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Amsterdam University of Applied Sciences
How location-based message characteristics lead to message value and store visitattitudes: An empirical studyVerhagen, Tibert; Meents, Selmar; Merikivi, Jani; Weltevreden, Jesse; Moes, Anne
Published in:Proceedings of the Oxford Retail Future Conference 2019, University of Oxford, Saïd Business School
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Citation for published version (APA):Verhagen, T., Meents, S., Merikivi, J., Weltevreden, J., & Moes, A. (2019). How location-based messagecharacteristics lead to message value and store visit attitudes: An empirical study. In Proceedings of the OxfordRetail Future Conference 2019, University of Oxford, Saïd Business School
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Download date: 24 01 2021
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How location-based message characteristics lead to message value and
store visit attitudes: An empirical study (EXTENDED ABSTRACT)
Tibert Verhagen (Amsterdam University of Applied Sciences, corresponding author)
Selmar Meents (Amsterdam University of Applied Sciences)
Jani Merikivi (Grenoble Ecole de Management)
Jesse Weltevreden (Amsterdam University of Applied Sciences)
Anne Moes (Amsterdam University of Applied Sciences)
Keywords: location-based message, message value, personalization, location congruency,
privacy concern, intrusiveness
Introduction
Having customers decide to enter a store is an important prerequisite for retail success and
seems to demand even more attention nowadays given the transformation of retail into a
highly competitive and complex multi-channel industry (cf. Pantano, Priporas, Sorace, and
Iazzolino, 2017). Surprisingly, except for some pioneering exploratory research into how
interactive technology in storefronts can be used to communicate with passers-by (see
Pantano, 2016), the role of advanced technology in store entry decision-making has largely
been left unaddressed. This has motivated us to setup this study into the effects of location-
based messaging (LBM), that is, the sending of marketer-controlled information tailored to
customers’ geographic position (Bruner and Kumar, 2007, p.4). In particular, this study aims
to answer the question of how and to what extent location-based message characteristics
generate location-based message value and influence customers’ attitudes to visit a physical
store.
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Research model
To answer our research question, we draw upon perceived value research (Zeithaml, 1988),
the theory on net valence (see e.g., Peter and Tarpey Sr., 1975), and mental accounting theory
(Thaler, 1985; Thaler, 1999) to propose and test a model. Next to location-based message
value and the store visit attitude, the model contains location-based message characteristics
that represent two benefits (personalization, location congruency) and two sacrifices (privacy
concern, intrusiveness). The inclusion of these particular benefits and sacrifices follows calls
for adding contextual richness to research models when studying IT-mediated settings (e.g.,
see Breward, Hassanein, and Head, 2017; Burton-Jones and Gallivan, 2007; Burton-Jones
and Volkoff, 2017; Hong, Chan, Thong, Chasalow, and Dhillon, 2014). Accordingly,
personalization, location congruency, privacy concern and intrusiveness were selected as they
specifically pertain to the typical nature of LBM; it is a marketing application that offers
recipients the opportunity to receive rather personal messages that are tailored to their
location, yet at the same time sending location-based messages appropriately is challenging
for retailers since such messages may invade customers’ privacy and may interrupt and
therefore irritate recipients (Gazley, Hunt, and McLaren, 2015; Hühn et al., 2017; Lee and
Rha, 2016). Figure 1 shows our research model and the corresponding hypotheses1.
1 Extensive support the model structure and each of the hypotheses is excluded from this extended abstract due to page limit considerations, but is available from the authors upon request.
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Fig. 1. Research model and hypotheses
Method
To test our research model we conducted a quantitative vignette study, consisting of a
vignette and a follow-up online survey which was used to measure the research constructs
and basic socio-demographics (Atzmüller and Steiner, 2010). The sample consisted of 1225
customers of a fashion retailer in the Netherlands. In the vignette, the respondents were asked
to imagine themselves walking in a shopping area that they are familiar with and that
contains a store of the fashion retailer. Then, the respondents were confronted with the
hypothetical situation that they would receive a location-based message on the retailer’ app
while being within walking distance from the store. Given that message content plays an
important role in shaping recipients’ message perceptions (Chang, Yu, and Lu, 2015; Chou et
al., 2014; Lin, Zhou, and Chen, 2014; Schindler and Bickart, 2012), we decided to make use
of multiple, disparate messages and distribute these at random to the respondents (a between
subjects design, see Atzmüller and Steiner, 2010). In collaboration with a team of marketing
professionals from the retailer, who indicated to prefer messages tapping into the persuasion
principles authority, scarcity, social proof and reciprocity as these were part of their current
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marketing communication practices, and drawing upon previous literature in the field of
persuasion (e.g., Cialdini, 2007, 2009; Griskevicius et al., 2009; Kaptein and Eckles, 2012;
Orji, Mandryk, and Vassileva, 2015), the following four messages were selected: “Visit our
store now and experience the expertise of our trained stylists” (authority-related), “Visit our
store now and benefit only today from a 20% discount on a product of your choice” (scarcity-
related), “Visit our store now and experience the customer service that other customers rate
as excellent” (social proof-related), ”Visit our store now and get a free cup of coffee or tea”
(reciprocity-related).
Results
We used Partial Least Squares (PLS) modeling using the software SmartPLS 3.0 (Ringle,
Wende, and Becker, 2015) with the consistent-PLS algorithm (500 iterations) to estimate the
model. After having established the validity and reliability of the multi-item measures and
absence of common method bias, we computed the standardized path coefficients and
amounts of variance explained. Together, personalization (b = 0.21, p < .001), location
concruency (b = 0.38, p < .001) and intrusiveness (b = - 0.28, p < .001) accounted for 53.9
% of the location-based message value variance. The influence of privacy concern on
location-based message value was non-significant. Furthermore, a total of 66.8 % of store
visit attitude was explained by personalization (b = 0.06, p < .05), location congruency (b =
0.34, p < .001), privacy concern (b = - 0.16, p < .001), intrusiveness (b = - 0.15, p < .001) and
location-based message value (b = 0.29, p < .001). Post-hoc tests were run to evaluate the
specified partial mediation model structure and test for possible effects of app usage and
differences in message type. Overall, the empirical testing confirms the predictive validity
and robustness of the model and reveal that location congruency and intrusiveness are the
location-based message facets with the strongest effect on both message value and store visit
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attitude. Together, the results lead to the support of eight hypotheses (hypotheses 1, 2, 3, 4, 6,
7, 8, 9) and rejection of one hypothesis (hypothesis 5).
Conclusions and implications
This study examined the influence of four location-based message characteristics
(personalization, location congruency, privacy concern, and intrusiveness) on location-based
message value and the attitude towards visiting the physical store. Except for the insignificant
influence of privacy concern on location-based message value, all tested relationships were
significant. As such, our findings add to the scarce literature (e.g., Pantano, 2016) on the
effect of advanced mobile technology on consumer store entry decision-making. When
centering on the relative relevance of the location-based message characteristics, our study
especially highlights the key role of location congruency as a benefit and intrusiveness as a
sacrifice. Location congruency was the main determinant of the perceived value of location-
based messages as well as of the customers’ attitude towards visiting the physical store,
thereby adding to previous studies demonstrating the importance of contextual relevance of
location-based messages (e.g., Luo, Andrews, Fang, and Phang, 2014). The found negative
effect of intrusiveness is in keeping with previous marketing literature on intrusive
advertising messages (e.g., Edwards, Li, and Lee, 2002; Wang and Calder, 2006). For
retailers, the fact that location congruency seems the strongest predictor of the dependents in
our model implies that creating and sending locational congruent messages should have
priority when engaging in LBM-activities but not without taking into account that the specific
message may come across as intrusive. One way to accomplish well-balanced location-based
messages could be, for instance, by ensuring that the sent messages are of high interest given
the proximity of the store (e.g., by making use of special, time-limited discounts and offers),
instead of reflecting generic store promotions (cf. Unni and Harmon, 2007), while at the same
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time making use of a friendly, more social communication style (cf. Alhakami and Slovic,
1994; Keeling, McGoldrick, and Beatty, 2010).
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