Renaud Lunardo Professeur de marketing Kedge Business School. Grégory Bressolles Professeur de marketing Kedge Business School

Transcription

1 Painting or scrapbooking within the store: Field evidence for the effects of in-store educational activities on consumer's perception of retailer's legitimacy and patronage behavior Renaud Lunardo Professeur de marketing Kedge Business School Grégory Bressolles Professeur de marketing Kedge Business School Damien Chaney* Professeur Groupe ESC Troyes * Groupe ESC Troyes 217 avenue Pierre Brossolette BP Troyes Cedex, damien.chaney@get-mail.fr, tel. :

2 Painting or scrapbooking within the store: Field evidence for the effects of in-store educational activities on consumer's perception of retailer's legitimacy and patronage behavior Abstract : This paper examines the effects of in-store activities on perception of retailer's legitimacy and consumer patronage behavior. Results from a study conducted in a real retail setting reveal that while in-store activities do not exert main effects on legitimacy and patronage behavior, corporate attributions play a major role. Precisely, the value consumers derive from their participation to these activities exerts a positive impact on perceived legitimacy and an indirect effect on patronage behavior only when corporate attributions are low. Key-words : In-store activity, legitimacy, corporate attributions, value, patronage behavior Peindre ou faire du scrapbooking en magasin : l effet des activités éducatives proposées en magasin sur la légitimité du distributeur et le comportement du consommateur Résumé: Cette recherche étudie les effets des activités proposées en magasin sur la perception de légitimité du distributeur et le comportement d'achat du consommateur. Les résultats issus d'une étude en magasin réel montrent que, si les activités en magasin n'ont pas d'effet principal sur la perception de légitimité et le comportement d'achat, les attributions commerciales jouent un rôle majeur. Spécifiquement, la valeur que le consommateur retire de sa participation à ces activités a un effet positif sur la perception de légitimité et un effet indirect sur le comportement d'achat uniquement quand les attributions commerciales sont faibles. Mots-clés: Activités additionnelles, légitimité, attributions commerciales, valeur, comportement d'achat 1

3 Painting or scrapbooking within the store: Field evidence for the effects of in-store educational activities on consumer's perception of retailer's legitimacy and patronage behavior Introduction The current retail trade sector is highly competitive, not to say the most competitive. One potential way to success in the market may lie in the implementation of in-store additional activities. Retailers can implement additional services in their stores and make them places where people can engage in different activities, such as painting, scrapbooking, playing music, or even exercising. Consistent with the idea of retailtainment (Howard, 2007), these activities already constitute a clear component of the mix of malls, with for instance the Mall of America providing consumers with family-friendly attractions. However, the addition of such activities as a component of the mix is quite new for retailers. In France for instance, the retailer Cultura is one of a few that have implemented additional in-store activities whereby shoppers can learn building and crafting within the store 1. These in-store educational activities supports Pine and Gilmore s (1999) theoretical explanation for the production of shopping experiences: a product or a retail place is enriched with a brand and complemented by services, leading to create a whole experience (Kim, Lee and Park, 2014). It also echoes Puccinelli et al.'s (2009) question regarding which types of in-store activities retailers can use to increase consumers involvement. However, while considerable research has examined the impact of many aspects of the store environment from atmospherics (e.g., Bitner, 1992, Michon et al. 2005) to shelf presentation (e.g., Chandon et al., 2009; Hansen, Raut and Swami, 2010) on patronage behavior, no research to date has surprisingly examined the effects of in-store educational activities. Thus, 1 2

4 the present research aims to determine and to provide a clear explanation for the effects of in-store educational activities. To this end, this research proposes a framework whereby their implementation increases legitimacy (Suchman, 1995) and in turn consumer's patronage behavior. In addition, considering the increasing spotlight on consumers' knowledge and interpretation of marketing techniques (Friestad and Wright, 1994), the current investigation examines the role of the consumers' interpretation of the in-store activities. 1. Theoretical background 1.1. Educational in-store services activities and legitimacy Institutional theory posits that firms exist within an area with common understanding systems (DiMaggio and Powell, 1983) in which constituents share values and norms (Scott, 2008). In this context, the survival of a firm depends on the acceptance of its existence by the constituents of the environment (Humphreys and Latour, 2013; Tost, 2011). This process of acceptance resulting from the organization's fit to environmental norms is called legitimation. Previous research highlights the need for an organization to be considered as legitimate to achieve performance and survival (Reast et al., 2013). Legitimacy refers to a generalized perception or assumption that the actions of an entity are desirable, proper or appropriate within some socially constructed system of norms, values, beliefs, and definitions (Suchman, 1995, p. 574). By nature, legitimacy is thus a perception, as it represents a reaction of observers to the organization as they see it (Suchman, 1995). The acceptance of the norms about what is socially appropriate in the field provides a show of cultural allegiance and the organization is therefore likely to be legitimized (Elsbach, 1994); at the opposite, a lack of legitimacy implies a lack of social support and resources from the stakeholders due to a low recognition (Scott, 2008; Yang et al., 2012). To this regard, Kim, Ha and Fong (2014) show how retailers' community oriented CSR practices lead to legitimization. The legitimacy gained by the organization can either be social or pragmatic (Suchman, 1995; Handelman and 3

5 Arnold, 1999). Social legitimacy occurs when people judge the organization's business will benefit the whole society. Pragmatic legitimacy results from the perception that the firm is able to satisfy consumers needs. When applied to the retail sector, this definition implies that consumers appraise the legitimacy of a retailer on the basis of all its actions in comparison with what is socially accepted in the retail field. Hence, the effects of in-store educational activities on consumers' perception of legitimacy may be a function of how well the educational activities can be seen as the right thing to do for the individual and the society (Handelman and Arnold, 1999). The existing instore educational activities in the United States and in Europe are mainly designed with the goal of helping individuals buildings and creating, and the assumption can thus be made that that they could be seen as beneficial from the societal and individual standpoints. As such, instore educational activities may thus lead to an increase in perceived legitimacy. However, a communal notion exists that learning as other values like health should be widely accessible because it represents a value of transcendental significance deemed sacred by consumers (Tetlock et al., 2000). This sacred status leads consumers to believe that culture and more broadly learning should be priced according to communal-sharing principles (Mc-Graw, Schwartz, and Tetlock, 2012). Such status mandates accessibility and affordability regardless of ability to pay (Fiske and Tetlock, 1997). Thus, the effects of in-store educational activities may differ according to how much they are priced such that higher-priced in-store educational activities may lead to a decrease in perceived legitimacy. Thus, it is proposed the following: H1: Consumers who participate to higher-priced (vs. no) in-store activities will exhibit a lower perception of retailer s legitimacy, while consumers who participate to lowerpriced (vs. no) in-store activities will exhibit a higher perception of retailer s legitimacy. 4

6 1.2. Corporate attributions and the value of in-store educational activities As in-store educational activities are allocated some space that retailers originally dedicate to profit-making activities, retailers face the need to make these activities achieve some return on investment. One solution lies in asking consumers a charge. While such a decision may seem relevant from a financial standpoint, recent research describes consumers not as passive information processors but rather as active agents who develop theories and beliefs about persuasion tactics (Friestad and Wright, 1994), suggesting that consumers may engage in a cognitive processing of the price asked for the activities. When priced, the in-store educational activities may change the perception consumers have of the retailer, and a retailer that charges for an educational activity may thus not be seen as benevolent but rather as trying to achieve corporate goals. Thus, perceived legitimacy may be higher in the context of a low(er)-priced activity because consumers can consider this activity as an authentic benevolent gesture from the retailer, a non-market gesture dedicated to the shoppers' good (pragmatic legitimacy) and more broadly to the good of the society (social legitimacy) (Handelman and Arnold, 1999). At the opposite, high(er)-priced activities may be viewed as profit-oriented activities (Vyas and Math, 2006) and therefore may cause less perceived legitimacy. Consumers can see behind this high(er)-priced additional activity an attempt to make more money and thus attribute corporate attributions to the retailer (Cotte, Coulter and Moore, 2005). Thus, we propose: H2: Consumers who participate to higher-priced (vs. lower-priced) in-store educational activities will exhibit higher (vs. lower) corporate attributions. The in-store activities can be implemented with the goal to enrich the retailer's offering and to provide consumers with the strongest shopping experience possible (Kim et al., 2014). The main goal of these non-core activities is to create value for the consumer (Holbrook, 1999; Sweeney and Soutar, 2001). Value has been demonstrated to influence positively consumer s 5

7 behavior in terms of satisfaction (Cronin, Brady and Hult, 2000) and loyalty (Hart et al., 2007; Sirdeshmukh, Singh and Sabol, 2002). Hence, the value consumers derive from these in-store activities may result in an increase in patronage behavior. However, the impact of value might gain in being examined under the light of corporate attributions. The literature on the person-environment interaction shows that cognitive appraisal is a major variable to understand the person-environment relations and their outcomes (Lazarus and Folkman, 1984). As a consequence, when people interact with their environment, it is more the interpretation of their environment than its intrinsic attributes that matters. The consequence is that consumers might not base solely their perception of legitimacy on the value they derive from the in-store activities but rather on their cognitive appraisal of the retailers' motives for the implementation of these activities. Hence, corporate attributions may play a major role in the effect of value on perceived legitimacy. Specifically, the value consumers derive from the in-store activities may lead to higher perceived legitimacy when consumers make low corporate attributions, while value may not lead to such increase in perceived legitimacy when consumers make high corporate attributions. Further, given the widely accepted role of perceived legitimacy on positive outcomes (Scott, 2008; Suchman, 1995; Yang et al., 2012) and considering this expected moderating role of corporate attributions on the effect of value on perceived legitimacy, it may be that corporate attributions moderate also the sequence whereby value leads to an increase in perceived legitimacy and patronage behavior. More specifically, when corporate attributions are low, value may result in higher perceived legitimacy and patronage behavior, while such a positive mediating effect of perceived legitimacy in the effect of value on patronage behavior may not be found when corporate attributions are low. From what precedes, we propose that: H3: The value derived from participation to the in-store educational activities will increase legitimacy. 6

8 H4: Corporate attributions will moderate the effect of value on perceived legitimacy: specifically, value will increase perceived legitimacy when corporate attributions are low while it will decrease perceived legitimacy when corporate attributions are high. H5: Corporate attributions will moderate the mediating effect of perceived legitimacy: specifically, when corporate attributions are low, perceived legitimacy will mediate the effect of value on behavior, while such a mediating effect will not be found when corporate attributions are high. 2. Method To ensure the quality of the data and the subsequent analyses, the choice was made to test the above hypotheses using data from consumers in a real retail setting. The most well-known retailer specialized in cultural goods and creative leisures in France Cultura - was selected for this research because it provides customers with two distinct types of in-store educational activities (e.g., painting, sculpture, scrapbooking ) of main importance for the test of our hypotheses. The first kind of activities refers to workshops. These workshops last 1 or 2 hours and customers are asked for a 6.90 euros charge for their participation. The other kind of activities consists in "academy classes". These classes are much more involving than the workshop as they ask customers to register for at least 3 months with a total cost of 65 euros per month on average. A questionnaire was administrated inside the store to shoppers that either had or had not already participated to an activity. The final sample was composed of 221 customers, with 49 having participated to a workshop (lower-priced activity), 58 having participated to a class of the academy (higher-priced activity) and 114 without having taking part to any in-store educational activity. As an indicator of the representativeness of our sample, 89% of respondents were women, consistently with the percentage of women that visit the shop and participate to the in-store educational activities of the retailer. Fifty-six percent were be- 7

9 tween 35 and 44 years old, with almost half of the sample (48.9%) having an annual income falling between and euros. Finally, 47% of the respondents declared visiting one of the retailer s shops at least once a month. Measurements of the major constructs are all drawn from extant literature and adapted for the present context. The value scale came from a three-item measure from Sweeney et al. (1999) ("The quality of the activity was excellent"; "I found the activity of great value"; "Compared to the efforts and sacrifices I've made to participate, I was worth participating"; α =.86). Patronage behavior was assessed using the three positively-framed items from Kaltcheva and Weitz and an additional item ("For my next purchases of creative leisure products, I will come to this store) (α =.84). Perceived legitimacy was measured using seven items from the scale developed by Handelman and Arnold (1999). This scale exhibited unidimensionality with one factor accounting for 62% of the variance (α =.90). Finally, corporate attributions were assessed through a single-item scale taken from Coulter and Pinto (1995) that was adapted to the retail context ("This retailer is primarily concerned with making money"; M = 3.66; S.D. = 1.64). All the constructs were measured on 7-point Likert scales anchored by "Not agree at all" to "Totally agree". All the multi-item scales exhibited convergent (Hair et al., 2005) and discriminant validity (Fornell and Larcker, 1981). 3. Results 3.1. Phase 1. The overall effect of participation (vs. no participation) to in-store educational activities (Hypothesis 1) To test the hypothesis that participation to an in-store educational activity increases legitimacy and behavior, an ANOVA was conducted with participation conditions as the independent variable and legitimacy as the dependent variable. When considering legitimacy as an overall construct, results indicate that perceived legitimacy does not vary according to the participation condition (F(1, 219) = 1.56, p >.10). Consistent with Handelman and Arnold (1999), we 8

10 followed their bi-dimensional conceptualization of legitimacy and investigated the effects of in-store educational activities on the social and pragmatic dimensions. Results show that participation has no effect on social legitimacy (F(1, 219) =.33, p >.10) but does have one on pragmatic legitimacy (F(1, 219) = 4.47, p <. 50) (Table 3). Bonferroni post-hoc tests first revealed that pragmatic legitimacy was significantly lower in the higher-priced activity participation condition (M = 5.06) than in the no-participation condition (M = 5.51, p <.01). However, they did not reveal any significant difference of pragmatic legitimacy between the lower-priced activity condition (M=5.54) and the no-participation condition (p >.10), providing only partial support to H1. Although not hypothesized, an ANOVA revealed an effect of participation on corporate attributions (F(1, 219) = 3.56, p <.05). Interestingly, Bonferroni post-hoc tests revealed that the mean score of corporate attributions was significantly higher in the higher-priced activity condition (M = 4.12) than in the lower-priced activity condition (M = 3.33, p <.05). Also, they revealed a marginal difference between the higher-priced activity condition and the no participation condition (M = 3.57, p <.10), such that corporate attributions are significantly higher in the higher-priced activity condition. These results shed light on the role that corporate attributions may have in the effects of instore educational activities. Specifically, they show that when in-store educational activities are lower-priced, people are more likely to believe that they are implemented to help retailers achieving corporate goals. Phase 2 thus focuses on these attributions and their role in the value consumers derive from their participation to in-store educational activities Phase 2. Focusing on value derived from participation to in-store educational activities (n=107; Hypotheses 2-5) As value can be derived only by participants, the hypotheses H2 to H5 were tested on the 9

11 Perceived legitimacy solely sample of participants. First, H3 and H4 were tested using PROCESS (Hayes, 2012). Results revealed that value derived from participation increases perceived overall legitimacy (β =.42, t = 3.51, p <.001), supporting H3. Interestingly, a value corporate attributions interaction emerged (β = -.08, t = -2.41, p <.05), indicating that value increases (vs. decreases) perceived legitimacy when corporate attributions are low (vs. high). These results support H4 and the notion that corporate attributions moderate the effect of value on perceived legitimacy (Figure 1a). Turning to corporate attributions as a moderator of the mediating effect of legitimacy, a moderated-mediation analysis was conducted using PROCESS with 5,000 bootstraps (Preacher and Hayes, 2004). Results revealed that value exerts an indirect effect of value on behavior through perceived legitimacy when corporate attributions are low (the confidence interval of this indirect effect excluding 0:.05;.38) (Zhao et al., 2010). This indirect effect is not found when corporate attributions are high, the confidence interval of the indirect effect including 0 (-.16;.17) (Figure 1b). Figure 1A Figure 1B 6 5 β =.40** Perceived legitimacy β =.72*** 4 3 Low Corporate Attributions High Corporate Attributions Value Value Direct effect: β =.05 Indirect effects: Low Corporate Attributions (-1 SD): β =.16* High Corporate Attributions (+1 SD): β = -.03 Patronage behavior Figure 1: Corporate attributions as a moderator of the direct and indirect effects of value These results support H5 and the notion that corporate attributions moderate the mediating effect of perceived legitimacy. Concretely, the value consumers derive from participating to 10

12 an in-store educational activity increases legitimacy and behavior when consumers attribute no corporate goal to the activity. On the contrary, when people attribute some corporate goals to the activity, this positive effect of value on legitimacy and subsequently on patronage behavior is not observed. Overall, these results provide a clear explanation of the effects of instore educational activities. Such activities increase perceived legitimacy and behavior provided that consumers make no corporate attributions whereby they see the educational activity as a mean for retailers to achieve corporate goals. 4. Concluding discussion This study offers different theoretical implications. To start with, we contribute to the retailing literature since our empirical study, here conducted in a real setting, is the first to our knowledge to provide clear evidence about the effects of additional in-store activities. Focusing on educational activities, our study highlights a first result of importance whereby in-store educational activities have no main positive effects. A comparison of the levels of perceived legitimacy and patronage behavior across conditions indicate that participating to an educational activity in the retail setting does not have any positive effect. To this regard, a striking result lies in that practicing a lower-priced activity does not lead to an increase in perceived legitimacy nor does it lead to an increase in approach behavior. The second result of importance refers to that practicing a higher-priced activity results in lower perceived pragmatic legitimacy and patronage behavior. In other words, when consumers engage in a higherpriced activity, they perceive the retailer as being less able than the other retailers to provide them with services that meet their needs. This negative effect of higher-priced in-store educational activities highlights the need to understand the effects of educational in-store activities under the light of corporate attributions, or the perception that the activity is not a benevolent gesture from the retailer but rather a marketing tool that is implemented to achieve corporate 11

13 goals (Cotte, Coulter and Moore, 2005). Our third result of importance supports this notion and shows that corporate attributions moderate the effect of value on consumers' perception of legitimacy such that the value derived from the practice of an in-store educational activity has a positive effect of consumers' perception of retailer's legitimacy only when corporate attributions are low. Also, corporate attributions moderate the mediating effect of perceived legitimacy in the value-behavior relationship. Said differently, the value that consumers derive from the practice of an in-store educational activity will increase the perception of retailer's legitimacy and approach behavior only when consumers will not perceived any corporate goals behind the implementation of the activity. When the activity is seen as a corporate tool, such positive effect of value on perception of legitimacy and approach behavior will not hold. Thus, while previous studies have extensively demonstrated how organizations can increase their perceived legitimacy (Handelman and Arnold, 1999; Reast et al., 2013; Kim et al., 2014), this research enriches the existing literature by showing how corporate attributions can lead to a decrease in perceived legitimacy. Further, while the literature has extensively studied the value derived from core activities (e.g. Holbrook, 1999; Sweeney and Soutar, 2001), this research shows that value can also be derived from non-core activities. Turning to the managerial implications, our results suggest that for the strategy of implementing additional in-store activities to have positive effects, retailers should diminish the profitoriented aspects of such activities. Given the highly negative effects of corporate attributions, retailers may gain in finding some ways to make their in-store educational activities not perceive as a tool to make money but as a benevolent gesture. One potential way for sure would be to propose all activities at a lower price, but we are conscious that retailers need to get some return on investment from these activities. The challenge is thus to decrease the attributions of corporate goals to the educational activities while keeping them being beneficial for the retailers. 12

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