A Tyre Retailer operating in Australia has only succeeded in achieving a marketing share of 25 percent. However, the market share has been on a decline for a considerable number of years. This is beside the company specializing in selling of the most-recognized brands such as Good Year and Dunlop. The retailer has lost customers. The new retailer chief executive officer was quick to observe after vising 20 of the major retail stores located in regional and cities, that half of customers were women. Besides, they were uncomfortable and tried to get out of the stores. While these issues were visible to the CEO within few stores, no study provides a understanding of environment factors that customers consider important among the outlets.
The study seeks to explore issues that affect the environment of the retail outlet. Furthermore, the study seeks to explain the manner in which customers perceive ambience factors in their purchase decision. Studies have failed to focus on Tyre Retailers involved in offering products and services to a diversified groups of customers. The study will focus on three key factors of store environment including design, social, and ambient factors. Secondly, this study will evaluate the manner in which consumers develop their perceptions concerning the ambience of retail stores. Thirdly, the study seeks to offer some recommendations concerning some of the best strategies that management could take to improve the retail environment.
The study seeks to adopt a case study as a qualitative strategy. A case study involves conducting empirical investigation concerning a given contemporary scenario. The scenario must also occur in their real life. The study will use structured questionnaires distributed at different stores to collect primary data from customers visiting the stores.
This study seeks to study a general objective that involves exploring environment Factors that influence customer purchase behaviour and retention in tyre retailers.
A retailer refers to an individual or a business that sells goods to final consumers for final consumption and not for reselling (Kaltcheva and Weitz, 2006). The customers purchase the products from a single point such as internet or brick-and-motor. Retailers buy goods in bulk from manufacturers and resell them in small quantities to customers. They link the manufacturers and consumers.
Retailers use marketing strategy attractive to target customers (Judd, Powell & Lewis, 2015). A good strategy for retail mix should be able to fulfil the customer expectations while its elements are consistent with each other (Sachdeva & Goel, 2015). It should also be competitive. Its elements include product, price, place, promotion, people and process.
Attractiveness of a retail store plays a major role in attractive customers to promote the sale of products (Reinartz & Kumar, 1999). Studies have found an association between store attractiveness and customer experiences (Berthold, Reese, & Martin, 2017). The current dynamic environment where technology is becoming a major influencing factor in determining how customers make decisions and shop, retailers operating offline stores must always think of factors that influence customers’ shopping experiences. Yurchisin and Park (2010) illustrates that physical stores are different with online stores in a number of ways. For instance, customers that purchase their products from physical stores always look for product information, fun, and speed of shopping, product selection, product quality sold at a good price, and convenience. All these differ from experiences of customers buying from online stores. Chen, Lin, & Chen (2015) found that such customers always seek for information from customers such as detailed photos, and price information. They also look for shopping aids like repairs, personalised services such as remembering preferences and special offers, and warranty. Furthermore, they also require a link between physical and online stores when making payments and convenience place for delivery.
Music is a factor that covers electronic instruments that creates and develops a positive mood at a work place. It emphasizes more on the atmosphere and the tone and differs from normal music, which emphasizes on rhythm (Burke, 2002). Ambient lighting involves the natural light that is normally present at a workplace before any secondary sources are switched on. This light might be coming through doors or windows depending on the structure of the building. It is very vital in a workplace where photography and video recording are done (Schielke & Leudesdorff, 2015). It can also be a problem for photographers who want less light when shooting videos (Tantanatewin, & Inkarojit, 2016). Studies have associated scent in store to stimulate a person to purchase from there. Temperature of a determine the performance of people at a workplace together with the equipment they use (Grubor, Milicevic, & Djokic, 2017). The temperature should be average in places where people work for longer hours (Gasparrini, Guo, Lavigne, Zanobetti & Leone, 2015). Higher temperatures may negatively influence the equipments reducing their performance.
Design Factors
Retail store layout involves making use of the physical space strategically to influence customers buying decision. This includes better positioning of furniture, fixtures, signage, displays and lighting. The customer navigation must be easy by understanding customers flow and their patterns. Layout includes factors such as the geographic location, the premises size, architecture style, colors used and the entrance design.
Assortments are total number of products or services that retailers display and make available for buying (Bhat, & Singh, 2017). The retail store should be able to indicate the depth of the products that indicates the number of similar products available in the store. They should also show product width, which indicates the types of different products in the store. If assortment is deep, it shows that the retail store has several variations of a single product. If the variety is wide, then the store contains many different products. Furthermore, interior designs form the internal appearance of the store should be very pleasing so that it can attract customers (Sheehan, & Van Ittersum, 2018). The arrangement of the products should be in a simple manner so that the customers can view the different types of products available. Smart design decisions have a major role in whether a person will buy or leave the store.
Different types of customers visit retail stores to purchase their products. Well-informed customers make a lot of research about the product before they actually buy it (Wang, & Goldfarb, 2017). They take note of descriptions on products and compare the prices of the products present in the store. The show roomers check a product personally but opt to buy a similar product online if the price is cheaper (Burke, 2002). They use apps for price comparison. The wanderer customers just pay a visit to the retail store without a reason. This maybe a product caught their eye or are trying to pass time as they gather information about a particular product.
Retail store employees are those individuals who work in the stores to sell the products to customers. Their duties in the store differ depending on what you are selling to the customers. The employees must understand the products they sell and the customers they interact with. To give customers a better experience, the employees should have used both types of the products before. Most of the positions normally include both working the cash register and giving a customer service. The main objective is to avoid the retail from making losses. Some of the positions include customer service representative, department manager, retail team leader, store manager, storekeeper and cashier.
Research Methodology
This chapter will look at the site description, design, sample and sampling procedure, data collection, analysis, as well as ethical consideration.
The study seeks to use a descriptive approach as the best procedure for expressing accurate situation regarding environment factors that respondents consider to shape their decision-making. Saunders, Lewis and Thornhill (2009) descriptive research seeks to produce accurate representation of an event. The pro to select this approach is to collect quantitative data while using structured questionnaires. The study will design structured questionnaires to help collect primary data from customers.
This study seeks to use customers that buy products from the physical stores. The study will target all categories of customers. Most of the customers will include those that come to purchase tyres in the stores.
This study will use customers that come to the retail stores as the primary sample. The customers will be of all demographic categories. Consequently, the study seeks to apply convenience sampling. Park, Jeon, and Sullivan (2015) the approach involves selecting a sample of cases easily accessible. The advantages using such a sampling approach is because while a majority of customers geographically distributed in different areas in Australia, it is easier to access those that come to the retail stores to purchase their products. The process will also save on the cost and time of having to travel long distances to approach the customers.
The study will apply Fisher’s formula in order to estimate the appropriate sample size. Furthermore, the study will apply 95% level of confidence while assuming that those affected by the store environment are 60%. The advantage of using this formula is when the researcher does not have a pre-defined population of the target subjects.
Therefore,
From the above equation, represent the sample size
Represent the critical value in a normal deviation
Represent the proportion of customers that have characteristics of being affected by the store environment. The reasonable estimate for this study will be at 60% (0.60).
Will represent the proportion of customers that are not affected by the store environment factors. In this case, this will represent the remaining 40% (0.40).
Will represent the degree of precision established at 0.05 with a corresponding z-value of 1.96.
The overall sample would be;
The study seeks to use quantitative method to collect primary data. The study seeks to apply structured-questionnaires. The structured-questionnaires will cover four different sections. The first section will collect data on demographic information concerning gender, age, region of residence, education, and frequency of shopping. The second section will include categorical questions on environment such as ambient factors, design factors, and social factors. For easier collection of data, all the questionnaires will be placed in a box at the entrance of the store. A notice will be placed on the box inviting customers to pick one questionnaire to fill while at the store and drop in the second box placed besides it. The study will allow a period of one week for customers to fill all the questionnaires.
The study will use Statistical Package for social sciences (SPSS version 25) to analyse all quantitative data. In order to do this, the study will analyse descriptive statistics to show frequencies and central measures across demographic values, and categorical variables. Furthermore, the study will conduct multinomial logistic regression in order to show the possibility of using environment factors to make purchase decisions.
The study seeks to apply a number of ethical concerns from the time of collecting to storage of data. According to Saunders, et al (2009), ethics are norms and standards that guide researchers about using moral choices to guide their behaviours and relationship with respondents. The study will be guided by the university code of ethics. All questionnaires will have objective statement explaining the objective of the study and the reason to give their consent before answering the questions. The study will also consider voluntary participation of respondents and their freedom to withdraw from the study.
References
Berthold, A., Reese, G., & Martin, J. (2017) The effect of red color on perceived self-attractiveness. European Journal of Social Psychology, 47(5), 645-652
Bhat, I. H., & Singh, S. (2017) Exploring the relationship between store image and store loyalty of an organized grocery retail. Clear International Journal of Research In Commerce & Management, 8(10), 44-46.
Burke, R.R., (2002) Technology and the customer interface: what consumers want in the physical and virtual store. Journal of the academy of Marketing Science, 30(4), pp.411-432.
Chen, M., Lin, Y., & Chen, I. (2015) Constructing innovative service quality for department stores. Total Quality Management & Business Excellence, 26(5/6), 482-496.
Gasparrini, A., Guo, Y., Lavigne, E., Zanobetti, A., & Leone, M. (2015) Mortality risk attribute to high and low ambient temperature: a multi-country observational study. The Lancet, 369-375.
Grubor, A., Milicevic, N., & Djokic, N. (2017) The impact of store satisfaction on consumer responses in out-of-stock situations. Revista Brasileira De Gestão De Negócios, 19(66), 520-537.
Judd, L. L., Powell, G. A., & Lewis, B. (2015) Do Retailer Pricing Strategies and the Perceived Competitive situation Influence Retailing Success? In Proceedings of the 1987 Academy of Marketing Science (AMS) Annual Conference, 296-300. Springer, Cham.
Kaltcheva, V.D. and Weitz, B.A., (2006) When should a retailer create an exciting store environment? Journal of marketing, 70(1), pp.107-118.
Park, H.H., Jeon, J.O. and Sullivan, P., (2015) How does visual merchandising in fashion retail stores affect consumers’ brand attitude and purchase intention? The International Review of Retail, Distribution and Consumer Research, 25(1), pp.87-104
Reinartz, W. J., & Kumar, V. (1999) Store-, Market-, and Consumer-Characteristics: The Drivers of Store Performance. Marketing Letters, 10(1), 5-22.
Sachdeva, I., & Goel, S. (2015) Retail store environment and customer experience: a paradigm. Journal of Fashion Marketing and Management, 290-298.
Saunders, M., Lewis, P., Thornhill, A. (2009) Research methods for business students (5th Ed) Prentice Hall
Schielke, T., & Leudesdorff, M. (2015) Impact of lighting design on brand image for fashion retail stores. Lighting Research & Technology, 47(6), 672-692.
Sheehan, D., & Van Ittersum, K. (2018) In-Store Spending Dynamics: How Budgets Invert Relative-Spending Patterns. Journal Of Consumer Research, 45(1), 49-67
Tantanatewin, W., & Inkarojit, V. (2016) Effects of color and lighting on retail impression and identity. Journal of Environmental Psychology, 197-205.
Wang, K., & Goldfarb, A. (2017) Can Offline Stores Drive Online Sales. Journal of Marketing Research (JMR), 54(5), 706-719.
Yurchisin, J., & Park, J. (2010) Effects of Retail Store Image Attractiveness and Self-Evaluated Job Performance on Employee Retention. Journal of Business & Psychology, 25(3), 441-450
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