Drivers of formal and informal retail patronage in emerging markets

Abstract

Purpose This study examines how formal retail formats (FRFs), and informal retail formats (IRFs) may coexist as substitutes and complements in emerging markets because of store patronage driven by customers’ chronic shopping orientations, and differences in salesperson consultation in the two retail formats.

Design/methodology/approach Using a shopping motivational orientation framework, we develop and test a moderated mediation model using survey data from 515 shoppers of formal and informal grocery retail outlets in India.

Findings While task-focused and experiential-focused shopping orientations influence both FRF and IRF patronage, store satisfaction mediates these relationships and crucially attenuates the negative impact of task-focused orientation on FRF patronage. Salesperson consultation moderates the mediating effects of satisfaction in the link between shopping orientation and patronage of both FRFs and IRFs.

Research limitations/implications The findings suggest that FRFs and IRFs could coexist as complements and substitutes when patronage is examined as repeated visits determined by shopping orientation, mediated by satisfaction and moderated by salesperson consultation.

Practical implications For FRFs and IRFs to be complements, both formats must prioritize their distinctive attributes that satisfy a consumer's chronic shopping orientation. Substitution depends on how both retail formats prioritize salesperson consultation and in-store characteristics that appeal to consumers’ chronic orientation during specific shopping trips.

Originality/value Whilst FRFs must satisfy task-focused shoppers to compete with IRFs, salesperson consultation can inhibit such satisfaction. However, the extent of coexistence between FRFs and IRFs depends on how each format leverages salesperson consultation to enhance satisfaction of experiential-focused shoppers.