Relations between merchandising information orientation, strategic integration and retail performance

Abstract

PurposeThe purpose of this study is to investigate the conditions under which small independent retailers can improve their business performance by adopting a merchandising information orientation and strategically integrating into retailer buying groups.Design/methodology/approachThis study tests hypotheses using a hierarchical multiple regression model and data obtained from 241 supermarket retailers that are existing members of buying groups in Japan.FindingsThe results indicate that merchandising information orientation alone may not be a beneficial strategy for small independent retailers to improve their business performance; however, by combining a merchandising information strategy with strong strategic integration with a buying group, optimal benefits can be achieved.Practical implicationsThe findings highlight the potential benefits small independent retailers can gain from buying groups when pursuing a merchandising information orientation, which may prompt such retailers to actively integrate the policies and activities of the buying group into their business strategy.Originality/valueThe authors conceptualise retailers’ merchandising information in a model that demonstrates the link between a firm’s information strategy and its performance from the perspective of resource-based theory. Thus, this study advances the knowledge of the strategic behaviours of small independent retailers and provides valuable information for buying groups in the retail sector.

Role of brand equity and competitive strategies in the relation between horizontal alliances and its benefits

“…In line with prior studies on RBV (Bıçakcıoğlu et al , 2019; Pertusa‐Ortega et al , 2010) and retail buying groups (Guan et al , 2012), this study focuses on the strategies of differentiation and low-cost orientation in business operations. Building on prior studies offering insights into differentiation and low-cost advantage as the essential motives for SMRs to join a retail buying group (Ghisi et al , 2008; Hernández-Espallardo, 2006; Kim et al , 2021), we shed light on how these two strategies interact with relationships of key constructs in the proposed conceptual framework.…”

“…First, in H3, this study postulates that both differentiation and low-cost orientation increase the positive impact of strategic integration on buying group benefits. The underlying rationale behind this is that the two merits of differentiation and low-cost are fundamental motives for SMRs to join a retail buying group (Ghauri et al , 2021; Ghisi et al , 2008; Hernández-Espallardo, 2006; Kim et al , 2021). To improve member retailers’ buying group benefits, both these merits, achieved by joint activities and combined with sharing of strategic resources among member retailers, are essential.…”

“…Simultaneously, member retailers with stronger low-cost orientation can also get improved benefits by capitalizing on the advantages of economies of scale and efficient logistics or store operations using advanced technology systems (Kim et al , 2021; Sandberg and Mena, 2015; Zentes and Swoboda, 2000). Especially in cases where competition is high, prices or costs become more competitive as member retailers focus on reducing operational costs, costs of supply and level of inventory.…”

“…Few studies have offered insights into the buying group benefits that member retailers can take advantage of through strategic integration. These benefits include merchandise differentiation through private brand (PB), low-cost advantages through centralized buying (Guan et al , 2012; Hernández-Espallardo, 2006; Kennedy, 2016) and utilization of external resources including information and networking (Burkink, 2002; Ghauri et al , 2021; Kim et al , 2021; Lindblom, 2008). They also include efficient logistics operations and organization (Sandberg and Mena, 2015; Zentes and Swoboda, 2000) and business and store support (Ghauri et al , 2021; Kennedy, 2016).…”

Small retailers and improving businesses performance

“…Need for greater insight prompts Kim et al (2021) to explore the issues further in a survey of retailers incorporated within eight different buying groups in Japan. Supermarkets were chosen for the study because their extensive product range necessitates access to a greater volume of merchandising information.…”