Ambient encounters in retail "discounters": How store environment drives customer satisfaction

Abstract

Cheap prices are the central positioning criterion of discount stores and the key variable explaining the intention to shop in discounters. Accordingly, discounters design their stores to maximize their efficiency. However, price may explain only a part of customer satisfaction. The purpose of this study is to delve into the environmental factors affecting discount retail store satisfaction. A conceptual model is empirically tested on the influence of discount store environmental attributes of customer satisfaction. Data are analyzed through partial least squares-structural equation modeling (PLS-SEM) on a sample of 381 customers. Findings show that factors, different from low prices, influence satisfaction with discount stores. Despite customers seek for low prices, the store personnel positively influences customer satisfaction, followed by a convenient product assortment and an attractive product layout and a convenient store location. Discount store managers may use the store personnel as a way to differentiate from other retail competitors in a cost-service tradeoff.