The Inter-Store Mobility of Supermarket Shoppers

The allegiance of a particular customer, and the distribution across customers of strength of a±liation to a store are important indicators of store health. It is therefore important to understand both the extent and determinants of consumer mobility across competing retailers. We assume that while shoppers may patronize many stores, they typically have a primary a±liation to a \main store." To understand mobility, we model the tendencies of shoppers to transition away from this main store and adopt another in its place. The model is formulated as a random-e®ects probit and includes shopper, store and time-speci ̄c covariates. Data from 548 households taking 88,945 shopping trips among ̄ve stores are used to calibrate the model. The substantive ̄ndings are as follows. First, we ̄nd that inertia is prevalent (nearly three quarters of the consumers show progressive attachment to a main store). Interestingly, this ̄nding is not simply driven by location because shoppers are captive to a single store based on geographical distance. It more likely re°ects the bene ̄ts of store-speci ̄c knowledge of assortment, layout and prices. Second, the decision to transition from a main store is not in°uenced by temporary price promotions on a common basket of items: shoppers will cherry pick, but this alone does not cause them to change allegiance. Moreover, the majority of transitions occur across competing stores of the same price format suggesting that \format loyalty" is an important aspect of shopper behavior. Third, after controlling for unobserved heterogeneity, we ̄nd little relationship between observable demographics and the transition probability | this result is counter to that for store choice behavior. We do, however, ̄nd a signi ̄cant link between the shopping behavior pro ̄le and the associated transition probability: shoppers who spend more per trip are more inertial as are less frequent shoppers. Fourth, shoppers are highly inertial | the longer they remain with a preferred main store, the more likely it is they will continue to do so. Implications for retail management strategy are discussed.