A Consumer-typology-based Study On Shopping Mail Cross-buying

The emergence of shopping mall echoes the demands for multi-purposeshopping trip and hedonic consumption, which is essentially the cross-buyingbetween products, foods, and recreational and entertainment services provided by themall. Consumer repatronage and large purchase in one trip will generate high salesfor shopping mall. However, broadening an individual’s cross-buying will bring themall with more profits. This is because consumer cross-buying is an easier option forfirms to grow compared to acquisition of new customers (Felvey,1982) and thusreduce the need to spend money on customer acquisition (Reichheld and Sasser,1990). Getting customer to more intensively use the organization’s services and buyadditional products are critical ways to leverage company revenues and profits(Aurier and N’Goala,2009).Cross buying describes the width (Verfeof et al.,2001) of customer relationship.Most of the current researches on retail agglomeration patronage focus on the lengthand depth of customer relationship. Shopping mall differs from store in the fact thatit caters the needs to multi-purpose trip and hedonic shopping and focuses on thesignificance of relationship width. Researches on repatronage, expenditure and otherbehavior that reflects relationship length and depth fail to cover the shopping mallpatronage behavior and miss the most important dimension, relationship width.In the retailing context, perceived value is one of the most predictive factors tocross-buying (Kumar et al.,2008), which influences consumer’s preference toretailer and his/her future intention (Overby and Lee,2006). Consumer’s perceived value in the shopping mall is more hedonic in nature. It is derived from a totalshopping experience (Stoel et al.,2004) that is composed by many serviceencounters between consumer and the mall.Heterogeneity is one of the foundations in marketing. Facing the heterogeneousmarket, the firm is required to develop an effective marketing strategy. Consumertypology is helpful for the firm in identifying the right and quality customers whosecross buying is more sufficient. Marketing strategy targeted at those customers willbe more effective.The research answers the following questions.(1) Who are the qualitycustomers of cross buying?(2) How does service encounter affect perceived hedonicvalue and cross buying in turn?(3) How does the relationship between serviceencounter, perceived hedonic value and cross buying varies with customertypologies?A survey research using questionnaire is conducted to answer the researchquestions.1336consumers who finished the shopping trip in three local malls aresurveyed. The data is analyzed in three stages. In the first stage, K-means clusteranalysis is conducted to classify the mall consumers using attitude toward mallattributes. Chi-square test and ANOVA is used to describe the demographic andbehavioral differences among groups. Stage1ends by identifying the consumergroups with widest cross buying, which is considered as the sampling frame in thenext stage. The objective in stage2is to construct the framework of serviceencounter, perceived hedonic value and cross buying. The research framework istested by Structural Equation Model (SEM). In stage3, current research tests if therelationship between service encounter, perceived hedonic value and cross buyingvaries with consumer groups. Multi-group SEM is the analytical technique in thisstage.The research concludes that (1) there are five groups of mall consumers, namely value-oriented, entertainment-oriented, sensor-oriented, apathetic andenthusiastic consumers;(2) the five consumer groups differ significantly in age,income, shopping activities and cross buying width;(3) positive personal encountersand functional physical encounters will result in positive hedonic value, while corephysical encounters does not necessarily result in positive hedonic value;(4) positivehedonic value will result in wider cross buying;(5) the influence of serviceencounter and hedonic value to cross buying is different between apathetic andenthusiastic consumers, two groups with widest cross buying.The research studies the consumer mall behavior from the perspective ofcustomer relationship width. It extends the research on retail agglomeration andcontributes to the customer relationship theory. In addition, perceived value isviewed and studied through service encounter, the controllable elements to the mallmanager. Finally, the consumer typology enables the shopping mall to targeteffective at the quality segments with widest cross buying and to explain, predict andmanage the cross buying behavior.