store image attributes and customer satisfaction of convenience store … · 2019. 10. 30. ·...
TRANSCRIPT
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
175
Store Image Attributes and Customer Satisfaction of Convenience Store and Implications on Retail Innovation: The
Malaysian Shopper Experience
Boon Chui Teo, Khairun Najwa Bt Ahmad Rathi, Siti Nor Syahirah Bt Mohd Saidi
Arshad Ayub Graduate Business School, Universiti Teknologi MARA, 40450, Shah Alam, Selangor, Malaysia
Abstract
New technology ideas have continued to change the retail industry landscape spurring innovation across the convenience store industry. Convenience stores (C-stores) are now considered as the fastest-growing retail vertically. Retailers are increasingly challenging the notion that c-stores should not be just mere pit stops. Modern c-stores are becoming convenience destinations. Recent developments witness new C-store chains popping up in Malaysia such as KK Mart, Happy Mart, Orange Mart, Family Mart and Irispay to compete along with conventional ones such as 7-Eleven and those stores subsumed with a petrol station. New C-stores have features beyond standard convenience offerings with digital technology to capture customer attention and drive store traffic. New players are expanding its brick-and-mortar presence, just like how Amazon shook up the C-store sector in 2017 with new checkout-free, ultra-convenient shopping experience. In the wake of this new retail innovation, how will other C-store retailers position themselves one step ahead of the game? This paper examines store image attributes influencing customer satisfaction of C-stores amongst the conventional one. These stores are considered as plain, outdated and at the boredom stage of its business lifecycle. C-stores may need to deliver a new experience that today’s digital consumers are looking for. The methodology utilized a survey questionnaire approach on 255 shoppers together with store observation and personal interview at a C-store franchise chain. Findings found personnel, pricing, merchandising and product assortment as predictors of customer satisfaction of C-stores. Findings had managerial implications for C-store retailers focusing on what innovations in-store image attributes can impact competition. Knowing how quick consumers are embracing technological advances in this C-store sector is imperative to stay ahead in this game.
Keywords - convenience store, customer satisfaction, pricing, personnel, product assortment, store image, merchandising
Introduction
Malaysia has a large and growing food retail market supplying both local and
imported products distributed by multiple retailers in different formats. Total retail
sales of food and beverages in 2016 totalled US$16 billion. Most retail sales are
channelled by traditional stores, such as provision stores, sundry shops and grocery
stores (56 per cent) as well as modern stores such as supermarkets, hypermarkets
and department stores that make up 43% of the nationwide retail food market.
Convenience stores (C-stores) are insignificant, with only about 1% share of the
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
176
nationwide retail food market (Retail Food Annual Malaysia, GAIN Report, 2017).
Although C-store share is small, it is still regarded as a successful format alongside
the traditional and large modern retailers. Ranking of C-stores in the world shows 7-
Eleven as the largest and widely recognized iconic franchise chain channel. (See
Fig. 1).
Figure 1: Top Convenience Stores Ranking in the World
Source: CSP Daily News
Malaysia ranks number 2 after Thailand in the number of 7-Eleven outlets in the
ASEAN market. This indicates the importance of the C-store segment and there is
the scope of untapped potential growth in this retail segment in the Malaysian
market. See Table 1.
Table 1: Total Number of 7-Eleven Stores in ASEAN
States
Total of 7-Eleven stores
In each State
Thailand 10 268
Malaysia 3 336
Indonesia 194
Singapore 393
Vietnam 11
Source: 7-Eleven Japan Co. Ltd (As 31 December 2017), http://www.sej.co.jp/company/en/g_stores.html
The exact estimation of the Malaysian convenience retailing market is
extremely difficult since the majority of C-stores are mixed up with traditional sundry
neighbourhood shops also known as shopkeepers or mini-marts that belong to
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
177
independent store owners. Table 2 shows the number of organized C-store chains in
Malaysia. The main franchise chain is 7-Eleven as a branded foreign franchise
followed by two home-grown large chains namely 99 Speedmart and KK Mart. The
proliferation of the C-store industry in Malaysia warrants studies into this retail
segment. This study is focused on the organized C-store chains that have recently
seen rapid expansion and have been attracting the interest of major new players like
FamilyMart and Crispy. These new e-concept C-stores have posed potential threats
to the revenues and market share of the conventional C-stores even in the small
neighbourhoods. Hence a study into store attributes and consumer behaviour of C-
stores is warranted.
Table 2: Convenience Stores in Malaysia
Convenience stores Type of Chain
Number stores in
Malaysia (2017)
7-Eleven Foreign Franchise 3336
MyNews Local 370
99 SpeedMart Local 1000
FamilyMart Foreign Franchise 37 (new)
KK Mart Local 924
Treats (Petron) Local (mused with
petrol station)
408
Mesra (Petronas) Local (mused with
petrol station)
765
Shell Select (Shell) Foreign Franchise
(mused with petrol
station)
575
Source: Statista & Company website
Problem Statement
While hypermarkets and supermarkets are still lucrative, the food and grocery
retail industry have witness growth of other smaller formats such as C-store.
Alongside these large scale retail formats, C-stores still constitute a successful
format not only in developed markets but in developing markets like Malaysia. Store
image attributes could significantly affect store loyalty according to retail typesetting
(Yoo and Chang, 2005). This relationship, in turn, is the main driver of customer
satisfaction. In the retail store environment, satisfaction comes mainly from the store
environment and the perceived value according to customers which are then
influenced by the retailer's product assortment (Grosso, Castaldo & Grewal, 2018).
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
178
Salient store attributes related to the access dimension of convenience such as
access to the store, parking facilities and hours of operation determine customer
satisfaction of C-store (Bianchi, 2009). As there is paucity in research in the retailing
literature and even less is known salient store image attributes and about C-store
behaviour in Malaysia and other emerging markets, this study aims to fill the gap of
C-store satisfaction and store image attributes.
Modern C-store chains have emerged in Malaysia recently with extended
services, trendy atmospheric and e-facilities, thus posing new threats to the
conventional store format such as that of 7-Eleven. Based on observation made at
new C-store concepts such as FamilyMart and Irispay E-Concept, it was found that
these stores are refreshing, new, modern and attractive with wider choices of
merchandise, ready-to-eat (RTE) meals and comfortable ambience for shoppers
raising the consumer expectations of store image attributes. Old conventional C-
stores hence lacked competition in terms of store attributes such as in-store
convenience, e-facilities and atmospherics. In-store convenience and atmospherics
such as toilet facilities, free Wi-Fi, eating place, international RTE meals, electronic
payment options could enhance the attractiveness of modern C-store image in which
sophisticated Malaysian consumers are looking for today. Conventional C-store
chain had also faced complaints on lack of competitive pricing, lack of product
assortment, poor customer service and absence of customer online feedback
communication. These are the salient C-store image attributes that consumers today
especially among the millennial shoppers, that could influence satisfaction towards
C-store.
Changes in lifestyle towards convenience and transition in family roles
especially among the millennial shoppers have a direct influence on food and
grocery shopping trends among the older generations. They are using food and
grocery to contribute to their social images. This has led to competition among
retailers and the need to relook into store attributes to win shoppers. Conventional C-
store could likely be considered as plain, outdated and at the boredom stage of its
business lifecycle. (See Fig. 2). There is a need for C-store to step up the game and
look into what shoppers are buying and what captures their attention and provide
opportunities to deliver an experience to satisfy consumers especially among the
Millennial shoppers (the oldest are about 35 years old now) who already parents and
have direct consumer discretionary purchasing power. This study attempts to
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
179
determine the influence of store attributes on store patronage in terms of personnel,
atmospherics, merchandising and product assortment on customer satisfaction of a
C-store franchise chain operating throughout Malaysia. Based on the model of
customer satisfaction (CS) towards C-store by Theodoridis & Chatzipanagiotou
(2009), this study aims to provide a better understanding of consumer satisfaction
and thereby expectations on store image attributes of C-stores in a more Asian
context.
The study is of significance as it provides knowledge of the store attributes that
drive CS towards a C-store. This enables customers to consider what attribute/s to
be most important when making choices of visiting C-store (e.g. merchandising type,
price competitiveness, product assortment, courtesy of personnel, atmospheric and
in-store facilities). The study has marketing strategy implications for C-store retailers
that operate in the Malaysian convenience retail market. More notably for the C-store
franchise chain, strategy recommendations are suggested and evaluated to assist
the store chain to manage customer expectations on store attributes. As competition
in this retail sector continues to evolve and consumer demographics change within
the Malaysian market, understanding the store image and CS linkage will be critical
to retailer performance in the industry.
Figure 2: Lifecycle of Grocery Retailers
Source: Who will win the battle for the millennial grocery shopper? https://www.bizjournals.com/bizjournals/how-to/marketing/2014/04/grocery-stores-battle-for-millennials.html
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
180
Literature Review
Convenience Store
Reimers (2014) defines store convenience consisting of all those attributes that
minimise the time and effort involved in patronising. A C-store is defined as a small
retail store ranging from 800 to 2,800 square feet in size. C-stores fill the
convenience retail gap by providing round the clock and quick access to food and
beverages rather than the supermarket and a range of other merchandise for daily
convenience and travellers' shopping needs. The c-store operation today is facing a
crossover revolution with the need to provide not only daily fresh foods and groceries
but multiple services for example café, ticketing and courier (Lee, Shih & Chen,
2012). Like all retailing business regardless of size, C-store environment is
hypercompetitive. Hence their presence can influence customer food choice and
consumption. C-stores are now operating in an anticipatory mode to recognize
customers' satisfaction. They have been offering goods or services but there is a
severe lack of confirmation to establish that customers are not completely satisfied
(Gomez et. al., 2004). This is because the concern now as highlighted by Yuen &
Chan (2010), is competition in the C-store segment has begun to intensify as
customers' demands are bound to rise, time after time due to the growth of service
quality comparable with multiplicities of products and progress of service industry in
which the retailing segment takes up an important position.
Store Image Attributes
Store image attributes have been regarded as important antecedents on store
preference in past studies based on the view of customers regarding how store
image features affect their store preferences (Bloemer & de Ruyter, 1998; Thang &
Tan, 2003; Nilsson, Gärling, Marell & Nordvall, 2015). The store image is “how a
given retailer is perceived by consumers and others” (Berman & Evans, 2007). If the
store image is good, it will cause customers to react to their store differently and
even encourage the purchase of products and services from the store. The store
image attributes are formed by various attributes including personnel, price, product
assortment, in-store convenience, atmospheric and merchandising as suggested by
Theodoridis & Chatzipanagiotou (2009).
.
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
181
Retail Store Customer Satisfaction
Satisfaction is a crucial issue for both customers and store management.
Several recent studies have ignited the importance of store satisfaction in managing
experiences in the F & G retailing (for example Fuentes-Blasco, Moliner-Velázquez,
Servera-Francés, Gil-Saura, 2017; Hsu, Huang, Swanson, 2010) and analyzing on
store attributes and store satisfaction (Martínez‐Ruiz, Jiménez‐Zarco & Cascio,
2011). These recent studies could imply that store experiences have evolved that
could be attributed to new marketing and technological innovation that has
transformed the way stores are being managed today.
Pricing
Price appears to be one of the main attributes affecting convenience stores'
customers on top of product variety, customer service and convenience (Panigyrakis
et al., 2009). Pricing has been classified as one of the sub-section under
merchandising dimensions of store image (Burlinson & Oe, 2017). However other
literature found pricing as one of the main dimensions of store image attributes
(Theodoridis & Chatzipanagiotou, 2009). As a store image attribute, pricing has a
critical source of influence over shopper purchase behaviour, and the pricing
decisions you make directly affect category sales, inventory positions, and category
profitability. Most importantly, the pricing strategy with small price adjustments could
have a profound impact on profitability and the bottom line of a convenience store
(Nicholls, 2017). Research shows that price has been rated as an attractive attribute
in grocery store choice although it is more important for consumers spending less
money (Nilsson et al., 2015). Although it has been proven that price influences
supermarket consumers' satisfaction (Helgesen et al. (2010); Huddleston et al.
(2009). However, whether pricing could influence customer satisfaction in a C-store
needs to be investigated given that purchase involvement is usually low when buying
convenience goods.
Atmospheric
Atmospheric describes the art of designing a store, such that it increases the
sensory feeling of customer's experiences or satisfaction of the customers. The store
atmosphere refers to the environment created by combining a set of visual elements
in the physical space of the store which are colours, displays and other decorative
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
182
elements. The senses stimulation includes smell, air-condition, music, clarity,
(Theodoridis & Chatzipanagiotou, 2009; Oh, Fiorito, Cho & Hofacker, 2008). In an
experience-oriented economy and experience-seeking consumption in retailing,
retailers, as well as consumers, are relating more and more to in-store experiences
(Bäckström & Johansson, 2006). Stores with a pleasant atmosphere are susceptible
to increase the positive experience of purchasing and customers' satisfaction (Koo,
2003; Orth & Green, 2009) and the perception of the quality of products (Oh, Fiorito,
Cho & Hofacker, 2008). Research supported that interior atmospheric factors such
as music, scent and light have a significant impact on the consumer purchasing
behaviour of self-serving C-stores (Ishar Ali, Kaldeen, Shameem, 2017). Shoppers
are becoming more sensitive and sensuous to store atmosphere as retail innovation
takes centre stage on improving service experience. New C-store chains that have
recently popped up such as FamilyMart and Irispay has built on store atmospherics
as store concept.
Retail Store Personnel
Personnel plays an important role in creating social cues in a store. They are
found to improve the evaluation of store image that can influence customer
satisfaction. Personnel is considered as an asset to a store when service staff make
a strong relationship with customers and increase their satisfaction (Oppewal and
Timmermans, 2008). The appearances of employees, the interaction of store
employees, friendly and knowledgeable personnel are important determinants for
customers to have good store experience.
Product Assortment
The perception of product variety influences the store image attribute and
customers satisfaction (Anselmsson, 2006). Literature has indicated that elements of
the "product mix" are captured by the quality and assortment of goods as well as
their presentation (Lindquist, 1974). Wide product variety along with low prices and
high-quality services are considered as selection criteria for C-store choice (Zairis &
Evangelos, 2014).
In-store Convenience
In-store convenience is an important factor to stimulate store patronage and it
is the key benefit sought by shoppers in the modern environment (Pan & Zinkhan,
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
183
2006). It refers to the layout and design of the store and it is an attribute that
facilitates the guidance and direction of the consumer when making purchases.
Customers' perceptions regarding in-store convenience have a positive influence on
satisfaction with the service (Berry, Seiders & Grewal, 2002). Customer evaluation
of in-store convenience factor for a C-store includes store hours or the opening and
closing time that can give customer satisfaction. Research study shows that in-store
convenience as a store image attribute was significantly related to customer
satisfaction (Theodoridis and Chatzipanagiotou, 2009). Salient in-store convenience
dimensions of significance to C-store were quick to access to the store, payment
options and parking availability (Bianchi, 2009).
Merchandising
Merchandising as activities which contribute to the sale of products to the
consumers for their end-use helps in the attractive store display of products to
increase sale and generate revenues for a retail store (Vahie and Paswan, 2006).
According to Collins-Dodd and Lindley (2002), as well as Thang and Tan (2002),
merchandising is considered the most important factor contributing to store image
attribute. However past study on C-store attributes has shown that merchandising
that did not have a very important impact on customer satisfaction (Theodoridis and
Chatzipanagiotou, 2009). A study on C-store behaviour in Japan found young
consumers demand constant innovation and high-quality products along with
merchandising and promotional policies. As visits to C-store are usually purposeful
and expedient, with relatively little time being spent in or around the store, the choice
of the store appears to be not only about the location but also about the merchandise
(Marshall, 2016).
Based on the above literature from past studies on store image attributes, the
following hypotheses were postulated.
H1: Pricing has a direct positive influence on customer satisfaction of C-store.
H2: Atmospherics has a direct positive influence on customer satisfaction of C-
store.
H3: Retail store personnel has a direct positive influence on customer
satisfaction of C-store.
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
184
H4: Product Assortment has a direct positive influence on customer satisfaction
of C-store.
H5: In-store convenience has a direct positive influence on customer
satisfaction of C-store.
H6: Merchanidisng has a direct positive influence on customer satisfaction of C-
store.
Methodology
The methodology utilized mixed methods with a qualitative and quantitative
study to obtain generalized responses from C-store shoppers. Personal interviews
were conducted with the staff and manager of C-store chain located at Shah Alam,
who had volunteered to be interviewed upon prior arrangement with the store
manager. Purpose of personal interviews was to help build the statement of purpose
of this study and subsequently to identify the situational analysis of the C-store
chain. Store observations were made at several outlets of the C-store chain to help
establish the issues of the study. Similarly, store visits were made to new C-stores
that have popped up recently such as Family Mart and Irispay E-concept for
comparison purposes. These two stores were selected for observation based on
their latest Japanese C-store concept (konbini concept) and proximity of store
location. Family Mart entered Malaysia in 2016 while Irispay started in 2018.
Subsequently, a primary survey was conducted to garner responses on store
image attributes and customer satisfaction towards C-stores chain. Respondents
comprise customers who had visited and purchased at C-store outlets. The research
instrument was adopted and adapted from a scale by Theodoridis &
Chatzipanagiotou (2009) that measured store image attributes within the
supermarket sector with a screening question on a visit to C-store. Using a survey
questionnaire approach, data were collected via a self-administered approach
through face-to-face or online access. Shah Alam was selected as the location of
study as it is one of the major urban cities in the Klang Valley with potential growth in
housing development and commercial centres (Inevitable growth in Shah Alam,
2016). In the face-to-face method, questionnaires were distributed to outlets of the
C-store franchise chain located at 15 housing sections at Shah Alam. Using
convenience and purposive sampling with different distribution between genders,
questionnaires were distributed to customers at each of the 7-Eleven stores located
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
185
at 15 housing sections of Shah Alam. A total of 105 respondents participated in the
face-to-face survey. Customers who had visited the stores were approached to
answer the questionnaire. The survey took place over two weeks in January 2018.
The same set of questionnaires was also distributed online via Google Form.
This study adopted an online survey due to the rapid growth of internet use and
mobile communication. The link of the questionnaires was shared through Facebook
and WhatsApp to reach out to a wider group of target respondents. 150 respondents
answered the online survey with a screening question on being a shopper at C-store.
The sample size for multiple regression analysis was utilized to determine sample
size sufficiency based on Green’s (1991) criteria of 104 + k, where k is the number of
predictors. Since this study aimed to test six predictors then a minimum sample size
of 104 + 5 = 109 respondents, is required. The number of respondents surveyed
totalled 255 and hence it met sample size criteria. Data analysis utilized Smart PLS
to analyze predictor influence of variables, with path analysis. Reliability and validity
results were also evaluated.
Analysis and Findings
Demographic characteristics of the respondents obtained showed more female
(66.5%) than male, mainly in the age range of 15-27 years old (85.5%) and were
Malays (84.5%). 58% were students because the location of C-store outlets in Shah
Alam is in the vicinity of universities and colleges. 27.5% worked in private sectors
and single (83.5%) who had a higher tendency to visit C-stores for daily needs rather
than supermarkets. This is due to their busy lifestyle with more time constraints and
hence a greater affinity for convenience (Busy consumers open to new ways of
grocery shopping, 2018). In terms of C-store consumption pattern, 58% of the
respondents prefer to shop as C-stores due to location and 24-hour accessibility.
42.5% indicated the frequency of weekly visit to these stores. Another 39% and 37%
indicated spending an average of RM10 and RM20 per visit to a C-store.
With the use of SmartPLS (Ringle et al., 2005), data were analyzed with path
analysis involving partial least squares to evaluate the hypotheses. Both
measurement and structural models were assessed for its reliability and validity as
shown in Table 3. Scales were reliable and acceptable with Cronbach alpha above
0.7 (Nunnally, 1978), all items achieved composite reliability (CR) > 0.7 and Average
Variance Estimated (AVE) above 0.5 (Hair et al., 2017).
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
186
Table 3: Construct Reliability and Validity Results
Variable Cronbach's
Alpha
Composite
Reliability
Average
Variance
Extracted (AVE)
Atmospheric (IVE) 0.928 0.946 0.777
Customer Satisfaction 0.816 0.879 0.644
In-Store Convenience (IVS) 0.846 0.907 0.764
Merchandising (IVH) 0.900 0.926 0.715
Personnel (IVD) 0.922 0.941 0.763
Pricing (IVG) 0.926 0.945 0.774
Product Assortment (IVF) 0.909 0.932 0.734
Table 4 presents the discriminant validity results using heterotrait-monotrait
(HTMT) ratio of correlation. Correlation values are below 0.9 (Henseler et al., 2015)
indicating that discriminant validity has been established except for merchandising
with in-store convenience (0.947) but still below 1. Figure 1 on the structural model
shows all items from the variables had factor loadings above the threshold value of
0.5 (Hulland, 1999). Test on multicollinearity using variance inflation factor (VIF) as
shown in Table 4 indicates no strong multicollinearity was detected (VIF<5) and
effect size (f2) of 0.05 to 0.2 was obtained (Cohen, 1988).
Table 4: Discriminant Validity (HTMT)
Variable 1 2 3 4 5 6
Atmospheric (IVE)
Customer Satisfaction (CS) 0.661
In Store Convenience (IVS) 0.682 0.754
Merchandising (IVH) 0.684 0.815 0.947
Personnel (IVD) 0.779 0.832 0.771 0.704
Pricing (IVG) 0.416 0.693 0.686 0.692 0.536
Product Assortment (IVF) 0.726 0.827 0.797 0.806 0.761
Table 5 presents the path results. Path analysis was performed to determine
beta coefficients to determine the predictor influence of atmospherics (IVE), in-store
convenience (IVS), merchandising (IVH), personnel (IVD), pricing (IVG) and product
assortment (IVF) on customer satisfaction (CS). Further analysis using bootstrapping
procedure of 500 runs of construct-level changes was operated to obtain t statistics
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
187
and p values of the path coefficients. 4 predictors yielded significant results.
Personnel (IVD) with (β=0.412, t=5.963, p=0.0001) followed by merchandising (IVH)
with (β=0.305, t=3.778, p=0.001) showed relatively strong influence towards
customer satisfaction of C-store. Product assortment (IVF) yielded significant
influence on CS with (β=0.236, t=3.162, p=0.002) followed by pricing factor with
(β=0.147, t=2.364, p=0.018). However, two factors namely in-store convenience and
atmospherics were not significant. Overall, the model explains 67.1% of the variation
in CS. Hence only four hypotheses were supported and statistically significant at the
level of 5% significance. Figure 3 presents the path results.
Table 5: Path Results
Relationship β t p f2 VIF R2
Atmospherics (IVE) -> CS
-0.055
0.809
0.419
0.004
2.501
0.671
In Store Convenience (IVS)-> CS
-0.115 1.512
0.131 0.011 3.747
Merchandising (IVH)-> CS
0.305
3.778
0.001*** 0.071
3.964
Personnel (IVD) ->CS
0.412 5.963 0.001*** 0.185 2.788
Pricing (IVG) -> CS
0.147 2.364 0.018** 0.032 2.067
Product Assortment (IVF) -> CS
0.236 3.084 0.002*** 0.052 3.27
Discussion and Implications
This is a limited study confined to a franchise chain C-store in Malaysia and
drawing on the store image attributes that could influence customer satisfaction. The
study is accompanied by a personal interview with a C-store manager to establish
the current situation of this retail sector followed by a convenience survey on
shoppers who have shopped or experience C-store atmosphere. The survey
provided some insights into how consumers perceive and react to store image
attributes of the C-store chain.
Based on the findings, salient store image attributes that contributed to store
satisfaction of the franchised C-store chain are merchandising, personnel, pricing
and product assortment. Similar trends on personnel, pricing and product assortment
were also observed in a study on C-store satisfaction (Theodoridis &
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
188
Chatzipanagiotou, 2009; Thang & Tan, 2003) while another study posited that the
dimension of in-store convenience determined customer expectations of what C-
store should have (Bianchi, 2009). Atmospheric and in-store convenience were not
significant to C-store franchise chain under this study as C-stores investigated were
the more conventional stores which did not provide much ambience such as Wi-Fi,
eat-in seating facilities, vending kiosks and/or quick payment system that existed in
modern C-store concept. This implies the need for traditional C-stores such as 7-
Eleven to focus on modernizing in-store facilities and atmosphere
Pricing and personnel were significant influencers of store satisfaction given
that Malaysian consumers tend to be price-sensitive (Malaysian shoppers most
price-sensitive in Southeast Asia, 2011). Even though items sold at C-stores are
usually low involvement and frequently bought goods, pricing is still important to
factor. Hence it could be inferred that consumers would choose convenience stores
for the provision of low priced products combined with high-quality services while
saving time on their daily buys. Similar observations were made at C-stores in
Greece by Zairis & Evangelos, 2014). Overall, customers patronize convenience
stores primarily because of relational and functional proximity (Gahinet & Cliquet,
2018).
Personnel is tied mainly to service quality delivered in C-store and staff still
plays a role as store image attribute given that conventional C-stores in Malaysia like
7-Eleven are still manned. However recent new C-store concept is towards self-
service, with e-payment and unmanned. Hence retail innovation in C-store may
require old stores to adopt and explore a human-less shopping experience like new
C-store Amazon Go and Irispay E-concept.
In Malaysia currently, it has been found that, though 7-Eleven is the most
popular convenience store player, other players like KK Super Mart and 99 Speed
Mart are giving a tough competition to 7-Eleven. According to the Malaysia
Convenience Store Market Outlook 2020 (Market Analysis Report, 2016), the
convenience store industry of the country is witnessing fast developments and
presents huge potential for convenience store players. The number of the
convenience store in Malaysia is growing at a CAGR of 2.5% during 2014-2020.
Conventional C-stores could be at a ‘boredom' stage of the business lifecycle and if
lack of retail innovation could lead to ‘divorce' or decline stage (Fromm, 2014). C-
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
189
store companies must build up operating efficiencies and scale to compete in a
competitive market place.
Findings had significant managerial implications for C-store retailers focusing
on what innovations in-store image attributes that are making an impact and how to
muscle their way to compete. Knowing how quick consumers are embracing
technological advances in this C-store sector is imperative to stay ahead in this
game. As iterated, the demand for constant innovation and high-quality products
along with the recent interest in fresh and even healthy products and foods is
changing the perception of the convenience store more generally (Marshall, 2016).
Figure 3: Path Results
Limitation, Future Research and Conclusion
Regarding research limitations, the study was confined to selected foreign
franchised C-store chain located in a specific locality. However, the C-store chain
currently has the most outlets in Malaysia. Hence, it is proposed that further
research could extend to local C-store chain that is also expanding rapidly such as
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
190
99Speed Mart and even C-store mused with a petrol station to compare on store
attributes, store satisfaction, store patronage and shopping behaviour. There have
been no documented studies on C-stores in the Malaysian context. Future research
may also focus on convenience stores in the context of loyalty and food shopping
(Gahinet & Cliquet). As C-stores appear to be an integral part of the shopping
experience for all groups of consumers and more notably among the young
Millennial shoppers who are tech-savvy and early adopters of new innovative retail
formats, future research should explore on retail innovation in C-stores. New
technologies are proving equally disruptive and are giving traditional convenience
stores the tools with which to compete against new players, hence focus of future
studies should on the readiness, adoption and acceptance.
Due to the growing intensity in the level of competition in the retailing industry
worldwide, it is important to understand consumer's expectations and satisfaction of
C-stores in different countries. Overall, this study attempts to provide a better
understanding of the most salient store image attributes for consumers in a
Malaysian context when shopping at C-stores. Emphasizing these salient attributes
can be essential for retailers to increase store satisfaction and thereby increase
patronage and achieve loyalty from consumers.
References
Annual Retail Foods (2017) Malaysia – USDA GAIN Reports. Retrieved from https://www.fas.usda.gov/data/malaysia-retail-foods-annual-1
Anselmsson, J. (2006). Sources of Customer Satisfaction with Shopping Malls: A Comparative Study of Different Customer Segments. International Review of Retail Distribution and Consumer Research, 16(1), 115-138. DOI: 10.1080/09593960500453641
Bäckström, K. & Johansson, U. (2006). Creating and consuming experiences in retail store environments: Comparing retailer and consumer perspectives. Journal of Retailing and Consumer Services, 13, 417-430. DOI 10.1016/j.jretconser.2006.02.005.
Berman, B., & Evans, J. R. (2007). Retail Management: A Strategic Approach (5thed.). Macmillan,
Berry, L.L., Seiders, Grewal, K. D. (2002) Understanding Service Convenience. Journal of Marketing, 66(3), 1-17.https://doi.org/10.1509/jmkg.66.3.1.18505
Bianchi, C. (2009) Investigating Consumer Expectations of Convenience Store Attributes in Emerging Markets: Evidence in Chile. Journal of International Consumer Marketing 21(4), 1-26.
Bluemer, J. & De Ruyter, K. (1998). On the Relationship between Store Image, Store Satisfaction and Store Loyalty. European Journal of Marketing. 32(5/6). p.499 – 513.
Busy consumers open to new ways of grocery shopping (2018, March 10),
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
191
Supermarket News. Retrieved from https://www.supermarketnews.com Collins-Dodd, C. and Lindley, T. (2003). Store brand and retail differentiation: the
influence of store image and store brand attitude on store own brand perceptions. Journal of Retailing and Consumer Services, 10(6), 345-352.
Fuentes-Blasco, M., Moliner-Velázquez, B., Servera-Francés, D. & Gil-Saura, I. (2017). Role of marketing and technological innovation on store equity, satisfaction and word-of-mouth in retailing. Journal of Product & Brand Management, 26(6), 650-666. https//doi.org/10.1108/JPBM-07-2016-1279
Fromm, J. (2014). Who will win the battle for the millennial grocery shopper? Food and Marketing. The Business Journal. Retrieved from https://www.bizjournals.com/bizjournals/how-to/marketing/2014/04/grocery-stores-battle-for-millennials.html
Gahinet, M-C. & Gérard Cliquet, G. (2018). Proximity and time in convenience store patronage: Kaïros more than chronos. Journal of Retailing and Consumer Services, 43, 1–9
Gomez, M.I., McLaughlin, E.W. & Wittink, D.R. (2004). Customer satisfaction and retail sales performance: an empirical investigation. Journal of Retailing, 80(4), 265-78.
Grosso, M., Castaldo, S. & Grewal. A. (2018). How store attributes impact shoppers’ loyalty in emerging countries: An investigation in the Indian retail sector. Journal of Retailing and Consumer Services, 40, 117-124
Hair, J.F.J., Hult, G.T.M., Ringle, C.M. and Sarstedt, M. (2017), A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM), 2nd ed., Sage, Thousand Oaks, CA.
Helgesen, O., Havold, J.I., & Nesset, E. (2010). Impacts of store and chain on the quality satisfaction-loyalty process in petrol retailing. Journal of Retailing and Consumer Services, 17, 109-118.
Henseler, J., Ringle, C.M. and Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modelling. Journal of the Academy of Marketing Science, 43(1), 115-135
Hsu, M.K., Yinghua Huang, Y-H., & Swanson, S. (2010). Grocery store image, travel distance, satisfaction and behavioural intentions: Evidence from a Midwest college town. International Journal of Retail & Distribution Management, 38(2), 115-132. https//doi.org/10.1108/09590551011020129
Huddleston, P.; Whipple, J.; Mattick, R.N. & Lee, S.J. (2009. Customer Satisfaction in food retailing: comparing speciality and conventional grocery stores. International Journal of Retail & Distribution Management, 37 (1), 63-68
Hulland, J. (1999). Use of partial least squares (PLS) in strategic management research: a review of four recent studies. Strategic Management Journal, 20(2), 195-204.
Inevitable growth in Shah Alam (2016, 15 Feb), METRO NEWS, The Star Online. Retrieved from https://www.thestar.com.my.
Ishar Ali, M. S. Kaldeen, M. & Alma, S. (2017). Interior Atmosphere: Does It Really Have an Impact on Consumer Purchasing Behavior at Self-Serving Convenience Stores? Journal of Marketing and Consumer Research, 31, 28-34
Lee, W., Shih B.Y & Chen C.-Y. (2012). A Hybrid Artificial Intelligence Sales-Forecasting System in the Convenience Store Industry. Human Factors and Ergonomics in Manufacturing & Service Industries, 22(3), 188-196. https://doi:10.1002/hfm.20272.
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
192
Lindquist, J.D. (1974). Meaning of Image – A Survey of Empirical and Hypothetical Evidence, Journal of Retailing, 50(Winter), 51-61.
Malaysian shoppers most price-sensitive in Southeast Asia (2011, July 14), TheEdge. Retrieved from http://www.theedgemarkets.com
Market Analysis Report, (2016) Malaysia Convenience Store Market Outlook 2020. Retrieved at https://www.rncos.com/Market-Analysis-Reports/Malaysia-Convenience-Store-Market-Outlook-2020-IM831.htm
Marshall, D. (2016). Convenience stores and discretionary food consumption among young Tokyo consumers, International Journal of Retail & Distribution Management, 44(10), 1013-1029, https://doi.org/10.1108/IJRDM-08-2015-0137
Martínez-Ruiz, M.P., Jiménez-Zarco, A.I, & Izquierdo-Yusta, A. (2010). Customer Satisfaction's key factors in Spanish grocery stores: evidence from hypermarkets and supermarkets. Journal of Retailing and Consumer Service, 11, 278-285.
Nicholls, S. (2017). Strategic Pricing Considerations for Your C-store, Category Management Knowledge Group. Retrieved at https://csnews.com/strategic-pricing-considerations-your-c-store
Nilsson, E., Gärling, T., Marell, A. & Nordvall, A-C. (2015). Importance ratings of grocery store attributes. International Journal of Retail & Distribution Management, 43(1), 63-91, https://doi.org/10.1108/IJRDM-12-2012-0112
Nunnally, J.C. (1978) Psychometric theory. 2nd Edition, McGraw-Hill, New York Oh, J., Fiorito, S.S., Cho, H., & Hofacker, C.F (2008). Effects of design factors on
store image and expectation of merchandise quality in web-based stores. Journal of Retailing and Consumer Services, 15, 237-249.
Oppewal, H., & Timmermans, H. (1997). Retailer self-perceived store image and competitive position. International Review of Retail, Distribution and Consumer Research, 7 (1), 41-59.
Pan, Y., & Zinkhan, G. (2006). Determinants of retail patronage: a meta-analytical perspective. Journal of Retailing, 82 (3), 229-43.
Panigyrakis, G.G., Prontzas, D.E., Theodoridis, P.K. & Zairis, A. (2009). Convenience store attributes impact on consumer satisfaction. Proceedings of 2nd Biennial International Conference on Services Orchestrating the Service Experience: Music to the Ears of our Customers. Thessaloniki, Greece
Reimers, V. (2014). A consumer definition of store convenience (finally). International Journal of Retail & Distribution Management, 42(4), 315-333. https://doi.org/10.1108/IJRDM-03-2013-0060
Ringle, C., Wende, S., & Will, A. (2005). SmartPLS 2.0 (Beta). Hamburg, (www.smartpls.de).
Thang, D.C.L. & Tan, B.L. (2003). Linking consumer perception to preference retail stores: an empirical assessment of the multi-attributes of store image. Journal of Retailing and Consumer Services, 10, 193-200.
Theodoridis, P. K., & Chatzipanagiotou, K.C. (2009). Store image attributes and customer satisfaction across different customer profiles within the supermarket sector in Greece. European Journal of Marketing, 43(5/6), 708 – 734.
Vahie, A., & Paswan, A. (2006). Private Label Brand Image: Its relationship with store image and national brand. International Journal of Retail & Distribution Management, 34(1), p. 67-84. https://dx.doi.org/10.1108/0 9590550610642828
MALAYSIAN JOURNAL OF CONSUMER AND FAMILY ECONOMICS
193
Yoo, S.J. & Chang, Y.J. (2005). An Exploratory Research on the Store Image Attributes Affecting Its Store Loyalty, Seoul Journal of Business, 11, (1), 19-41.
Yuen, E.F.T. & Chan, S.S.L. (2010). The effect of retail service quality and product quality on customer loyalty. Journal of Data Base Marketing and Customer Strategy Management, 17, 222-240.
Zairis, A.G. & Evangelos, P. (2014). Consumer behaviour toward convenience store chains in Greece, EuroMed Journal of Business, 9(2), 175-197, https://doi.org/10.1108/ EMJB-03-2013-0010