Selling the Extraordinary in Experiential Retail Stores
Abstract
To drive differentiation and create competitive advantage, most brands strive to deliver extraordinary brand experiences. One means of doing so is operating flagship stores, in which an augmented brand display allows consumers to experience the brand more strongly. The results of an experiment that simulates a brand store versus flagship store visit and manipulates motivational orientation indicate that the retail experience updates the brand experience. In flagship stores, this process is facilitated by recreational (vs. task-oriented) motivation, while the opposite occurs in (nonexperiential) brand stores. Through improved brand experience, a positive retail experience generates purchases of both standard and exclusive store products. A field study confirms this effect, identifies brand salience as a moderator, and shows that positive retail and brand experiences generate cross-channel purchase intention and brand buzz.
The retail landscape is facing rapid changes from an increasing share of digital and mobile shopping. Yet brick-and-mortar retailing still holds promise when it comes to unique and more intense customer experiences (Grewal, Levy, and Kumar 2009; Verhoef et al. 2009). To evolve the daily selling of goods into more of an event for consumers, brands—in addition to their traditional outlets—have begun to operate stores designed to deliver extraordinary experiences. Even digital eyewear disruptor Warby Parker opened a flagship store in New York City to create a unique brand experience for its customers (Kasperkevic 2013). Experiential retail stores, such as offline showrooms, pop-ups, and flagship stores, do not simply sell goods; they attempt to tell a story. A firm’s heritage, product development, customized services, and exclusive and future product lines are displayed as a means to experience the brand in an extraordinary way, adding to what consumers already know from traditional brand touch points (Borghini et al. 2009; Nierobisch et al. 2017). Emerging literature has acknowledged the role of flagship and pop-up stores in brand communications (e.g., Kozinets et al. 2002; Dolbec and Chebat 2013; Klein et al. 2016); however, knowledge is still limited about the potential of these stores to update consumer-perceived brand experiences and generate purchases, particularly in nonluxury retail.
This work offers theoretical and practical insights into how the customer experience inside fast-moving consumer goods flagship stores translates into brand experience and economic outcomes. We build on retailing and consumer research to suggest that recreational versus task-oriented motivation affects responsiveness to experiential cues (Childers et al. 2001; Kaltcheva and Weitz 2006) and that consumers who visit a store spontaneously tend to respond more positively to in-store stimuli than consumers who planned their visit in advance (Bucklin and Lattin 1991; Brüggen, Foubert, and Gremler 2011). Drawing from this literature, we argue that motivational orientation moderates the extent to which a retail experience updates consumers’ brand experience at an experiential retail store. We also argue that brand salience is a moderator of this relationship. Brand salience influences advertising effectiveness (Miller and Berry 1998) and elicits positive brand-related behaviors (Park et al. 2010). Likewise, experiential cues at a store may result in a more positive brand experience when brand salience is high.
Existing models of experiential retail store effectiveness are static in that they do not account for brand experience perceptions before the consumer enters a store. If customer and brand experiences are indeed of a dynamic nature (Verhoef et al. 2009; Schmitt, Brakus, and Zarantonello 2014) and update at various brand touch points (Lemon and Verhoef 2016), previous research may have overstated the effectiveness of experiential retail stores. A related shortcoming in extant literature is the limited empirical evidence on flagship stores’ potential to trigger purchases, particularly in nonluxury retail contexts in which experiential retail stores are primarily considered communication vehicles that improve brand perceptions (Borghini et al. 2009; Dolbec and Chebat 2013). Yet revenue generation is vital to cover the expenses incurred when staging the brand in prominent locations. Furthermore, the efficacy of the experiential retail store may be disputed within firms, and managers might face pressure to demonstrate the necessity of such stores. Against this background, it is critical to examine whether and what kind of purchases are generated at experiential retail stores.
This article attempts to fill this gap in the research on experiential retail stores and makes several key contributions to the literature on retail, customer, and brand experience (Puccinelli et al. 2009; Verhoef et al. 2009; Lemon and Verhoef 2016; Lee et al. 2018). First, by using experimental and field data on visitors to a fast-moving consumer goods flagship store, this research contributes to the understanding of how a retail experience translates into brand experience by considering the moderating effects of motivational orientation and brand salience. Second, this research is the first to our knowledge to examine the impact of the retail experience on brand experience while controlling for previous brand experience. In doing so, we provide a more realistic assessment of the extent to which experiential retail stores can effectively update brand experience. Third, we link retail and brand experience with different measures of economic impact, such as the purchase of standard and/or store-exclusive products, cross-channel purchase intention, and brand buzz. Taken together, this research offers a more holistic understanding of the processes underlying flagship or pop-up store visits and the outcomes for brands that operate such stores.
Theoretical Background
Updating Brand Experience via Retail Experience
Research has defined brand experience as a consumer’s set of subjective, internal responses, such as feelings, sensations, cognitions, and behaviors, evoked by brand-related stimuli (Brakus, Schmitt, and Zarantonello 2009). In contrast with brand attitude and brand perception, brand experience requires either the use of the brand or previous contact with brand touch points, such as advertisements, social media, or services (Brakus et al. 2009; Lemon and Verhoef 2016). In this article, a visit to an experiential retail store serves as the focal touch point. Experiential retail stores hold particular interest because they are brand and/or partner owned, customer co-controlled touch points with limited external influence (see Lemon and Verhoef 2016). Unlike online or mobile stores, experiential brick-and-mortar stores allow for a haptic and more intense experience (Peck and Childers 2003) and have knowledgeable sales personnel readily available (Gensler, Neslin, and Verhoef 2017). Because of these attractive features, researchers have begun examining flagship stores (Kozinets et al. 2002; Dolbec and Chebat 2013; Nierobisch et al. 2017), pop-ups (Klein et al. 2016; Robertson, Gatignon, and Cesareo 2018), brand museums (Hollenbeck, Peters, and Zinkhan 2008), and offline showrooms (Bell, Gallino, and Moreno 2018).
The retailing literature provides robust evidence of the positive impact of retail atmospherics (Kotler 1973; Donovan and Rossiter 1982; Baker et al. 2002; Kaltcheva and Weitz 2006; Puccinelli et al. 2009). Although the customer experience during a typical store visit is created in part by elements that the retailer can control (Verhoef et al. 2009), experiential retail stores offer several attractive features that may lead to improved brand experience. In particular, these stores enable consumers to gather brand-tailored information and form cues about all facets of the brand (Kozinets et al. 2002; Dolbec and Chebat 2013). The brand-tailored information and staged brand features may include the brand’s history (Hollenbeck et al. 2008), its ideology (Borghini et al. 2009), demonstrations of manufacturing processes for quality standards, and complementary services (Dolbec and Chebat 2013). These are further emphasized through brand-tailored architectural designs and other atmospheric elements (Puccinelli et al. 2009; Klein et al. 2016), as well as trained, brand-familiar staff (Kozinets et al. 2002; Dolbec and Chebat 2013). Given these potential enhancements, the retail experience can become richer than that experienced in traditional stores, in which design, ambience, and social cues tend to be more restricted (Puccinelli et al. 2009; Nierobisch et al. 2017).
Previous research has emphasized the possibility that the store atmosphere–evoked retail experience improves a consumer’s brand experience (Kozinets et al. 2002; Borghini et al. 2009; Dolbec and Chebat 2013; Nierobisch et al. 2017). However, the underlying process is not well understood. For example, Verhoef et al. (2009) note that brand experience (in period t) can be influenced by a preexisting brand experience (from period ). Thus, prior research may have overstated the effectiveness of experiential retail stores by not accounting for this. Moreover, consumer- and brand-related variables may moderate the influence of the retail environment on brand experience. We explore these variables next.
Motivational Orientation
We argue that a brand experience update due to a store visit differs across motivational orientations (for an overview of articles that consider the moderating impact of motivational orientation in retail settings, see table 1). Consumers do not shop only to fulfill a particular buying task; they also might enjoy the experience for its own sake (Holbrook and Hirschman 1982; Babin, Darden, and Griffin 1994). Research has shown that recreational versus task-oriented shopping motivation moderates the link between store environment–evoked arousal and the pleasantness of that environment (Kaltcheva and Weitz 2006). Furthermore, hedonic (vs. utilitarian) motivation moderates the link between shopping enjoyment and attitude toward new interactive media (Childers et al. 2001). Likewise, research has proposed that task-oriented consumers consider store assortment a more important driver of customer experience than experientially oriented consumers (Verhoef et al. 2009).
Article | Motivational orientation labels | Key findings |
---|---|---|
Bucklin and Lattin (1991) | Planned vs. unplanned shoppers | Planned shoppers are less influenced by in-store stimuli than unplanned shoppers. |
Childers et al. (2001) | Utilitarian vs. hedonic motivation | Enjoyment of new interactive media is a stronger predictor of attitude toward these media in a more hedonic shopping environment. |
Kaltcheva and Weitz (2006) | Task-oriented vs. recreational motivational orientation | Recreational (vs. task-oriented) consumers prefer high-arousal retail environments that create rich shopping experiences. |
Verhoef et al. (2009) | Task-orientation vs. experiential orientation | Task-oriented customers may consider assortment a more important driver of customer experience than experientially oriented customers. (proposition) |
Brüggen et al. (2011) | Planned vs. spontaneous visits | Consumers on a spontaneous visit tend to respond more positively to store remodeling than consumers who planned their visit in advance. |
Bucklin and Lattin (1991) and Brüggen et al. (2011) offer a slightly different perspective on shopping motivation and its potential influence on the retail experience–brand experience link. Bucklin and Lattin argue that unplanned shoppers are more responsive to in-store stimuli than planned shoppers. Moreover, Brüggen et al. show that consumers on a spontaneous shopping trip are influenced more by a remodeled servicescape than those who plan their trips in advance. By contrast, consumers who plan their store visits are more likely to rehearse and define their shopping behavior, thereby generating or activating shopping scripts (Block and Morwitz 1999). They also might form expectations of the brand touch point encounter (Lemon and Verhoef 2016), which makes them less responsive to the store attractions (Bucklin and Lattin 1991; Brüggen et al. 2011).
Both perspectives on motivational orientation share the notion that task-oriented and planned shoppers try to achieve their shopping goals with a minimum of irritation (Bucklin and Lattin 1991; Childers et al. 2001; Kaltcheva and Weitz 2006). Consequently, these consumers will be less responsive to store atmospherics. This suggests that the retail experience will have a stronger effect on brand experience when consumers have a recreational motivation and visit the store spontaneously.
Retail experience has a stronger influence on brand experience when (a) motivational orientation is recreational and/or (b) the visit is spontaneous.
The preceding argument implies that at nonexperiential retail stores, recreational orientation might have less of an effect. For example, when shoppers have a dominant task orientation, many stimuli in experiential retail stores might prove distracting (Kaltcheva and Weitz 2006). Accordingly, in the absence of these stimuli, the retail experience would translate into brand experience more easily among task-oriented shoppers. A recent study found that convenience plays a greater role in customer satisfaction when small, fill-in shopping trips are utilitarian than when the shopping trip is for special occasions (Hunneman, Verhoef, and Sloot 2017). Given the distinction between experiential retail stores and brand stores focused more on selling a product at a profit and less on reinforcing the brand (Dolbec and Chebat 2013), the moderating impact of motivational orientation on the retail experience–brand experience link is likely to differ across store types. Whereas recreational orientation should boost the impact of the retail experience on brand experience at flagship stores, the opposite might be true at brand stores.
The moderating impact of motivational orientation on the link between retail and brand experience differs between flagship stores and brand stores.
Brand Salience
We further argue that consumer-brand relationships influence whether the brand experience is updated at a given touch point (Verhoef et al. 2009; van Doorn et al. 2010). Consumers with close brand relationships are more interested in regularly acquiring new brand information (Keller 1993; Fedorikhin, Park, and Thomson 2008). Thus, they should be more open when engaging with the experiential retail store’s augmented brand display. Here we focus on brand salience—that is, the cognitive and affective bond that connects the brand with the self and makes the brand stand out from its competitors (van der Lans, Pieters, and Wedel 2008; Park et al. 2010). This understanding of brand salience differs from both brand prominence, a construct reflecting a brand’s conspicuousness (Han, Nunes, and Drèze 2010), and brand familiarity, the accumulated number of direct and indirect experiences that a customer has with a brand (Alba and Hutchinson 1987). Unlike brand familiarity, which may decrease brand schema change at a single store encounter (Klein et al. 2016), high brand salience inhibits the recall of other thoughts (Alba and Chattopadhyay 1986), increases search performance (van der Lans et al. 2008), and elicits positive brand behaviors (Park et al. 2010). Thus, experiential cues at a store may result in a more positive brand experience when brand salience is high.
Retail experience has a particularly strong influence on brand experience when brand salience is high for the visitor.
Economic Outcomes of Visiting an Experiential Retail Store
The literature on experiential retail stores—and flagship stores in particular—largely agrees that their purpose is one of marketing communication rather than selling goods to consumers per se (Kozinets et al. 2002; Borghini et al. 2009; Dolbec and Chebat 2013). Consequently, these stores are not designed to maximize sales, and consumers do not necessarily enter the store with the mind-set to make a purchase. Yet operating flagship stores incurs high costs, and most brands offer higher priced, extraordinary products available exclusively at the flagship store, alongside the brand’s standard assortment to soften the financial burden. Effective communication can indirectly contribute to the economic success of experiential retail stores by increasing the desire to purchase the brand at traditional, non-brand-owned retail channels (cross-channel purchase intentions) and generating brand buzz, which is a primary goal of many brands that operate such stores (Kasperkevic 2013; Robertson et al. 2018).
From a research perspective, it is useful to examine whether the updated brand experience during an experiential retail store visit indeed translates into these economic outcomes. Although there is a surprising dearth of studies on this issue, previous research has successfully linked brand experience with increased brand loyalty intentions (Brakus et al. 2009). With regard to brand buzz, the impact of brand experience has been replicated among visitors of a pop-up store (Klein et al. 2016). It is therefore reasonable to assume that the brand experience updated at a flagship store will stimulate immediate, direct purchases (of both standard and exclusive products), as well as future purchases when shopping at other retailers, and will trigger consumers’ intention to talk favorably about the brand.
Through brand experience, the retail experience positively affects (a) store purchase, (b) cross-channel purchase intentions, and (c) brand buzz.
Overview of Studies
The remainder of this article describes the methodology and results of one experiment and one field study. These studies present a mix of approaches and samples, which provide converging evidence for a mechanism that links retail experience with brand experience and store purchase. The first experiment explores the link between retail experience and brand experience across two store types and motivational orientations. The goal of this experiment is to determine whether the retail experience’s influence on brand experience and in-store purchase differs depending on visitors’ task orientation versus recreational motivation (hypothesis 1a). Moreover, we explore whether the resulting pattern is different for experiential retail stores versus brand stores (hypothesis 2). Because the results of an experiment with manipulated motivational orientation and store type will be limited in their external validity, we also conduct a field study of visitors to a flagship store. This natural setting enables us to test additional parts of our conceptual model. The flagship store is located in the city center where walk-in customers may be the norm; yet some visitors may enter the store purposefully. Thus, we used planned versus spontaneous store visits to measure motivational orientation (hypothesis 1b). Moreover, we asked visitors about brand salience (hypothesis 3) before they entered the store. Importantly, the additional time that consumers spent in the flagship store (compared with the time respondents participated in our experiment) enabled us to meaningfully measure brand experience both before and after the store visit. The previsit measure of brand experience can be used to estimate an unbiased parameter of the effect of retail experience on (post-visit) brand experience (see Verhoef et al. 2009). Study 2 also includes cross-channel purchase intention (hypothesis 4b) and brand buzz (hypothesis 4c) as additional outcome variables. Figure 1 outlines the conceptual framework. Conceptual model of experiential retail store effectiveness.
Study 1: Influence of Motivational Orientation and Store Type on the Retail Experience–Brand Experience Link
Participants and Procedure
One hundred ninety-four individuals (, ; 39.2% female) were recruited using the Clickworker platform, and they completed the study in return for a nominal payment. Participants were randomly assigned to one of four conditions as part of a 2 (motivational orientation: task-oriented vs. recreational motivation) × 2 (store type: brand store vs. flagship store) between-subjects design. To manipulate motivational orientation, we randomly assigned participants to read one of two scenarios about a hypothetical shopping experience (based on Kaltcheva and Weitz 2006; see app. A). Next, we asked participants to imagine that they were entering the store and showed them photos and videos. The footage was from a national chocolate brand’s flagship store (a member of the research team filmed and photographed various parts of the store). The videos were edited to include five short films depicting the informational and interactive store elements, as well as product shelves. In the brand store condition, participants only saw shelves containing a variety of products from the target brand. In the flagship store condition, participants also saw footage depicting the informational and interactive attractions.
At the end of the study, we simulated a checkout area and asked participants whether they would purchase any of the presented items (if so, how many, ranging from one to five). Participants could choose from up to 10 items, 5 of which were standard products and 5 of which were extraordinary, store-exclusive products. The standard products were popular chocolates widely available at grocery stores, gas stations, and so forth. The store-exclusive products were special chocolate offerings, merchandise, and memorabilia (e.g., a bag, a smartphone cover). Standard products were priced between €1.09 and €1.29 per item, and the store-exclusive products were priced between €2.50 and €11.49 per item. Study participants with a task-oriented motivation may lean toward selecting at least one item as a gift, regardless of store type. For respondents in the recreational motivation condition, we expected their purchase to be higher in the flagship store condition. We calculated the dependent variable, store purchase, by summing up the amount of money each participant would have spent to buy the selected items.
During the simulated retail journey, we measured (using 7-point Likert scales) retail and brand experience. Following Brakus et al. (2009), we measured the sensual, affective, intellectual, and behavioral components of brand experience (Cronbach’s alphas ranged from .72 to .92). We then computed a brand experience index as an average of the four dimensions (Cronbach’s ). For our measure of retail experience, we combined seven items from scales measuring extraordinary store atmosphere, staff service quality, and assortment (Baker et al. 2002; Kahn and Wansink 2004; Brady et al. 2005; Puccinelli et al. 2009; see app. B). Cronbach’s alpha (.88) indicates high reliability.
Results
Brand Experience
We summarize our moderated regression analysis results in table 2. Retail experience has a positive, significant effect on brand experience (, ; model 1) that is further qualified by a significant three-way interaction of retail experience, motivational orientation, and store type (, ; model 4). As table 2 shows (models 2 and 3), only the combined consideration of motivational orientation and store type qualifies the direct effect of retail experience on brand experience.
Dependent variable: Brand experience | Model 1 | Model 2 | Model 3 | Model 4 | ||||
---|---|---|---|---|---|---|---|---|
β | t | β | t | β | t | β | t | |
Retail experience | .62 | 10.88*** | .62 | 10.56*** | .60 | 7.48*** | .62 | 7.75*** |
Motivational orientation (task vs. recreational) | −.00 | .06 | −.11 | 1.29 | ||||
Store type (brand vs. flagship store) | .10 | 1.69* | .10 | 1.75* | ||||
Retail experience × motivational orientation | .00 | .05 | −.16 | 1.97** | ||||
Retail experience × store type | −.01 | .15 | −.05 | .68 | ||||
Motivational orientation × store type | .08 | .96 | ||||||
Retail experience × motivational orientation × store type | .22 | 2.68*** | ||||||
R2 (adj.) | .378 | .372 | .381 | .395 |
Hypothesis 1a predicts that in experiential retail stores, motivational orientation moderates the effect of retail experience on brand experience. A significant interaction between retail experience and motivational orientation in the flagship store condition supports this hypothesis (, ). Spotlight analysis reveals that in flagship stores, the effect of retail experience is more pronounced under recreational (vs. task-oriented) motivation (see fig. 2A). These results provide support for hypothesis 1a. In brand stores, the pattern is reversed: retail experience has a stronger effect on brand experience under task-oriented (vs. recreational) motivation (see fig. 2B). These results provide support for hypothesis 2. Brand experience by motivational orientation and store type (study 1). Panel A: flagship store. Panel B: brand store.
Store Purchase
To examine how the retail experience is linked to store purchase (hypothesis 4a), we performed a moderated mediation analysis (using PROCESS model 11 with 10,000 bootstrap samples; Hayes 2013). The results indicate a significant indirect effect (total indirect effect: −.58, 95% confidence interval [CI]: −1.585 to −.056) that is further qualified by motivational orientation and store type (see table 3). Specifically, a flagship store retail experience strongly increases store purchase through brand experience if consumers have a recreational motivation (indirect effect: 1.32, 95% CI: .628 to 2.329). Accordingly, the results provide support for hypothesis 4a. We find the opposite effect at brand stores, where the indirect effect is stronger among task-oriented consumers (indirect effect: 1.45, 95% CI: .744 to 2.690).
Dependent variable: Store purchase | B | t | 95% CI | Mean purchase (in €) |
---|---|---|---|---|
Direct effects: | ||||
Intercept | .87 | .25 | ||
Retail experience | −.62 | .75 | ||
Brand experience | 1.39 | 2.28** | ||
Indirect effects: | ||||
Brand store, task-oriented motivation | 1.45 | .744 to 2.690** | 5.03 | |
Brand store, recreational motivation | .87 | .363 to 1.810** | 2.83 | |
Flagship store, task-oriented motivation | .65 | .226 to 1.428** | 1.98 | |
Flagship store, recreational motivation | 1.32 | .628 to 2.329** | 3.85 |
Descriptive analyses (see table 3, right column) indicate that shoppers spend more in brand stores when they have a task-oriented motivation () and less when they have a recreational motivation (). By contrast, shoppers spend more in flagship stores when they have a recreational motivation () and less when they have a task-oriented motivation (). The purchase differences across groups are driven primarily by purchases of exclusive products (M’s ranging from €.49 to €3.34), whereas purchases of standard products differed only minimally across groups (M’s ranging from €1.21 to €1.68).
Discussion
Study 1 provides evidence that a consumer’s retail experience influences brand experience, but this influence differs across motivational orientation and store type. We find support for our hypothesis that through brand experience, the retail experience affects in-store purchasing. Combined with the three-way interaction of retail experience, motivational orientation, and store type, we can identify differential patterns of the influence of retail experience on store purchase. Specifically, retail experience has a stronger impact on flagship store (brand store) purchases when visitors have a recreational (task-oriented) motivation.
A limitation of this study is that watching footage is an imperfect simulation of a real retail experience, and self-reported measures of store purchase may be subject to social desirability bias. Therefore, we conducted a field study among flagship store visitors. While we could not manipulate these visitors’ motivational orientation, the extended stay at the store (compared with participation time in the experiment) enabled us to measure previsit brand experience and examine its updating. Moreover, we used brand salience as an additional moderator of the link between retail and (post-visit) brand experience.
Study 2: Field Test of Experiential Retail Store Effectiveness
Participants and Procedure
A national brand in the cosmetics industry (in the lower to medium price range) that sells its products primarily through major retailers agreed to let us approach their flagship store visitors for the purpose of this field study. The brand operates flagship stores in major German cities, often located next to prestigious fashion, car, or furniture brands. The flagship store’s augmented brand display contains a video wall informing consumers about the quality and manufacturing process of the brand’s products, the standard products that are available on retailers’ shelves, and certain product lines that are available exclusively at flagship stores. In addition, beauticians acting as sales advisers and brand ambassadors are available to offer visitors recommendations, and consumers can personalize their packaging with pictures or slogans. The architectural and interior design is tailored to the brand, with the brand’s colors and packaging shapes present throughout the flagship store.
During a 1-week period, 1,100 visitors to the flagship store agreed to participate in our study. To avoid picking up cultural influences as a moderator for the perception of the flagship store’s augmented brand display, we only approached German consumers. Consumers were approached with questionnaires both before entering the flagship store and after leaving it. We used established scales and, if necessary, adapted item formulation to the research context of experiential stores. Unless indicated otherwise, we measured all constructs on 7-point Likert scales, ranging from 1 (“strongly disagree”) to 7 (“strongly agree”). In the previsit questionnaire, we asked consumers about their preexisting brand experience, about their brand salience (with two items from Park et al. 2010; Cronbach’s ), and whether the flagship store visit was planned (, ). In the post-visit questionnaire, we asked consumers to fill out items pertaining to their retail experience (Cronbach’s ) and brand experience (Cronbach’s alphas ranged from .74 to .94), using the same scales as in study 1. At the end of the survey, we measured consumers’ cross-channel purchase intention (using three items from Yoo, Donthu, and Lee 2000; Cronbach’s ) and brand buzz (using two items from Harrison-Walker 2001; Cronbach’s ). To reduce common method bias, we added a “don’t know” option and randomized the item order (MacKenzie and Podsakoff 2012). We were not permitted to collect or use information about the amount of money spent or the specific products purchased. Instead, interviewers inspected the items purchased to classify them as either standard assortment or exclusive flagship store products. Exclusive products included items from the brand’s professional product line or its infant or male product lines, special sets, and merchandise such as fashion and bathing accessories. Standard products were those that could be bought both at the flagship store and elsewhere. Standard assortment and exclusive, extraordinary store product purchases each were dummy coded (0 = not purchased, 1 = purchased). A tracking number enabled us to match the respective answers from both time points. We removed from the study any consumers who answered only one questionnaire, responded in obvious patterns, rushed through, or chose the “don’t know” option more than 10% of the time, which left 416 valid responses (51% aged 36 years or older, 78.4% female, 43.7% planned shoppers) in our sample.
Results
Brand Experience
In hypotheses 1b and 3, we predict that spontaneity of the visit and brand salience will moderate the effect of retail experience on brand experience. Moderated regression analysis results (see table 4, model 3) indicate a significant interaction between retail experience and brand salience (, ) but a nonsignificant interaction between retail experience and motivational orientation (, ). Instead, visiting the flagship store spontaneously had a direct, marginally significant but negative effect on brand experience (, ). Table 4 (see models 1, 2, and 4) also shows that adding previsit brand experience takes explanatory power away from retail experience. Yet the effect of retail experience remains positive and significant (model 2: ; model 4: ; all ), as does the interaction between retail experience and brand salience (, ). Spotlight analysis reveals that retail experience has a stronger effect on (post-visit) brand experience when brand salience is high (, ) than when it is low (, ). When we control for previsit brand experience, the effect decreases but remains significant in both conditions (high brand salience: , ; low brand salience: , ). These results provide support for hypothesis 3.
Dependent variable: Brand experience | Model 1 | Model 2 | Model 3 | Model 4 | ||||
---|---|---|---|---|---|---|---|---|
β | t | β | t | β | t | β | t | |
Retail experience | .53 | 12.86*** | .17 | 5.072*** | .41 | 11.46*** | .19 | 6.06*** |
Motivational orientation (planned vs. spontaneous visit) | −.06 | 1.91* | −.02 | .75 | ||||
Brand salience | .52 | 15.03*** | .24 | 7.49*** | ||||
Retail experience × motivational orientation | −.03 | .84 | −.01 | .34 | ||||
Retail experience × brand salience | .12 | 3.70*** | .09 | 3.19*** | ||||
Brand experience (previsit) | .73 | 22.417*** | .57 | 15.72*** | ||||
R2 (adj.) | .284 | .676 | .548 | .718 |
Economic Outcomes
The final analysis examines the outcome variables of the flagship store visit, namely, store purchase (standard and/or exclusive products), cross-channel purchase intention, and brand buzz. Regression analysis results show that brand experience exerts positive and significant effects on the purchase of exclusive store products, cross-channel purchase intention, and brand buzz (see table 5, direct effects results). In addition, retail experience has direct effects on the purchase of standard store products, cross-channel purchase intention, and brand buzz (see table 5, direct effects results).
Standard store purchase | Exclusive store purchase | Cross-channel purchase intention | Brand buzz | |||||
---|---|---|---|---|---|---|---|---|
Direct effects | ||||||||
Intercept | −3.86 | 26.12*** | −3.70 | 17.70*** | .48 | 1.55 | −.35 | .94 |
Retail experience | .48 | 10.91*** | .13 | .53 | .54 | 8.70*** | .16 | 2.12** |
Brand experience | .06 | .42 | .30 | 6.31*** | .38 | 8.40*** | .75 | 13.87*** |
Indirect effects | B | 95% CI | B | 95% CI | B | 95% CI | B | 95% CI |
Planned visit | .02 | −.033 to .076 | .08 | .019 to .192** | .10 | .047 to .173** | .21 | .092 to .329** |
Spontaneous visit | .02 | −.030 to .066 | .07 | .020 to .161** | .10 | .052 to .154** | .19 | .104 to .284** |
Low brand salience | .01 | −.018 to .050 | .05 | .010 to .121** | .06 | .016 to .114** | .12 | .030 to .216** |
High brand salience | .02 | −.042 to .096 | .11 | .027 to .237** | .14 | .083 to .214** | .27 | .169 to .394** |
To examine the combined effects of retail experience on cross-channel store purchase, purchase intention, and brand buzz through brand experience, while considering motivational orientation and brand salience, we conducted moderated mediation analysis (using PROCESS model 9 with 10,000 bootstrap samples; Hayes 2013). In all analyses, we control for the influence of previsit brand experience on post-visit brand experience.
The analyses indicate that retail experience has a positive direct effect on the purchase of standard store products (, ) that is not mediated by brand experience (see table 5, indirect effects results). By contrast, retail experience exerts no direct effect on the purchase of store-exclusive products (, ) but indirectly affects these purchases through brand experience, particularly when brand salience is high (see table 5, indirect effects results). The combination of favorable retail experience and high brand salience influenced 26.5% of participants to purchase a store-exclusive product, compared with 12.6% when brand salience was low (when the retail experience is unfavorable, 11.8%–12.4% of the participants purchased at least one exclusive product). These results provide support for hypothesis 4a regarding the purchase of extraordinary products. Brand experience partially mediates the effects of retail experience on cross-channel purchase intention and brand buzz. Thus, retail experience increases cross-channel purchase intention and brand buzz both directly ( and .16, respectively; all ) and indirectly (see table 5, indirect effects results). These results provide support for hypotheses 4b and 4c.
Discussion
Study 2 replicates the positive impact of retail experience on brand experience in a field setting. In addition, the results of study 2 extend those of study 1 in several important ways. We empirically demonstrate that previous research (Dolbec and Chebat 2013; Nierobisch et al. 2017) may have overstated the impact of experiential retail stores on brand experience. Yet the retail experience at these stores still updates brand experience after controlling for previsit brand experience. This means that brick-and-mortar stores that create a unique and positive customer experience are an effective brand-building tool.
With regard to the moderating influence of motivational orientation and brand salience, we find that store visit spontaneity does not substantially change the impact of the retail experience on brand experience (thus rejecting hypothesis 1b). This finding is at odds with previous research, which has found improved responses to store remodeling efforts among spontaneous visitors (Brüggen et al. 2011). One reason might be that a fraction of visitors planned a “recreational” visit to the store, which would have confounded the measure of “planned visit.” Another interpretation is that even planned visits to experiential stores (vs. planned trips to grocery stores or fast-food restaurants; Block and Morwitz 1999; Brüggen et al. 2011) do not prevent consumers from reacting to their experience within the store.
In line with hypothesis 3, brand salience boosts the retail experience–brand experience link. By enhancing the impact on brand experience, a favorable retail experience increases the likelihood of purchasing exclusive store products and the intention to purchase standard products from that brand at both the experiential retail store and other stores and to talk favorably about the brand (hypotheses 4a–4c). These findings are in line with previous research that has examined brand experience after a pop-up store visit and its influence on word of mouth (Klein et al. 2016), and they extend research that has linked brand experience with brand loyalty intentions but not purchase behavior (Brakus et al. 2009).
General Discussion
One experiment and one field study demonstrate that consumers’ retail experience inside flagship stores updates their brand experience. This finding corroborates the commonly held assumption that flagship stores are effective means of brand communication (Kozinets et al. 2002; Hollenbeck et al. 2008; Borghini et al. 2009). Furthermore, we show that this influence is facilitated by a recreational shopping motivation and high brand salience. We also show that the positive impact of retail experience prevails even after controlling for preexisting brand experience. Regarding downstream consequences, a favorable retail experience translates into economic outcomes such as increased store purchase, cross-channel purchase intention, and brand buzz, both directly and indirectly through brand experience.
This research contributes to the literatures on customer experience and the customer journey in retailing (Puccinelli et al. 2009; Verhoef et al. 2009; Lemon and Verhoef 2016; Lee et al. 2018) and brand experience formation. We provide evidence that the customer experience inside flagship stores updates brand experience, but the impact is smaller than previously assumed (e.g., Dolbec and Chebat 2013; Nierobisch et al. 2017). To the best of our knowledge, this research is the first empirical demonstration of Verhoef et al.’s (2009) conceptual argument that a dynamic perspective on updating brand experience at brand touch points offers a less biased estimate of the extent to which brand experience is updated. We empirically confirm the proposition that brand experience creation largely depends on preexisting brand experience (Brakus et al. 2009; van Doorn et al. 2010; Lemon and Verhoef 2016).
Our studies shed light on the mechanism that links retail experience with brand experience. Specifically, our findings go beyond those of Dolbec and Chebat (2013), who find a moderating influence of store type alone on the link between store image and brand experience. Notably, we do not find such an influence with respect to the relationship between retail and brand experience (see table 2, model 3). Indeed, it was the additional consideration of motivational orientation that revealed differences in the influence of retail experience on brand experience.
We also find support for our hypothesis that high brand salience facilitates the effect of retail experience on brand experience. This result specifies the more general observation that highly attached consumers are more likely to update their brand knowledge at each brand touch point (Fedorikhin et al. 2008). It also complements the work of Klein et al. (2016), who find a nonsignificant interaction effect of store atmosphere and brand familiarity on word of mouth but a significant and positive interaction between store uniqueness and brand familiarity. Notably, both effects run counter to their predictions. Our findings indicate that high brand familiarity may not always prevent consumers from changing their brand perception. Indeed, if the salience of brand feelings is high, a unique store environment (which is typical of experiential retail stores; Robertson et al. 2018) can update brand experience and, by extension, lead to more favorable economic outcomes.
The absence of a moderating influence of visit spontaneity also indicates the generalizability of experiential retail store effectiveness. In contrast with everyday retail experiences at grocery stores (Block and Morwitz 1999) or fast-food restaurants (Brüggen et al. 2011), a unique, augmented brand display effectively updates brand experience even when the store visit is planned. We note the apparent robustness of this positive effect, as task-oriented shopping motivation, low brand salience, and previsit brand experience do not completely eliminate the positive effect of retail experience on brand experience. Consequently, using the brand’s website to steer consumers to the experiential retail store (Kleinlercher et al. 2018) may ultimately lead to improved brand experiences.
Importantly, while prior research has affirmed experiential retail stores’ impact on consumers’ brand identification, brand perceptions, and loyalty intentions (Kozinets et al. 2002; Dolbec and Chebat 2013; Nierobisch et al. 2017), we also demonstrate some economic benefits of experiential retail stores. Our studies provide evidence that brand experience contributes to the purchase of both standard and store-exclusive products, enhances cross-channel purchase intention, and stimulates brand buzz. Importantly, we identify differential patterns of the retail experience–store purchase link. Specifically, retail experience has a stronger impact on brand store purchases when visitors are task oriented (study 1) and on flagship store purchases when visitors have a recreational motivation (study 1) and high brand salience (study 2).
Retailing Implications and Future Research Directions
Although the effect of flagship stores may have been overstated in prior research, we demonstrate that a consumer’s retail experience inside flagship stores still can improve brand experience. Yet our findings qualify this relationship by suggesting that flagship and pop-up stores can help update brand experience perceptions but will not fundamentally change them. Both findings are important for managerial decision making.
Our results add to the strategic and economic understanding of flagship stores for brands that largely distribute through third-party channels. In established and competitive partnerships, experiential retail stores may be regarded as threats to partners, as consumers might satisfy their wants at the brand’s own stores. For example, the opening of an offline store can decrease online sales in areas in which the retailer has a strong presence (Wang and Goldfarb 2017). If traditional retailers and distribution partners feel threatened by flagship or pop-up store opening, they might reallocate shelf space to private-label or competing national brands (Geyskens, Gielens, and Gijsbrechts 2010). We find support for the idea that brand experience increases the purchase of exclusive products more than the purchase of standard products at flagship stores, especially when brand salience is high. Combined with the boost to consumers’ intention to purchase the brand at other retailers, brands that operate experiential retail stores do not appear to present a threat to their partners. At the same time, a flagship store’s sale of exclusive products that are not available outside the experiential retail store can help cover its operating costs. Thus, our findings emphasize that experiential retail stores are complementary communication and distribution channels rather than substitutes for or threats to traditional brand outlets, retailers, or other third-party distributors.
The limitations of our study offer fruitful avenues for future research. In the field study, we only used a dummy-coded store purchase measure. Although we used a metric measure in study 1, the participants selected items in a hypothetical scenario. Thus, field studies that link experiential retail store visits with metric measures of store purchase (including the number of items purchased) and even follow-up cross-channel purchases would be useful. The ultimate test of the economic performance of such stores could be achieved with field experiments and natural interventions, such as store remodeling (see Brüggen et al. 2011). Furthermore, we identified two moderator variables, motivational orientation (study 1) and brand salience (study 2). Considering both moderators in one study could further illuminate the complex mechanism that links retail with brand experience.
In conclusion, we offer a framework to examine the effectiveness of experiential retail stores. This study is among the first to address the mechanism that links store visits with updating the brand experience and to examine whether this mechanism leads to increased store purchase. The findings have implications for brands that are sold across multiple channels, both brand-owned and non-brand-owned. Taken together, the results provide an optimistic view of the potential of brick-and-mortar stores.
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