eThesis - School of Business electronic theses

» hse_ethesis_12643.pdf   size:7 MB (7264158)

OBJECTIVES OF THE STUDY This thesis attempts to increase understanding about how retail design affects customer perceived value. Customer value, which is directly related to customer loyalty and therefore sales, is measured through price perceptions. First, the study seeks to find out what are the different elements of retail environments and how they affect consumer behavior. Second, this paper looks into measuring consumer perceived value in store environments. Finally, the empirical part will test how changes in retail environments affect customers’ price and value perceptions.

METHODOLOGY An experiment was conducted in a Finnish convenience store chain, R-kioski, which was undergoing a retail environment redesign process. The data was gathered from two different stores in order to increase the reliability of the results. A sample of 100 responses was collected by asking customers to fill out a survey after shopping in the store. 50 of the responses were collected before the redesign project had started and 50 after the project was completed. To measure the effect that the changes to the store environment had, the quantitative data was analyzed by using Student’s t-test, multivariate regression analysis and price sensitivity calculations.

RESULTS OF THE STUDY This study strenghtened some of the earlier findings about the relationship between pleasant store environments and increased customer value. The results suggest that consumers evaluate prices based on retail environment design and accept a higher price level in store environments, which are perceived favorable. Investing in retail design can therefore offer a lucrative way for retailers to increase sales and customer satisfaction and to build a sustainable competitive advantage over competitors. The results also support the earlier findings in behavioral economics and psychology about the irrationality of consumer behavior in complex psychophysical phenomena. However, some results are controversial with earlier findings and thus indicate the need for additional research.