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Effects of consumer psychographics and store characteristics in influencing shopping value and store switching

PAURAV SHUKLA

Brighton Business School, University of Brighton, Mithras House, Lewes Road, Brighton, BN1 2DD, UK

BARRY J. BABIN

Department of Marketing and Analysis, College of Business, Room # 114, P. O. Box 10318, Louisiana Tech University, Ruston, LA 71272

Abstract The research examines the impact of psychographic variables and store characteristics on utilitarian and hedonic shopping value. The findings demonstrate the direct influence of deal proneness and normative interpersonal influences on personal shopping value. Moreover, the study also captures the influence of several store characteristics such as assortment, after sales service and ambience. The significant influence of shopping value in reducing store switching is also noteworthy. This study also provides evidence relating to how retailer controlled variables can influence consumer derived shopping value. Results show how each store environment factor influences consumers’ overall shopping value and thereby provide an avenue to make strategic adjustments which in turn can generate a better consumer experience and increased value. The study builds on and extends the previous work carried out relating to antecedents of shopping value by looking at the simultaneous influence of consumer level factors as well as retailer managed factors. Moreover, the study provides further evidence regarding how shopping value can lessen the dire impact of consumer defection at retail store level. Keywords: Shopping value, interpersonal influences, deal proneness, store characteristics, store switching. Paper type: Research paper

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Effects of consumer psychographics and store characteristics in influencing shopping value and store switching

1. Introduction Researchers observe that value creation comes from the interaction between a consumer and a shopping environment and it is this value that represents the worth of the activity to the consumer (Babin and Babin, 2001; Babin et al., 1994; Jones et al., 2006). The retailer offers a value proposition and the shopper and retailer together create value in the experience. Retail stores are replete with sensory stimuli as retailers increasingly allocate significant resources towards constructing a better consumer experience and therefore a higher value potential (Breugelmans and Campo, 2011; Zielke, 2010). Shoppers acquire what they set out to buy, and perhaps more, and the overall activity provides gratification in itself; thus the outcome is captured by utilitarian and hedonic value dimensions (Babin et al. 1994). Retail and services managers only can create effective value propositions when they know the factors that shape these outcomes. The overall purpose of this research is to offer insight into just what value propositions are most effective in everyday shopping experiences. In other words, this research offers greater insight into shopping value creation and examines how this culminates in decreased switching behaviour. Extant research studies several antecedents to shopping value including affect and intentions (Babin and Darden, 1995); attribute belief (Stoel et al., 2004) and schema typicality (Babin and Babin, 2001). Much of the research on value in experiences has focused on relatively complex and involving services such as fashion shopping, fine dining or even recreational activities. However, everyday consumer experiences more often occur in hypermarts and supermarkets. This research examines shopping value in the context of interpersonal everyday experiences. In addition, this context highlights consumers’ varying orientations toward price sensitivity and the role that deals play in creating value. The link between consumer deal proneness and value generation in everyday experiences is yet unexplored. Thus, this research focuses on two broad antecedent categories, namely two consumer psychographic variables (i.e. normative interpersonal influences and general deal proneness) and three store characteristics (i.e. product assortment, store ambience and after sales service). Jones et al. (2006) observe that extant research on both hedonic and utilitarian shopping value has focused much effort on antecedents of shopping value (Babin et al., 1994; Griffin et al., 2000; Stoel et al., 2004) with very little emphasis on the outcomes of shopping value. The abundance of choice in today’s marketplace provides a great opportunity for consumers to switch between stores. Researchers observe waning consumer loyalty and increased store switching among consumers (Wright and Riebe, 2010). However, earlier studies have not given attention to the specific relationship between shopping value and store switching. Overall, the research offers potential contributions related to the effects of consumer psychographics and store characteristics on shopping value and the effect of shopping value on store switching in the context of everyday experiences. Theoretically, the work expands knowledge related to the interplay between the individual difference variables of normative influence and deal proneness on shopping value and examines the relationship between value and switching. Practically, the work offers insight into ways managers can best appeal to shoppers and create more valuable propositions for customers that in turn, create longer lasting and more valuable returns for the retailer.

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2. Conceptual framework and hypotheses development 2.1 Shopping value Many consumers consider shopping an excursion (Hausmann, 2000), a fun activity, and an entertainment experience (Arnold and Reynolds, 2003). However, at the same time, many consumers focus on shopping with a task orientation which creates a work-like mentality (Babin and Attaway, 2003; Hirschman and Holbrook, 1982). Babin and Attaway (2000) suggest that shopping can be valuable from task-oriented as well as experiential perspectives. When a consumer receives an intended service or finds an intended item in store, the task oriented value is prominent. Moreover, the immediate personal gratification generates experiential value. Given that shopping involves both experiential and instrumental outcomes, Babin et al. (1994) operationalize two dimensions of shopping value namely (a) hedonic and (b) utilitarian. Hedonic value refers to the value reflected in the experience of shopping while the utilitarian value reflects the task-related worth associated with shopping. Hedonic value, which reflects shopping’s potential entertainment and emotional worth is more subjective and personal than its utilitarian counterpart and results more from fun and playfulness than from task completion (Hirschman and Holbrook, 1982). In case of everyday experiences, consumer may derive shopping value differently than complex and more involving retail scenarios studied earlier (Babin and Babin 2001). In this regards, we posit that the yet unexplored relationship between deal proneness and shopping value generation may be highly significant. Similarly, everyday experiences occurring in supermarkets and hypermarts occur in the presence of others. We believe that in such situations the role played by normative interpersonal influences maybe non-negligible. Therefore, we look at the role played by both deal proneness and normative interpersonal influences on shopping value. Deal proneness has been defined as a general proneness to respond to promotions because they are in deal form (Lichtenstein et al., 1995). Researchers have observed that most consumers are deal prone to some extent (Burton et al., 1998; DelVecchio, 2005). Beyond the money saved (utilitarian value), deal prone consumers are also likely to feel happy (hedonic value) due to the bargain received when shopping. While seemingly important in influencing everyday experiences the relationship between deal proneness and shopping value has not been explored previously. Extant research suggests that consumers’ experiences are strongly influenced and shaped by their social environment and interpersonal interactions (Bearden et al., 1989). There are often multiple customers in a store simultaneously and the experience of each customer can impact that of others (Verhoef et al., 2009). Ariely and Levav (2002) argue that in the presence of others, consumers make different choices from those they would have made by themselves. However, Verhoef et al. (2009) in their conceptual framework of customer experience management, highlight that the research on the impact of interpersonal influences at store level is sparse and call for exploring the link between interpersonal influences and shopping value. Therefore, the first aim of this article is to measure the effects of consumer psychographics (i.e. normative interpersonal influences and deal proneness) on shopping value (i.e. hedonic and utilitarian shopping value). Theory of affordances (Gibson, 1979) suggests that people perceive their physical environment as a meaningful entity and that such a perception conveys information directly to them. Considerable research has examined the impact of various store characteristics including product assortment, music, lighting, fragrance, after sales service and facilities on shopping behaviour (Ailawadi et al., 2006; Breugelmans and Campo, 2011; Kaltcheva and Weitz, 2006; Manganari et al., 2009; Theodoridis and Chatzipanagiotou, 2009; Yoo et al., 1998). In this regard, it has also been noted that ambient store environment conditions such as

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store layout, design, employee and customer appearance evoke varying levels of emotions among consumers (Badrinarayanan et al., 2010; Darden and Babin, 1994). The effects of these emotions have been observed on willingness to buy (Baker et al., 1992); customer satisfaction (Theodoridis and Chatzipanagiotou, 2009); and store and brand loyalty (Ailawadi et al., 2006). Given the importance of efforts on improving store characteristics by retailers, it is critical to understand to what extent store characteristics influence hedonic and utilitarian shopping value. The study also posits that store characteristics will moderate the relationship between consumer psychographics and shopping value. The relationships have been depicted in Figure 1. ---------------------------------- Figure 1 about here ---------------------------------- 2.2 Antecedents to shopping value 2.2.1 General deal proneness Consumer deal proneness is considered to be the responsiveness to promotions and deals (Blattberg and Neslin 1990). According to transaction utility theory (Thaler, 1985), deal prone behaviour is perceived to be going beyond the lowest price and seeking the utility in the transaction when the price paid is below the consumer’s internal reference price. This in turn, can generate increased value within consumer’s mind. Deal proneness is observed across a range of consumers belonging to various socio-economic backgrounds (Blattberg and Neslin, 1990; Burton et al., 1998; DelVechhio, 2005). Lichtenstein et al. (1995) argue that consumers are attracted towards a deal because the benefits appear in the form of a deal, rather than lower prices. In similar vein, Talukdar et al. (2010) opine that many consumers spend considerable time and effort bargain hunting and enjoy the thrill of getting bargains, in addition to the price savings. This suggests that buying on deal has psychological benefits, irrespective of the financial consequences. DelVechhio (2005) observes that deal-prone consumers give increasing attention to the overall transaction utility in their buying process in addition to the acquisition utility. However, Chandon et al. (2000) observe that prior studies focusing on deal proneness centre mainly on the monetary savings. Despite the significant managerial interest in consumer deal proneness (Jacob, 2002; d’Astous and Landreville, 2003; Talukdar et al., 2010), the consumer deal-proneness personal shopping value link remains understudied. In presence of various forms of deals, the overall consumer deal proneness can increase consumer excitement and participation (Carpenter and Moore, 2008) in the purchase process and in turn may affect the overall perceptions of pleasure associated with the shopping value. Following Keller (1993), this study defines that deal proneness at store level is associated with both exposure (e.g. a consumer observing the specific deal on a product) and usage (e.g. a consumer is enticed to act on the deal and buys the product). Given that most hypermarts and supermarkets emphasize price with EDLP, price matching or heavy promotion policies, the highly deal prone consumers may sense fulfilment in these activities. This definition in turn implies that the positive experience provided by a deal may affect consumer’s perceptions of hedonic (i.e. through exposure and experience) as well as utilitarian value (i.e. through usage) derived from the shopping. Thus,

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H1: The level of consumers’ deal proneness has a positive relationship to (a) the hedonic value derived from shopping and (b) the utilitarian value derived from shopping.

2.2.2 Normative interpersonal influences Even though marketers have long realized the importance of building strong bonds between customers, Verhoef et al. (2009) observe that researchers and marketers alike have mostly ignored the call for studying relationship between how other consumers influence fellow consumers’ experience and value perspectives. This paper addresses such calls by exploring the effects of normative interpersonal influence on shopping value. Burnkrant and Cousineau (1975) define “normative influences” as the tendency to conform to the expectations of others. Researchers also suggest that consumers’ consumption experiences are strongly influenced and shaped by their social environment and interpersonal interactions (Bearden et al., 1989; Massara, Liu and Melara, 2010). Verhoef et al. (2009) opine that consumer experience and value generation is not only associated with the elements which the retailer can control (e.g. retailer atmosphere, assortment, service interface, price) but also by elements that are outside of the retailer’s control (e.g. influence of others, purpose of shopping, consumers cognitive and affective responses). While existing literature has mostly focused on the interaction between the company or its employees, with the customer (Verhoef et al., 2009), at retail level, interactions among customers can have profound effects on the value consumers derive from the experience (Dagger and O’Brian, 2010; Huang et al. 2010). For example, customers often visit a retail space with friends or family members. This can affect the customer’s own value perceptions as well as that of fellow customers. Verhoef et al. (2009) suggest that companies which can manage dissemination of useful customer knowledge via other consumers can gain substantial competitive advantage. Researchers separate consumer susceptibility to normative interpersonal influences into value expressive and utilitarian dimensions (Shukla, 2011). Value expressiveness exhibits the individual's desire to augment self-image by association with a reference group. On the other hand, utilitarian influence is reflected in an individual’s attempt to comply with the expectations of others to achieve rewards or avoid punishments (Bearden and Etzel, 1982; Massara et al., 2010). In their typology of the role played by strangers in retail environment, McGrath and Otnes (1985), identify that consumers play various roles such as helpseeker, helper, competitor and complainer, each of which gives a specific signal about a product’s worth to other consumer. These signals may affect both the value expressive and the utilitarian dimensions as consumers attempt to manage their self-image and at the same time try to comply with the signals to receive rewards and avoid punishments. Consumers highly influenced normatively will find gratification in the interpersonal shopping environment and they may also perceive themselves as making better purchases by taking the advice or cues given off in the environment, including other shoppers, retailers and promotional materials. These cues may influence consumers’ overall experience and task-related worth and thus their overall perceptions of shopping value. Thus, it is predicted that consumers with high normative interpersonal influence will derive high hedonic and utilitarian value from shopping. The following hypotheses are proposed.

H2: The level of consumers’ susceptibility to normative interpersonal influences has a positive relationship to (a) the hedonic value derived from shopping and (b) the utilitarian value derived from shopping.

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2.2.3 Store characteristics Researchers suggest that in recent times, many consumers use shopping as a mood-altering process. With the changing consumer attitude toward shopping, retailers have provided engaging store layouts and many store-level exclusive bargains and offers. Baker et al. (2002) suggest that whereas yesterday’s store environment had few standards to meet, today a store must tie in directly to the brand and speak of its brand value proposition. Extant research captures how ambient conditions, including store layout, employee and customer appearance, assortment, after sales service, arouse differing levels of emotions among consumers (Babin and Attaway, 2000; Baker et al., 1992; Breugelmans and Campo, 2011). These emotions have been observed to have an impact on the consumers’ price perceptions (Grewal and Baker, 1994); perceived value (Babin and Attaway, 2000; Babin et al., 1994), willingness to buy (Baker et al., 1992), customer satisfaction (Theodoridis and Chatzipanagiotou, 2009) and their approach/avoidance behaviour (Donovan and Rossiter, 1982). Mazursky and Jacoby (1986) as well as Ailawadi and Keller (2004) categorize the retail atmospherics into smaller set of categories including location, merchandise, service and store atmosphere related dimensions. However, in today’s overcrowded retail marketplace, location no longer explains most of the variance in store choice decisions (Ailawadi and Keller, 2004). Researchers observe that retail stores differentiate themselves significantly on the basis of their product assortment (Ailawadi and Keller, 2004; Messinger and Narasimhan 1997), their after sales service (Badrinarayanan et al., 2010; Mazursky and Jacoby, 1986; Yoo et al., 1998) as well as the overall atmosphere (Baker et al., 2002, Grewal et al., 2003; Yoo et al., 1998). Consumers’ perception of the breadth of different products and services offered by a retailer under one roof significantly influence store patronage (Ailawadi and Keller, 2004). Wider assortment has got significant advantages as the retailer can be recalled in a greater range of consumption situations and considered by the consumers. Not only does a wider assortment enhance the likelihood of completing the shopping task (higher utilitarian value), but the wider assortment also comes along with more and more new and exciting products for a consumer to explore (higher hedonic value). Many supermarkets today highlight the significant focus on after sales service, wherein the delivery, repair, return and refund policies are highlighted on all forms of communications including the product packaging. Good after the sale service generally means better in store help, making the shopping task easier to accomplish. To the extent that this service is also friendly, service translates into greater hedonic value as well. Baker et al. (2002) note that store ambience can affect consumers’ perceptions of the economic and psychological value in a store. Similar findings have also been observed by other researchers including Penz and Hogg (2010) and Yoo et al. (1998). The economic and psychological value will get reflected in the task-related worth and the overall experience of shopping respectively. Based on the above evidence it is proposed that:

H3: The level of assortment has a positive relationship to (a) the hedonic value derived from shopping and (b) the utilitarian value derived from shopping. H4: Promised after-sales service has a positive relationship to (a) the hedonic value derived from shopping and (b) the utilitarian value derived from shopping.

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H5: Store ambience has a positive relationship to (a) the hedonic value derived from shopping and (b) the utilitarian value derived from shopping.

2.3 Consequence of shopping value Extant research on shopping value suggests a direct correspondence between shopping values and the worth assigned to the shopping activity (Chiu et al., 2005), so that the higher the utilitarian and hedonic shopping values, the greater the customer's worth assessment of the shopping activity (Babin et al., 1994). In simpler terms, consumers will generally purchase products from a retailer where they can derive the maximum value. However, extant research on both hedonic and utilitarian shopping value has focused much effort on the antecedents of shopping value with very little emphasis on the outcomes of shopping value (Jones et al., 2006). Moreover, with regards to consequences, researchers have focuses on satisfaction, word-of-mouth, loyalty and re-patronage intentions as outcomes (Jones et al., 2006; Stoel et al., 2004). In summary, the outcomes of shopping value requires much further research as the available research on shopping value outcomes have largely focused on positive outcomes. Campo et al. (2000) observe that store switching is one of the less researched phenomena, yet remains important as it may entail serious negative consequences for the manufacturer and/or retailer. This research therefore explores the negative consequences of shopping value especially focusing on store switching. Marketing literature on store switching has mostly looked at store switching from the perspective of opportunistic cherry picking behaviour based on attractive price promotions (Fox and Hoch, 2005; Talukdar et al., 2010). However, Urbany et al. (1996) observe that approximately 10-35% of the consumers are affected by price promotions. This is significantly below the percentage of shoppers (approximately 75%) who regularly shop at multiple stores (Gijsbrechts et al., 2008). Therefore, this research posits that consumers may systematically switch stores for reasons other than promotional offers including the overall value they derive from shopping. Value received is the goal of consumption. Thus, consumers repeat valuable experiences and as a result are not inclined to switch when they receive sufficient value from interacting with a retailer. The question of what type of value is strongest in encouraging loyalty remains a question. Research on hedonic and utilitarian products suggests that hedonic experiences are more likely to influence anticipated attitudes towards similar consumption events in the future (O'Curry and Strahilevitz, 2001). Likewise, competitors lure customers away from their previous stores by encouraging anticipation of exciting future intrinsic rewards (i.e., hedonic) should they switch (Van Trijp et al., 1996). Hedonic value is associated more with felt emotions like joy and pleasure and is thus more pleasurable to anticipate (Loewenstein, 1987). Researchers further suggest that, pleasurable experiences are more readily accessible and salient in the mental imagery because they leave affective traces in the memory (Jones et al., 2006). These traces can easily get activated when anticipating future consumption events (Shiv and Huber, 2000). Thus, we expect that while both utilitarian and hedonic shopping value will influence store switching, hedonic shopping value is likely to be of stronger influence. Hence, it is proposed that: H6: Store switching is related to (a) hedonic shopping value and (b) utilitarian shopping value such that more value leads to a greater chance of repeated patronage.

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H7: Hedonic shopping value will be a stronger influencer on store switching than utilitarian shopping value. 3. Methodology 3.1 Procedure and sample A quantitative methodology employing a self-administered structured questionnaire was used to measure and validate the hypothesized relationships. The data was collected in two cities in the South East of England. More than 800 consumers were contacted outside three different large supermarkets over a four-week period with a final usable sample of 309 (response rate = 38.63%). The supermarkets were chosen because of the high traffic, wide assortment of product categories sold, and high degree of store browsing. The survey team rotated the location of interviews, times of the day and days of the week to make the final sample representative of the population of shoppers. The respondent profile reflects the same (see Table 1). A total of 51.5% are male and 48.5% are female. The age group and occupation representation is also fairly balanced. Nearly 1/3 of consumers spend between £21-30 per week on grocery shopping. ------------------------------------- Insert Table 1 about here ------------------------------------- 3.2 Research instrument Table 2 shows the scales used to measure the eight latent constructs. The normative interpersonal influences scale was adopted from Bearden et al. (1989). The scale proposed by Burton et al. (1998) was used to measure general deal proneness. Shortened version of the hedonic and utilitarian shopping values scale as proposed by Babin and Attaway (2001) was used. The responses for the normative interpersonal influences, general deal proneness and hedonic and utilitarian values were captured using a five point Likert scale with strongly disagree and strongly agree as anchors. The scales relating to store characteristics (i.e. assortment, after-sales service and ambience) were adapted from Baker et al. (2002) and Yoo et al. (1998). The assortment scale response was captured through 7-point scale (1 = not at all; 7 = very much). The after sales service scale response was captured through 7-point scale (1 = not clear and detailed at all; 7 = very clear and detailed). Ambience scale response was captured using 7-point scale with strongly disagree to strongly agree as anchors. To capture store switching behaviour procedure used by Sloot and Verhoef (2008) was followed. Consumers were shown six product categories including three hedonic (i.e. ice creams, chocolates and deodorant) and three utilitarian (i.e. detergents, toilet paper and toothpaste) product categories. Consumers were then asked to rate each category according to the importance they gave to these categories in terms of their overall grocery basket. Once the consumer identified the top product category, they were asked to recall (a) the brands they usually bought and (b) the brands they thought of as the alternative to their usually bought brand in that specific product category. After selecting the brand of interest among the six product categories, the interviewer asked the consumer whether they will switch to a different store if the store did not have either of these brands in that specific product category. The store switching intention was captured using a 7 point scale with ‘definitely switch’ to

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‘definitely not switch’ as anchors. The consumers were then exposed to another scenario, wherein they were asked that a competing store provided a better overall value for the specific brands they were planning to buy. The store switching intention was captured on a similar scale as earlier. ------------------------------------- Insert Table 2 about here ------------------------------------- 3.3 Scale validity and reliability As Table 2 shows, the items used to measure the latent constructs in the model show values above the recommended level for both composite reliability and average variance extracted (AVE) (Bagozzi and Yi, 1988). The Cronbach’s alpha value was above 0.7 suggesting high reliability of the constructs. For all seven scales, the factor loadings were high and significant (p < 0.001), satisfying the criteria for convergent validity. Other fit indices were also above the recommended threshold value (Chi-sq (df) = 297.36 (210); RMSEA = 0.037; NNFI = 0.98; CFI = 0.98; SRMR = 0.044; GFI = 0.92). Discriminant validity was assessed using the test developed by Fornell and Larcker (1981). This test suggests that a scale possesses discriminant validity if the AVE by the underlying latent variable is greater than the shared variance (i.e., the squared correlation) of a latent variable with other latent variable. As Table 3 shows, this criterion was met by all the variables in the study; no correlation exceeds the square root of the AVE. The composite reliability (Table 2) was found to be above 0.7 across the constructs, exceeding the recommended threshold value, which also provides strong evidence of discriminant validity. The reliability and validity analysis results indicate that the constructs appear to have satisfactory measurement qualities. The totality of these tests provides strong evidence for reliability and validity of the construct measures. ------------------------------------- Insert Table 3 about here ------------------------------------- 4. Results The proposed model was analyzed with the maximum likelihood estimator of LISREL 8.70 by using the covariance matrix of the measured variables as an input (Jöreskog and Sörbom 1993). ------------------------------------- Insert Table 4 about here ------------------------------------- Table 4 provides the path coefficients and associated t-values for each hypothesis. With regards to general deal proneness, the relationship was significant only in the case of utilitarian shopping value (β = 0.30, t = 3.41) providing partial support to H1. As predicted in H2, positive relationship was observed between consumer’s susceptibility to normative

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interpersonal influence for both (a) hedonic shopping value (β = 0.25, t = 3.40) and (b) utilitarian shopping value (β = 0.25, t = 3.44). Thus, H2 is supported. Hypothesis 3 was fully supported as the relationship between level of assortment and (a) hedonic shopping value (β = 0.30, t = 3.66) and utilitarian shopping value (β = 0.20, t = 2.62) was found to be positive and significant. Hypothesis 4 was not supported as the relationship between after-sales service and hedonic and utilitarian shopping value was found to be non-significant. Partial support was observed for hypothesis 5, wherein ambience has a direct positive influence on utilitarian shopping value (β = 0.31, t = 3.89). In the case of consequences of shopping value on store switching, Hypothesis 6 proposed direct influence of hedonic and utilitarian shopping value on store switching. This hypothesis was supported as store switching (scored so that a higher score means less switching) is significantly influenced by hedonic shopping value (β = -0.52, t = -5.43) and utilitarian shopping value (β = -0.20, t = -2.49). The significantly high beta value also supports Hypothesis 7 which suggests that the hedonic shopping value is a stronger influencer to store switching behavior. 5. Discussion As retailers continuously increase their spend on improving in-store customer experience and overall shopping value, it is important for both researchers and retailers to understand the effects of consumer psychographics and store characteristics on consumer perceptions of shopping value. While earlier studies have focused on shopping value in complex retail environment (Babin and Babin 2001), this study looks at how consumer derive shopping value in everyday experiences. In this regards, the objective of this research was to examine the effects of consumer psychographics and store characteristics on shopping value and the effect of shopping value on store switching. In addressing the above issues, the study makes several important contributions towards the understanding of shopping value as it empirically demonstrates the effects of consumer controlled and retailer controlled factors on overall shopping value. The results of this study are discussed as follows. It was observed that general deal proneness was significant in case of utilitarian shopping value only. While it was opined that the deal proneness may be associated with exposure and usage (Keller, 1993), the findings suggest that consumer deal proneness is strongly linked with usage component. This in turn reflects the significant association of deals in consumers’ minds with their task-related worth. Managers have to be wary of this association in building their in-store promotion campaigns. This finding may also be a reflection of the definition and measurement of general deal proneness based on extant literature. Chandon et al. (2000) suggest that generic deal proneness is more aligned to monetary promotions and less towards non-monetary promotions. They also opine that monetary promotions provide low levels of hedonic benefits to consumers. Thus, the association between general deal proneness and utilitarian and hedonic shopping value needs further examination. Future research should differentiate between deal proneness using monetary and non-monetary promotions to capture the subtle differences between the types of promotions and the resultant effects on shopping value. Looking at the effects of normative interpersonal influences, the findings demonstrate that presence of others can significantly affect the shopping value at store level. The study findings provide empirical support to the calls for understanding the influence of groups on customer experience at store level (Verhoef et al., 2009). The findings suggest that signals given by other consumers can significantly affect consumer’s own perceptions of hedonic and utilitarian value derived from the shopping experience. Therefore, retailers will need to give greater attention to this phenomenon. Some retailers seem to have identified the influence of

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normative interpersonal influences and have started acting on it. For example, in early 2010, the retail giant Tesco in the UK declined to serve consumers who were without any footwear or have come to store in their nightwear (BBC, 2010). While this is a one-off case, the other supermarkets have still to act on how they can manage the customer to customer interactions at store level. The effects of store characteristics are worthy of attention as it is observed that not all store characteristics influence consumer perceptions of shopping value. While findings of this study corroborate with the earlier suggestions regarding the influence of product assortment (Ailawadi and Keller, 2004; Messinger and Narasimhan 1997), they contradict the assertions regarding after sales service (Mazursky and Jacoby, 1986; Yoo et al., 1998). The results demonstrate that the breadth and depth of product assortment can certainly lead to higher perceptions of shopping value. This is probably due to the higher salience (Keller, 1993) and also because of the convenience offered by the breadth and depth of product assortment. A retailer offering breadth and depth of product assortment in turn offers a one-stop shopping convenience. This in turn can help the time-constrained consumer of today and thus increase the overall value associated with shopping. Such convenience can be costlier for retailers to manage however provide higher levels of shopping value for consumers. Focusing on the influence of after sales service, the findings suggest that overall shopping value at store level is highly dependent on immediate gratification rather than future promise. The results relating to ambiance are also interesting. Prior research findings demonstrate the significant influence of ambiance on consumer shopping behaviour in fashion shopping, fine dining and such others contexts. However, findings of this research show that ambience significantly affects utilitarian shopping value and not the hedonic shopping value. This finding has important implications for retailers because it provides a direction with regards to managing store level spending. The result suggests that retailers should improve ambiance in a way that it improves the efficiency of consumer’s shopping focusing on the task-related worth. If the store level investment can increase consumers speed of shopping (i.e. it facilitates them to buy faster and find the product they are looking for in a shorter period of time), it will significantly increase consumer’s overall shopping value perceptions for that specific store. By looking at the impact of hedonic and utilitarian shopping value on store switching, this research addresses calls for studying the consequences of shopping value (Campo et al., 2000; Jones et al., 2006). A broader view of these results suggests an important interrelationship between hedonic and utilitarian shopping value and store switching. The findings demonstrate that higher shopping value offered by a store can significantly deter consumers from store switching behaviour. This is highly important in retail environment as retailers are constantly facing heightened consumer defection. The findings of this study provide an avenue to reduce consumer defection. The results suggest that it is important for a retailers to focus on both task related worth (i.e. utilitarian shopping value) and emotional worth (i.e. hedonic shopping value) to avoid customer defection. The study provides empirical support to the assertion put forward by Jones et al. (2006) stating that utilitarian shopping value may very well be a necessary, but not sufficient condition for building store loyalty. While both utilitarian and hedonic values affect the store switching behaviour, it is interesting to note that hedonic value, which represents the emotional worth of the shopping experience, is far stronger predictor of store switching behaviour. This result highlights the importance of creating an overall worthwhile retail experience. While many retailers in today’s environment focus on merchandise variety and assortment, convenience of location and store hours, it seems that consumers are looking

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for more. The retailers focusing on building engaging layouts, increasing store-level interactivity, and building an overall better experience may actually reap the rewards. 6. Conclusion The increasing investment by retailers on store level expenditure warrants further attention with regards to its implication on consumer shopping value. This study makes multiple conceptual, substantive and managerial contributions to the literature relating to shopping value. Conceptually, the study builds on and extends the previous work carried out relating to antecedents of shopping value by looking at the simultaneous influence of consumer level factors as well as retailer managed factors. The results make a substantive contribution wherein it is demonstrated as to how retailer controlled variables can influence consumer derived shopping value. Moreover, the findings also demonstrate the critical importance of shopping value in store switching behaviour. Managerially, the study provides vital information regarding how the investment at store level should be targeted to achieve greater impact and how shopping value can lessen the dire impact of consumer defection at retail store level. 7. Limitations and future directions This study, like any other, suffers from various limitations which also offer further avenues for research. While this study focuses on the impact of store characteristics on the relationship between consumer psychographics and shopping value, further research should be carried to address the influence of store characteristics on socio-economic groups. It would be interesting to see how consumers belonging to different socio-economic groups derive shopping value. The non-significance of the relationship between ambience and hedonic shopping value also need further examination. While this study only focused on three ambient characteristics namely design, lighting and music, future studies should look at other atmospherics including, air quality, space for rest, store congestion among others. Another avenue for research is to look into how overt and covert signals by other consumers can influence the overall shopping value. Experimentation can be a useful method in this regards. While this study specifically focused on the influence of shopping value on store switching, future researchers could also look at other variables which affect store switching. By comparing the effects of other variables and shopping value simultaneously on store switching, researchers will be able to identify the comparative importance of shopping value. Another avenue for comparative research will be to look at the effects of all the antecedents studied in this research at product category level. Especially, controlling for the level of involvement and uniqueness of the product may influence consumers differently. Most studies addressing shopping value construct have been conducted in the US or other developed markets. With rapid expansion of many multi-national retail firms in emerging markets, it will be interesting to see the importance of shopping value construct in emerging markets too. A cross-national comparison may be a welcome effort in this regards. References Ailawadi KL, Harlam BA, Cesar J, Trounce D. 2006. Promotion profitability for a retailer:

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Table 1: Respondent profile Variable Category Percentages Gender Male 51.5% Female 48.5% Age group Less than 20 11.32% 20 – 29 30.09% 30 – 39 23.30% 40 – 49 23.62% 50 and above 11.65% Occupation Self-employed 12.94% Employed full time 23.62% Employed part time 7.77% Housewife 30.42% Student 21.36% Unemployed/Retired 3.88% Weekly grocery spend

Under £10 12.30%

Between £11 - £20 24.27% Between £21 - £30 33.66% Between £31 - £40 11.33% ` Between £41 - £50 13.27% Above £50 5.18%

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Table 2: Measurement model Scale items

Std. Est.

AVE CR Cronbach’s α

Normative interpersonal influences 0.70 0.80 0.89

If other people can see me using a product, I often purchase the brand they expect me to buy.

0.61

I like to know what brands and products make good impression on others.

0.84

I achieve a sense of belonging by purchasing the same products and brands that others purchase.

0.80

General deal proneness 0.55 0.72 0.84

Beyond the money I save, buying brands on deal makes me happy.

0.75

When I purchase a brand that is offering a special promotion, I feel that it is a good buy.

0.73

I feel like a successful shopper when I purchase products that offer special promotions.

0.82

I love special promotional offers for products. 0.57

Hedonic shopping value 0.53 0.71 0.82

A shopping trip to [store X] is a joyful experience. 0.82

I enjoy shopping for its own sake, not just for the items I may have purchased.

0.66

While shopping at [store X], I am able to forget my problems.

0.54

Utilitarian hopping value 0.70 0.81 0.78

While shopping at [store X], I found just the items I was looking for.

0.74

I was disappointed because I had to go to another store to complete my shopping. (R)

0.68

It was a good shopping trip because it was over very quickly.

0.59

Assortment 0.75 0.83 0.83

The [store X] has…

…New products available. 0.71

…Variety of products available. 0.77

…Variety of brands available. 0.87

After sales service 0.64 0.77 0.81

The [store X] has a clear and detailed…

…Return policy. 0.72

…Refund policy. 0.88

…Repair policy. 0.59

Ambience 0.66 0.78 0.73

The [store X] has…

…Nice design. 0.73

…Good lighting. 0.66

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…Good music playing in the store. 0.79

Store switching (R) 0.78 0.83 0.77

Will you switch to another store if your favourite brand was not available in store?

0.89

In case of the other store providing a better value for your favourite brand, will you switch to the other store?

0.80

χ2 (df) = 294.86 (210); RMSEA = 0.036; NNFI = 0.97; CFI = 0.98; SRMR = 0.046; GFI = 0.92

(R): Reverse coded item

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Table 3: Correlations matrix NI HSV USV GD PA AM ASS BS

Normative interpersonal influences (NI)

0.83

Hedonic shopping value (HSV)

0.32 0.74

Utilitarian shopping value (USV)

0.46 0.59 0.73

General deal proneness (GD)

0.30 0.21 0.56 0.83

Product assortment (PA)

0.27 0.42 0.53 0.41 0.87

Ambience (AM) 0.20 0.24 0.54 0.34 0.42 0.80

After sales service (ASS)

0.33 0.19 0.44 0.54 0.39 0.31 0.82

Store switching (BS) -0.25 -0.63 -0.49 -0.29 -0.36 -0.38 -0.16 0.88

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Table 4: Path coefficients with interaction analysis Hypothesis Std.

Est. T-value

H1a General deal proneness -> Hedonic shopping value 0.04 0.48

H1b General deal proneness -> Utilitarian shopping value 0.30 3.41*

H2a Normative interpersonal influence -> Hedonic shopping value 0.25 3.40*

H2b Normative interpersonal influence -> Utilitarian shopping value 0.25 3.44*

H3a Product assortment -> Hedonic shopping value 0.29 3.66*

H3b Product assortment -> Utilitarian shopping value 0.20 2.62*

H4a After sales service -> Hedonic shopping value -0.07 -0.83

H4b After sales service -> Utilitarian shopping value -0.03 -0.43

H5a Ambience -> Hedonic shopping value 0.11 1.37

H5b Ambience -> Utilitarian shopping value 0.31 3.89*

H6a Hedonic shopping value -> Store switching -0.52 -5.43*

H6b Utilitarian shopping value -> Store switching -0.20 -2.49*

* Relationship significant at p <0.01

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Figure 1: Conceptual framework (+) denotes positive relationship

Store characteristics

Consumer psychographics

Hedonic shopping value

Utilitarian shopping value

Store switching

General deal proneness

Normative interpersonal

influences

Product assortment

Ambience

After sales service

H1a (+)

H1b (+)

H2a (+)

H2b (+)

H3a (+)

H3b (+)

H4a (+)

H4b (+)

H5a (+)

H5b (+)

H6a

H6b