Assessing Grocery Store Attraction via Cross-Shopping Linkages – Theoretical Foundation

From the moment a store’s competitor opens in its trading area, consumers can choose where they will spend their dollars. With competition it becomes critical for the retailer to understand the differences between consumers who are store loyal and consumers who will cross-shop. Attracting the cross-shopper market can provide retailers a strategic advantage to increase their market share. The concept of cross-shopping has been addressed in the literature from multiple perspectives such as store switching behavior, store choice behavior, multi-store purchasing, even consumer promiscuity The current study uses Cort and Domiguez’s definition of cross-shopping which states that cross-shopping occurs “when a single consumer patronizes multiple types of retail outlets which carry the same broad lines of merchandise”.
In the marketing literature, the foundation for cross-shopping research is derived from Hirschman’s Theory of Retail Market Structure and the Principle of Natural Dominance. The Principle of Natural Dominance is based on competition among retail formats and has two tenets. First, retailers can be grouped by their price, quality, and merchandising strategies. Second, intra-type competition is greater than inter-type competition. These tenets provide a means to categorize previous cross-shopping research.
Previous research has focused on the antecedents of cross-shopping behavior. A review of the literature identified consumer characteristics (e.g., gender, age, income, household size, education, and time pressure) and retail mix strategies as the predominant antecedents used to enhance our understanding of cross-shopping behavior. Using type of competition (i.e., inter-, intra-) and antecedents of cross-shopping behavior (i.e., consumer characteristics, retailer characteristics) a taxonomy of four categories showing how consumer characteristics and type of competition affect cross-shopping behavior was developed (see Figure 1). Identifying sociodemographic antecedents of cross-shopping behavior in inter-type competition provides retailers with a broad understanding of market segments. Previous research has found that income, time, and distance to the store can heavily influence cross-shopping behavior. In addition a variety of retail formats has been studied. Carpenter and Moore created demographic profiles of consumers who frequent traditional supermarkets, internet grocers, specialty grocers, supercenters, and warehouse clubs. Skallerud et al. found a consumer’s impulse buying tendency is negatively related to supermarket patronage but positively related to specialty store (i.e., seafood and meat stores) patronage.
Retailer Characteristics / Inter-type Competition
While retailers can identify and respond to consumer demographics and preferences, they have greater control over store characteristics. By creating a unique and competitive strategy retailers can enhance loyalty and reduce consumer cross-shopping behavior. Previous research has examined retailer characteristics such as store location, product assortment and promotion, and store services. In addition, Corstjens and Lal found that private label brands can be effective in creating store differentiation and consumer loyalty. While research classified in this category can provide retailers with insights into strategy development, findings from these studies will also be generalizable across a wide variety of store formats.

Figure-1

Figure 1. A taxonomy of cross-shopping behavior literature.

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