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Multi-Channel Grocery Retail

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Multi-Channel Grocery Retail 1 Multi-channel Grocery Retail Retail brand equity and its influence on online channel consumer adoption in the Czech market Master Thesis MSc International Marketing Aalborg University IM Department of Business and Management Prepared by: Lubomira Zavodnikova Supervisor: Andreea Ioana Bujac Character count: 215 069 Abstract The sales in online grocery retail have been gradually increasing. The interest towards the online grocery has been no longer demonstrated only by consumers in developed markets, but smaller markets such Czech Republic are eagerly following the trend too. While pure online retailers have been among the first to offer groceries online, leading brick and mortar retailers have started entering online channels too. There are more pure online retailers on Czech market compared to brick and click, and it is expected that other brick and mortar retailers will extend to online too. With the increasing competition, the retailer brand is gaining an importance. Brick and mortar retailers’ extension to online channels have been related in literature to that of product brand extensions. Online stores are understood as a brand extension of an offline store. Previous studies have acknowledged that brand equity significantly influence brand extension strategies. The main objective of this study was therefore to examine how retailer brand equity built in the offline channel influences the retailer online channel adoption. The study focuses on traditional grocery retailers who have been transforming or will eventually in the future turn into multichannel retailers through the establishment of their own online stores. This study is based on Retail brand equity conceptualization which foundation lies in well recognized Aaker (1991) Brand equity conceptualization, composed of retailer awareness, association, quality and loyalty. Due to the complex nature of retailer associations, as noted in the research, this study attempted to extend this dimension to suit the research context. Retail brand equity was expected to transfer in retailer online trust, extension attitude and purchase intention. In line with brand extension theory, non-brand related factors were included into the examination, too. Namely, two most frequently cited factors of consumer innovation adoption, perceived complexity and perceived benefits were included in the study. The study has also aimed to recognize the differences between online grocery shoppers and non-shoppers. Pure online retailers available on the market and consumer related perceptions were also evaluated. Data were collected through an online survey. A convenience sampling and snowball technique were employed as a method for data collection and 120 questionnaires were subjected to data analysis. The data were analysed using multiple statistical analyses including regression analyses, correlation analyses, T-tests, ANOVA etc. The study evidenced the significant importance of brand related factors in consumer evaluation of the online extensions. Retailer equity dimensions proved their direct and indirect influence on consumer acceptance. Retailer loyalty proved to be a direct and strong predictor of online purchase intentions, together with value associations. Retailer quality strongly predicted online trust towards the retailer, which together with extension attitude too predicted purchase intentions. Perceived complexity was a strong determinant of extension attitude. Consumers with online grocery experience evaluated multichannel extension more positively and demonstrated also higher online purchase intentions compared to non-shoppers. However, they have also demonstrated higher purchase intentions towards pure online retailers. The perceived benefits of online grocery shopping were less acknowledged by non-shoppers, while perceived complexities were significantly higher compared to shoppers. Close social influence also varied among two segments. With the increasing level of awareness, measured by recognition, the purchase intentions towards pure play retailers have been increasing. Implication for brick-and mortar retailers have been drawn to help them guide their online extension strategy accordingly. Table of content 1 Introduction ................................................................................................................................................................ 1 1.1 Research Background ................................................................................................................................... 1 1.2 Problem Statement and Research Questions ...................................................................................... 3 1.3 Project Outline ................................................................................................................................................. 5 1.4 Definitions ......................................................................................................................................................... 6 2 Methodology ............................................................................................................................................................... 7 2.1 Ontology Assumptions .................................................................................................................................. 7 2.2 Epistemological Reflections ....................................................................................................................... 8 2.3 Methodological Approach ........................................................................................................................... 9 2.4 Methods & Techniques ................................................................................................................................. 9 2.4.1 Secondary Sources and Data Collection ....................................................................................... 9 2.4.2 Primary Data Collection .................................................................................................................. 11 2.4.3 Questionnaire Sampling & Distribution.................................................................................... 12 2.4.4 Questionnaire Development .......................................................................................................... 12 2.4.5 Scale Measurements ......................................................................................................................... 12 2.4.6 Questionnaire Description ............................................................................................................. 14 2.5 Reflections on Applied Methods & Techniques ............................................................................... 16 3 Theoretical Background and Literature Review ...................................................................................... 18 3.1 Multichannel Retailing ............................................................................................................................... 18 3.1.1 Grocery Industry & Multichannel Retailing ............................................................................ 19 3.1.2 Multichannel Retailers vs Pure Online Retailers................................................................... 19 3.1.3 The Importance of seeing the ´Retailer as a Brand´ ............................................................. 20 3.1.4 Online Channel Extensions of Retail Brand ............................................................................. 20 3.2 Retail Brand Equity (RBE) ....................................................................................................................... 22 3.2.1 Retail Brand Equity Background ................................................................................................. 22 3.2.2 Retail Brand Equity & Dimensionality ...................................................................................... 24 3.3 Retail Brand Equity Factors and Online Channel Adoption ....................................................... 25 3.3.1 Retailer Associations ........................................................................................................................ 25 3.3.2 Retailer Quality ................................................................................................................................... 27 3.3.3 Retailer Loyalty ................................................................................................................................... 28 3.4 Brand Extension Believes and Attitudes ............................................................................................ 29 3.4.1 Online Trust .......................................................................................................................................... 29 3.4.2 Attitude towards the Extension ................................................................................................... 30 3.5 Non-Brand Related Factors Associated with Online Channel Adoption ............................... 30 3.5.1 Perceived Benefits ............................................................................................................................. 31 3.5.2 Perceived Complexity ....................................................................................................................... 32 3.5.3 Social Influence ..................................................................................................................................
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