Inward retail internationalization and exogenous – based outshopping on the US-Mexico border

Abstract

Purpose Previous research on the internationalization of retailing typically focused on retail companies crossing borders to enter other countries. Yet, a large number of people cross country borders to outshop in neighboring countries. This form of inward retail internationalization has received little attention in the literature. To address this void, the purpose of this paper is to investigate the strategies of retailers in a border zone setting. Design/methodology/approach The authors collected data from 109 US retailers on the USA–Mexico border. The survey instrument included questions that captured the participants’ opinions regarding the importance of Mexican consumers, retail mix strategies, performance issues and overall retailer characteristics. Findings The findings show that US retailers perceive cross-border consumers as important to their performance. Interestingly, the findings also suggest that border zone retailers do not adapt their retail mix strategies with this target market in mind. Research limitations/implications The research was conducted at one particular border zone with its own unique characteristics. It is not clear whether the authors’ findings would apply in other inward internationalization contexts (e.g. medical tourism) or border zones. Future research should delve much more deeply into understanding outshopping motivations in border zones, but also the reasons why retailers do not actively engage in marketing their establishments to this target market. Practical implications The authors’ findings have interesting implications for retail managers in border zones. While exogenous and uncontrollable advantages on one side of the border may attract customers away from the other side of the border, retail mix customization under the control of retail managers may actually stimulate similar or better results. Border zone retailers are encouraged to engage in efforts to understand the border zone consumer and engage in programs directly targeted at them. Originality/value The study is grounded in theory and empirically assesses the retailers’ own contributions to enhancing their inward internationalization performance. By using the model of secondary boundary effects developed by Clark (1994) as their theoretical prism, the authors have put forward hypotheses, which address the aforementioned issues.

The Impacts of Shopping Tourism on Retail Sales and Rents: Lessons from the COVID-19 Quasi-Experiment of Hong Kong

“…It encompasses activities like cross-border shopping, parallel trade, and international out-shopping (Sharma et al 2018). Extensive research has been conducted globally to understand the reasons behind cross-border shopping tourism, including for the borders between Canada and the US, various European countries, Malaysia and Singapore, Mainland China and Hong Kong, Germany and Denmark, Mexico and the US, and Thailand and Laos (Piron 2002;Baruca and Zolfagharian 2012;Lau et al 2005;Nguyen et al 2016;Makkonen 2016;Hadjimarcou et al 2017;Boonchai and Freathy 2020). One common motivation for engaging in cross-border shopping tourism is the opportunity to benefit from differences in taxes and/or product quality (UNWTO 2014).…”

Cross‐border tourism: Case study of inbound Russian visitor arrivals to China

“…Timothy and Tosun (2003) claimed that cross-border tourism between neighbouring states is relatively unexplored in the literature, Another special type of cross-border shopping is seen as "parallel trading activities" such as Chinese cross-border tourists to Hong Kong carrying products from Hong Kong to Mainland China for resale (Li, Cheung, & Han, 2018). More importantly, two recent tourism studies (Hadjimarcou, Herrera, & Salazar, 2017;Sharma, Chen, & Luk, 2018) claimed that cross-border tourists contributed equally to the internationalisation of trade. In addition, Hampton (2010) proposed that cross-border as a form of economic development, which suggested that cross-border tourism generated income, employments, and economic linkages for the analysis of cross-border tourism between Indonesia, Malaysia, and Singapore.…”