1. Retail image and its effects on the consumer-
A comparative study of the retail environment
Anna Catani
Department of Marketing
Hanken School of Economics
Helsinki
2014

2. HANKEN SCHOOL OF ECONOMICS
Department of: Marketing Type of work: Thesis
Author: Anna Isabelle Catani Date: 30.9.2014
Title of thesis: Retail image and its effects on the consumer- A comparative study of
the retail environment
Abstract: Researchers state that the consumers do not only react to the physical
product but to the total package, of which the place where the product is bought is
most influential. Several studies prove that the retail environment can largely affect
the consumers. Furthermore, studies have shown that the image a retail setting
portrays has a critical bearing on consumers’ opinions, and even behaviour. The image
a retail environment portrays is not as easily match or duplicated as product, price,
promotion or location. A well unique and successful image will differentiate a brand
from its competitors.
The aim of the paper is to study the different effects the retail environment and the
image it portrays can have on consumer opinions. Moreover, this paper studied the
effect of a retail environment portraying a higher and a lower image, and their effect
on consumer perceptions and intentions.
The theoretical framework comprises models from previous literature that categorize
the different elements in the retail environment. Additionally, previous literature is
used to divide the elements of the retail environment that portray a higher image or a
lower image.
The data was gathered in May 2013 in the Finnish department store Stockmann’s hard
corner in Helsinki, and in the soft corner in Tapiola. A total of 66 responses were
featured in this paper’s study. The questionnaire comprised questions measuring
consumers’ overall evaluation of various retail elements. The questions also measured
the consumers’ price perceptions, quality perceptions and purchase intentions.
The results of the study show that consumers evaluate both ambient and design
elements significantly higher in a retail environment that portrays a higher image,
than in a retail environment that portrays a lower image. Overall, price perceptions,
quality perceptions and purchase intentions are also rated significantly higher in a
retail environment portraying a higher image.
Keywords: Retail environment, higher and lower image, ambient and design
elements, soft and hard corner, price and quality perceptions, purchase intentions

3. CONTENTS
1 INTRODUCTION................................................................................ 1
1.1 Research problem................................................................................................3
1.2 Aim of the paper..................................................................................................5
1.3 Delimitations.......................................................................................................6
1.4 Structure of the paper..........................................................................................6
1.5 Main definitions..................................................................................................7
2 THE RETAIL ENVIRONMENT ......................................................... 10
2.1 The concept of retail environment and retail atmosphere................................10
2.1.1 Retail environment...............................................................................10
2.1.2 Retail atmosphere.................................................................................11
2.2 Elements of the retail environment...................................................................13
2.2.1 Ambient elements.................................................................................13
2.2.2 Design elements....................................................................................17
2.2.3 Social elements......................................................................................23
3 RETAIL IMAGE ................................................................................25
3.1 Higher image and lower image retail environments.........................................25
3.1.1 Higher image ambient elements...........................................................26
3.1.2 Higher image design elements..............................................................27
3.2 Retail image and consumer opinions................................................................33
4 METHODOLOGY..............................................................................38
4.1 Georg Jensen.....................................................................................................38
4.2 Research method...............................................................................................39
4.3 Research questionnaire....................................................................................40
4.4 Data collection...................................................................................................41
4.5 Analysis method............................................................................................... 42
4.5.1 Mann-Whitney U test........................................................................... 42
4.5.2 Multivariate analysis of variance......................................................... 43
5 RESULTS OF THE EMPIRICAL STUDY............................................45
5.1 Background information.................................................................................. 45
5.2 Mann-Whitney U test....................................................................................... 47
5.2.1 Evaluations of the ambient elements................................................... 49

4. 5.2.2 Evaluations of the design elements...................................................... 49
5.3 Multivariate analysis of variance.......................................................................53
5.3.1 Assumptions for MANOVA...................................................................53
5.3.2 Differences in price perceptions between the hard corner and soft
corner 55
5.3.3 Differences in quality perceptions between the hard corner and soft
corner 58
5.3.4 Differences in purchase intentions between the hard corner and soft
corner 60
5.4 Reliability of scale..............................................................................................62
6 DSICUSSION....................................................................................64
6.1 Higher and lower image retail environment.................................................... 64
6.2 Theoretical implications....................................................................................65
6.3 Managerial implications....................................................................................66
6.4 Limitations and suggestions for further research.............................................67
6.5 Conclusions .......................................................................................................68
REFERENCES ......................................................................................70
APPENDICES
Appendix 1 Questionnaire in English.......................................................................79
Appendix 2 Basic assumptions.................................................................................81
Appendix 3 Mann-Whitney U test............................................................................82
Appendix 4 Manova price perceptions.....................................................................83
Appendix 5 Manova quality perceptions................................................................. 84
Appendix 6 Manova purchase intentions.................................................................85
Appendix 7 Georg Jensen soft corner, Stockmann Tapiola.....................................86
Appendix 8 Georg Jensen hard corner, Stockmann Helsinki..................................87
Appendix 9 Georg jensen hard corner, Stockmann Helsinki...................................88

5. TABLES
FIGURES

6. 1
1 INTRODUCTION
There was a time not so long ago that retail environments had few standards to
meet. A store should be clean and organized to maximize sales per square foot. It
should also be pretty […]. Today, though, the retail environment must tie in
directly to the brand, and, in fact, speak the brands’ value propositions. […]
Anything can happen in this booming new frontier. (Green 1997:27)
Retailers spend millions of dollars every year designing and refurbishing stores.
American department store chain Neiman Marcus spent more than 200$ in five years
on renovating its stores. In 2012, in the middle of the recession, the company had
redesigned six of its store- within- stores, resulting in a revenue growth of 7.5% to $
1.06 billion. As a result, the company renewed all of its 42 luxury retail stores. (Stynes
& Talley 2012) In 2011 the British department store chain Marks & Spencer spent £ 450
million on renovating its store in High street Kensington. The company estimates the
renovation of the store to boost sales, reaching a total of £ 1.5 billion in sales within
three years. After the pilot 80 more store where planned to be redesigned by the first
quarter of 2012, with the rest of the companies 703 store being redesign by the middle
of 2012. (Garside 2011)
In 2010 the technology company Apple started an extensive project of redesigning its
stores in order to strengthen the image they wish to portray, and to enhance its culture
of design and excellence (Prunty 2014). The redesign of Apple’s 220 stores in the USA,
a well-known success story that has been copied by companies such as Disney,
Microsoft and Tesla (Gallo 2012), cost closer to $ 1.9 billion in total, or $ 8.5 million per
store (Dediu 2011). Additionally, Apple recently hired Angela Ahrendts to be
responsible for its retail stores. Ahrendts is most known for her successful work in
transforming the image of the luxury fashion house Burberry. Store refurbishment has
been considered one of the main contributors to the brands upswing in 2006. (Prunty
2014) These well- known brands have made extensive redesigns and changes in their
stores. The costs are substantial, but as each case shows the outcome is well worth the
cost.
Philip Kotler explained in 1970 that consumers do not respond only to the tangible
product, but the total product such as service, packaging and image. Kotler (1970)
concluded that the place where a product is bought is one of the most significant
features of the total product. Kotler states that this place and the atmosphere of this

7. 2
place is “more influential than the product itself in the purchase decision” (Kotler 1973-
1974:43). As the marketing researchers have come to the realization that consumers are
affected by various elements in the point of purchase (Milliamn & Turley 2000),
research in retail environment and the relating effects on consumer behavior has grown
constantly.
The effects of various retail elements such as colour, music and temperature and their
effects on consumer cognition have been studied. Retail design has been studied in the
aspect of consumer cognition, as well as direct buying behavior, or the relationship
between the two. Areni & Kim (1993) showed that music can have a positive effect on
the purchases of expensive products. Moreover, the findings of the study conducted by
Babin, Hardesty & Suter (2003) show that in a fashion store a blue coloured interior
elicits higher evaluations and increased retail patronage intentions, compared to an
orange coloured interior.
Baker, Grewal & Parasuraman stated in 1994 that “store environment has […] been
found to be one of several inputs into the consumer’s global store image” (Baker,
Grewal & Parasuraman 1994:328). For their study, the authors categorized different
environmental elements (such as colour, lighting and layout) that portray a high or
discount image retail environment. The authors found that retail image affected price
perceptions and quality perception positively. Another study using the same images
concurred that the image a high image retail design portrays, positively affects
purchase intentions (Baker, Grewal, Parasuraman & Voss 2002). Store image has also
been proven to have a critical bearing on store patronage (Huston & Nevin 1980). As a
result, retailers have focused on creating influential retail environments that portray a
strategic image.
Retailers are facing an increasingly competitive market. It is becoming more difficult to
differentiate stores merely on the basis of product, price, promotion and location
(Baker et al. 1994). However, the retail setting itself can offer a unique environment
with a unique image that may influence the consumers. Today, marketing planners use
spatial aesthetics as skillfully and consciously as they used price, advertising, personal
selling, public relations and other marketing tools (Kotler 1973).
Marketers have understood that a consumer can be influenced by the elements in the
retail environment. Hence, creating an influential atmosphere that portrays a desired
image should be an important marketing strategy for retailers (Kocamaz & Ylaçin

8. 3
2003). According to Milliman & Turley (2000), this kind of atmospheric planning can
make the difference between a business success and failure. The atmosphere of a retail
setting is a component of the retail image which is not as easily matched or duplicated
as retail prices, merchandise assortments or sales promotions. Once a well- defined,
unique and successful atmospheric design has been chosen and implemented, a retailer
can expect this to differentiate it from its competitors. (Chebat & Turley 2002) The
image a retail environment portrays is one key factor for retailers to achieve and sustain
success in the ever increasing competitive marketplace (Baker, Borin, Grewal &
Krishnan 1998).
It is evident that the retail environment induced image has a critical bearing on both
consumer opinions such as price perception and purchase intentions, as well as on
concrete consumer behavior, such as retail patronage. In today’s competitive markets,
where it is becoming increasingly difficult to gain advantages over competitors by the
traditional marketing tools product, price, promotion or location, retail managers
ought to understand the power of the retail environment and the image it portrays. This
image can have a big effect on consumers.
Everything from a kiosk (Baker, Kim & Runyan 2012) to a shopping mall (Bearden
1977) and a restaurant (Barnes, Bitner & Ward 1992) can be considered retail settings
with environments portraying a specific image. This retail image can affect everything
from loyalty (Bloemer & de Ruyter 1997) to patronage behavior (Zimmer & Golden
1988) and purchase intention (Baker et al. 1998). Thus, it is assumed in this paper that
a soft corner and a hard corner can also be regarded as retail settings. A soft corner is a
brand dedicated area in a retail store next to other brands merchandise. Meanwhile a
hard corner is a brand dedicated area in a retail store created by the brand, with the
authority to decide on most matters. A hard corner is a so called shop-in-shop. A more
detailed explanation is presented in section 1.5.
In the study of this paper focus will be put on the two retail settings of the Danish
luxury design brand “Georg Jensen”. Georg Jensen’s hard corner and soft corner in the
department store Stockmann’s stores will act as the retail setting studied in this paper.
1.1 Research problem
The purpose of this paper is to study the different effects the retail environment and the
image it portrays can have on consumer opinions. Moreover, this paper will identify

9. 4
wheatear a hard corner setting and the higher image it portrays, will have more positive
effect on consumer opinions compared to that of a soft corner setting and the lower
image it portrays.
Retailers need to acknowledge the potential the retail environment can present. A
unique retail design can portray an image that is very different from the competitors. A
specific and successful image is not easily copied. Furthermore, the retail image is
becoming more important as traditional promotional techniques are becoming
inadequate (Shclosser 1998). The image a retail environment portrays should be
consciously utilized by retail managers (Chebat & Turley 2002). Not only cana strategic
retail design provide a competitive advantage, but it can also be directly used as a tool
to prompt several desired consumer reactions.
The research in retail design has been extensive. The field of environmental psychology
has been frequently utilized to identify different stimuli i.e. elements, in the retail
environment, and how the retail environment affects consumers (Donovan & Rossiter
1982; Spangenberg & Yalch 1990; Buckley 1991, Baker, Grewal & Levy 1992; Dick, Jane
& Richardson 1996). Retail image has also received quite the extensive academic
attention in the retail environmental literature. The kind of effect environmental
elements, such as colour, lighting scent and layout can have on the consumers, has
been evident in many studies. The combination of the various stimuli in a retail
environment will portray a specific image (Bearden 1977; Chebat & Turley 2002;
Lindquist 1974-75). This image has been found to affect several critical consumer
responses such as perceptions (Chiu & Wheatley 1977) and intentions (Baker et al.
1994).
The majority of the studies investigating the retail environment and the image it
portrays, have been studied in strictly controlled settings. In some cases the data is
gathered by describing a store, or by showing pictures or video tapes of a store
(Gardner & Siomkos 1985; Korgaonkar, Lund & Price 1985; Mazursky & Jacoby 1986;
Babini et al. 2003). In other cases data is gathered in a mock up store environment.
Furthermore, if the studies have been conducted in a real life retail setting, grate
attention has been paid to traditional retail stores (Baker et al 1994; Collins-Dodd &
Linley 2003; Cottet, Lichtle & Plichon 2007). A minority of the studies have
investigated other types of retail settings such as restaurants (Barnes et al. 1992) or
malls (Bearden 1977; Baker et al. 2012). The writer has not found any existing research
that has studied a hard corner and a soft corner as retail settings. Furthermore, Baker

10. 5
et al. (1994) call for retail settings that are related but have a different retail
environment. The hard and soft corner studied in this paper belong to the same brand
and are located in the same retailer’s facilities. However, the images that these two
retail environments portray differ greatly.
In 2013 the discount chain Best- buy announced it will install “Samsung Experience”
shops inside its 900 stores, and possibly another 500 later on. The American clothing
store JC Penny did the same thing, adding shops such as Levi’s and Liz Claibourne to
its department stores. The sales of the JC Penny stores with the brand hard corners
increased by 20 % compared to the rest of the JC Penny stores without the brand hard
corners. (Oursler 2013) The idea is to move away from the old sales model that
department stores have used for decades, and instead operate a hard corner (Tuttle
2013). Hard corners can be seen in everything from department stores to airports. In
the Finnish department store Stockmann brands such as Khiel’s, Mac and Gucci have
their own dedicated areas, using the brands own fixtures, furniture, colours, price
points, product assortments etc. (Jerath & Zhang 2010). Therefore, excluding these
kinds of brand specific dedicated areas such as hard and soft corners can be seen as a
shortage in the current retail environmental literature.
Baker et al. (1994) stated that the effects of the environment of traditional stores and
the image it portrays should be explored in other store types, such as different types of
speciality stores. Moreover, the authors stated that effects of the retail image should
also be tested across various product categories. The authors suggest that more
expensive items ought to be investigated, for example.
This paper will attempt to fill this aforementioned research voids by studying the
different effects retail environment and the image it portrays can have on consumer,
especially consumer opinions. The Danish luxury design brand Georg Jensen’s soft and
hard corner in the department store Stockmann’s stores will be the research subjects.
1.2 Aim of the paper
The primary aim of the paper is to study the different effects the retail environment and
the image it portrays can have on consumer opinions. Moreover, this paper compares
the overall design of two retail settings: one with a retail environment portraying a
higher image and the other with a retail environment portraying a lower image, and
their effects on consumer opinions.

11. 6
1.3 Delimitations
This paper focuses on identifying in which ways the overall design of the retail
environment and the image it portrays can affect consumer opinions. The elements in
the retail environment are classified based on previous literature into ambient and
design elements (Baker 1987). Due to the theory-driven approach of the paper, other
possible classifications were not included in the study.
The image the retail environment portrays is divided into lower and higher image retail
environments. This division is also brought from a predetermined model by Baker et al.
(1994) and is further adapted based on other literature within the field (Bernman &
Evans 2007; Golden & Zimmerman 1986; Levy & Weitz 2009; Markkanen 2008 etc.).
Thus, this paper does not include other means of dividing a retail image.
Majority of the literature used in this paper stems from the retail environment
literature. However, some theories have used the topic of store environment. The topic
correlates strongly with the concept of retail environment. Both topics have even been
used simultaneously in some of the literature as the citation by Green (1997) on page
one shows. Moreover, some of the researches in the store environment literature stems
from studies that de facto have been conducted in other retail settings than stores, such
as restaurants (Barnes et al. 1992). Therefore, store environment literature is also used
in this paper in order to identify the effects the retail environment induced image can
have on consumer opinions.
1.4 Structure of the paper
This paper is built on four major parts, the theoretical framework, the research method,
the empirical study and the results.
There are two chapters that constitute the theoretical framework. The theoretical
framework starts with chapter two. In this chapter the concept of retail environment is
explained. The closely related, and in some instances overlapping, concept of retail
atmosphere is also explained. Furthermore, the chapter presents the different elements
in the retail environment, and what kind of effects they can have on consumers. The
elements are classified based on a framework used in the previous literature.
Chapter three is the other chapter constituting the theoretical framework. In this
chapter the retail environment and the image it portrays is divided into two separate

12. 7
images, adapted from previous research (Baker et al. 1994). The overall design of a
retail environment can portray either a higher image or a lower image. The different
environmental elements that constitute either of the two images are brought from
previous literature (Lin & Sternquist 1994; Mattila & Wirtz 2001; Spangenberg & Sprott
2005; Bernman & Evans 2007 etc.) Ambient elements are elements in the background
of the retail environment which can be apprehended with the five senses (Baker 1987).
Lighting is used as the ambient element in this paper’s study. Design elements are the
functional and aesthetic elements: flooring, colours, fixtures, display, product
presentation, layout and aisles (Baker 1987). These elements are used as independent
variables in this study.
The aim of the paper is to study the different effects the retail environment and the
image it portrays can have on consumer opinions. Therefore, the hypotheses of the
paper are presented in chapter three. The hypotheses are based on the findings from
previous research.
The methodology chapter begins with a description of the company, and its two retail
settings that are the study subjects of this paper. Next, the choice of research method is
motivated. Furthermore, the type of research questionnaire used in this paper is
explained, as well as the scale used to measure these questions. Then the data of the
study is also described.
The data is described in chapter five and the results of the empirical study are
presented. Finally the findings, managerial and theoretical implications as well as
limitations will be discussed, along with recommendations for further research. The
chapter ends with conclusions of the study.
1.5 Main definitions
Retail image
According to Lindquist (1974-75), the image of a retail setting consists of everything
people associate with that retail setting. It is the consumer’s perceptions of a retail
setting based on different attributes (Bloemer & de Ruyter 1997).
Atmosphere

13. 8
Kotler (1973-74) defined atmosphere as the air surrounding a sphere, as the quality of
the surrounding. Atmosphere is apprehended through the five senses (Kotler 1973-74).
Soft Corner
A soft corner is a dedicated area for a specific brand, within a retail store, see appendix
8. It is a specific area aimed for a specific brand. A brand sells its products to the
retailer, who sells the products to the consumer. The product range and presentation is
decided solely by the retailer. The fixtures, lighting, flooring etc. are the retailers own,
and are the ones that are being used throughout the whole retail shop. Thus, a brand x
can have a brand dedicated area where the products are collected and presented, with
another brands products lined up directly next to brand x. A brand is usually allowed to
put its own logos and signage, in order to differentiate the brand products from other
brands’ products. (Y. Catani; e-mail 2.9.2014; Managing Director, fashion and design
industry)
The soft corner can be altered both in terms of size and location. For example, if the
products of a brand happen to sell well, the soft corner can be increased. The retailer
decides upon everything that has to do with visual merchandising of the soft corner.
Thus, a soft corner follows the guidelines of a retailer, but it still enables a brand to
display its products in one unified area. This means that Brand x’s whole product range
is sold in the same are, instead of the brand’s candles being sold in the retail store’s
candle section, the brands cutlery being sold in the retail store’s kitchen section and so
on. (Y. Catani; e-mail 2.9.2014; Managing Director, fashion and design industry)
Hard corner
A hard corner is a dedicated area for a specific brand within a retail store, see appendix
9& 10. The hard corner is a brand’s own area where the brand itself decides on almost
all matters related to the dedicated area. The brand decides upon the products that are
sold in a hard corner, or at least provides guidelines for the product range. In case of a
new product line, the brand can decide to sell it in a hard corner in order to test how it
is received by the consumer, before the retailer stocks up on the new product line. The
brand also decides upon price points. Hence, a hard corner can also be called a shop-in-
shop. (Y. Catani; e-mail 2.9.2014; Managing Director, fashion and design industry)
All matters related to visual merchandising are decided by the brand: product
presentation, display, flooring, lighting, signage, logo, fixtures, layout and more. The

14. 9
visual merchandising follows a brand’s global guidelines and standards. A brand’s own
visual merchandiser visits the retailer and changes the hard corner visual
merchandising whenever needed. To keep a globally unified look, a hard corner’s visual
merchandising and product range is usually predetermined according to the square
meters of the dedicated area. However, a brand still sells its products to the retailer,
who sells the products to the customer. (Y. Catani; e-mail 2.9.2014; Managing Director,
fashion and design industry)
Stimulus
Stimuli are environmental elements that influence behavior. A stimulus is elicited when
a change in the environment occurs that correlates with a later response. (Barker,
Kreider, Peissig, Sokoloff & Stansfield s.a.)

15. 10
2 THE RETAIL ENVIRONMENT
This chapter is the first of the two chapters that constitute the theoretical framework of
this paper. Section 2.1 explains the different terminology used by researchers to
describe the retail environment that affects consumer opinions. The chapter will
continue by presenting the different elements that can be found in the retail
environment, for it is these elements that can affect consumer opinions. Various
literatures regarding the categorizations of the different retail environmental elements
will be presented.
2.1 The concept of retail environment and retail atmosphere
In the retail environment literature the concepts of environment and atmosphere are
frequently used. These concepts are even used to describe the same phenomenon in
some of the literature (Bellizzi, Crowley & Hasty 1983; Barnes et al. 1992; Babin et al.
2003; Chebat, Michon & Turley 2005; Doucé & Janssen 2013). However the two
concepts do have some differing characteristics.
2.1.1 Retail environment
A retail environment can be defined by separating the person from the physical
elements that surround the person. Listing the myriad of elements in the customers’
environment is an impossible task. (d´Astous 2000) To tackle this problem researchers
have grouped the elements into different categories. There are various methods of
categorizing the elements in a retail environment.
Baker’s (1987) framework that categorizes the elements in the retail environment into
three critical groups is still one of the most widely used models in the retail
environment literature. Baker divides the elements of a retail environment into
ambient, design and social elements. The Ambient elements are background conditions
in the environment: music, scent, temperature etc. A customer might not even notice
these non-visual factors until they have surpassed a certain acceptable level, such as
when the music becomes too loud. The design elements are divided into functional and
design elements. Functional elements and design elements are more visual in nature
compared to ambient elements. Functional elements include elements such as layout
and privacy, while design elements include elements such as architecture and style.
Finally, social elements represent all the people within the retail environment: the

16. 11
customers and the sales personnel. (Baker 1987; Baker et al. 1992; Baker et al. 1994)
The model by Baker (1987) will be more thoroughly presented in section 2.2.
2.1.2 Retail atmosphere
According to Kotler (1974), atmosphere is a term used to describe the quality of a
certain surrounding. Berman & Evans (2007) describes a retail atmosphere as the
personality of the retail setting. Atmosphere is apprehended via the senses: sound,
sight, scent, touch and taste. Thus an atmosphere can be heard, seen, smelled and felt
but not tasted in the traditional sense of the word. Nevertheless, an atmosphere can be
remembered as tasteful. (Kotler 1974) For example, a candy store filled with candy in
every colour of the rainbow and infused with a scent of marshmallows can be described
as having a delicious atmosphere.
According to Broekemeir, Gentry & Marquardt (2008), the atmosphere incorporates
elements such as temperature, scent, brightness, volume, pitch, scent, and freshness.
This definition correlates with that of Kotler’s (1974), where atmosphere is regarded as
everything in the physical surrounding that canbe apprehended with the sense. Fugate
& Milliman (1993:68) continue on this notion by describe the atmosphere as “the
collection of stimuli (atmospheric variables) which impinge upon an individual's senses
effecting the total experience of being in a given place at a given time”. The retail
atmosphere does not include social components such as sales personnel, or external
components such as architecture.
Atmosphere can also be regarded as the physical environment of a retail setting (Barnes
et al. 1992). Barnes et al. (1992) divide the atmosphere into the external and the
internal environment. The external environment is the part of the retail setting that is
visible before entering into the retail area, while the internal environment is the part of
the retail setting that is visible from the selling space. Berman & Evans (2007) divide
the retail environment into four different categories. The first one is the external
variables that comprise architectural style; exterior signs; entrance; colour of building;
address and location etc. The second category is the general interior variables which are
elements such as temperature, scents, colour schemes, music and merchandise. The
third category, layout and design variables, incorporates space design and allocation;
placement of merchandise; placement of cash registers; racks and cases; waiting rooms
etc. Point- of- purchase and decoration variables is the fourth category, and it

17. 12
comprises elements such as signs and cards; price displays; pictures; and degrees and
certificates.
Milliman & Turley (2000) take the model by Berman & Evans even further. The
authors adds a fifth category, human variables, that incorporates employee
characteristics, customer characteristics, privacy etc. (Milliman & Turley 2000;
Kocamaz & Yalçin 2003) Thus, the categorization by Berman & Evans (2007) and
Milliman & Turley (2000) differ from the categorization by Baker (1987) as it includes
the external factors of a retail setting such as window display and architecture.
Therefore, it is a broader categorization.
In the retail sense, atmosphere can be described as the designing of a space in a way
that elicits specific consumer behaviour. Atmospherics can hence be described as “the
effort to design buying environments to produce specific emotional effects in the buyer
that enhances his purchase probability” (Kotler 1974:50). Fugate & Milliman (1993)
state that atmospheric variables are any elements in a person’s perceptual field that
stimulates the person’s senses, affecting the experience of being in a specific setting.
Fugate & Milliman (1993) claim that positive atmospheric outcomes increase purchase
probability. Thus, atmospherics is the study of these variables and their effect on
consumer behaviour.
Despite the term being used, the retail atmosphere is designed to stimulate customers,
prompt the right emotions and ultimately affect purchase intentions in the retail
environment. (Spangenberg & Yalch 1990) The retail environment and the retail
atmosphere have the power to affect several different aspects such as peoples shopping
enjoyment (Berman & Evans 2007), the time customers spent browsing the
merchandise (Levy & Wietz 2009), decrease perceptions of the time spent shopping
(Baker et al. 2002), patronage intentions (Herbert & Summers 1999), customers’
willingness to engage with the sales personnel and spending. As these results and
conclusions of the previous literature are valid in a retail context, it can be assumed
that a hard corner and soft corner environment would yield similar results and
conclusions.
Section 2.1 has introduced the different terminology that can be used to describe the
retail environment affecting consumer opinions. The concepts of retail environment
and retail atmosphere have been explained.

18. 13
2.2 Elements of the retail environment
Researchers have been able to show that certain elements of the retail environment can
directly affect the consumer (Areni & Kim 1994; Herberts & Summer 2001; Babini et al.
2003; Grohmannet al. 2005). There are various methods of categorizing the different
elements. However, characterizing the myriad of stimuli in a retail environment is not
an easy task, and some models have been more successful than others (Donovan &
Rossiter 1982 and Milliman & Turley 2000). In the retail environment literature the
model by Baker (1987) can be found in several of them e.g. Baker et al. (1992); Baker et
al. (1994); Baker & Cameron(1996); Lam (2001) and Baker et al. (2002). Studies have
shown that the elements of the retail environment identified in Baker’s (1987) model
can directly affect the consumers’ opinions such as retail image. The model classifies
the retail environment in variables that retailers can easily control and combine
according to preference (Baker et al. 1992).
Thus, the model by Baker (1987) will also be used in this paper. The elements in the
retail environment are divided into ambient, social and design elements in accordance
with the model. Ambient elements are the background characteristics of the retail
environment, such as music, scent, noise, temperature, cleanliness and lighting. Design
elements include functional and aesthetic elements. Finally, social elements
incorporate all the people in the retail environment such as sales clerks and other
customers. (Baker 1987; Baker et al. 1992; Baker et al. 1994) Research studying the
elements of these three factors is presented in the next sections.
2.2.1 Ambient elements
A general rule of thumb is that the ambient factors affect the five senses. However, the
factors may be imperceptible, and thus customers might not be aware of these
components. Ambient factors are elements such as chemicals, infrasound and
temperature (Bitner 1992). Several researchers have studied the effects of ambient
factors on the human perception of the environment, and human behaviour to the
environment (Cox 1967 (cited in Olahut & Plaias 2013); Bellizzi et al. 1983; Gardner &
Siomkos 1986; Garg, Kumar & Rahman 2010). Nevertheless, Baker (1992) posits that
ambient factors might not even have an effect until they surpass an accepted level. The
accepted level might be surpassed if the temperature in the retail environment is too
cold, lighting is too bright, music is too loud etc.

19. 14
Of all different ambient elements, music has received the largest amount of attention.
Music can affect the pace of the customer flow in the retail setting, product image, the
image of a retail environment, customers’ attention and even purchase behavior.
Customers perceive music played in a service setting to be pleasant in general. Studies
show that pleasant music can affect consumer perceptions of a retail setting, as well as
the shopping experience. For example, Spangeberg & Yalch (1993) studied how music
effects customers’ overall perceptions of the retail setting. The authors found customers
to prefer specific sections of the retail setting playing specific kinds of music. The
respondents purchased more in the sections that played pleasant music.
Studies have also showcased the importance of the synergy between the retail
atmosphere and music. A study by Belcher & DeNora (2000) showed that when French
music was played in a store the sales of French wines increased. Similarly, the
researchers found that the sales of German wines increased when German music was
played in a store. Thus, it seems that if music is in synergy with the retail atmosphere it
can affect consumer behavior.
The effect of foreground and background music have also been studied. Background
music can affect how in control and aroused a customer feels. Moreover, it has been
found that the feeling of arousal and dominance directly affect consumers’ purchase
intentions. (Belk, Farrag & Sayed 2003)
Lighting has been found to influence customers’ retail image, behavior, time
perceptions and emotions, for example. Lighting can be used to draw customers’
attention to any desired area. By drawing customers’ attention to a strategic area, a less
attractive area can go unnoticed. (Grag et al. 2010) Despite its prominent assets,
lighting has received quite little attention in the retail atmospherics literature. The
most significant studies have been conducted between the 80s and the 90s e.g. Meer
(1985); Butler & Beaner (1987) & Areni & Kim (1994).
The relation between lighting and consumer behavior has been studied by Areni & Kim
in 1994. The authors studied 171 consumers in a wine store. The authors varied between
using soft lights and bright light in the wine store. The findings indicate a significant
relation between the amount of wine bottles handled and examined, and bright
lighting. The customers handled and examined significantly more wine bottles during
the nights that the brighter lighting was used in the retail setting, compared to when

20. 15
the softer light was used. Herbert & Summers (2001) came to similar conclusions as
Areni & kim (1994). The authors conducted a test in both a hardware store and an
apparel store. Additional strong, fluorescent lights were installed in both stores. The
authors studied customers’ behavior during normal lighting, as well as during stronger
lighting. The results show that customer in both retail settings touched significantly
more items when the stronger light was used. Furthermore, the findings show that
when the stronger light was used customers picked up significantly more items in both
retail settings, than when the normal light was used.
Grag et al. (2010) studied the relationship of retail atmospherics and consumer value.
Three kinds of retail settings were examined: multi-brand stores, exclusive brand stores
and discount stores. Customers were asked to rank the retail atmospherics and the
impact on the customers’ perceived value. Lighting together with color was seen to
significantly affect the customers’ value perceptions.
Farr & Park (2007) studied the relation between color quality of light and the emotional
states of pleasure and arousal, as well as approach-avoidance intentions. A brighter
lighting was perceived significantly more arousing than a softer lighting. Not
surprisingly, the subjects perceived the brighter lighting as significantly better in terms
of visual clarity. However, subjects found the softer lighting to be more pleasurable
than the brighter lighting. Nevertheless, the results show that the brighter lighting was
perceived more approachable than the softer lighting.
In terms of general retail environmental stimuli, lighting has been found to affect
consumers and their behavior. However, there are discrepancies in the research
findings regarding the brightness of lighting. Brighter lighting has been shown to result
in more products being handled and examined. Furthermore, brighter lighting has been
found to prompt the feeling of arousal and approach behavior. Nevertheless, a softer
lighting has been perceived as more pleasurable and as enhancing a retail settings high
quality image. Additionally, a softer light has been shown to affect price fairness
perceptions. These discrepancies will be discussed later in this paper, in section 3.1.1.
Bloch & Gulas (1995:87) describe scents in the environment in the following way
“Ambient scent is portrayed as an environmental cues that is compared
with scent preferences to influence affective responses and ultimately
approach-avoidance behavior”

21. 16
The effects of odor and aroma have received relatively little attention until the 90s.
During the last 24 years retailers have increasingly incorporated scent as a marketing
tool. Research in the field has studied the effects of scent that is directly related to a
product that is sold, e.g. the smell of ground coffee in a café. However, more recent
studies have focus on scents that are generally perceived to be pleasant, and which do
not necessarily relate to the products being sold. Studies from the last 20 years have
shown the effect that odor can have on consumer perception, attitudes and behavior.
Studies indicate that the usage of an inoffensive scent in a retail environment leads to
more positive evaluations of the retail setting; retail environment; and a specific
product as well as the overall merchandise, than when no scent is utilized (Crowley,
Henderson & Spangenberg 1996). Crowley et al. (1996) found respondents in a retail
environment with an inoffensive scent to express a stronger intent to visit a retail
setting and purchase a specific item, than did respondents in an un-odorized retail
environment. Respondents in the retail environment utilizing an inoffensive scent did
also examine more products. The retail environment with the inoffensive smell did not
attract respondents to stay longer, but the respondents estimated their stay in the retail
setting to be shorter than it was.
The study conducted by Hirch in 1996 is one of the most cited once in terms of the
relation between scent and consumer behavior. The findings suggest that respondents
were more likely to purchase a pair of sneaker sold in an odorized room, than an
identical pair sold in an odor free room. (Miller 1991) Cox study from 1967 continues on
this notion. The research findings suggest that scent infused stockings sold more than
the pair of un-odorized stockings. The process of increased sales of the odorized
stockings was due to customers’ quality associations. Customers regarded the stockings
that were infused with a scent to be of higher quality. (Cox 1967 (cited in Olahut &
Plaias 2013))
Furthermore, the study by Grochmann, Spangenberg, Spratt & Tracy (2006) illustrate
how congruent/incongruent scents can affect consumer evaluations. The authors
studied congruent versus incongruent scents on gender-based clothes, and the
perceived masculinity or femininity thereof. The findings illustrate that a scent
congruent with gender-based piece of clothing resulted in more favorable merchandise
and retail setting evaluations.

22. 17
As a conclusion, ambient factors are non-visual background elements in an
environment. These elements affect the five senses, but they can be imperceptible.
Therefore, the consumer might not be aware of the elements until they have surpassed
an acceptable level. These factors can affect purchase intentions, purchase behavior,
value perceptions, retail patronage intentions and more. Generally speaking, it seems
very important for sensory variables (lightning, scents, music etc.) to be coherent with
retail image to avoid shocking the consumers. (Baker & Cameron 1996)
The consumer can be affected by the different ambient factors that are present in a
retail environment. Therefore, this paper assumes the same factors can be found in the
environment of a soft corner and hard corner. However, a brand seldom controls what
kind of music or scents are used in a soft and hard corner environment. The music that
can be heard in a soft and hard corner is usually the one that is played in the retail
facility. Similarly, the scents that are present in a soft and hard corner environment are
usually the once that are present in the whole retail facility. Moreover, it is uncommon
that music or scents would be used in a soft and hard corner in addition to the one that
is used by the retail store. Hence, music and scent will not be included as
measurements in the empirical study of this paper.
2.2.2 Design elements
While ambient elements are sense orientated, and can largely affect the consumer
unconsciously, design elements are more visual. Baker (1987) divides the design factors
into functional and aesthetic elements.
Functional elements
Layout, display, comfort and privacy constitute the functional elements in a retail
environment (Baker et al. 1994 & Levy & Weitz 2009). Layout and display are
considered to be the main functional elements.
The retail layout has the ability to prompt a pleasurable shopping environment where a
customer wants to spend time and can easily find what they are looking for. Moreover,
the right kind of layout utilizes every square of a retail setting, minimizing so-called
dead-spaces. The traffic pattern should be planned in detail on beforehand. The
different elements in the environment can regulate the desired customer flow.

23. 18
Furniture, music, light etc. can be used to strategically guide the customers through the
retail setting. (Markkanen 2008)
In accordance with traditional layout theory, layout type can be divided into grid,
racetrack and freeform. In a grid layout displays and aisles are placed in a rectangular
formation. Furthermore, the displays and isles are usually placed parallel to each other,
with merchandise on selves on both sides of the isles. While the layout is not visually
appealing, it enables a customer to easily move through the retail setting and easily
locate their preferred products. The layout form is both fast and flexible, making it
ideal in e.g. a grocery store where shopping behaviour is planned and a routine. The
advantages of the grid layout is its cost efficiency. The aisles are usually just big enough
for a customer and their carts, effectively reducing the waste of space. Furthermore,
displaying merchandise on shelves makes it possible to have more products on the sales
floor. The disadvantage is unlimited exposure to all merchandise in the retail setting.
This will especially be an issue in department stores where customers do not always
have a clear image of what they want to buy. Thus, a racetrack layout would be a more
suitable option. (Levy & Weitz 2009)
In a race track layout there is one main aisle that runs around the retail setting. The
track guides customers to multiple departments in the retail setting, exposing
customers to a greater amount of merchandise. As customers go around the track their
attention is caught by more merchandise than when they walk down a single aisle.
Popular departments are usually placed in the back of a retail setting to entice
customers to walk through the whole setting. The pattern is favoured by large
department stores. (Levy & Weitz 2009)
In the free form layout the displays and isles are not organized in any particular order.
Instead, the layout is organized in a free and flowing manner, with displays and isles in
various styles, sizes and shapes. (Doukidis, O’Keefe, Siomkos & Verchopoulos 2004)
The layout creates an intimate and relaxing environment which makes it suitable for
shopping and browsing. The layout enables the customer to move freely in any
direction. Therefore, it is suitable for departments within large retail stores.
Nevertheless, the layout is costly. Because no well-defined traffic pattern exists,
customers are not lead to walk through the whole retail setting. Furthermore, creating
an enticing and spacious shopping environment means that the storage and display
space are not fully utilized. (Levy & Weitz 2009)

24. 19
Merchandise can be displayed in various manners. There are four main principle types
of fixtures that display the merchandise in a retail setting: a gondola, a rounder, a four-
way and wall shelves. In a gondola the products are stacked on shelves in a longitudinal
manner. Gondolas are common in a retail setting employing a grid layout, such as
grocery stores. The displaying allows for customers to see merchandise on both sides as
they move along aisles between gondolas. On a rounder the merchandise is displayed in
a circular presentation. The merchandise can be hung from different prongs attached to
the rounder, or the display can be more solid. A rounder is mostly used in apparel
stores as it can be easily moved and display a maximum amount of merchandise (Levy
& Weitz 2009). A four way rack offers a front and side facing presentation of the
merchandise. Wall space is useful for facilitating the general display of the merchandise
being sold. It facilitates a large amount of merchandise as it can be stapled from floor to
roof, whilst providing an easy overview of a large amount of products. Clothing stores
usually embark on this method when displaying jeans, for example. Varley (2001)
Studies have found displays to have an effect on sales. Curhan (1974) examined the
effect merchandising and temporary promotional activities of groceries had on sales.
The study explored how sales of vegetables and fruits were affected by variables such as
display space and quality of display location. The findings suggest that increased
display space increased sales of all four fruit and vegetable categories that were tested.
For example, one of the fruit categories increased its sales by 44%, as a result of bonus
space. Furthermore, the display quality was found to affect sales of the categories of
salad vegetables and soft fruits. This would imply that in order to affect sales of the
cooking vegetables and hard fruits more attention should be paid on display location
instead of display quality.
A study conducted by Gagnon & Osterhaus (1985) also found that sales can be affected
by display space and the type of fixture the merchandise is displayed on. The study
examined the effect of pop up floor stands on unit sales in 24 grocery stores and
pharmacies. The floor displays were located in independent pharmacies chain
pharmacies and grocery chains. The amount of units sold from a floor display increased
by 388% in the grocery store and 107% in the pharmacies, compared to units sold from
store shelves.
Markkanen (2008) divides the product display into two different categories. The
merchandise in a retail setting can be displayed vertically or horizontally. When the
merchandise consists of several different brands a vertical display is most suitable. The

25. 20
display method is especially suitable for product news. The display enables an easy
comparison of the different brands, even though it might take a longer time to browse
through the products than in a horizontal display. (Markkanen 2008)
However, if the products are of completely different quality the brand image of the
higher quality product might suffer. Thus, a horizontal display would be more suitable.
In a horizontal product display the shelves can be divided into different categories,
based on their relative selling power. The shelves on eye-level are found to generate
most sales, followed by the shelves that are on the same level as the hands. The shelves
on the same level as the head are the third most important shelves, followed by the
shelves on the same level as the knees and the feet. Studies have corroborated the
relative selling power of the different shelf levels. In one study the products on the
shelves at eye-level where moved down to the level of the feet. The sales of the
rearranged products plummeted by 60% as a result. (Markkanen 2008)
Aesthetic elements
Aesthetic elements include colour, style, design materials and architecture (Baker et al.
1994).
The effects of colour have been widely studied in the marketing literature. Especially
packaging and advertising has been the centre of attention. Researchers have shown
that colour can draw attention, generate emotional responses etc. Thus, retailers
attempting to utilize colours in order to affect consumers’ buying mood for example,
have had to rely on knowledge from non-retail fields such as psychology. Previous
research has shown the attention-getting power of colours. Colour selection becomes
important for retailers as it attracts customers’ attention, but more importantly it can
physically draw a customer to the retail setting (Bellizzi et al. 1983). Colours can evoke
several different emotions. These are presented in table 1.

26. 21
Table 1. The Psychological associations of colours
Red Exsiting, passionate and warm
Orange Sociable, "folk-style" and implifies
affordability
Blue Relaxing, refershing and cool
Green Nurturing, dynamic and universally
appealing
Brown and earth
colours
Stable, respectful and relates to
instincts
Yellow Cheereful, communicative and
youthful
White Unifies; brings life into other
colours; and cold, impersonal and
steril
Black Culturally ambiguous and formal
Grey (metallic and
pearl shades)
Mysterious
Source: adapted from Sivakumar (2007)
Several studies regarding colour hue, i.e. colour wavelength, have been made. Colours
that have a short wavelength are the cool colours, while colours of long wavelength are
warm colours. It has been consistently shown that cool colours are preferred over warm
colours. The study by Bellizzi et al. (1983) shows that retail environments with cooler
colours were preferred over retail setting with warmer colours. A significantly larger
amount of the subjects were physically drawn to the cooler colours. Additionally,
blue/violet colours increased purchase intention more than red/orange. However,
warmer colours have been proven to create greater arousal. (Babin et al. 2003)
In a research conducted by Bellizzi & Hite (1992) 70 subjects, exposed to a red or blue
simulated retail setting, were studied. The research corroborates previous research of
cool colours yielding more positive retail environment outcomes, than warm colours.
The blue display was found to increase purchase (decreasing postponement of
purchase). Furthermore, the authors found that 50% of the subjects exposed to the
blue display would have chosen the most expensive merchandise, whereas 19% of those

27. 22
exposed to the red display would have chosen the most expensive merchandise.
Additionally, the blue environment resulted in greater intentions to buy, shop, and
browse.
Studies of cool and warm background colours have also been made. In Middelstadt’s
(1990) regarding background colours and product attributes and beliefs, a cool colour
was found to elicit a more positive attitude towards buying. The subjects were shown a
pen against a blue and a red background. The combination of a pen against a blue
background colour affected positively respondents’ attitudes as well as the underlying
beliefs.
The literature and research in the area of style and design material is limited. It is
difficult to draw any general conclusions about style as it is relatively subjective.
Furthermore, styles are subjected to frequent change which makes it difficult to create a
general framework.
The various researches have studied the effects that overall retail environment
aesthetics can have on consumer opinions. Dick et al. (1996) found that retail aesthetics
were strong moderators of consumers’ evaluation of retail brand quality. Thus,
investing in aesthetics e.g. upgrading fixture quality, making it easy to move between
aisles and keeping the retail environment clean, helps enhance the overall perception of
retail brand quality.
As a conclusion it can be stated that amongst the three groups of elements constituting
a retail setting, the design elements constitutes the largest group of elements.
Functional and aesthetic retail elements are important factors of a retail environment.
Functional elements can increase the likelihood of purchase. For example, a specific
layout can entice customers to stay longer in a retail setting and possibly shop more.
Increasing product display space has shown to increase sales. Furthermore, aesthetic
elements such as the usage of a cool colour in a retail environment, will result in more
positive purchase attitude. This paper assumes that the design elements in a retail
environment presented in this section can also be found in a soft and hard corner
environment.

28. 23
2.2.3 Social elements
The people in a retail environment can be classified as social elements. A retail
environments social elements are the amount, type and behavior of the other customers
and sales personnel.
Studies about the social factors of the retail environment have mostly revolved around
the subject of crowding. The amount and behavior of sales personnel has also been
studied. The studies have shown that the perceived crowding has a negative effect on
consumers’ evaluations of the shopping experience. For example, Bateson & Hui (1991)
found that there was a positive relationship between the density and perceived
crowding. Therefore, the authors concluded that density had a direct negative influence
on pleasure. Eroglu, Kellaris & Machleit (1994) also found crowding to negatively
impact shopping satisfaction. However, more recent studies have proven that crowding
has a positive impact on service experience. Laroche, Mourali & Pons (2006) found
there to be an overall positive relationship between how customer perceived density
and their evaluation of the service setting. This result is naturally more likely if the
service setting is a movie theater, a concert, an opera, a sporting event etc.
The ideal number of sales personnel present in a retail environment has been the
subject of several studies. Mazursky & Jabocby (1986) found the number of sales
personnel to be a critical factor in the consumers’ evaluation of the service quality.
Baker et al. (1992) studied the amount of sales personnel and sales personnel behavior,
and its result on consumer behavior. Respondents subjected to a service setting with
three shop assistants, of whom one greeted the customer when entering the setting,
perceived a high level of arousal. Meanwhile, the respondents subjected to a setting
with only one shop assistant who did not greet the customer, perceived a lower level of
arousal. Moreover, there was a significant positive relationship between perceived
arousal and willingness to buy.
Social elements comprise all the persons present in a retail environment. Crowding and
the behavior of other customers are also social elements of a retail environment.
However, observing other customers in a retail environment is demanding.
Furthermore, brands do not always use own sales personnel in a hard corner setting.
The staff found in a hard corner is usually the retail store’s own. Therefore, the social
elements of a retail environment will not be used in the empirical study of this paper.

29. 24
Section 2.2 has presented Baker’s (1987) model of classifying the various elements in
the retail environment. The elements in the retail environment can be divided into
three critical groups: ambient elements, design elements (functional and aesthetic
elements) and social elements. The model by Baker classifies the retail environment
into variables that retailers can control and combine in an easy manner. This is one of
the reasons that the model has been extensively used by other researchers (e.g. Baker et
al. 1994; Lam 2001).
Furthermore, looking at the retail environment through the lenses of the model
provided by Baker, one can identify elements that have a direct effect on consumers’
opinions. These elements can affect everything from perceived retail image to brand
quality perceptions, price fairness perceptions, purchase behaviour and consumers’
evaluations of the shopping experience.

30. 25
3 RETAIL IMAGE
This chapter constitutes the second part of the theoretical framework. Research
regarding the categorizations of the different elements in the retail environmental has
been discussed. A more focused view on the environmental elements and their effect on
consumer opinions will be presented in the next sections. The paper presents the model
by Baker et al. (1994) that divides the retail environment into a prestige image or a
discount image environment, based on the elements in the retail environment. This
enables the identification of consumer opinions resulting from a higher or lower image
retail environment. The hypotheses of this paper will be presented in combination with
this chapter, as the aim of this paper is to study the different effects the retail
environment and the image it portrays can have on consumer opinions.
3.1 Higher image and lower image retail environments
The study by Baker et al. (1994) investigated the influence of retail atmospheric
elements on consumers’ inferences of merchandise and service quality, and how the
inferences shape the retail image. Moreover, Baker et al. created a model of ambient,
social and design elements that constitute a prestige or a discount image retail
environment. The model is based on previous marketing and environmental psychology
literature about the retail environment. The authors concluded that the model is
particularly suitable for retail settings that are related, but that have a different retail
environment. Moreover, the model makes it possible to compare the effects of a high
versus discount image retail environment. Thus, the model is suitable in comparing a
hard and soft corner setting, and the kind of effect the image they portray can have on
consumer opinions. Hence the model will be utilized as a framework for this paper too.
The retail environment provides several important cues for the consumer, and can
therefore have a substantial impact on consumers. Many purchase decision are made at
the point of purchase. As a consequence, different elements in the retail environment,
such as colour, music or lighting, can have a more immediate effect on consumers than
other marketing inputs, such as advertising, that are absent in the point of purchase.
Previous research has identified what a big impact the retail image, e.g. a prestige
image, can have on consumers (Darden, Darden & Ordem 1983 (cited in Grewal 1998);
Gardner & Siomkos 1986; Mazursky & Jacoby 1986; Baker, Berry & Parasuraman 1988

31. 26
(cited in Barnes et al. 1992)), and their opinions, such as purchase intentions (Baker et
al. 2002). (Baker et al. 1994)
3.1.1 Higher image ambient elements
In a higher image ambient environment the music played is classical; scents are
utilized; and the lighting is low and soft. Classical music has been found to affect
everything from an increase in purchase of more expensive products (Areni & Kim
1993) to evaluations of the retail atmosphere (Baker et al. 2003) and pleasure (Baker et
al. 1992). The utilization of scents has shown to affect consumers in different ways.
Studies have shown that using scents in a retail setting can increase purchase likelihood
(Hirsch 1996), increase retail setting patronage (Hirsch 1995) and positively affect
retail environment perceptions (Chebat et al. 2005).
Garnder & Siomkos (1986) studied how retail atmospherics influence consumer
evaluations of a perfume, when subjected to descriptions of either high or low image
retail atmospherics. “The lighting is indirect and subtle”, was one of the descriptions of
a high image retail environment (Garnder & Siomkos 1986:28). A lower image
environment was described as having very bright and harsh lighting. Ratings,
evaluations and evaluative beliefs of the perfume were given higher scores by the
customers subjected to the high image description. Furthermore, in 2003 Babin et al.
conducted a research on color, lighting and price point combinations. The findings
demonstrate the relationship between lightning and price fairness perception. Prices
were more often perceived fair in the simulated retail setting with a soft light, than with
bright lights.
However, one ought to remember that several studies have shown that utilizing
brighter lights in a retail environment in fact has a positive impact on consumer
behavior. For example, Areni & Kim (1994) compared the lighting a retail
establishment. The findings show that customers in the setting with the brighter
lighting examined and physically handled more products than customers in the setting
where the lighting was softer. As previously stated, the research conducted by Herbert
& Summers (2001) came to similar conclusions: customers in both of the two stores
that were being tested touched significantly more items when a stronger light was used,
than when a stronger light was not used. Additionally, customers in both stores picked
up significantly more items when a stronger light was used then when it was not used.

32. 27
Therefore, one ought to be careful when drawing conclusions in terms of what lighting
will be most valuable. On one hand, soft and dim lighting can give the impression of a
higher image which results in customers perceiving products to be of higher value, and
in customers being more acceptant of a higher price. On the other hand, stronger
lighting has proven to result in customer examining and handling more products,
which can lead to direct increase in sales.
Levy & Weitz (2009) point out that having an appropriate lighting has been shown to
positively influence consumers’ shopping behavior. One way of arranging the lighting in
the retail environment is the so called popping of the merchandise: using a spotlight to
showcase specific areas and items. The aim with the lighting is to draw the customers’
attention to strategic areas. Additionally, this kind of lighting can be used to physically
draw the customers through the retail setting. (Levy & Weitz 2009) An example of the
popping of the merchandise-lighting could be that the overall lighting in the retail
environment itself is soft and dim. However, additional spotlights are used in the retail
environment to illuminate a counter with new product arrivals, for example. In
accordance with the research findings mentioned above, this approach would take into
account the benefits of both the soft and the bright lighting.
3.1.2 Higher image design elements
A higher image design environment comprises wood floors or carpets. Moreover, a
higher image retail environment uses an aromatic- neutral and brown monochromatic
colour palette of few vivid hues. A light hard wood floor provides a nice backdrop for
fixtures and merchandise. It creates a natural and warm feeling compared to vinyl, for
example. However, the upcoming trend especially in bars and restaurants is the usage
of a richer and darker coloured wood floor. (Sivakumar 2007) Nevertheless, it would be
more reasonable to utilize a lighter coloured wood in a retail environment as the aim is
to draw attention to the products being sold, as opposed to creating and overall relax
and enjoyable atmosphere where a customer would want to linger for hours.
The different effects that colours can have on consumer opinions have been presented
in the section describing the retail environment’s design elements, section 2.2.2. Red
and violet represent the separate ends of the extreme wavelengths. They have been
found to elicit opposite physiological responses. A red coloured environment will raise
the blood pressure while a blue coloured environment will lower it. (Bellizzi et al 1983)
Thus, red colours excite and arouse while blue colours calm and sedate. Therefore, the

33. 28
optimal colour would be in the middle of these extreme colours (Markkanen 2008).
That is, neutral colours such as white, beige, light brown and dark brown. A high image
retail environment is characterized as utilizing neutral, monochromatic-brown colours.
These colours elicit neither extremely aroused behaviour nor extremely phlegmatic
behaviour, but rather a pleasurable and relaxing atmosphere. Moreover, the colours
generate the kind of atmosphere that correlates the image of a higher end brand (Levy
& Weitz 2009).
Previous research findings show a significant difference between the organizational
type and the way colours are employed. Retail establishments, especially higher end
women’s clothing shops, tend to have a narrow spread of colour and often tend to use
few vivid hues. The most used colours in these retail environments are natural and
monochromatic-brown colours: white, beige, medium brown, dark brown, light grey
and black (Foote 1983). Furthermore, Markkanen (2008) states that light neutral
colours signal elegance. Light colours such as off-white, beige, light brown and light
grey help display merchandise more effectively (Golden & Zimmerman 1980).
Similar results can be seen in research on retail environment colours and price level.
For example, Foote (1983) examined the relation between the overall price level, and
the number of colours and the type of hues that were used in a retail environment.
Women’s and men’s clothing stores were divided into three price categories. The least
expensive category was made up of discount stores and outlets; the intermediate
category comprised low priced goods; and finally design store and boutiques
constituted the most expensive category. The findings show that there was a significant
difference between the colour scheme and the price level of the clothing shops. Shops
belonging to the most expensive category used the least amount of colours as well as
the least amount of vivid hues. These design stores favoured black, beige, light grey, off-
white and medium brown colours.
Table 1 presents the psychological associations with different colours. However, the
impact of different colours can vary if a particular colour is used alone or together with
several other colours. According to Bender & Kizer (2010), the colour of white may
prompt a feeling of absence of colour. Sivakumar (2007) further states that when white
is used together with other colours it unifies and brings life to the other colours. In
other words, using a white colour solely can actually result in negative associations.
Instead of the white colour resulting in positive associations such as a high retail image,
when used together with brown, beige and black. According to Markkanen (2008),

34. 29
white is a dominant colour in the lower image retail environments such as grocery
stores.
The characteristics of a higher image retail design are also coordinated fixtures that
portray a brand’s image; and neatly decorated and un-crowded displays. The general
purpose of fixtures is to display merchandise (Levy & Weitz 2009). Furthermore,
fixtures should portray a sense of coordination throughout the retail environment by
using same design features. The style of the fixtures should complement and accentuate
the merchandise. Fixtures ought to correlate with the retail image and character. This
enables the support and reinforcement the retail brand image. It is common that well
established retail brands use their own customized fixturing. (Varley 2001) According
to Levy & Weitz (2009), fixtures are also used to guide customers and affect the traffic
flow. Fixtures can be used to define areas and hence it is important that fixtures
correspond with the other design elements in the same area.
In a high image retail environment the fixtures, such as wall stands or islands, should
present the merchandise so that the display is neat and un-crowded (Garnder &
Siomkos 1986). According to Johnson (2007), displays should be easy to view, enabling
a customer’s eye to move easily over the display. The author further posits that an
overcrowded showcase can hurt the perceptions of value of the merchandise. Berman &
Evans (2007) continue on this notion by stating that in a higher image environment the
displays should be somewhat decorated, in order to avoid too exposed fixtures. For
example, the merchandise on a wall stand should be organised so that the stand is not
exposed and drawing attention. The fixtures and displays can be decorated in various
ways. A wall stand selling living products can be decorated with flowers in flower vases,
fruits in bowls, a loaf of bread and a knife on a cutting board etc. The decorations of the
fixtures and displays should be beautiful, but the decorating should be almost
imperceptible in order to avoid a messy look (Markkanen 2008). Fixtures and counters
that were crowded and had an all over messy look were used in Garnder & Siomkos
(1986) experiment to characterise a lower image retail design.
A retail environment with a higher image design has displays incorporating an “idea-
orientated” presentation of the merchandise (Levy & Weitz 2009:528). In an idea-
orientated presentation the merchandise in a retail setting is presented based on the
image or an idea of the setting. Individual items are presented together to showcase
how the items would look in real life, and to give ideas of how the products could be
combined and used. For example, a furniture store can combine different furniture in a

35. 30
setting, showing how a specific room would look like. Consequently, the customers are
able to see how the furniture would look in their home. Higher image brands tend to
opt for an idea-orientated presentation. (Levy & Weitz 2009)
Finally, a retail environment with a higher image design is characterized by a
“freeform” layout (Doukidis et al. 2004:14), aisles that are wide and an overall clean
look. The layout should be unique and it should convey the image the brand wishes to
project; suit the merchandise being sold; and correlate with the purchase habits of the
customers. The free form layout is common in designer stores and boutiques. The
layout enables customers to form their own shopping patterns and allows more casual
shopping and browsing. (Golden & Zimmerman 1980) The free form layout is more
suitable in retail environments with high- end merchandise as it creates a relaxed
atmosphere (Levy & Weitz 2009). The layout differentiates itself from the hectic
atmosphere that can be felt in the retail environments with lower end merchandise,
utilizing a grid layout such as grocery stores (Levy & Weitz 2009).
Garnder & Siomkos (1986) studied how retail atmospherics influence consumer
evaluations of a perfume when subjected to descriptions of either high or low image
retail atmospherics. “The lighting is indirect and subtle” was one of the descriptions of
a high image retail environment (Garnder & Siomkos 1986:28). A lower image
environment was described as having very bright and harsh lighting. Ratings,
evaluations and evaluative beliefs of the perfume were given higher scores by the
customers subjected to the high image description
As mentioned earlier, the study conducted by Garnder & Siomkos (1986) examined the
evaluations of a perfume. The respondents were subjected to a description of either a
high or low image retail environment. The high image retail environment was described
as having “aisles that are wide” (Garnder & Siomkos 1986:28). The perfume received
higher evaluations, ratings and evaluative beliefs by the customers when it was
combined with this description. Meanwhile, “aisles that are narrow” (Garnder &
Siomkos 1986:28) was the description of a low image retail environment. The low
image description resulted in lower ratings, evaluations and evaluative believes of the
perfume, than the high image description.
And finally, a retail environment needs to be kept clean. According to Levy & Weitz
(2009: 551), “[n]o matter how impressive the […] interior, an unkempt store will be

36. 31
perceived poorly”. According to Johnson (2007), an unclean retail environment affects
customers’ perceptions of the retail brand image.
As a conclusion, a high image retail environment should have a soothing and peaceful
atmosphere. The furniture should be of high quality but simple. The fixtures should
have a degree of cohesiveness throughout the retail setting, using the same set of design
features (Varley 2001). The layout and the merchandise displays should create a
spacious and un-crowded feeling. (Phibbs 2012) When the various ambient and design
elements of a retail environment are shifted towards that of a higher image retail
environment, overall evaluations of the retail design ought to increase. Hence, it is
suggested that:
H1 a Changes in the ambient elements towards a higher image retail
design, will be better evaluated by the consumer
And
H1 b Changes in the design elements towards a higher image retail design,
will be better evaluated by the consumer
Table 2 summarises the various ambient and design elements that can be found in a
retail environment. Furthermore, the table demonstrates the elements that researchers
have found to portray a retail environment with either a higher or a lower image.

37. 32
Table 2. Higherimage and lower image retail environments
Source: adapted from Baker et al. (1994); Berman & Evans 2007; Doukidis et al.
(2007); Foote (1983); Gardner & Siomkos (1985); Golden & Zimmerman (1980); Levy
(2007); Markkanen(2008); Sivakumar (2007); Varley (2001)
Characteristics
Higher image store design Lower image store design Authors
Ambient elements
Lightning
Overall soft lighting with
some spotlights showcasing
specific products
Very bright and harsh
Levy & Weitz 2009 and
Garnder & Siomkos 1985
Design elements
Floor
covering
Wood with a light colour,
ceramic tiles
Linoleum Sivakumar 2007
Fixtures
Similar design features,
coordinated, portray brand
image
Exposed
Berman & Evans 2007; Levy
& Weitz 2009 and Varley
2001
Display
Beautifully decorated but in
a imperceptible manner;
neat; and spacious and un-
crowded
Messy, crowded
Gardner & Siomkos 1985;
Markkanen 2008
Colour
Black, beige, light grey, off-
white, medium brown, few
vivid hues
Largest amount of vivid
hues, flashy and flamboyant
colours, only white
Foote 1983; Golden &
Zimmerman 1980;
Markkanen 2008 and
Aisles Wide Narrow Gardner & Siomkos 1985
Layout Free-form layout Grid layout
Berman & Evans 2007;
Doukidis et al. 2004 and Levy
& Weitz 2009
Presentation
techniques
Idea-oriented presentation Style/item presentation Levy & Weitz 2009

38. 33
3.2 Retail image and consumer opinions
It has been recognized that consumer behavior is affected by the stimulus in the
environment. This behavior can be everything from retail patronage to purchase
behavior and the retail image a consumer infers.
Retail atmosphere is a retail settings physical characteristic that projects a certain
image. Customer often judge the firm even before they have examined the merchandise
and their prices. (Berman & Evans 2007) Retail image canaffect perceived product and
brand quality. It can also increase customer traffic and attention, and prompt positive
word-of-mouth. (Donthu, Lee, Yoo 2000) Consequently, consumers’ retail images are
of vital information to a company as it gives valuable clues in terms of possible behavior
(Golden & Zimmerman 1988), or might even lead to direct behavior in some situations.
Martineau (1958:47) described retail image as “the way in which the store is defined in
the shopper’s mind, partly by its functional qualities and partly by an aura of
psychological attributes”. Meanwhile, Bloemer & de Ruyter (1997:501) posit that the
retail image is “the complex of a consumer’s perceptions of a store on different […]
attributes”. Lindquist (1974-75) identified different attributes that affect the image of a
retail environment. Merchandise is one of the attributes, and comprises quality; styling
and fashion; and selection or assortment. Another attribute is physical facilities that
incorporate lighting, air conditioning, architecture, retail layout and aisles placement
and width. Also retail atmosphere is regarded as a retail image attribute. (Lindquist
1974-75)
The retail image is formed and developed through the process of inferring various
beliefs from perceptions, with the possible interference of memory factors (Bloemer &
de Ruyter 1997). Thus, the creation of a retail image is a complex process because it can
be influenced by numerous elements (Chebat et al. 2005), and can also be altered
(Mellott, Pettijoh & Pettijoh (1992). As a result, the concept of retail image has been
difficult for researchers to conceptualize and utilize (Chebat et al. 2005). However,
once a retail image is formed it can be associated with several critical behaviours such
as retail satisfaction (Chang & Tu 2005), brand image (Mellott et al. 1992), retail loyalty
(Koo 2005), retail patronage (Kotler 1973) and spending (Hildebrandt 1988 (cited in
Chebat et al. 2005)).
Consumer perceptions can be influenced by the retail image. Nagle (1987) continue on
this notion by concluding that consumers’ impressions of the entire purchase situation

39. 34
are important determinants of the consumers’ response to price (cited in Baker et al.
2002). The retail environment can be regarded as the entire purchase situation. Thus,
retail environment cues will influence the kind of price level a customer expects. Thaler
(1985) conducted a research where he studied consumers’ price expectations. Subjects
were asked to estimate how much they would be willing to pay for a bottle of beer that
they would be drinking on a beach. One group of respondents were told that their beer
was bought from a resort hotel nearby, while the other group was told that their beer
was purchased from the local grocery store. The respondents estimated the price for the
beer bought from the hotel to bee $1,15 higher than the beer bought from the grocery
store. Meanwhile, the respondents in Lin & Sternquist’s (1994) study estimated the
price for sweaters from a store with a higher image to be $ 4,62 more expensive than
sweaters from a store with a lower image.
Davis, Kern & Sternquist 1990 (cited in Lin & Sternquist 1994) found in their study that
retail prestige was the strongest information cue for customers’ price estimates.
Likewise, Sternquist & Davis 1986 (cited in Lin & Sternquist 1994) found customers to
infer significantly higher prices to products from a retail setting with a more prestige
image. The finding of the study by Baker et al. (2002) concur this assumption. The
authors found that when the retail design was geared toward a more favourable one,
customers’ perceptions of the merchandise prices increased.
Therefore this paper arrives at the conclusion that when the overall design of the retail
setting is changed to that of a higher image retail environment, consumers’ price
perceptions will increase. Hence, it is posited that:
H2 When the overall retail design is shifted towards a higher image retail
environment, consumers will perceive merchandise prices to be higher.
Researchers have found that retail image also serves as an informational cue for
consumers’ perceptions of merchandise quality (Champion, Hunt & Hunt 2010). In the
study by Chiu & Wheately (1977) respondents rated the quality of six different carpets
in a high prestige and in a low prestige retail environment. The findings indicate that
the there was a significant positive relationship between the high prestige environment
and the perceived quality of the carpets. The study by Baker et al. (2002) arrives at
similar conclusion. The author found a significant relationship between perceived
merchandise quality and retail image. The respondents evaluated merchandise in a

40. 35
retail setting with a prestige looking design to be of higher quality that the merchandise
in a retail setting with a discount looking design.
Champion et al. (2010) studied how a low, medium and high retail image affects three
types of product quality: low, medium and high. The results show that the retail image
was directly associated with the product quality perceptions. The results indicate that
even if a lower image retail environment would sell a high quality product, the products
might not be perceived as carrying a higher quality. Furthermore, Schlosser (1998)
found that social identity products were evaluated more favourably in a prestige retail
atmosphere than in a discount retail atmosphere. Meanwhile, the findings of Dick et al.
(1996) indicate that private label products sold in a retail setting with a pleasant
looking image were perceived to be of significantly superior quality, than in a retail
setting with an unpleasant image.
Baker’s et al. study from (1994) also analysed the relationship between retail image and
perceptions of merchandise quality. Two respondents were shown a videotape of a
retail environment with ambient, design and social elements that correlated with a
prestige image retail design, or a discount image retail design. The study measured
effect the retail environment portraying a prestige or a discount image had on perceived
merchandise quality and service quality. The authors found that respondents perceived
the merchandise to be of higher quality in a prestige image ambient, design and social
environment, than in a discount image retail environment. The study by Sharma &
Stafford (2000) also indicates a significant relationship between perceived
merchandise quality and a prestige image retail environment.
Thus, it can be concluded that when the overall design of the retail setting is changed
towards that of a higher image retail environment, consumers’ merchandise quality
perceptions will increase. It is posited in this paper that:
H3 When the overall retail design is shifted towards a higher image retail
environment, consumers will perceive the merchandise quality to be
higher
Finally, the relationship between retail image and purchase intentions is discussed.
Buckley found in 1990 a direct link between retail image and intentions to purchase a
specific product. Champion et al. (2010) conducted a study where respondents rated
the willingness to buy for a low, medium and high image retail setting. The authors

41. 36
found retail image to directly influence the willingness to buy. That is, the higher the
retail image, the higher the intention to purchase a product. Huston & Nevin (1980)
concluded that retail image had a significant impact on actual purchase behaviour in an
intra- urban shopping area.
Furthermore, the findings of a study conducted by Baker et al. (1998) also verify the
relationship between retail image and purchase intentions. The respondents evaluated
bicycles from a store with a higher image and a store with a lower image. The authors
found a significant positive relationship between the perceived retail image and
consumers’ purchase intentions. Therefore, it is assumed in this paper that when the
overall retail design is changed towards that of a higher image retail environment,
consumers purchase intentions will increase. Moreover, it is posited that:
H4 When the overall retail design is shifted towards a higher image retail
environment, consumers’ purchase intentions will be higher.
This chapter presented the model by Baker et al. (1994) that divides the retail setting
into a higher or lower image, based on various elements in the retail environment.
Furthermore, various image induced opinions and behaviour were described. The
elements in the retail environment have a critical bearing on the kind of retail image a
consumer will infer. Based on previous literature it is hypothesised that a higher image
retail environment will receive higher consumer evaluations than a lower image retail
environment. Additionally, it is hypothesised that a retail setting with an overall higher
design can prompt consumers to perceive both merchandise quality and merchandise
prices to be higher. The final hypothesis posits that consumers’ purchase intentions will
increase in a higher image retail environment.

42. 37
Table 3. Compilation of hypotheses
Hypotheses Theory
H1 a Changes in the ambient elements
towards a higher image retail design, will be
better evaluated by the consumers
Baker et al. (1994)
H1 b Changes in the design elements
towards a higher image retail design, will be
better evaluated by the consumers
Baker et al. (1994)
H2 When the overall retail design is shifted
towards a higher image retail environment,
consumers will perceive merchandise prices
to be higher
Davis et al. 1990 (cited in Lin
& Sternquist 1994), Lin &
Sternquist (1994); Baker et al.
(2002)
H3 When the overall retail design is shifted
towards a higher image retail environment,
consumers will perceive the merchandise
quality to be higher
Davis & Sternquist 1986 (cited
in Lin & Sternquist 1994);
Schlosser (1998); Baker et al.
(2002)
H4 When the overall retail design is shifted
towards a higher image retail environment,
consumers’ purchase intentions will be
higher
Baker et al. (1998)
Source: Baker et al. (1994); Baker et al. (1998); Baker et al. (2002); Davis & Sternquist
1986 (cited in Lin & Sternquist 1994); Davis et al. 1990 (cited in Lin & Sternquist 1994);
Lin & Sternquist (1994); Schlosser (1998)

43. 38
4 METHODOLOGY
The chapter will begin with a short introduction the research subject, Georg Jensen.
Georg Jensen’s soft corner and hard corner which will be compared in this study, are
also presented. Next, the research questionnaire will be described and the chosen
research method will be motivated. Finally, the chapter will discuss the data collection
and analysis method, as well as the validity and reliability of the study.
The aim of this study is to get an insight in the different effects the retail environment
and the image it portrays can have on consumer opinions. Therefore there is a need to
study the various effects different images can have on consumer opinions.
4.1 Georg Jensen
Georg Jensen is a Danish luxury design brand. Georg Jensen himself was a jeweler and
silversmith with superior artisanal skills and an eye for aesthetics. Georg Jensen
founded the company carrying his own name in 1904. (Georg Jensen, 2014) Jensen was
a well-known professional already then, participating in many international fairs and
producing hollowware to the royal Danish family. Even though Jensen started within
jewellery, he also created impressive hollowware pieces. Thereafter, Jensen started to
produce living products as well. Today the brand Georg Jensen represents quality
craftsmanship and timeless aesthetics. The products range from jewellery to living
products, watches and hollowware (Georg Jensen, 2014).
Georg Jensen is a Danish luxury design brand. In order to keep on portraying this
image, the company has taken certain measures. To be able to portray the image of a
luxury design brand, the company has created global guidelines that secure a
unanimous look no matter where in the world. The brand needs to look the same in
Helsinki, London, New York, Taipei etc., in order to consider itself as a luxury design
brand.
Thus, the company has decided to move away from the usage of soft corners and more
toward the usage of hard corners, in order to secure that a dedicated area correlates
with the brand image. This can of course be achieved in Georg Jensen’s own retail
stores. In a wholesale context this is only possible by using hard corners. Georg Jensen
has had an extensive project where wholesalers that cannot meet these requirements
are cut out. Short term sales are affected, but in the long term this is what is beneficial

44. 39
for the brand. After this new company policy 50% of the Finnish customers were cut off
in 2013 -2014. This is a necessary step if the company wants to portray an image of a
luxury design brand.
In other words, hard corners have been a lot in the focus. The hard corner visual
merchandising and product range is predetermined according to the square meters of a
dedicated area. The material and colour of the hard corners are black and cherry wood.
This creates a dramatic effect that suits the luxury image of the jewelleries. However, in
the last years the sales of the brand´s living products have grown to that extent that it
was decided to make it an own brand: “Living Georg Jensen”. The material of the hard
corner is steel and oak wood, with a colour palette of off-white, beige, light brown and
little bit of black. This correlates with the image of a Nordic contemporary premium
brand that the brand wishes to portray.
4.2 Research method
A presentation of various researches conducted in the field of retail environment and
retail environment induced retail image have been presented in the chapters
constituting the theoretical framework (chapter 2&3). The image a retail environment
portrays and its effect on consumer opinions has mainly been studied in laboratory
settings or controlled retail environments. The majority of these studies have been
quantitative (Milliman & Turley 2000) mostly utilizing questionnaires to gather the
data (Jacoby & Mazursky 1986; Baker et al. 1992; Chebat et al. 2005; Champion et al.
2010) According to Birks & Malhotra (2006), qualitative methods are used to create
hypotheses and identify variables that ought to be included in a quantitative study. This
also seems to be the case in the retail environment and retail image literature. In the
literature the hypothesizes and variables have been created based on previous
literature, or been created based on qualitative researches. Meanwhile quantitative
methods have been used to study these hypothesizes. A quantitative research method is
suitable for the study of this paper as the aim is to verify the theory regarding the retail
environment and retail image, and measure consumers’ opinions thereof.
If a research takes on a quantitative approach it usually means the usage of a deductive
approach. A deductive approach starts from general theory and ends in data, thus
verifying theory. An inductive approach starts from data and ends in theory, thus
creating theory. (Hyde 2000) In this paper, hypotheses have been based on existing
theory about retail environment and retail image. Furthermore, the choice of variables

45. 40
and the result measure is also based on previous literature regarding retail
environment and retail image. Therefore the research approach of this paper can be
classified as deductive. (Birks & Malhotra 2006)
In order to study how a retail environment and the image it portrays can effect
consumers’ opinions, data was gathered using questionnaires. Using a quantitative
approach enabled gathering a large sample which improves the possibility to generalize
the research findings (Anderson, Babin, Black & Hair 2010).
4.3 Research questionnaire
The effects retail environmental induced retail image can have on consumer opinions
were examined by utilizing a 5-point Likert-type scale. The Likert scale was chosen as
it is easy to construct and administer. Furthermore, respondents find it easier to
understand how to use the scale. Utilizing five response categories ranging from
“strongly disagree” to “strongly agree” was chosen as it the most typical approach. The
questions were brought from previous studies in the retail environment field such as
Collin-Dodd & Lindley (1990), Ambrosini, Riel & Semeijn (2004) and Champion et al.
(2010) (see table 3 and page 63). For every question, a high score reflected a favorable
response. This method of consistent scoring was used in order to avoid confusion
amongst respondents. The advantages of this kind of survey method are that a
questionnaire is simple to administer; the obtained data is consistent due to the limited
responses; and data analysis and interpretation is relatively easy. (Birks & Malhotra
2006) The questionnaire was made both in Finish and in English in order to secure a
wide range of responses.
A pilot test was carried out before the main research study. A pilot test with two
respondents, for both the higher and lower image retail environment, was conducted in
order to ensure the validity of the questionnaire. (Birks & Malhotra 2006) According to
Anderson et al. (2010), each construct should comprise at least three items in order to
secure that the data is reliable and can be generalized. This is why the ambient design
comprised three different questions. In other words, no construct was measured with
only a single item. Nevertheless, the aim has been to keep the questionnaire compact in
order to increase the consumers’ willingness to participate and response accuracy.
The questions can be found in appendix 1 (English) and 2 (Finnish). The questionnaire
was formatted so that questions measuring the overall design and style were placed