INCOMaR Unleashing the Effect of Store Atmospherics on Hedonic Experience and Store Loyalty

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1 Available online at ScienceDirect Procedia - Social and Behavioral Scienc es 130 ( 2014 ) INCOMaR 2013 Unleashing the Effect of Store Atmospherics on Hedonic Experience and Store Loyalty Nur Shahrulliza Muhammad *, Rosidah Musa and Noordiana Sadar Ali Faculty of Business Management, Universiti Teknologi MARA, Shah Alam, Selangor Darul Ehsan, Malaysia Abstract Positive experiences enhance the value of products or services offerings and more importantly could be utilized as a differentiation strategy in a highly competitive retail business. The growing body of knowledge in this research stream posits that creating pleasant experiences to customers while they are actively engaging with the products or services at every touch points in the retail setting, retailers can exploit these happy customers to feel emotionally attached and bonded with the retail store. If retailer attempt to create exceptionally enjoyable shopping experience, undoubtedly it is imperative to identify the predictors of shoppers experience. In respond to this notion, hence the main objective of this research is to assess the effect of store atmospherics on shoppers hedonic experience and in turn store loyalty. A framework was developed and tested in the context of a very popular chain bookstore in Malaysia, that is MPH. Shoppers hedonic experience is hypothesized to be influenced by three elements of store atmosphere, namely store design, ambient and social factors. Subsequently, it was hypothesized that hedonic experience has positive effect on store loyalty. The research findings unveil that there was no evidence to support the hypothesized links between ambient factors with shoppers hedonic experience. Interestingly, however it was discovered that store design and social factors have significant influence on the shoppers hedonic experience. In addition, it was found that shoppers hedonic experience has positive influence on store loyalty. Therefore, the research findings reaffirms that retailers should pay attention to consumers in-store emotional state as the emotions of consumers are determining factors in formation of experience quality. Implications of the research findings to the body of knowledge and retail management practices were discussed The The Authors. Authors. Published Published by by Elsevier Elsevier Ltd. Open access under CC BY-NC-ND license. Ltd. Selection Selection and and peer-review peer-review under under responsibility responsibility of of the the Organizing Organizing Committee Committee of of INCOMaR INCOMaR Keywords:store atmospherics; hedonic experience; store loyalty; store design factors; ambient factors; social factors 1. Introduction The Authors. Published by Elsevier Ltd. Open access under CC BY-NC-ND license. Selection and peer-review under responsibility of the Organizing Committee of INCOMaR doi: /j.sbspro

2 470 Nur Shahrulliza Muhammad et al. / Procedia - Social and Behavioral Sciences 130 ( 2014 ) * Corresponding author. Tel.: address: nurshahrulliza@salam.uitm.edu.my Today, retailers are becoming more competitive due to the rivalry intensity of the retail industry. With the current emphasis on creating more lasting relationships with customers, the role of store atmosphere and what can foster or sustain pleasant emotional reactions becomes strategically more important. According to Sharma and Stafford (2000), a store atmosphere can have the ability to attract customers, to entice purchases and to attract customers back to the store for repeat purchases. Indeed, a store atmosphere can be more influential than the product itself in the purchase decision. An appropriate store atmosphere will become a competitive advantage for retailers to set them apart from the rivals. Customers consistently explore retail outlets that could make them feel pleasant and enjoyable shopping and consequently make shopping as recreational activities. Thus, store atmosphere of the retail outlet possess the ability to affect consumers not only cognitively but also emotionally. In addition, customers prefer to visit stores that provide great additional services that make them comfortable while shopping. Many large retailers spent a huge amount of money in acquiring high traffic locations but if customers do not find anything systematic, unique and attractive, they may just passed by at the door or if visited will try some other places to shop next time. Therefore, as such this study was conducted to validate that store atmosphere will influence shoppers hedonic experience. It is logical to speculate that a pleasant store atmosphere could create positive emotional state among customers and consequently contribute to store loyalty. 1.1 Research Rationale Retailers spent millions of dollars each year designing, building and refurbishing stores. Millions more are spent on hiring, training and compensating employees that interact with retail customers. Yet, retailers do not generally engaged in systematic research that enables them to determine the appropriate mix of atmospheric factors that may influence shoppers experience and contribute to store loyalty. In this study, it will identify and explore how store atmosphere and emotional states may influence various dimensions of purchase behavior. Efforts have shifted from a sole concern with merchandise breadth, depth and quality to include an emphasis on creating a pleasant, entertaining experience for the shoppers. Unless a store has a distinct product offering or pricing strategy, retailers must distinguish their store by building on the relationship between store atmosphere and shoppers emotional states. Research done by Mathur, Sherman and Smith (1997) confirmed that although cognitive factors may largely account for store selection and for most planned purchases within the store, the atmosphere in the store and the emotional states of shoppers may be important determinants of purchase behavior. Therefore, the research reaffirmed that retailers should pay attention to shoppers in-store emotional state combining pleasure and arousal because the emotions of shoppers are important factors in buyer behavior. It should be noted, of course, that just as a positive in-store experience may induce a positive emotional state and subsequent positive affirmative behavior whereas a negative in-store experience could nullify the influence of preexisting good feelings, enhance a negative state or even create a mood state. Indeed, the retailer must not only ensure that positive good feelings remain positive or become even more so, but must also take steps to help change negative feelings to positive ones. For some shoppers, this may amount to simply not being offended by discourteous salespeople, unpleasant odors, noise or temperatures in the store. Consequently, by having a pleasant experience, a retailer can also encourages a shopper to build a more lasting relationship with the store and seek to return in the future. Hence, this study aims to disentangle the effect of three aspects of store atmospherics in a retail store on shoppers hedonic experience and to examine the relationship between shoppers hedonic experience and store loyalty with retail outlet, in this case is MPH Bookstores.

3 Nur Shahrulliza Muhammad et al. / Procedia - Social and Behavioral Sciences 130 ( 2014 ) Literature review 2.1. Store Atmospherics Previous literatures on store atmosphere demonstrated that various atmospheric elements, taken one at a time, affect consumer responses. Elements examined include music (Areni and Kim, 1993; Chebat, Dube and Hui, 1997), color (Bellizzi, Crowley and Hasty, 1983), scent (Crowley, Henderson and Spangenberg, 1996) and crowding (Eroglu and Machleit, 1990; Bateson and Hui, 1991). While others examined how general constructs such as store atmosphere (Donovan and Rossiter, 1982) or physical attractiveness of the store (Darden and Erdem, 1983) affect store patronage intentions. Notably, evidences suggest that store environments trigger affective reactions in customers (Babin and Darden, 1996; Baker, Grewal and Levy, 1992; Donovan et al., 1994; Wakefield and Blodgett, 1999) were successfully obtained. Without doubt, there are many elements that contribute to store atmosphere. The majority of research regarding the effect of the shopping atmosphere on approach responses has employed an experimental method, controlling all stimulus variables (Bellizzi and Hite, 1992; Grossbart et al., 1990; Hornik, 1992; Spangenberg et al., 1996; Yalch and Spangenberg, 1990). There are a few exceptions to this tendency. For example, Baker et al. (1992) examined the effect of a combination of ambient cues (lighting and music) and social cues (number and friendliness of employees). Fiore et al. (2000) explored the combined effect of product display method and scent, whereas Michon et al. (2005) examined retail density and scent. Eroglu et al. (2005) investigated music tempo and retail density. However, Baker (1986) had suggests in his framework that three critical dimensions of the store atmosphere are store design, ambient and social factors. Hence, for the purpose of this study, these three elements of store atmosphere will be examined Store Design Factors The store design factor is comprised of physical elements of the store including exterior features (eg. parking), general interior features (eg. floor coverings, color), store layout features (eg. floor space allocation) and interior display features (eg. signage) (Fiore and Kim, 2007). For many shoppers, the shopping goal is convenience, which includes getting in and out of the store quickly and finding the merchandise they seek easily. Layout is an example of a store design cue that may influence shoppers expectations of their efficient movement through a store (Titus and Everett, 1995) Ambient Factors Ambient factors are background conditions in the environment that relate to non-visual elements of a store s environment (eg. temperature, scent, noise, music and lighting). When shoppers exceed an acceptable range, such as when the lighting becomes too bright or the music too loud, they may notice ambient factors in the store. Both display and in-store lighting help create the proper image and also draw shoppers eyes around the store, onto merchandise and ultimately encourage them to purchase the product (Chain Store Age, June 2003:78). Moreover, music is capable of evoking affective and behavioral responses in consumers (Bruner, 1990). Background music tends to be soothing, which creates a pleasurable atmosphere (Milliman, 1982). Yalch and Spangenberg (1990) found that background music produced a more pleasant mood than did foreground music (although the difference was statistically non-significant). Similarly, peaceful classical music created positive moods in experimental subjects, leading to greater helping behavior (Berkowitz and Fried, 1979). Robust evidence indicates that the presence of music in retail store modulates various facets of the transactions taking place in those environments. However, most prior work done by Mehrabian and Russell (1974) examined music as a single environmental parameter. For example, pleasant music as compared with

4 472 Nur Shahrulliza Muhammad et al. / Procedia - Social and Behavioral Sciences 130 ( 2014 ) less pleasant music is associated with longer consumption times (Caldwell and Hibbert, 2002; Herrington and Capella, 1996; Holbrook and Anand, 1990; Yalch and Spangenberg, 2000), shorter time perceptions (Cameron et al., 2003; Kellaris and Kent, 1992), less negative emotional reactions to waiting (Chebat, Dube and Hui, 1997), an increased desire to affiliate, more positive attitudes toward the provider (Dube et al., 1995) and more favorable service outcomes like evaluation, patronage intentions and behaviors (Caldwell and Hibbert, 2002; Chebat, Dube and Hui, 1997; Herrington and Capella, 1996; North and Hargreaves, 1996). In general, music has an effect on emotion. For example, a faster tempo creates feelings of happiness or animation, whereas a slower tempo evokes tranquil and sentimental feelings. In addition, consonant harmonies are described as playful and happy while dissonant harmonies see more ominous and sad. Music as an ambient feature of the atmosphere (Bitner, 1992), integrates with space, functions, signs, symbols and artifacts to shape shoppers overall holistic perceptions of and responses to physical environments or servicescape (Bitner, 1990) Social factors Previous research has revealed that since the early years of modern retailing, stores have served not only as a place for purchasing goods but also as a place for socializing (Skoll, 1999). The number, appearance and behavior of store employees may help shape a shopper s perception of the service level within a retail store (Baker, 1986). The social factor has been investigated in terms of other customers presence in the store, as exemplified by crowding research (Harrell et al., 1980). An atmosphere that creates a high level of arousal is likely to be more interesting to shoppers, thus they may stay longer in the store. Retailers may benefit when shoppers stay longer because they may purchase more (Milliman, 1986). The greater the number of store employees, the more active and arousing the store atmosphere. In addition, employees whose behavior is friendly would be likely to create a more active, arousing store atmosphere (Baker, Grewal and Levy, 1992) Shoppers Hedonic Experience The shopping experience entails consumer processes (eg. product evaluation, attitude formation) and responses (eg. satisfaction or purchase behavior) affected by aspects of the shopping environment, situation and consumer characteristics. Shopping experience is more than consumer acquisition of goods resulting from the broadly defined shopping environment, such as an elaborate store design, educational events, recreation and entertainment. The shopping experience involves more than merely selecting from the never-ending shelves of products using rational evaluation of product features (Fiore and Kim, 2007). Arnold and Reynolds (2003) had recognized six dimensions of hedonic shopping motivations namely adventure, gratification, role, value, social and idea shopping. The experiential view highlighted fantasies, feelings and fun that represented the hedonic aspects of consumption (Holbrook and Hirschman, 1982). Hedonic value is characterized as self-purposeful and self-oriented whereby it is abstract and subjective. (Babin et al., 1994; Holbrook, 1999). Hedonic experience includes subjective feeling states within the individual such as joy and excitement. In addition, hedonic experience is related to the shoppers emotion towards the retail outlet. Emotion includes experimentally produced mood which is defined as a mild, transient, subjectively perceived affective state, not an intense emotion and directed at specific consumer offerings (Swinyard, 1993). Beyond mood, which precedes the shopping experience, emotion also taps the feeling state created by the shopping experience (Donovan et al., 1994). Mehrabian and Russell (1974) as cited by Fiore and Kim (2007) had implemented the effects of shopping environments or cues on emotions. According to Mehrabian and Russell (1974), pleasure is the degree to which a person feels good, joyful or happy. On the other hand, arousal is the degree to which a person feels excited, stimulated, alert or active. Arousal is seen as a major motivation for experientially-oriented consumers (Hirschman and Holbrook, 1982) and an amplifier of the effect of positive or negative hedonic tone of consumption experiences (Kellaris and Mantel, 1996; Mano and Oliver, 1993). According to Fiore and Ogle (2000), hedonic benefits include sensual pleasure, beauty, creative expression and alternative existence whereby a desired situation or persona is created physically and/or in imagination.

5 Nur Shahrulliza Muhammad et al. / Procedia - Social and Behavioral Sciences 130 ( 2014 ) Perceived value influences consumer selection, evaluation, purchase, use of and ultimate satisfaction with consumer offerings of the shopping experience. Moreover, perceived value derived from one offering of the shopping experience can affect outcomes towards other offerings. For instance, experiential value from a pleasing store design influenced perceived utilitarian value of a product, which in turn affected store patronage intentions (Baker et al., 2002) Store Loyalty The ultimate goal of any business is to establish a loyal and profitable customer base to ensure future longevity of the business. According to Jacoby and Chestnut (1978), store loyalty can be defined as the biased behavioral response, expressed over time, by some decision making unit with respect to one store out of a set of stores, which is a function of psychological processes resulting in brand commitment. The critical part from this definition is store commitment whereby it is a necessary condition for store loyalty to occur. Consumers whose patronage is not based on store loyalty may exhibit an attachment to store attributes and can easily be lured away by competitors through for instance, pricing strategies. In contrast, Osman (1993) argues that a customer who is loyal to a certain retail establishment will give this store his or her priority visit in any shopping event. To date, two major approaches dominate the extant literature to conceptualize customer loyalty namely behavioral in orientation which typically infers the loyalty status of a given consumer from an observation of his or her purchase record and attitudinal measures, which reflects repurchase intentions. It is better account for the cognitive and affective components of loyalty but often suffers from low predictive power (Mittal and Kamakura, 2001). In that sense, loyalty is determined on the basis of what people think and say but perhaps with a distant relation to what they do. For the purpose of this study, the framework is conceptualized as follows: Store design factors Ambient factors H1 H2 Shoppers hedonic experience H4 Store loyalty Social factors H3 Fig. 1. Conceptual framework 3. Research Methodology The population of interest for this study was defined as adult consumers over 16 years of age who shopped at MPH Bookstores, One Utama, Kuala Lumpur. The data for this study were collected using self-administered questionnaires distributed were distributed throughout the store. As this study is concerned on shoppers hedonic value or their emotional state, therefore questionnaires were distributed at the exit of the bookstore. By doing so, the shoppers hedonic value can be tapped and their shopping experience still fresh. The researchers distribute 50 questionnaires in the morning, afternoon, evening and night respectively throughout the store whereby 10 respondents per day are selected randomly in 5 days. The first section of the questionnaire was structured to include questions related to the behavioral aspects of respondents such as the frequency of their visits, amount of money they spent per visit, the type of products they mostly purchased, an approximate time of visit. In the second part of the questionnaire, the respondents are being asked about the elements of store atmosphere in MPH Bookstores, One Utama. The elements of

6 474 Nur Shahrulliza Muhammad et al. / Procedia - Social and Behavioral Sciences 130 ( 2014 ) store atmosphere comprise of three elements, namely store design, ambient and social factors. The preference evaluation employed a 6-point Likert scale strongly disagree-strongly agree at all scale anchored with (1) Strongly Disagree, (2) Disagree, (3) Slightly Disagree, (4) Slightly Agree, (5) Agree and (6) Strongly Agree. In addition, respondents are being requested to respond to questions about their hedonic value as well as their loyalty preferences. All of the questions in the questionnaire used 6-point Likert scale similar to the second part of the questionnaire. 4. Analysis and Findings 4.1. Hypotheses Testing This study involves hypothesis testing because it aims to investigate the effects of the independent variables (store atmospherics elements) on hedonic experience and subsequently testing the relationship of hedonic experience on store loyalty towards MPH Bookstores. It was noted that customers seek for pleasant and enjoyable shopping experience, thus it is important to identify the in-store atmosphere factors to ensure customers satisfied with the overall aspect of the store, which will then influence them to come again for repeat purchases. The findings of the present study could enhance knowledge and enrich insights on the interrelationship among the factors examined. The results of the hypotheses tested are as follows: H1: store design has positive effect on shoppers hedonic experience (β = 0.287) H2: ambient has negative effect on shoppers hedonic experience (β = ) H3: social factors positively influence shoppers hedonic experience (β = 0.202) H4: shoppers hedonic experience positively influence store loyalty (β = 0.281) Store design H1: β = Ambient H2: β = Hedonic experience H4: β = Store loyalty Social H3: β = Fig. 2. Theoretical framework after regression Referring to the above Fig. 2 the results of regression analysis indicate that H1: store design factors positively influence shoppers hedonic experience is substantiated. The store design factors are appropriate element to influence the formation of shoppers hedonic experience. It was observed that the exclusiveness and attractiveness of the store design of MPH Bookstores might trigger respondents to feel pleasant and entice them to stay longer. On the other hand, H2: ambient factors negatively influence shoppers hedonic experience. These results could be speculated that the data was collected sales and weekend where MPH Bookstores were crowded. While the H3: social factors positively influence shoppers hedonic experience is substantiated. The finding indicates that social factors could be one of the determinants of shoppers hedonic experience. Finally, H4: exemplifies that hedonic experience has positive effect on store loyalty. The hypothesis is substantiated due to facts that shoppers that had a pleasurable and delighted hedonic experience would enjoy their shopping and logically could influence their loyalty towards the store, in this case MPH Bookstores Regression Analysis

7 Nur Shahrulliza Muhammad et al. / Procedia - Social and Behavioral Sciences 130 ( 2014 ) Regression analysis is used to test the hypothesized relationships among the variables. The first regression analysis was carried out to determine the relationship between the elements of store atmosphere of store design, ambient and social factors, and shoppers hedonic experience. Subsequently, the second regression was carried out to determine the relationship between shoppers hedonic experience and store loyalty. This study may help in identifying the influence of all the factors in contributing to the shoppers hedonic experience and store loyalty. Table 1. Regression between store design, ambient and social factors and hedonic experience Model R R Square Adjusted R Square Std. Error of the Estimate Table 1 shows the R square value is which means that only 15.6 percent of shoppers hedonic experience towards MPH Bookstores is influenced by the elements of store atmosphere of store design, ambient and social factors. Another 84.4 percent of shoppers hedonic experience is due to other factors excluded and not tested in this study. Table 2. Coefficients of the regression of between design, ambient and social factors and hedonic experience Model Standardized t value Sig. Coefficients Beta (Constant) Store design Ambient Social From Table 2 above, it shows that only store design and social factors are significant to shoppers hedonic experience towards MPH Bookstores. The significance values for store design and social factors are and respectively. The highest beta value is for store design factors which is significant at the level. In addition, the t-value for the two variables is significant due to the t-statistic is for store design factors and for social factors that is above than However, ambient factors are not significant to influence shoppers hedonic experience because it had for t-value where it is below acceptance level of The negative beta weight indicates that if ambient factors are to be reduced, it is necessary to enhance the social and store design factors of MPH Bookstores. Table 3. Regression between shoppers hedonic experience and store loyalty Model R R Square Adjusted R Square Std. Error of the Estimate Table 3 indicates that only 7.9 percent of the variance is significantly explained by mediating variable considered in this study and leaves 92.1 percent unexplained. In other words, there are other variables that are important that have not been considered in this study. Further research is necessary to explain more about the effect of mediating variable of shoppers hedonic experience on the store loyalty. Table 4. Coefficients of the regression between shoppers hedonic experience and store loyalty Model Standardized t Sig. Coefficients Beta (Constant)

8 476 Nur Shahrulliza Muhammad et al. / Procedia - Social and Behavioral Sciences 130 ( 2014 ) Hedonic experience Table 4 depicts that shoppers hedonic experience is significantly related to store loyalty. In addition, the t-value indicates the value of which is above accepted level of greater than The beta value is which is significant at the level. 5. Conclusion The empirical analysis yielded some valuable knowledge with regards to the effects of elements of store atmospherics on hedonic experience and in turn store loyalty. The findings demonstrate that the ambient factors in MPH Bookstores do not significantly affect the shoppers hedonic experience. It can be presumed that this may due to the fact that ambient are non-visual elements, shoppers may not noticed it. Although store design and social factors of the store atmospherics shown significant results, MPH management still need to focus on the three factors in order to improve the level of shoppers hedonic experience. Nevertheless, these findings might be applicable for MPH Bookstores only and cannot be generalized to other type of retail stores. Clearly, this calls for future research to undertake a study in other bookstore setting to validate the effect of the examined factors on hedonic experience and in turn store loyalty. The findings of the present study further imply that other atmospherics elements should be incorporated in the research framework in order to achieve a better fit model. As there is statistical evidence which exemplify that present model suffers from low variance explained, which imply that it needs to be improved by integrating other relevant variables. Further research need to explore this fertile research direction. Overall, this study was carried out with great care and perseverance so that the objectives are met and the results obtained were reliable and represents the store atmosphere that has positive effect on shoppers hedonic experience and store loyalty. In conclusion, the present work affords important insights to retail store management that store design factors are critical drivers to shoppers hedonic experience. It should be noted that social factors also have significant influence on shoppers experience; it could be speculated that they were treated well while shopping at MPH Bookstores. In addition, the research finding also illustrates that shoppers hedonic experience positively influences customers store loyalty towards MPH Bookstores. In sum, the results of this study imply that store design and social factors are the two important elements of store atmospherics that influence shoppers hedonic experience. Subsequently hedonic experience positively influences store loyalty. Evidently, retailers should emphasize and prioritize their resources towards improving their store atmospherics in order to sustain their business in the highly competitive marketplace. Acknowledgement The authors would like to thank Universiti Teknologi MARA for providing the Research Intensive Faculty grant to conduct this interesting research. The university s commitment in offering assistance is very much appreciated. References Areni, C.S. & Kim, D. (1993). The influence of background music on shopping behavior: classical versus top-forty music in a wine store. Advances in Consumer Research, Arnold, M.J. & Reynolds, K.E. (2003). Hedonic shopping motivations. Journal of Retailing, 79(2),

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