The magnitude of change effect in store remodeling

Carla R. Ferraro, Tracey S. Danaher, Peter J. Danaher, Sean J. Sands

Research output: Contribution to journalArticleResearchpeer-review

2 Citations (Scopus)

Abstract

While store remodeling can increase customer sales, not all remodeling efforts are successful. In this study, two treatment stores from a large national retailer are matched with control stores in a field experiment. Even though the cost of remodeling the treatment stores was the same, and the remodeled stores had identical layout, color, furnishing and interior design, one store had a 12% lift in sales while the other had only 1%. We show that a key determinant of remodeling success is the perceived magnitude of change between the initial and final condition of the store. Indeed, customer psychological and sales responses are greater when the perceived magnitude of change between the condition of the store prior to remodeling and the store after remodeling is larger. Importantly, these positive effects continue for as long as 12 months after remodeling. We further find that the profile of customers drawn to the remodeled stores differs based on the perceived magnitude of change, as do the environmental attributes that contribute to customer perceptions of the remodel.

Original languageEnglish
Pages (from-to)440-457
Number of pages18
JournalJournal of Retailing
Volume93
Issue number4
DOIs
Publication statusPublished - 1 Dec 2017

Keywords

  • Field experiment
  • Loyalty
  • Reference points
  • Satisfaction
  • Store environment
  • Store remodeling

Cite this

Ferraro, Carla R. ; Danaher, Tracey S. ; Danaher, Peter J. ; Sands, Sean J. / The magnitude of change effect in store remodeling. In: Journal of Retailing. 2017 ; Vol. 93, No. 4. pp. 440-457.
@article{6187ef4997d34dc28178213d142a3c6b,
title = "The magnitude of change effect in store remodeling",
abstract = "While store remodeling can increase customer sales, not all remodeling efforts are successful. In this study, two treatment stores from a large national retailer are matched with control stores in a field experiment. Even though the cost of remodeling the treatment stores was the same, and the remodeled stores had identical layout, color, furnishing and interior design, one store had a 12{\%} lift in sales while the other had only 1{\%}. We show that a key determinant of remodeling success is the perceived magnitude of change between the initial and final condition of the store. Indeed, customer psychological and sales responses are greater when the perceived magnitude of change between the condition of the store prior to remodeling and the store after remodeling is larger. Importantly, these positive effects continue for as long as 12 months after remodeling. We further find that the profile of customers drawn to the remodeled stores differs based on the perceived magnitude of change, as do the environmental attributes that contribute to customer perceptions of the remodel.",
keywords = "Field experiment, Loyalty, Reference points, Satisfaction, Store environment, Store remodeling",
author = "Ferraro, {Carla R.} and Danaher, {Tracey S.} and Danaher, {Peter J.} and Sands, {Sean J.}",
year = "2017",
month = "12",
day = "1",
doi = "10.1016/j.jretai.2017.08.003",
language = "English",
volume = "93",
pages = "440--457",
journal = "Journal of Retailing",
issn = "0022-4359",
publisher = "Elsevier",
number = "4",

}

The magnitude of change effect in store remodeling. / Ferraro, Carla R.; Danaher, Tracey S.; Danaher, Peter J.; Sands, Sean J.

In: Journal of Retailing, Vol. 93, No. 4, 01.12.2017, p. 440-457.

Research output: Contribution to journalArticleResearchpeer-review

TY - JOUR

T1 - The magnitude of change effect in store remodeling

AU - Ferraro, Carla R.

AU - Danaher, Tracey S.

AU - Danaher, Peter J.

AU - Sands, Sean J.

PY - 2017/12/1

Y1 - 2017/12/1

N2 - While store remodeling can increase customer sales, not all remodeling efforts are successful. In this study, two treatment stores from a large national retailer are matched with control stores in a field experiment. Even though the cost of remodeling the treatment stores was the same, and the remodeled stores had identical layout, color, furnishing and interior design, one store had a 12% lift in sales while the other had only 1%. We show that a key determinant of remodeling success is the perceived magnitude of change between the initial and final condition of the store. Indeed, customer psychological and sales responses are greater when the perceived magnitude of change between the condition of the store prior to remodeling and the store after remodeling is larger. Importantly, these positive effects continue for as long as 12 months after remodeling. We further find that the profile of customers drawn to the remodeled stores differs based on the perceived magnitude of change, as do the environmental attributes that contribute to customer perceptions of the remodel.

AB - While store remodeling can increase customer sales, not all remodeling efforts are successful. In this study, two treatment stores from a large national retailer are matched with control stores in a field experiment. Even though the cost of remodeling the treatment stores was the same, and the remodeled stores had identical layout, color, furnishing and interior design, one store had a 12% lift in sales while the other had only 1%. We show that a key determinant of remodeling success is the perceived magnitude of change between the initial and final condition of the store. Indeed, customer psychological and sales responses are greater when the perceived magnitude of change between the condition of the store prior to remodeling and the store after remodeling is larger. Importantly, these positive effects continue for as long as 12 months after remodeling. We further find that the profile of customers drawn to the remodeled stores differs based on the perceived magnitude of change, as do the environmental attributes that contribute to customer perceptions of the remodel.

KW - Field experiment

KW - Loyalty

KW - Reference points

KW - Satisfaction

KW - Store environment

KW - Store remodeling

UR - http://www.scopus.com/inward/record.url?scp=85029569654&partnerID=8YFLogxK

U2 - 10.1016/j.jretai.2017.08.003

DO - 10.1016/j.jretai.2017.08.003

M3 - Article

VL - 93

SP - 440

EP - 457

JO - Journal of Retailing

JF - Journal of Retailing

SN - 0022-4359

IS - 4

ER -