RETAILING INNOVATIVE AMBIANCE AND CUSTOMER PERCEPTION

RETAILING INNOVATIVE AMBIANCE AND CUSTOMER PERCEPTION

This study aimed at evaluating the relationship between retailing innovative ambiance and customer perception

CHAPTER ONE: INTRODUCTION

1.1   Background to the Study

The development of retailing concerning hypermarkets in developed countries such as Australia, Europe, and America evolve from traditional markets and fairs from the 1800s (McCann 2002; Webber et al, 2003).  In the 1870s, the retailers in these developed nations were affected strongly by the appearance of department stores, whereby retailers began to manage the stock into departments.  This led to the development of the multi-stores building and it became the typical trend for store-based retailers until the beginning of the 20^th century.  Recently, the number of shopping centers and hypermarkets has grown and attention paid to the perception of customers on retail store ambiance.

The retailing industry has played a vital role in meeting the needs of modern society (Bawa et al, 2013).   The authors emphasized that the retailing industry is regarded as a significant component of a nation’s economy.  National retail federation (NRF 2000) emphasized that retailers need to re-evaluate the use of storage space to meet customer expectations and make shopping more enjoyable.  Li et al (2009) state that traditional or physical retailers must consider restricted store space as a critical aspect of the store ambiance.  The authors equally emphasized that each square meters of shop space need to provide a return to the retailer.  This is born out of the fact that a thorough understanding of atmospheric factors and their effects as regards getting benefits from shoppers is necessary.

In modern society today the retailing industry has become more diversified and dynamic.  In such an environment, it is not surprising that there is an increasing demand for skills and education (Ihtiyar et al, 2014; Kumar and Kim 2014; Ogden 2005).  It is emphasized by the scholars that the retail industry has become increasingly global in scope through the integration of technology, economic, and demographic changes.

Scholars have shown that one important way to develop traditional or store-based retailing is to make full use of the innovative ambiance such as design and social factors that has a strong influence on customer behavior and perception (Baker et al, 2002; Liao et al, 2012; Seok 2009).  Seok (2009) further stated that store innovative ambiance impacts not only on impulse buying but also on patronage (Mohan et al, 2013).  Liao et al (2012) conducted a study on retail store ambiance and results revealed that consumers’ potential profit and perceived value are influenced by store environment cues. Other scholars equally emphasized that store ambiance significantly influence sales and customer satisfaction, therefore, helping stores growth and development (Demirgunes, 2014; Turley and Milliman 2000).

Previous researchers have paid attention to individual factors of ambient, design, and social factors, such as scent, signage, or number of employees.  Other researchers have focused more widely on combining these individual factors such as scent and music (Mattila & Wirtz 2001), layout, and signage (Ang et al. 1997).  However, these approaches somewhat lack a comprehensive framework to achieve a detailed understanding of retailing innovative ambiance.  To overcome this lacuna, the researcher is of the interest to investigate the relationship between retailing innovative ambiance and customer perception of hypermarkets in Port Harcourt.

1.2 Statement of the Problem

Ideally, the environment of hypermarkets ought to be beautified with the use of color, lighting, music, technological innovation for effective monitory in the store environment, exhibitions in the store space to stimulate the perception and emotional response of potential and actual consumer such that it will ultimately influence their buying behavior.

However, it is surprising that most stores that are referred to as hypermarkets do not even have parking space in their environments let alone putting store design or physical features that will trigger the buying decision of the customers or what will produce specific emotional effects in the buyers.

It is somewhat believing that if there are exterior displays in the hypermarket’s environment or interior displays in line with modern store layout practices, as well as the inclusions of technology, the perception of customers toward retail hypermarkets will be enhanced. Hence, the study focused on retailing innovative ambiance and customer perception of hypermarkets in port Harcourt.

1.3 Conceptual Framework

Figure 1.1: Conceptual Framework of the Study

Source: Researchers review of relevant literature, 2019

1.4  Aim and Objectives of the Study

This study aimed at evaluating the relationship between retailing innovative ambiance and customer perception.  To achieve this, the following objective was considered.  Thus:

1. To evaluate the relationship between exterior displays and customer perception.
2. To ascertain the relationship between interior displays and customer perception.
3. To evaluate the relationship between store layout and customer perception.
4. To ascertain the relationship between technological inclusions and customer perception.

1.5  Research Questions

1. What is the relationship between exterior display and customer perception?
2. What is the relationship between interior display and customer perception?
3. What is the relationship between store layout and customer perception?
4. What is the relationship between technological inclusions and customer perception?

1.6 Research Hypotheses

H_o1: There is no significant relationship between exterior displays and affective evaluation.

H_o2: There is no significant relationship between exterior displays and cognitive evaluation.

H_o3: There is no significant relationship between exterior displays and customer response.

H_o4: There is no significant relationship between interior displays and affective evaluation.

H_o5: There is no significant relationship between interior displays and cognitive evaluation.

H_o6: There is no significant relationship between interior displays and customer response.

H_o7:  There is no significant relationship between store layout and affective evaluation.

H_o8: There is no significant relationship between store layout and cognitive evaluation.

H_o9:  There is no significant relationship between store layout and customer response.

H_o10: There is no significant relationship between technological inclusions and affective evaluation.

H_o11: There is no significant relationship between technological inclusions and cognitive evaluation.

H_o12:  There is no significant relationship between technological inclusion and customer response.

1.7  Significance of the Study                                    

The relevance of a study is based on its contributions to contemporary issues in the context of the field of study.  This study will play an important role in the retail industry by making available quality information to key players in the industry who occupied strategic positions and make strategic decisions concerning the innovative ambiance of retail to enhance customer perception toward hypermarket. On the part of the academic, consumer, and the society at large, the study will be of great help.

The findings of this study will help managers (actual and potential) to have an in-depth on how to set up retail store ambiance with innovative technology that will aid shopping convenience that will be appealing to the customers.

Additionally, the academic will find the study useful since its findings will contribute to the existing body of knowledge in retail management literature.  More so, this research shall be relied upon by future researchers in this field of study as a source of secondary data.

Furthermore, customers will appreciate the outcome of the study since it will shape their perception concerning the retail store atmosphere, as well as aesthetic factors in hypermarkets that will enhance the purchasing decisions and shopping experience base on hedonic values. On the part of the government and the legislators, it will aid policymaking that will be favorable to investors.

1.8   Scope of the Study 

This study will be carried out in port Harcourt, which it refers to as the geographic scope.  The study was conducted on retailing innovative ambiance (RIA) in the retail industry.  Information will be obtained from customers of RIA which it refers to as a unit of analysis.

1.9 Definition of Terms

• Affective Evaluation: This is a judgment whether an object is pleasant, attractive, valuable, likable, or preferable.
• Cognitive Evaluation: This has to do with the evaluation that is associated with the consumer perception process, which originates from information processing and inference theories.
• Customer response: This constitutes the psychological reactions such as attitudes or behavioral reactions of consumers.
• Store Layout: This entails how the structures and facilities are physically located with the effect of creating a particular pattern of people traffic in a hypermarket.
• Interior Displays: This refers to the interior design factor which includes elements related to displays inside the store, such as color, cleanliness, décor, signage, and merchandise.
• Exterior Displays: This has to do with the outside attractive decoration of the hypermarkets store design, parking space, etc.
• Customer Perception: The process by which a customer select, arrange,s and interpret his business environment.
• Technological–inclusion: This is a term used to describe the fact that the world can be divided into people who do and people who don’t have access to and the capability to use modern information technology
• Retailing innovative Ambiance: Is all about change. But, more than that, it’s about to change that provides tangible value to consumers. It provides that value because it offers something new or an improvement on something old in the field of technology, services, products, or business systems

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