Shopper loyalty to whom? Chain versus outlet loyalty in the context of store acquisitions

Research output: Contribution to journalArticleScientificpeer-review

8 Citations (Scopus)

Abstract

When patronizing stores, consumers may exhibit loyalty not only to a retail chain but also to a specific outlet. This distinction is important in a dynamic retail environment: if a store changes ownership, chain loyalty makes customers inclined to seek out another outlet of the former chain, whereas outlet loyalty enhances their stay rate after the takeover. This article distinguishes the two forms of loyalty conceptually and discusses how both can be identified empirically in a model of consumers’ reactions to store acquisitions. The authors estimate their model on unique scanner panel data covering ±200 local markets and takeovers. The results confirm that after an acquisition, consumers exhibit outlet loyalty, regardless of changes in chain and marketing mix. Counterfactual simulations point to important managerial implications. Acquiring outlets with a clientele in place leads to higher store traffic levels than the new owner could otherwise reach. Notably, these benefits cannot be reaped if the acquiring chain is a hard discounter, in which case customers’ previous store knowledge is less relevant, and incentives to seek out new outlets are greater.
Original languageEnglish
Pages (from-to)352-370
JournalJournal of Marketing Research
Volume51
Issue number3
Early online date7 Feb 2014
DOIs
Publication statusPublished - Jun 2014

Keywords

  • store acquisitions
  • state dependence
  • choice models
  • outlet loyalty
  • takeovers
  • store choice

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