Pocket-Sized Power: increasing attraction to small-assortment retailers

The small revolution

With consumers seeking more convenience and instant product access, big-box grocery retailers have been developing more small-scale store formats for urban locations, such as in city centers. The multinational retailer Walmart has tested the water of these store types with its “Walmart Express” stores. Similarly, the French retailer Carrefour introduced a small-store format with its “Carrefour Express” stores. Also, pharmacies, sporting goods retailers and electronic goods stores have ventured into this direction. Often these small-scale stores are less than 10% of the size of their “full-size” counterparts.

Although these smaller formats provide the consumer with more access convenience in e.g. city centers, they come with their own limitations. A particular challenge is the limited assortment that the retailer can showcase on the smaller sales floor. As consumers perceive a smaller assortment to be a constraint on their ability to make the best choice, small-assortment stores may be less appealing to visit. In their Journal of Retailing paper “Highlighting supply-abundance increases attraction to small-assortment retailers”, Yangjie Gu ( 法国HEC管理学院 , France) and Yuechen Wu ( Spears School of Business - Oklahoma State University , USA) investigate how retailers can use communication about the supply abundance of this smaller assortment to increase the store’s attractiveness.

We had the chance to talk to both authors and learn about the origins and research process of the paper.

How it all started

The paths of the two authors first crossed several years ago at an ACR conference. Yuechen, at the time a PhD student at the University of Maryland, decided to take a chance. "Yangjie was already a well-accomplished professor. I was brave enough to just go up to talk to her. And then we were like, 'let's talk about ideas,'" she recalled.

Fast forward to today: what began as a casual conversation at a conference blossomed into a successful JR publication – a testament to the power of courageous conversations and Yanjie’s point that “conferences are truly the best way to meet new co-authors.”

The paper’s journey at JR

As many scholars will agree, the publication process can be very unpredictable. However, a continuous commitment and belief in the paper can do wonders, as Yuechen and Yangjie demonstrated. Even when a pandemic limited their ability to run in-person studies, they were adamant on moving this paper forward.

Both authors look back on the paper’s review journey at JR very favorably. Yangjie remembered: “When we got through the first round, the AE and reviewers provided us with a very clear and constructive action plan.” All throughout the review process, they felt their paper was treated with much respect to their initial vision, and they received helpful guidance.

Yet, not every review process goes as smoothly. However, Yuechen’s advice is clear: don't get disheartened. Keep working on your interesting project and find a good co-author who’ll support you and vice versa.

The creative minds behind the experiments

At the heart of the research project are a set of online and real-life experiments, where Yangjie and Yuechen demonstrate the effect of supply abundance on store attractiveness. They also pre-registered experiments; an extra step that they not only took to increase research transparency, but which they also perceive as advantageous for researchers themselves. Specifically, the preregistration process helps them to better structure a research project and to thoroughly plan an experiment upfront. Or as Yangjie explained it: “Preregistering helps researchers to think through the entire study before trying out experiments. [...] You have to think through which measures you want to collect, how many participants you need, what your prediction is, how you’re going to analyze your data [...] So that's something people have to make up their mind before running the study and the preregistration makes that the case.”

To create visuals to accompany online experiments, authors oftentimes have to tap into their creative sides. However, this might be an unexpectedly fun part of the research project. Yangjie gave all credits to Yuechen, and shared with us: “One day, Yuechen even told me: ‘you know, Yangjie, this is a lot of work to do, but once I start it I cannot stop. I keep changing minor details to the design. I'm just too addicted to it!’ ” This just goes to show what a wide variety of skills researchers learn to master.

A word of caution

We finished our interview by discussing potential managerial implications. Given our own research interests in physical stores, we were curious to explore with them the boundary conditions to the recommendation to use advertising to highlight supply-abundance in brick-and-mortar stores. What would happen if a consumer would find the supply to not be as abundant as advertised? Yangjie walked us through their reasoning for such a scenario: “Brick-and-mortar stores can manipulate this sense of abundance through advertisement, carrying the message of abundant supply. That being said, indeed there might be some backfire situations where marketers overpromise having abundant supply, while in the end, the product is out of stock. Our advice would be for marketers: If you are confident based on your experience that, if a consumer walks in, they are able to get the product and that it would not be out of stock, you can carry out this message of being abundant. But when you feel there's a lower stock, or that it could be out of stock anytime soon, we would suggest marketers to remove the product in order to avoid this backfire effect.”

In short, highlighting supply abundance can help small retailers to mitigate the negative effect of their smaller assortments, but it is important to not oversell their supply, as this can backfire.

Read the Journal of Retailing paper: Gu, Y., & Wu, Y. (2023). Highlighting supply-abundance increases attraction to small-assortment retailers. Journal of Retailing, 99(3), 420-439. Click here for the full paper: https://doi.org/10.1016/j.jretai.2023.08.002

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Meet the JR interviewers

Lieve Heyrman is a PhD candidate at 比利时荷语天主教鲁汶大学 in Belgium. Lieve’s research interests center around the dynamics of digital and physical retailing. In her work, she uses econometric methods to model consumer reactions to various retailing disruptions.

Lina Altenburg is a PhD candidate at 比利时荷语天主教鲁汶大学 n in Belgium. Her research focuses on the future of retailing, more specifically how physical stores can innovate to remain relevant for consumers. She is also interested in how external store location factors impact the performance of physical stores.

Meet the JR authors

Yangjie Gu is an Associate Professor of Marketing at 法国HEC管理学院 (France) at the “Beauty Tech” L’Oréal research chair. She holds a PhD in Marketing from 英国伦敦商学院 (2013). Before joining HEC Paris, Yangjie held an Assistant Professor position at Tilburg University (the Netherlands).

In her research, Yangjie focuses on consumer behavior and decision-making, specifically topics related to consumers’ hedonic adaption or post-choice satisfaction and preferences. Yangjie has several publications in the Journal of Consumer Research. The paper about highlighting supply-abundance in small-assortment retailers is her first study published in the Journal of Retailing.

Yuechen Wu u is an Assistant Professor at 美国俄克拉荷马州立大学 . She obtained her PhD at the 美国马里兰大学帕克分校 in 2019 and held a postdoctoral researcher position at the The Johns Hopkins University in Baltimore before joining Oklahoma State University.

Yuechen has published several papers on different consumer behavior topics, such as topics related to the sharing economy and the social aspects of consumption. Before joining academia, Yuechen worked as a Research Associate and Vice President in Marketing.