A distribution services approach for developing effective competitive strategies against “big box” retailers

Abstract

According to one theoretical approach, the primary economic function of retailers is to deliver products together with distribution services. We use this framework to identify competitive niches for smaller retailers competing against big box stores. We compare the distribution services offered by the Home Depot versus smaller retailers using both in-store measures and consumer perception data, and the relative importance of distribution services as determinants of store choice. The results show that the Home Depot's superiority in pricing and assortment attracts a significant market, but smaller retailers can secure niche markets by delivering higher levels of ambiance and information.

The demand for and the supply of distribution services: A basis for the analysis of customer satisfaction in retailing

“…The literature asks a much larger set of questions about services in general, as many as 20 for example, and then tries to collapse them with statistical methods into a smaller set of constructs. The latter sometimes coincide with ours, for a most ingenious and well done example of this approach see Barber and Tietje (2004).…”

“…Usually they can be assigned to one of the following five broad categories: accessibility of location, information, assortment (breadth or depth), assurance of product delivery (in the desired form or at the desired time), and ambiance. Attempts at measurement of these services at the level of the store are starting to appear, e.g., Barber and Tietje (2004), and will be explicitly discussed in the next section.…”

Competing with Costco and Sam's Club: Warehouse Club Entry and Grocery Prices

“…Our results are consistent with the segmented-market theoretical framework offered by Frank and Salkever (1992), work by Ellickson (2004Ellickson ( , 2007 showing that firms compete on the basis of quality, and Barber and Tietje's (2004) argument that "big box" competitors might cause traditional retailers to raise prices. They also illustrate how firms' entrepreneurial and managerial decisions are multi-dimensional.…”

The Impact of Market Environments on Marketing Relationships

“…Measurement of these five services at the level of the establishment has been undertaken for supermarkets (Betancourt et al, 2007) and hardware stores (Barber & Tietje, 2004). We followed their procedures with minor changes to adapt them to the context of gas stations.…”