Changing Retail Store Dynamics - A Study of the Consumer Durable Market in South Africa

(ProQuest: . denotes formulae omitted.)Introduction"Competition in the retail industry has reached dramatic dimensions. New retailing formats appear in the market increasingly and rapidly. A focus on a particular aspect of the retail mix (e.g., service or price) means that retailers can compete on highly diverse dimensions. Scrambled merchandising and similar developments have implied that particular retailers are now competing against retailers they did not compete with in the past" - Leszczyc, Sinha and Timmermans (2000). The South African market is a testimony of such a competitive landscape and as Kearney, 2014 report on Africa suggests, "Modern retail accounts for more than 60 percent of sales in South Africa, led by local chain Shoprite. Supermarkets dominate the market thanks to substantial investment; hypermarkets have spread a little more slowly but cater to more affluent classes. " The report further suggests, "bulk purchases are increasing, and store size, look and feel, and assortments are growing more important. " The changing retail dynamics of South African market fuelled by a growing middle-class population is attracting the global retailers, who along with the local retailers are experimenting with the retail formats to attract and retain the customers. "The South African retail sphere offers attractive growth opportunities, which suggests that major changes in this sector are imminent. National retail companies such as Pick 'n Pay, Shoprite and Spar are aiming to expand over the next few years by increasing their number of retail outlets in South Africa" - Marais, Klerk and Dye (2014). "As a certain result, store choice and patronage decision have been widely studied to serve for the need of understanding and developing the retail industry in many countries" - Nguyen, Vu and Zhang (2010). Little empirical research is available in South Africa to help guide the retailers in selecting the most appropriate retail format in the consumer durables market.This research paper aims to study the changing retail store dynamics in the consumer durables market in South Africa and in the process identify the effect of retail formats on the customer buying behaviour.Literature Review"A store format has been defined as the mix of variables that retailers use to develop their business strategies and constitute the mix as assortment, price and transactional convenience and experience" - Messinger and Narsimhan (1997). Levy and Weitz (2002) defines a store format as a type of retail mix. Customers assess these different retail store formats and patronize them for the purchase of different types of goods. Hansen, Cumberland and Solgaard (2012) suggests that there can be a number of different dimensions which are potentially significant for the customer's assessment of individual stores.An important dimension of the retail store choice is the age of the customer. "Young consumers, interestingly, lend to shop not from a utilitarian perspective but from a hedonistic perspective. Their key indulgence includes getting product ideas or meeting friends. They also view shopping as a means of diversion to alleviate depression or break the monotony of daily routine. In addition to this, they also go shopping to have fun or just browse through the outlets" - Kiran and Jhamb (2011). Store location, attributes, environment, and prices are other important dimensions that are found in store choice literature.Bell, Ho and Tang (1998) also believe that shoppers are influenced predominantly by store location and travel distance. However, Grewal, Krishnan, Baker and Borin (1998) opine that the three important components that appear to be key to store patronage decisions are the retailer's store image, quality of the merchandise/brands sold and price/promotions. Discussing other important dimensions, Singh, Katiyar and Verma (2014) suggest that retail store atmospherics & design is also highly associated with future consumption behaviour in terms of the customers' intention to visit, purchase and recommend the store to family and friends. …