Impact of Format on retailers Brand:Its Threats, and Opportunities "A Theoretical Analysis"

Piyush Kumar Sinha

No WP2002-11-03, IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department

Abstract: Historically, retailing was carried out in traditional store format, with minor non- store variation, like catalogue selling, direct sailing and telemarketing till the last decade of twentieth century. Even those non- store formats were restricted among fringe players, while big retail houses concentrated more on on-land business model. The last decade witnessed a wide metamorphosis in the retailing business. Propelled by growth in technological innovation, mainly World Wide Web the retail industry is evolving to serve the more convenience and value seeking shoppers. As a result, retailers are venturing into multi-format structure to deliver higher value proposition to the shoppers. But adoption of new formats brings with it opportunities, as well as, threats. The fall-out can be distinguished into three heads: 1) When a patron of the parent format switches occasionally or permanently to another format, even of the same retail brand, he/she seeks an altogether different value proposition. 2) While switching of format, the shopper carries to the new format the expectations, built on shopping experience and perceived brand image. If expectation are disconfirmed, shoppers engage in constructive processing that can result in revised brand image 3) As a consequence, retailers success (or failure) in synchronisation of delivering and communicating retail value proposition across formats, results into reinforcement (or distortion) of retailers brand image. The present article attempts to bring out the nature and dimensions of threats and opportunities faced by the retailers and its consequence in the light of the above mentioned issues. It is hypothesised that a retailer with multi-format system would need to define, design and deliver integrated values across the formats and there by creating consistent brand image.

Date: 2002-11-03
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