What Is Happening to My Nearby Stores? New JAMS Publication of the MCM

Another great achievement by the Marketing Center Münster:

The paper entitled "What is happening to my nearby stores? The own- and cross-effect of a radical store transformation on existing customers" co-authored by Professor Manfred Krafft and former Chair of Marketing Management team members Dr. Mirja Kroschke and Dr. Felix Lehmkuhle has been published in print in the prestigous Journal of the Academy of Marketing Science (JAMS).

The article essentially deals with the following:

Brick-and-mortar grocery retailers that undertake major format changes often do so in a staggered rollout and radically transform just one store at a time. This approach begs two questions: What effects does a radical store transformation have on existing customers’ sales at the transformed store (own-effect) and at the chain’s nearby untransformed stores (cross-effect)? Do the effects vary with customer characteristics? These questions are investigated using a quasi-field experiment of a staggered radical store transformation of a German retailer. Conventional wisdom would predict cannibalization of nearby untransformed stores’ sales. However, applying our proposed theoretical framework shows, for this empirical case, a negative own- but a positive cross-effect on existing customers. Further, existing customers who had a greater preference for and shopped more at the old format are most likely to migrate. Thus, nearby untransformed stores can help retain existing customers who may get turned off by a radical store transformation.

In case you are interested, you can access the full paper via this link.