An Evaluative Analysis of Retail Chains of the 21st Century
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An Evaluative Analysis of Retail Chains of the 21st Century

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The next phase in retail growth is all about change, which will be more about how retail stores connect, interact, and involve consumers in the buying process. The recent economic crisis shifted the ...

The next phase in retail growth is all about change, which will be more about how retail stores connect, interact, and involve consumers in the buying process. The recent economic crisis shifted the buying habits of consumers and the next decade will bring a very different business environment for retail store chains.

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  • 21 st Century Business Innovation through Technology and Marketing by Leon Grove, MBA

An Evaluative Analysis of Retail Chains of the 21st Century Presentation Transcript

  • 1. An Evaluative Analysis of Retail Chains in the 21st Century Leon Grove University of Phoenix
  • 2. Committee Membership
    • Dr. Santosh Sambare, Ph.D. – Mentor
    • Dr. Kevin Banning, Ph.D. – Committee Member
    • Dr. Craig Martin, Ph.D. – Committee Member
    2
  • 3. Problem Statement
    • In the retail chain of consumer goods, there appears to be relatively limited information on the relationship between allocation of resources by these chains for marketing, technology and inventory initiatives and customer satisfaction and customer loyalty .
    3
  • 4. Support for the Problem Statement
    • “ Firms that are unable to satisfy customers can expect to lose market share to rivals offering better products and service at lower prices” (Simon et al., 2009).
    • “ Satisfaction is also not always enough to ensure customer loyalty, even though satisfaction leads to loyalty in many instances” (Pleshko & Baqer, 2008).
    Literature supports the hypothesis that customer satisfaction may not lead to customer loyalty in several situations: 4
  • 5. Purpose Statement
    • The purpose of this study was to determine if there is empirical data to support the hypothesis that retail store chains can increase customer satisfaction and customer loyalty through allocation of resources to marketing, technology, and inventory management systems.
    5
  • 6. Significance of Study/Leadership
    • The significance for the study is that retailing is an important component of consumers’ buying and consumer spending impacts the overall economy. Improvements gained through technology and inventory efficiency will allow retail store chains to provide the highest quality products at exceptionally low prices.
    • Marketing initiatives lead to customer satisfaction and loyalty and helps consumers in particular and the economy in general.
    • This research will help decision makers in implementing programs which will benefit their customers through improvements in satisfaction and loyalty.
    6
  • 7. Research Questions
    • Do retail store chains effectively use tools such as marketing, technology, and inventory management systems to improve customer satisfaction?
    • How technology can be an effective management tool to improve customer’s loyalty?
    7
  • 8. Research Questions
    • How may the inventory management systems improve customer loyalty?
    • How may the implementation or maintenance cost affect customer satisfaction and customer loyalty as it relates to marketing, technology, and inventory management systems?
    • How will management transform the technological processes to optimize the level of customer satisfaction?
    8
  • 9. Hypotheses
    • H1: There is no positive/negative relationship between technology processes and customer satisfaction.
    • H01: There is a positive/negative relationship between technology processes and customer satisfaction.
    • H1a: There is no positive/negative relationship between technology processes and customer loyalty.
    • H01a: There is a positive/negative relationship between technology processes and customer loyalty.
    9
  • 10. Hypotheses
    • H2: There is no positive/negative relationship between marketing spend on customer satisfaction.
    • H02: There is a positive/negative relationship between marketing spend on customer satisfaction.
    • H2a: There is no positive/negative relationship between marketing spend on customer loyalty.
    • H02a: There is a positive/negative relationship between marketing spend on customer loyalty.
    10
  • 11. Hypotheses
    • H3: The efficiency of inventory management systems do not reduce retailer’s cost to improve customer satisfaction.
    • H03: The efficiency of inventory management system reduces retailer’s cost to improve customer satisfaction.
    11
  • 12. Relevant/Important Research Betancourt et al., (2007) research results imply that “distribution services are the main mechanism through which retailers can influence customer satisfaction with a transaction at the supermarket level” (p. 311). Bowden (2009) conceptualized that “companies have a continued reliance on marketing to assess customer responses to their products and services in the belief that high levels of satisfaction will lead to increased customer loyalty, intention to purchase, word-of-mouth recommendations, profit, market share, and return on investments” (p. 63). 12
  • 13. Methodology
    • The methodology consisted of two parts:
    • In the first part, financial data of several retail store chains was captured.
    • In the second part, an online survey was used to collect data from customers and analytical approaches were applied to determine the relationship between the dependent and independent variables namely marketing, technology initiatives and inventory control systems.
    13
  • 14. Target Population The population for this research study are several leading retail chain for consumer goods in the US. 14
  • 15. Sample The research study surveyed a sample of consumers to gain a better understanding of their overall level of satisfaction and loyalty as well as their satisfaction with specific variables related to their shopping experience at these stores. The total sample for this study were 126 respondents who shopped at Wal-Mart, Target, and Kroger Stores. 15
  • 16. Analyses
    • The data will be analyzed using Analysis of Variance (ANOVA), to understand the relationship between marketing, inventory control and technological initiatives and customer satisfaction as well as customer loyalty.
    16
  • 17. Results
    • Analysis of Variance: Comparison of Overall Satisfaction
    • SUMMARY
    • Groups Count Sum Average Variance
    • Overall, I am satisfied with this store. – Wal-Mart 105 366 3.48 1.14
    • Overall, I am satisfied with this store. – Target 103 399 3.87 1.03
    • Overall, I am satisfied with this store. – Kroger 36 140 3.88 0.84
    • ANOVA
    • Source of Variation SS df MS F P-value
    • Between Groups 9.19 2 4.59 4.38 0.01
    • Within Groups 253.14 241 1.05
    • Total 262.34 243 
    17
  • 18. Results
    • Analysis of Variance: Comparison of Overall Loyalty
    • SUMMARY
    • Groups Count Sum Average Variance
    • I consider myself loyal to the store. – Wal-Mart 105 290 2.76 1.95
    • I consider myself loyal to the store. – Target 103 324 3.14 1.40
    • I consider myself loyal to the store. – Kroger 37 119 3.21 1.61
    • ANOVA
    • Source of Variation SS df MS F P-value
    • Between Groups 9.85 2 4.925 2.94 0.054
    • Within Groups 404.133 242 1.66
    • Total 413.98 244
    18
  • 19. Results
    • Analysis of Variance Commitment to remaining a customer
    • SUMMARY
    • Groups Count Sum Average Variance
    • I am committed to the store - Wal-Mart 105 294 2.8 1.68
    • I am committed to the store – Target 105 339 3.22 1.46
    • I am committed to the store – Kroger 36 113 3.13 1.55
    • ANOVA
    • Source of Variation SS df MS F P-value
    • Between Groups 10.11 2 5.05 3.22 0.041
    • Within Groups 381.61 243 1.57
    • Total 391.73 245 
    19
  • 20. Results
    • From the above results we can infer that customer satisfaction, customer loyalty, and commitment to the store are different for these stores.
    20
  • 21. Results
    • Evaluation of hypothesis H1
    • This hypothesis is related to the use of technology
        • Retailers employ technology to facilitate their functions as well as to make shopping easier and efficient for customers.
        • Some of the benefits of utilizing technology are:
            • reduction in waiting time
            • making it easier to locate items in the store
            • reducing processing time when items are returned
            • ability to process manufacturer’s and competitors coupons
    • The null and alternate hypotheses are noted below:
    • H1: There is no positive/negative relationship between technology processes and customer satisfaction.
    • H01: There is a positive/negative relationship between technology processes and customer satisfaction .
    21
  • 22. Results
    • Table 4-8
    • Analysis of Variance
    • Test Variable: Overall satisfaction with the store
    • Reasonable Waiting time
    Wal-Mart Groups Count Average Std. Dev. Std. Error Waiting time is reasonable 13 4.15 .555 .154 Waiting Time is not reasonable 92 3.39 1.09 .114 T-test df P-value Equal Variances Assumed 2.47 103 .015 It can be inferred that for Wal-Mart store at 95% Confidence Level Customer Satisfaction is associated with waiting time. 22
  • 23. Results
    • Table 4-8
    • Analysis of Variance
    • Test Variable: Overall satisfaction with the store
    • Reasonable Waiting time
    Target Groups Count Average Std. Dev. Std. Error Waiting time is reasonable 49 4.06 .966 .138 Waiting Time is not reasonable 54 3.70 1.04 .141 T-test df P-value Equal Variances Assumed 1.81 101 .07 It can be inferred that for Target store at 93% Confidence Level Customer Satisfaction is associated with waiting time. 23
  • 24. Results
    • Table 4-8
    • Analysis of Variance
    • Test Variable: Overall satisfaction with the store
    • Reasonable Waiting time
    Kroger Groups Count Average Std. Dev. Std. Error Waiting time is reasonable 16 4.25 .775 .194 Waiting Time is not reasonable 20 3.60 .94 .210 T-test df P-value Equal Variances Assumed 2.27 34 .03 It can be inferred that for Kroger store at 95% Confidence Level Customer Satisfaction is associated with waiting time. 24
  • 25. Accepted Hypotheses H1: There is no positive/negative relationship between technology processes and customer satisfaction. H01: There is a positive/negative relationship between technology processes and customer satisfaction . Based on this analysis the null hypothesis can be accepted that there is a positive/negative relationship between technology processes and customer satisfaction 25 Wal-Mart Target Kroger H1: Reject Reject Reject H01: Accept Accept Accept
  • 26. Results
    • Evaluation of hypothesis H1a
    • This hypothesis is related to the use of technology
        • Retailers employ technology to facilitate their functions to improve customers loyalty.
        • Some of the benefits of utilizing technology are:
            • reduction in waiting time
            • making it easier to locate items in the store
            • reducing processing time when items are returned
            • ability to process manufacturer’s and competitors coupons
            • having advertised items in stock.
    • The null and alternate hypotheses are noted below:
    • H1a: There is no positive/negative relationship between technology processes and customer loyalty.
    • H01a: There is a positive/negative relationship between technology processes and customer loyalty .
    26
  • 27. Results
    • Table 4-13
    • Analysis of Variance
    • Test Variable: I consider myself loyal to the store
    • Reasonable Waiting time
    Wal-Mart Groups Count Average Std. Dev. Std. Error Waiting time is reasonable 12 3.25 1.22 .351 Waiting Time is not reasonable 93 2.70 1.41 .146 T-test df P-value Equal Variances Assumed 1.29 103 .200 It can be inferred that for Wal-Mart that the relationship customer loyalty and waiting time is not significant. 27
  • 28. Results
    • Table 4-13
    • Analysis of Variance
    • Test Variable: I consider myself loyal to the store
    • Reasonable Waiting time
    Target Groups Count Average Std. Dev. Std. Error Waiting time is reasonable 49 3.18 1.185 .169 Waiting Time is not reasonable 54 3.11 1.192 .162 T-test df P-value Equal Variances Assumed .310 100 .758 It can be inferred that for Target that the relationship customer loyalty and waiting time is not significant. 28
  • 29. Results
    • Table 4-13
    • Analysis of Variance
    • Test Variable: I consider myself loyal to the store
    • Reasonable Waiting time
    Kroger Groups Count Average Std. Dev. Std. Error Waiting time is reasonable 17 3.47 1.18 .286 Waiting Time is not reasonable 20 3.00 1.34 .299 T-test df P-value Equal Variances Assumed 1.14 35 .263 It can be inferred that for Kroger that the relationship customer loyalty and waiting time is not significant. 29
  • 30. Accepted Hypotheses H1a: There is no positive/negative relationship between technology and customer loyalty. H01a: There is a positive/negative relationship between technology and customer loyalty . Based on this analysis the alternate hypothesis can be accepted that there is no positive/negative relationship between technology and customer loyalty 30 Wal-Mart Target Kroger H1a: Accept Accept Accept H01a: Reject Reject Reject
  • 31. Results
    • Evaluation of hypothesis H2
    • This hypothesis is related to marketing spend
        • Retailers spend marketing dollars to employ processes to improve customer satisfaction.
        • Some of the benefits of marketing spends are:
            • Prices from most brands lower than other stores
            • Good customer service
            • Receive circulars with specials in the mail
            • Has good interior décor
    • The null and alternate hypotheses are noted below:
    • H2: There is no positive/negative relationship between marketing spend and customer satisfaction.
    • H02: There is a positive/negative relationship between marketing spend and customer satisfaction .
    31
  • 32. Results
    • Table 4-18
    • Analysis of Variance
    • Test Variable: Overall satisfaction with this store
    • Prices from most brands lower than other stores
    Wal-Mart Groups Count Average Std. Dev. Std. Error Prices from most brands lower 63 3.67 .950 .120 than other stores Prices from most brands not 42 3.21 1.180 .182 lower than other stores T-test df P-value Equal Variances Assumed 2.167 103 .033 It can be inferred that for Wal-Mart store at 95% Confidence Level Customer Satisfaction is associated with prices from most brands lower than other stores. 32
  • 33. Results
    • Table 4-18
    • Analysis of Variance
    • Test Variable: Overall satisfaction with this store
    • Prices from most brands lower than other stores
    Target Groups Count Average Std. Dev. Std. Error Prices from most brands lower 29 4.14 .743 .138 than other stores Prices from most brands not 74 3.77 1.092 .127 lower than other stores T-test df P-value Equal Variances Assumed 1.961 75 .054 It can be inferred that for Target store at 95% Confidence Level Customer Satisfaction is associated with prices from most brands lower than other stores. 33
  • 34. Results
    • Table 4-18
    • Analysis of Variance
    • Test Variable: Overall satisfaction with this store
    • Prices from most brands lower than other stores
    Kroger Groups Count Average Std. Dev. Std. Error Prices from most brands lower 12 4.33 .651 .188 than other stores Prices from most brands not 24 3.67 .963 .197 lower than other stores T-test df P-value Equal Variances Assumed 2.41 31 .020 It can be inferred that for Kroger store at 95% Confidence Level Customer Satisfaction is associated with prices from most brands lower than other stores. 34
  • 35. Accepted Hypotheses H2: There is no positive/negative relationship between marketing spend and customer satisfaction. . H02: There is a positive/negative relationship between marketing spend and customer satisfaction . Based on this analysis the null hypotheses can be accepted that there is a positive/negative relationship between marketing spend and customer satisfaction 35 Wal-Mart Target Kroger H2: Reject Reject Reject H02: Accept Accept Accept
  • 36. Results
    • Evaluation of hypothesis H2a
    • This hypothesis is related to marketing spend
        • Retailers spend marketing dollars to employ processes to improve customer loyalty.
        • Some of the benefits of marketing spends are:
            • Prices from most brands lower than other stores
            • Good customer service
            • Receive circulars with specials in the mail
            • Has good interior décor
    • The null and alternate hypotheses are noted below:
    • H2a: There is no positive/negative relationship between marketing spend and customer loyalty.
    • H02a: There is a positive/negative relationship between marketing spend and customer loyalty .
    36
  • 37. Results
    • Table 4-22
    • Analysis of Variance
    • Test Variable: I consider myself loyal to the store
    • Prices from most brands lower than other stores
    Wal-Mart Groups Count Average Std. Dev. Std. Error Prices from most brands lower 85 2.75 1.362 .148 than other stores Prices from most brands not 20 2.80 1.576 .352 lower than other stores T-test df P-value Equal Variances Assumed -.135 103 .893 The results show that for Wal-Mart that the relationship customer loyalty and prices from most brands lower than other stores has no significant relationship. 37
  • 38. Results
    • Table 4-22
    • Analysis of Variance
    • Test Variable: I consider myself loyal to the store
    • Prices from most brands lower than other stores
    Target Groups Count Average Std. Dev. Std. Error Prices from most brands lower 29 3.48 1.214 .225 than other stores Prices from most brands not 74 3.01 1.153 .134 lower than other stores T-test df P-value Equal Variances Assumed 1.790 49 .080 The results show that for Target that the relationship customer loyalty and prices from most brands lower than other stores has no significant relationship. 38
  • 39. Results
    • Table 4-22
    • Analysis of Variance
    • Test Variable: I consider myself loyal to the store
    • Prices from most brands lower than other stores
    Kroger Groups Count Average Std. Dev. Std. Error Prices from most brands lower 12 3.58 1.311 .379 than other stores Prices from most brands not 25 3.04 1.241 .248 lower than other stores T-test df P-value Equal Variances Assumed 1.20 21 .244 The results show that for Kroger that the relationship customer loyalty and prices from most brands lower than other stores has no significant relationship. 39
  • 40. Accepted Hypotheses H2a: There is no positive/negative relationship between marketing spend and customer loyalty. . H02a: There is a positive/negative relationship between marketing spend and customer loyalty . Based on this analysis the null hypotheses can be accepted that Wal-Mart and Kroger that there are no positive/negative relationship between marketing spend and customer loyalty. Target we accept the alternative hypothesis. 40 Wal-Mart Target Kroger H2a: Accept Reject Accept H02a: Reject Accept Reject
  • 41. Results
    • Evaluation of hypothesis H3
    • This hypothesis is related to efficiency of inventory management systems
        • Retailers reduces the cost of inventory to improve customer satisfaction.
        • Some of the benefits of marketing spends are:
            • Extensive variety products/services in the store
            • Various brands of each product available in store
            • Good selection of products always present
            • Products sold are of the highest quality
    • The null and alternate hypotheses are noted below:
    • H3: The efficiency of inventory management systems does not reduce retailer’s cost to improve customer satisfaction.
    • H3: The efficiency of inventory management systems reduces retailer’s cost to improve customer satisfaction.
    41
  • 42. Results
    • Table 4-26
    • Analysis of Variance
    • Test Variable: Overall satisfaction with this store
    • Extensive variety products/services in the store
    Wal-Mart Groups Count Average Std. Dev. Std. Error Extensive variety products/services 63 3.67 .950 .120 in the store Extensive variety products/services 42 3.21 1.180 .182 in the store not reasonable T-test df P-value Equal Variances Assumed 2.167 103 .033 It can be inferred that for Wal-Mart store at 95% Confidence Level Customer Satisfaction is associated with extensive variety products/services in the store. 42
  • 43. Results
    • Table 4-26
    • Analysis of Variance
    • Test Variable: Overall satisfaction with this store
    • Extensive variety products/services in the store
    Target Groups Count Average Std. Dev. Std. Error Extensive variety products/services 51 4.10 .944 .132 in the store Extensive variety products/services 52 3.65 1.046 .145 in the store not reasonable T-test df P-value Equal Variances Assumed 2.264 100 .026 It can be inferred that for Target store at 95% Confidence Level Customer Satisfaction is associated with extensive variety products/services in the store. 43
  • 44. Results
    • Table 4-26
    • Analysis of Variance
    • Test Variable: Overall satisfaction with this store
    • Extensive variety products/services in the store
    Kroger Groups Count Average Std. Dev. Std. Error Extensive variety products/services 14 4.29 .914 .244 in the store Extensive variety products/services 22 3.64 .848 .181 in the store T-test df P-value Equal Variances Assumed 2.137 26 .042 It can be inferred that for Kroger store at 95% Confidence Level Customer Satisfaction is associated with extensive variety products/services in the store. 44
  • 45. Accepted Hypotheses H3: The efficiency of inventory management systems does not reduce retailer’s cost to improve customer satisfaction. H03: The efficiency of inventory management systems reduce retailer’s cost to improve customer satisfaction. Based on this analysis the null hypotheses can be accepted that the efficiency of inventory management systems reduces retailer’s cost which may improve customer satisfaction 45 Wal-Mart Target Kroger H3: Reject Reject Reject H03: Accept Accept Accept
  • 46. Accepted Hypotheses
    • The results are summarized here
    46
  • 47. Accepted Hypotheses H1: There is no positive/negative relationship between technology processes and customer satisfaction. H01: There is a positive/negative relationship between technology processes and customer satisfaction . Based on this analysis the null hypothesis can be accepted that there is a positive/negative relationship between technology processes and customer satisfaction 47 Wal-Mart Target Kroger H1: Reject Reject Reject H01: Accept Accept Accept
  • 48. Accepted Hypotheses H1a: There is no positive/negative relationship between technology and customer loyalty. H01a: There is a positive/negative relationship between technology and customer loyalty . Based on this analysis the alternate hypothesis can be accepted that there is no positive/negative relationship between technology and customer loyalty 48 Wal-Mart Target Kroger H1a: Accept Accept Accept H01a: Reject Reject Reject
  • 49. Accepted Hypotheses H2: There is no positive/negative relationship between marketing spend and customer satisfaction. . H02: There is a positive/negative relationship between marketing spend and customer satisfaction . Based on this analysis the null hypotheses can be accepted that there is a positive/negative relationship between marketing spend and customer satisfaction 49 Wal-Mart Target Kroger H2: Reject Reject Reject H02: Accept Accept Accept
  • 50. Accepted Hypotheses H2a: There is no positive/negative relationship between marketing spend and customer loyalty. . H02a: There is a positive/negative relationship between marketing spend and customer loyalty . Based on this analysis the null hypotheses can be accepted that Wal-Mart and Kroger that there are no positive/negative relationship between marketing spend and customer loyalty. Target we accept the alternative hypothesis. 50 Wal-Mart Target Kroger H2a: Accept Reject Accept H02a: Reject Accept Reject
  • 51. Accepted Hypotheses H3: The efficiency of inventory management systems does not reduce retailer’s cost to improve customer satisfaction. H03: The efficiency of inventory management systems reduce retailer’s cost to improve customer satisfaction. Based on this analysis the null hypotheses can be accepted that the efficiency of inventory management systems reduces retailer’s cost which may improve customer satisfaction 51 Wal-Mart Target Kroger H3: Reject Reject Reject H03: Accept Accept Accept
  • 52. Conclusions
    • The results shows that marketing, technology, & inventory management systems affects customer satisfaction and customer loyalty. It affects customer satisfaction more so than customer loyalty.
    • The findings of this study indicates that retail stores can increase customer satisfaction and customer loyalty by allocating resources to marketing, technology, and inventory initiatives.
    • It is recommended to spend more on marketing and effectively deploying technology and reducing inventory cost.
    52
  • 53. Limitations/Delimitations
    • Limitation in this study is related to the online method of data collection versus personal interviews or surveys by mail. This methodology does not allow for probing as compared to personal interview method and may deter some respondents who are not familiar with online surveys.
    • The delimitation also limits the research study to the marketing, technology, and inventory management systems as they relates to customer satisfaction and customer loyalty as opposed to employee involvement, brand identify, checkout times, customer service, and store neatness. The delimitation only focuses on how these independent variables relate to the dependent variable.
    53
  • 54. Recommendations
    • Retail store chains should evaluate cost effective initiatives that will help improve customer satisfaction and customer loyalty.
    • Retail store chains should evaluate how marketing, technology, and inventory management systems improves relationship with consumers.
    54
  • 55. Future Study
    • Researchers may consider obtaining the actual marketing spend to relate to customer satisfaction and customer loyalty.
    • Researchers may consider tracking inventory movement: brand versus non-brand products and how they relate to customer satisfaction and customer loyalty.
    • Research may consider regional understanding of the relationship between these variables.
    55
  • 56. Questions 56
  • 57. References
    • Betancourt, R. R., Cortinas, M., Elorz, M., & Mugica, J. M. (2007). The demand for and the supply of distribution services: A basis for the analysis of customer satisfaction in retailing. Quant Market Econ, 5, 293-312. Retrieved January 14, 2010, from EBSCOhost database.
    • Bowden, J. L. (2009). The process of customer engagement: A conceptual framework. Journal of Marketing Theory and Practice, 17(1), 63-74. Retrieved February 2, 2010, from EBSCOhost database.
    • Simon, D. H., Gomez, M. I., McLaughlin, E. W., & Wittink, D. R. (2009). Employee attitudes, customer satisfaction, and sales performance: Assessing the linkages in US grocery stores. 30, 27-41. Retrieved December 3, 2009, from EBSCOhost database.
    • Pleshko, L. P. & Baqer, S. M. (2008). A path analysis study of the relationships among consumer satisfaction, loyalty, and market share in retail services. Academy of Marketing Studies Journal , 12(2), 111-127. Retrieved October 4, 2009, from EBSCOhost database.
    57