Research Article: 2023 Vol: 29 Issue: 4S
Analytical Study of the Correlation between Retail Store Image and Shopping Behaviour of Saudi Arabian Consumers
Mohammad Naquibur Rahman, Umm Al Qura University
Citation Information: Rahman, M.N. (2023). Analytical study of the correlation between retail store image and shopping behavior of Saudi Arabian consumers. Academy of Entrepreneurship Journal, 29(S4), 1-10.
Abstract
In the fast-moving consumer industry, consumers' behaviour is influenced by the brand's representative character and the first-hand experience after consuming goods. While a plethora of studies have been carried out in order to explore the fundamental characteristics of consumers' behaviour the industry needs further analysis, which would benefit from formulating business strategies with the objective to bridging the gap between managers' imagination about the consumers' buying behaviour and the realities on the ground. This research aims to evaluate Saudi Arabian consumers’ behaviour in supermarkets, hypermarkets, wholesale stores, and Baqalas (local retail outlets). It identifies the representative character of product selling establishment in the image of consumers, examines differences between expectation and satisfaction, and guides to formulate strategies to strengthen the relationship between expectation and consumers' satisfaction with a last objective of making companies financially viable. During the study, 625 consumers interacted through a structured questionnaire from eight cities in Saudi Arabia, which has a multicultural political environment with unique logical ambiances with the progress of all sections of the society. Four store image criteria were set for examination: services, price, location and atmosphere, and convenience. The study says that a store's representative character varies considerably by the class of customers, i.e. gender, age, ethnicity, and social stratification that affect customers' shopping decisions. By exploring the factors affecting consumers' decisions, the findings would play a pivotal role in providing valuable inputs to managers to improve the functional adequacy of supermarkets, hypermarkets, wholesalers, and even Baquala (local retail outlets) with an ultimate objective to make their presence felt in the stiff competitive scenario of Saudi Arabia.
Keywords
Retail Store Image, Shopping Frequency, Store Choice, Supermarket, Baqala, Consumer Behaviour, Retail Strategy.
Introduction
Saudi Arabia has proved itself a robust and resilient aftermath reception in the wake of the severe pandemic. It implemented dynamic financial strategies under Vission-2000 effectively. Its economy got helped by high oil prices and suitable products for its demography. Its inflation remained under reasonable control as well. Its rising oil prices, production, and sound economy have helped strengthen its fiscal position worldwide.
Consumers' perception plays a pivotal role in determining the financial viability of any business establishment. A better study for formulating business strategy has an indelible impact on functional adequacy, which has a ripple effect on consumers' perception. In the present stiff competition, every right or wrong step impacts the health of a business. The store's image in consumers' perception has a significant role in efficiently and effectively achieving the organisation's goal. As a result, it is essential to study the factors that make the store image relevant in the current business environment. Previous research has relatively contributed and advocated that store image has varied characteristics across retail sectors bearing that each retail outlet has a distinctive perception of consumers (Cho & Lee, 2017; Vukadin et al., 2019; Trevino & Trevino, 2021; Ndengane et al., 2021; Pavlic et al., 2022; Hiremath et al., 2022; de Cosmo et al., 2022).
Shamsher (2014) has identified factors that contribute to the store image, i.e. product and service quality, that impact the consumers' choice. Studies on retail business reflect that service provided to the consumers and internal and external reprehensive character and business executions play a pivotal role in consumer loyalty. In the present scenario of stiff competition, business people in the retail industry need to understand the relationship between products and services and customer satisfaction, thereby suggesting improved sales performance and customer retention (Graciola et al., 2020). Saudi Arabian industry is facing an evolutionary change due to a change in Saudi Arabian consumer behaviour. The industry is coming across the ripple effect of the emergence of a new retail approach, and the fast transformation of the unorganised retail sector into the organised retail industry has resulted in double growth for modern retailing in Saudi Arabia in the era of globalisation.
The role of Baqalas must be addressed. These small outlets prefer to sell both local products as well as foreign product as per the demand of consumers. They have a good rapport with local consumers and know well what goods and services their consumers need. Despite the emergence of supermarkets, the Baqalas are intact and trying to offer their consumers better options.
Even with a plethora of research on store image carried out, few pieces of research have been carried out in Middle East countries (e.g. Belwal, & Belwal, 2017; Aji, 2018), which may not represent the actual characteristics of the Saudi Arabian business environment. Saudi Arabia enjoys a vast geographical hemisphere with a unique religious world capital having the prestige of backbone of the economy of Middle East countries.
Even with a plethora of research on store image carried out, few pieces of research have been carried out in Middle East countries (e.g. Belwal, & Belwal, 2017; Aji, 2018), which may not represent the actual characteristics of the Saudi Arabian business environment. Saudi Arabia enjoys a vast geographical hemisphere with a unique religious world capital having the prestige of backbone of the economy of Middle East countries.
According to the General Authority for Statistics (GAST) (2020, Kingdom of Saudi Arabia), it has a population of 34.81 million, making it the 41st most populous country in the world. As per the General Authority for Statistics (2020), the state's total population is 34.81 million (2020), and directly blessed with a vast base of consumers. According to GAST (2022).
The Middle East Economy retail trade contributes 12 percent of Saudi Arabia's GDP. It is expected that the annual growth of e-commerce will reach 18.95 percent by 2025 in the Kingdom. The supermarket and hypermarket have been experiencing tremendous growth at par with European trends. As per USDA, there is 1360 hypermarkets/supermarket, which accounts for only 2.9% of retail outlets in Saudi Arabia. This accounted for 2.9% of the retail outlets and contributed 37% of the total sales in the Kingdom. The report of the General Authority for Statistics states that the Saudi economy grew by 9.9% in Q1/2022 on an annual basis achieving the highest growth rate since 2011. The Saudi Arabian GDP and the retail business have been witnessing relentless growth for the last 10 years.
As Saudi Arabia is a commercial superpower among GCC countries, it gives Saudi Arabia a hallmark position in the Middle East hemisphere. Therefore, understanding consumers' store choice approach is very important for running retail players and potential supermarket retailers to formulate business strategies to achieve the set goals efficiently and effectively.
Academicians and researchers opine that the Saudi Arabian retail sector will perform positive growth over the next five years. The current retail industry is based on the format of Souqs, Baqalas, high-street, departmental stores, discount stores, hypermarkets, and malls. As per the Saudi Gazette report (2022), the Saudi Arabian grocery sales by infrastructure consist of supermarkets 26%, hypermarkets 18% and others 56% (including Baqalas). The major retail industry players are Panda Stores, Bin Dawood Stores, Al Othaim Markets, AL Raya Stores, Farm Store, Carrefour and Danube supermarkets. The ripple effects of changing lifestyle and favourable demography have an indelible impact on retail sales of the Kingdom. Online marketing is also making its presence felt in the global era where boundaries between nations are melting away, and the world has become a global village.
As per the Saudi Gazette (Okaz) report (2022), the second quarter of Saudi Arabia's wholesale and retail segments and trade has a silver lining with a growth rate of 6.3%, representing promising growth in 2022. The Small and Medium Enterprises General Authority (Monsha’at) has revealed to Saudi Gazette that implementing proactive government policies to strengthen the private sector has resulted in various commercial sectors, including the retail industry (Monsha'at. https://www.monshaat.gov.sa/en/about)
Further, per the Saudi Gazette (Okaz) report for the 2nd quarter of 2021, the food industry's investment reached SR 221 Billion.
Literature Review
Undoubtedly, consumers' perception of store image plays a crucial role in creating an indelible impact on the retail industry. Previous research has ascertained that store image attributes and customer satisfaction across different customer profiles within the supermarket sector (Thomas et al., 2018). It has been verified that store image is the main element that influences consumers' purchase decisions (Hanaysha et al., 2021). Consumer satisfaction is the ramification of store image, which is considered a significant challenge for management (Andreassen & Lindestad, 1998; Watanabe et al., 2013). Some authors emphasize that businesses need to formulate a retail strategy of identifying potential customers to understand what products they need and decide which forms of advertisement will be highly effective in targeting potential consumers. (Tweni & Tlapana, 2021). Studies have unfolded that the store atmosphere can make customers entertained instead of distracted (Grewal et al., 2003). The highly competitive environment makes retailers realize the ramification of store mechanisms to increase customer retention and loyalty (Theodoridis & Chatzipanagiotou, 2009; Johar & Sharma, 2022).
A plethora of researchers have reflected in their studies that staff attitudes have an indelible impact on the store's image in the mind of consumers. Shoppers' experiences may differ from store to store (Jinfeng & Zhilong, 2009; Hilal, 2020). Customer loyalty is mainly influenced by information about experiences in each outlet (Faria et al., 2022). Therefore, the store image is the output of the mind of consumers based on the comparative experience of various stores in different markets (Bolton et al., 2022).
There is no place for doubt that quality products, suitability of location, and value take guarantee of sales performance of retail stores (Ali? et al., 2017). Maslakci et al. (2021) suggested product quality and professional staff, allied services, availability of parking and petrol, and value of money have a stimulus impact on promoting customers to buy products.
Many other studies have facilitated retailers to formulate a strategy to do business in a healthy and secure atmosphere. Previous studies have also analysed the role of the demography of a particular region. The typical approach of studies is concerned with gender and age. Still, most of them ignore to keep in mind the other significant factors like education, occupation, income, and family structure. Customer delights have been hallmarked in all studies.
Research Methodology
Aim and Originality
Previous research was carried out because Saudi Arabian consumers have covered the behavioural approach of its native citizen, ignoring the multicultural ambiance of dwellers in Saudi Arabia, which is essential to consider by retailers and investors for setting business strategies.
Thus, the first aim is to identify the factors that result in store image in the eyes of consumers in Saudi Arabia and to correlate the relationship between the store image and customers’ delight.
H1: Store image expectations vary considerably by consumer characteristics.
Earlier, researchers have focused on factors attributed to the stores' perception in the eyes of the consumer, but only a few have tried to analyse the nature of shopping frequency.
H2: Shopping frequency depends on the association between the factors contributing to the store image and consumer satisfaction.
Until now, this dimension of study has been untouched, which would facilitate the retailers to formulate the right set of strategies for their outlets to be financially viable in this stiffly changing competitive atmosphere. The present study is an analytical study of the correlation between store image and the shopping behavior of Saudi Arabian consumers.
Methods
The data is based on interviews with 625 consumers actively shopping from supermarkets and local retail outlets (Baqalas) for daily use. One set of 325 consumers resides in four main cities viz. Makkah, Taif, Madinah, and Jeddah, and another group of 300 consumers live in comparatively less active viz. Najran, Jizan, Abha and Khamis.
Data-Collection Tools
The consumers were interviewed to survey using a five-part questionnaire. The first part of the questions comprises 27 store image characteristics to classify consumers' expectations from supermarkets and local retail outlets (Baqalas). The consumers were asked to evaluate each feature using a five-point Likert-Type scale from 1(least valuable) to 5(very valuable) in the Saudi Arabian business ambiance. In the second part of the questionnaire, consumers were requested to assess the attributes of supermarkets as well as local retail outlets (Baqala) they regularly visit the 27 store image characteristics using a five-point Likert-Type scale from 1 (least delighted) to 5 (most delighted to identify consumers' perceptions).
The third part of the questionnaire comprises four informative questions about consumers' shopping behavior, including shopping frequency, and one question related to their overall satisfaction with supermarkets and local retail outlets (Baqala) that they visit in Saudi Arabia.
In the fourth part, consumers under research were asked if they would switch to different shopping floors provided by, they experienced inconvenience and satisfaction keeping in five such criteria. Satisfaction is measured as overall delivery, which meets the post-purchase satisfaction. In the last part of the specific questionnaire, consumers under study were placed on recognizing themselves as per 11 demographic realities. The questionnaire was developed in English to facilitate consumers to respond correctly, but competent professional translators also translated the questionnaire into Arabic.
To make the questionnaire more informative, appropriate, and relevant, it has gone through an evaluation of experts, including business executives, suppliers of products to business outlets, and academics in this specific field.
Results
The study reveals that 21.3% of the respondents visit supermarkets and Baqalas outlets daily, 26% visit four to five times a week, 26% visit twice a week, and 19% visit once or twice per month. The study further reveals that out of the respondents, 89% of consumers visit either one supermarket or one outlet regularly. Furthermore, the study says that 57.3% of consumers purchase from a local chain of outlets regularly, 30.7% buy goods from local retail stores (Baqalas), and 12% purchase from a global chain.
It is pertinent to mention that 94.3% of consumers are content with goods purchased from a Saudi Arabian supermarket. In consumers' eyes, cleanliness of the business floor, better value for their money, and fresh goods like fruits, dairy products, and vegetables are the primary sources of their satisfaction and dissatisfaction with the services and products, which compels them to switch to other business outlets. Table 1 reflects the consumers 'shopping behavior.
| Table 1 The Shopping Behavior Of The Consumers |
|
|---|---|
| Details of business floor regular visit | |
| Local Supermarket Chain | 57.3% |
| Baqala (local outlets) | 30.7% |
| Global Supermarket Chain | 12.0% |
| Sub Total | 100% |
| Satisfaction with purchase | |
| Satisfied | 94.3% |
| Not Satisfied | 5.7% |
| Sub Total | 100% |
| Shopping Frequency | |
| Everyday | 23.3% |
| 3-4 times a week | 29.2% |
| 2-3 times a week | 26.8% |
| Once a week | 13.3% |
| 1-2 times a month | 7.4% |
| Purchasing time | |
| Weekdays | 66 % |
| Weekends | 34 % |
| Shopping Partner | |
| Alone | 76.9% |
| With spouse | 2.4%% |
| With spouse and kids | 14.6% |
| With parents | 5.2% |
| With friends | 0.9% |
| Total | 100% |
| Switching Reason | |
| Cleanliness | 14.4% |
| Freshness of food | 13.7% |
| Competitive price | 9.9% |
| Variety in products | 9.3% |
| Product quantity | 8.3% |
| Value return | 7.7% |
| Sales promotions | 6.7% |
The study says one of the main factors is 'Services' comprising attributes like cleanliness and tidiness of shelves, polite behavior of sales personnel, and hygienic atmosphere of the store. It further speaks of the 'Store environment' represented by style, suitability of colour, the language of music, lighting, capaciousness and interior design. Price competitiveness has some impact on the choice of consumers. It is also important to note that the availability of facilitating facilities like car parking, medical aid centers etc., is a factor influencing consumers' decisions.
The hypothesis is that consumer characteristics vary from retail outlet image expectations. The analysis reflects that males and females are predominantly different in their approach to price, location, convenience, services and value return of their money.
The flowchart mentioned below represents the mechanism of the behavior of consumers of stores' functional viability and representative character (see Figure 1)
Figure 1: Mechanism Of The Consumers' Behavior.
The results regarding ethnicity and expectations reflect no specific distinction between different sects of Arab origin consumers in their expectations about services, location, and convenience. But there is a significant difference between Arab and non-Arab consumers; choices and preferences regarding services, location and comfort.
To test of the second hypothesis, hierarchical regression analysis was used to examine the moderating role of shopping frequency in the connection between store image perceptions and satisfaction (see Thomas et al., 2018).
In the first step, demography has been made as a variable to conclude. Furthermore, the interface between shopping frequency and service is tested to analyse the hypothesis in the Saudi Arabian context, shown in Table 2.
| Table 2 Hierarchical Regression Analysis: The Moderating Role Of Shopping Frequency On The Relationship Between Services Perception And Satisfaction |
||||
|---|---|---|---|---|
| Step | Variable | Model-1 β | Model-2 β | Model-3 β |
| 1 | Gender | 0.026 | 0.004 | -0.003 |
| Age | 0.096* | 0.048 | 0.053 | |
| Education | 0.088* | 0.088* | 0.091* | |
| Ethnicity | -0.045 | 0.045 | 0.028 | |
| 2 | Shopping frequency | -0.004 | 0.013 | |
| Services | 0.344* | 0.367* | ||
| 3 | Service x Shopping frequency | -0.104* | ||
| Model F | 3.916* | 15.568* | 14.456* | |
| Total R2 | 0.023 | 0.129 | 0.136 | |
| ?R2 | 0.023 | 0.105 | 0.009 | |
Note: *p≤0.01.
The result is based on variable factors contributing to consumer preference behaviour. It would pave the way for retailers to operate their businesses and make them understand the factors that may lead to dissatisfaction in consumers' minds shows in Table 3.
| Table 3 Hierarchical Regression Analysis: The Moderating Role Of Shopping Frequency On The Relationship Between Store Atmosphere Perception And Satisfaction |
||||
|---|---|---|---|---|
| Step | Variable | Model-1 β | Model-2 β | Model-3 β |
| 1 | Gender | 0.026 | 0.004 | -0.003 |
| Age | 0.096* | 0.069 | 0.072 | |
| Education | 0.088* | 0.092* | 0.091* | |
| Ethnicity | -0.045 | 0.013 | 0.003 | |
| 2 | Shopping frequency | -0.045 | -0.054 | |
| Store atmosphere | 0.243* | 0.248* | ||
| 3 | Store atmosphere x Shopping frequency | -0.094* | ||
| ModelF | 3.916* | 9.286* | 8.893* | |
| Total R2 | 0.023 | 0.081 | 0.088 | |
| ?R2 | 0.023 | 0.058 | 0.009 | |
Note: *p≤0.01
Discussion and Conclusions
This study has examined the relevant factors contributing to sales of supermarket and Baqala outlets choice criteria of Saudi Arabian consumers and made some steps ahead in the analysis if these expectations vary based on consumer profile. The findings conclude with four attributes: services, store environment & its representative character, price, convenience and location.
The first attribute is 'Services', which consists of clean, humble, well-mannered and enthusiastic employees and the availability of products in a very hygienic atmosphere. The evolution of cheerful staff and consumer relationships can play a pivotal role in creating satisfaction and providing a competitive edge in the market. Healthy interaction between consumers and staff offers the managers first-hand information, which is very helpful in improving the product and services.
According to this study, the second attribute is store ‘atmosphere’, which was one of four attributes that directly impact the retail store's sales performance. A pleasant store atmosphere strengthens the representative character of the store. A conducive atmosphere results in spending more time and money in the store.
Further, the third important attribute is 'price', which has emerged as an essential variable. The reasonable price may compel consumers to switch to a competitor. It was found that price is more important to women than to men. Besides, women contribute higher than men.
As per this study, the last important factor is 'location and convenience'. It influences consumers' preference decisions. Consumers who have their cars prefer stores with parking facilities.
Shopping frequency is the ramification of the relationship between the perception of services and the store's image and satisfaction. Staff with good communication and etiquette are accommodating to build strong consumer relationships.
However, researchers may replicate this study in other GCC countries such as Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates if Middle East consumers have similar behaviours. Replicating this study in the Saudi Arabian geographical hemisphere would facilitate business people to be adaptive to the need of a competitive environment.
Limitations
Despite the rigorous study, the reason behind uncertainties still needs to be discovered about how consumer behaviour affects store preference. This study contributes to the limited research in Saudi Arabia regarding supermarkets, hypermarkets and Baqala helping business people formulate retail strategies. After extensive research, it was found that there are many contradictions in various literature. Thus, it is challenging to make an absolute conclusion. It is a fact that the store image is the output of multi-dimensional realities that have dynamic behaviour with the changing space and times. Therefore, it is challenging to adopt a uniform scale to ascertain the factors attributing to the store's image. This study presents different yardsticks that would help retailers formulate the right strategies to thrive in a very competitive atmosphere.
Scope for Future Study
This study offers a hemisphere with dynamic factors, which are still folded positions, which may bring new insight through future research. To date, the previous studies bring many contradictory approaches, which need to be removed by further investigations to get forth-empirical strategies for the retail industry.
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Received: 05-April-2023, Manuscript No. AEJ-23-13353; Editor assigned: 07-April-2023, PreQC No. AEJ-23-13353(PQ); Reviewed: 18-April-2023, QC No. AEJ-23-13353; Revised: 20-April-2023, Manuscript No. AEJ-23-13353(R); Published: 22-April-2023