rooms Washrooms Refreshment booths Delivery Warranty Return policy

197

higher would be their preference for the store. Estimates of bs are obtained by the maximum likelihood function. 4.4. Sampling frame and procedure To eliminate any bias between actual behavior and intentions, we consider only responses of consumers who have visited all the stores under consideration. This approach enables us to assess consumer preference more precisely and avoids misperception due to non-visits. A random sampling approach was adopted. Three hundred and fty questionnaires were distributed through a random pick of every fth person alternating in gender type to avoid selection bias. The conduct of the survey in a manageable proximity that is not biased to any store in the area provides for a more realistic response from a uniformly distributed trafc. The questionnaires were self-administered and interviewers were present to clarify any doubts or queries. The survey was conducted at different times of the day, during weekdays and weekends. In anticipation of the short-time duration that respondents would be willing to respond to the questionnaire, the length of the questionnaire was kept to a reasonable length.

Merchandising (Merchand)

Store atmosphere (Atmosphere)

In-store Service (InServ)

Accessibility (Access)

Reputation (Repute)

Promotions (Promote)

5. Results and interpretation 5.1. Response rate and test of difference Of the 350 questionnaires distributed, 72 were excluded from the analysis due to incomplete responses (64) and responses that had ties in their ranking of the stores (8). The remaining 278 usable responses represent a rate of 79.4 percent, which is fairly satisfactory. To check for response bias, we tested the difference in the means of attributes between the complete and incomplete responses. The test revealed that there was no difference between the two groups of responses. The sample is divided roughly between males (48%) and females (52%); distribution of the age groups (mean of 39.6 years old and standard deviation 11.3 years) approximates that of the national population. 5.2. Attributes inuencing customers preference Table 2 shows the results of the polychotomous regression analysis. An initial check reveals an absence of multicollinearity among the independent variables. The beta coefcients provide a useful comparison of the relative importance of the attributes of store image. The results reveal that merchandising of the store (b 0:57; po0:01) is the most signicant factor contributing to consumer preference of the stores. This result substantiates the assertions by Hanson (1980) and Nevin and Houston (1980) on the need for retail

Facilities (Facility)

Post-transaction Service (PostServ)

i.e., in terms of the ranking of the stores, we can estimate the proportion of occurrences higher than the jth level. The model assumes that: PCPref > J such that uj a b1 Merchandb2 Atmosphere b3 InServb4 Accessb5 Repute b6 Promoteb7 Facilityb8 PostServ Our consumer preference model thus assumes that there is a log-linear relationship between the underlying choice of stores and the covariates. Owing to the ascending order of preference, a negative b implies that the higher the consumer perception of an attribute, the eu j 1 eu j

198 Table 2 Signicance of variables Variables

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Beta coefcients and associated t-values b t 9.66** 4.30** 5.91** 7.44** 6.28** 2.53* 1.06 0.31

X1 X2 X3 X4 X5 X6 X7 X8

Merchandising Store atmosphere In-store service Accessibility Reputation Promotion Facilities Post-transaction service

0.57 0.30 0.36 0.48 0.42 0.27 0.19 0.14

*po0:05; **po0:01: Goodness of t chi square: 613.602, p 1:000:

agglomerationit alludes to the shopping under one roof concept to attract consumers as a critical element of store management (Huff, 1962). Since consumers visit usually involves acquisition of multiple items, a store with extensive merchandising provides more choices to the consumers and obviates their need to visit other stores (OKelley, 1981). Accessibility is found to be the next signicant variable (b 0:48; po0:01) that inuences consumer preference. The result partly explains why the Big Six choose to site in an immensely popular tourist belt area, a decision that is in line with the emphasis on the importance of location (Vandell and Carter, 1993; Ownbey et al., 1994). Surprisingly, although the stores are all located along the same road and within walking distance from each other, there is still a perceived variation in accessibility among them. This is probably due to the differences in the stores proximity to bus stops, cabstands, and subway station. Also, the stores are located in different shopping centers with varying availability of car park facilities. Thus, the inuence of physical distance on store preference becomes less obvious and is overshadowed by other psychological perceptions of accessibility. Next is reputation (b 0:42; po0:01). The result shows that reputable stores are preferred over the less reputable ones. Consumers appear to link reputation of the stores with the quality and value of their purchase. This is important whether the purchase is intended for personal consumption or as gifts. It could also be that their preference for the stores is inuenced by the favorable word-of-mouth recommendations from their close circle of friends and relatives. In-store service is found to be the fourth most important attribute (b 0:36; po0:01). In a broader perspective, consumers consume the intangible instore services that are embedded in the tangible merchandise that they purchase (see Beatty et al., 1996). Hence, stores that provide good service leave shoppers with a favorable perception and encourage

them to make repeat visits. The result reveals that strength in this attribute translates into a stronger preference for the stores. It conrms the assertions by Reynolds and Beatty (1999), Bitner et al. (1994) and Shycon (1992) of the positive impact of favorable instore services on consumers purchasing behavior. The result reveals store atmosphere as another signicant variable inuencing consumer preference (b 0:30; po0:01). It validates the linkage between the emotive response of consumers and the physical aspects of stores. A pleasing store atmosphere, which offers comfort and gratications that contribute to consumers sense of well being in the stores, enhances the quality of their visit and this increases consumer preference for the stores. This result corroborates ndings of past studies by Donovan and Rossiter (1982), Westbrook and Black (1985) and Sherman et al. (1997). Lastly, promotions is found to have a signicant inuence (b 0:27; po0:05) on consumer preference. This nding ties in well with the conjecture by Bagozzi et al. (1998) that promotions are important to increase store awareness and trafc and build customer relationship. Consumers have to be constantly attracted to the stores and pampered with good deals to build in them a sense of afliation. Also, this recurring exposure to the varied activities and fresh offerings help to maintain the newness of store and creates a novelty feeling in their retail behavior (Alexander, 1983; Logue, 1986). Overall, it is interesting to note that the merchandising, accessibility and in-store service have a common characteristic of time saving for the consumers. This is particularly important to consumers who often desire to optimize visit to their preferred retail stores and are less inclined to switch to other stores due to the risk of disutility that is associated with uncertainties of merchandise availability, travel and parking inconvenience. These results lend support to espousal of the concept of consumers time poverty (Beatty et al., 1996; Reynolds and Beatty, 1999), which has been cited to explain consumers unwillingness to switch to another retail store provider (Gwinner et al. 1990).

6. Conclusion This study extends the current research on consumer retail behavior by demonstrating the importance of store image in the retailing businessthat possession of certain strong attributes increases the ability of the store to attract consumers. We have endeavored to structure our study to analyze the consumer preference in term of inter-store comparison, a departure from past studies that traditionally focus on relationship among the variables. This conceptualization provides a realistic replication of the situation consumers typically

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encounter when they are exposed attributes of the stores, form a perception of their images and subsequently develop an approach-avoidance reaction toward them. By focusing on the attributes S and consumer preference R in a SOR framework, we have identied the following as signicant variables (listed in a descending order of importance): merchandising, accessibility, reputation, in-store service, store atmosphere and promotions. These results lend weight to the assertion that stores that are able to expend their resources effectively to strengthen these essential attributes of their mage are likely to increase consumer preference. This is critical to ensure their viability in the face of escalating competition in the retail sector. As with any other studies involving perception, however, there are certain caveats in the interpretation of the results. First, while customers may have a stronger preference for certain stores, more research is needed to ascertain whether this preference translates into repeat visits to and, possibly, higher patronage of the stores. Second, the improvement of store image to increase consumer preference adds to the costs of operation and should be carefully weighed against the prot objectives of the store. Thus, being or becoming the most preferred store does not necessarily translate into higher protability for the store. Third, it is futile to equate the cost of improvement to the attributes with the level of enhancement to the attributes. As consumer perception is a subjective process, it does not necessarily mean that a more costly alternative will enhance an attribute better than a less costly one. Fourth, the enhancement of these attributes should be considered " -vis the attributes of other competing stores since vis-a consumer preference implies a comparison of stores. Despite some of its limitations, this study has attempted a broad-based, theoretically guided eld study of the effects of store image on consumer preference. The results are promising and provide the platform for a number of future research possibilities. Future research could focus on consumer preference to predict the magnitude of store patronage. This would require a more rened conceptualization and measurement of consumer preference based on theories related to consumer choice and decision-making. The strategic implications of the research could extend our current knowledge of store patronage. It would be interesting to classify the market into segments and assess the strategic positioning of stores. A competitive analysis to test differences in customer preference could reveal the intensity of competition of the segments. A signicant difference would indicate certain stores having a distinct over others. Unless the weaker stores improve their consumer preference, they are unlikely to remain viable in the long run. Another possible extension of this research would be to evaluate the impact of nancial input of stores on the consumer preference. However,

given the subjective nature of this enquiry, the linking of the capital investment with attribute enhancement to reect improvement to consumer preference remains a formidable challenge.

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