The influence of a retailer’s corporate social responsibility program on re-conceptualizing store image Shruti Gupta , Julie Pirsch 8 Conference Center, The Pennsylvania State University,1600 Woodland Road, Abington, PA 19001, USA article info Keywords: Retail store image Corporate social responsibility Retailing abstract The construct of retail store image is typically built based on a variety of the store’s functional attributes. This conceptualization fails to consider the role of corporate social responsibility (CSR) polices and practices in forming store image. Results from a study of 460 consumers indicate CSR influences consumer store image. CSR is particularly effective at influencing store image when the retailer experiences a positive performance perception among its customers. Consumers shopping at such stores are more receptive to CSR programs, and experience significant increases in their level of satisfaction and loyalty to the store through the addition of these programs. & 2008 Elsevier Ltd. All rights reserved. 1. Introduction Target Stores throughout the country donate over $1 million each week to the communities in which they are located. Other actions that exemplify Target’s commitment to the society are its support of the Washington Monument, the Target House at the St. Jude’s Children’s Research Hospital and the Arts-in-Education program that allows children in public schools to take trips to museums, plays, and musical performances. Additionally, Target’s philanthropic gestures include contributions to nationwide charities like the United Way and the American Red Cross (www.target.com). Similarly, in its recent initiative to ‘‘go green’’ and fight global warming, Wal-Mart plans to install solar panels its store roof tops to harness the sun’s rays and convert them into solar energy. This is in keeping with Wal-Mart’s other envir- onmentally friendly policies of waste reduction throughout their supply chain, reduction of greenhouse gas emissions, and overall reduction of energy use through ‘‘sustainable value networks’’ (www.walmart.com). Finally, all 51 American Apparel stores promote the company’s anti-sweatshop policy by having their clothing labels state the company’s corporate social responsibility (CSR) policy: ‘‘All of our 1500 employees, sewing and adminis- trative alike, are paid fairly and have access to basic benefits like healthcare’’ (Kuczynski, 2005). All of these initiatives are examples of different ways in which retailers, like other organizations, attempt to communicate their CSR policies to their target customers. CSR policy ‘‘yencompasses the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time (Carroll, 1979, p. 500),’’ and articulates the firm’s motivation to fulfill these expectations. CSR is most relevant when organizations are viewed as entities that share a social contract with the society in which they operate, and thus find themselves obligated to make decisions that enhance both their own as well as society’s best interests (Andreasen and Drumwright, 2001). Despite compelling evidence about CSR’s role in enhancing the consumer’s company image, within the retailing literature, the construct of store image or ‘‘personality’’ (Martineau, 1958) has excluded CSR from its definition. Research in the area of store image has primarily defined it almost exclusively in terms of the various aspects of the retailing mix (Ghosh, 1990) like store location, merchandise, store atmosphere, customer service, price, advertising, personal selling and sales incentive programs, plus the subsequent affective inferences that arise from the store’s attributes. However, it is increasingly clear that retailers also spend a great deal of money, time and effort on CSR-related activities in order to influence the overall perceptions by customers and non-customers about the store’s position as a good corporate citizen and enhance their image in the market- place. Based on research demonstrating that CSR plays a significant part in the formation of the consumer’s overall ‘‘corporate evaluation’’ (e.g. Brown and Dacin, 1997), this paper highlights the contributory role of CSR in the conceptualization of retail store image. By demonstrating the predictive ability of CSR on store patronage behaviors, this paper argues that the construct of store image should be re-conceptualized from its more limited performance-based view (as currently defined in retailing litera- ture) to one that includes both performance and CSR as the two principle components of this important retailing construct. ARTICLE IN PRESS Contents lists available at ScienceDirect journal homepage: www.elsevier.com/locate/jretconser Journal of Retailing and Consumer Services 0969-6989/$ - see front matter & 2008 Elsevier Ltd. All rights reserved. doi:10.1016/j.jretconser.2008.02.003 Tel.: +1215 8817649; fax: +1215 8817648. E-mail address: [email protected] (S. Gupta). Journal of Retailing and Consumer Services 15 (2008) 516–526
Transcript
ARTICLE IN PRESS
Journal of Retailing and Consumer Services 15 (2008) 516– 526
The construct of retail store image is typically built based on a variety of the store’s functional
attributes. This conceptualization fails to consider the role of corporate social responsibility (CSR)
polices and practices in forming store image. Results from a study of 460 consumers indicate CSR
influences consumer store image. CSR is particularly effective at influencing store image when the
retailer experiences a positive performance perception among its customers. Consumers shopping at
such stores are more receptive to CSR programs, and experience significant increases in their level of
satisfaction and loyalty to the store through the addition of these programs.
& 2008 Elsevier Ltd. All rights reserved.
1. Introduction
Target Stores throughout the country donate over $1 millioneach week to the communities in which they are located. Otheractions that exemplify Target’s commitment to the society are itssupport of the Washington Monument, the Target House at the St.Jude’s Children’s Research Hospital and the Arts-in-Educationprogram that allows children in public schools to take trips tomuseums, plays, and musical performances. Additionally, Target’sphilanthropic gestures include contributions to nationwidecharities like the United Way and the American Red Cross(www.target.com). Similarly, in its recent initiative to ‘‘go green’’and fight global warming, Wal-Mart plans to install solar panelsits store roof tops to harness the sun’s rays and convert them intosolar energy. This is in keeping with Wal-Mart’s other envir-onmentally friendly policies of waste reduction throughout theirsupply chain, reduction of greenhouse gas emissions, and overallreduction of energy use through ‘‘sustainable value networks’’(www.walmart.com). Finally, all 51 American Apparel storespromote the company’s anti-sweatshop policy by having theirclothing labels state the company’s corporate social responsibility(CSR) policy: ‘‘All of our 1500 employees, sewing and adminis-trative alike, are paid fairly and have access to basic benefits likehealthcare’’ (Kuczynski, 2005).
All of these initiatives are examples of different ways in whichretailers, like other organizations, attempt to communicate theirCSR policies to their target customers. CSR policy ‘‘yencompassesthe economic, legal, ethical, and discretionary expectations that
ll rights reserved.
society has of organizations at a given point in time (Carroll, 1979,p. 500),’’ and articulates the firm’s motivation to fulfill theseexpectations. CSR is most relevant when organizations are viewedas entities that share a social contract with the society in whichthey operate, and thus find themselves obligated to makedecisions that enhance both their own as well as society’s bestinterests (Andreasen and Drumwright, 2001).
Despite compelling evidence about CSR’s role in enhancing theconsumer’s company image, within the retailing literature, theconstruct of store image or ‘‘personality’’ (Martineau, 1958) hasexcluded CSR from its definition. Research in the area of storeimage has primarily defined it almost exclusively in terms ofthe various aspects of the retailing mix (Ghosh, 1990) like storelocation, merchandise, store atmosphere, customer service,price, advertising, personal selling and sales incentive programs,plus the subsequent affective inferences that arise from thestore’s attributes. However, it is increasingly clear that retailersalso spend a great deal of money, time and effort on CSR-relatedactivities in order to influence the overall perceptions bycustomers and non-customers about the store’s position as agood corporate citizen and enhance their image in the market-place.
Based on research demonstrating that CSR plays a significantpart in the formation of the consumer’s overall ‘‘corporateevaluation’’ (e.g. Brown and Dacin, 1997), this paper highlightsthe contributory role of CSR in the conceptualization of retail storeimage. By demonstrating the predictive ability of CSR on storepatronage behaviors, this paper argues that the construct of storeimage should be re-conceptualized from its more limitedperformance-based view (as currently defined in retailing litera-ture) to one that includes both performance and CSR as the twoprinciple components of this important retailing construct.
S. Gupta, J. Pirsch / Journal of Retailing and Consumer Services 15 (2008) 516–526 517
1.1. CSR
Conceptually, CSR is composed of four inter-related subcom-ponents: economics, law, ethics, and philanthropy. These factorsprompt the firm to ‘‘ymake a profit, obey the law, be ethical, andbe a good corporate citizen (Carroll, 1991, p. 43).’’ Broad-basedconceptualizations of CSR describe it as ‘‘as action(s) that appearto further some social good, beyond the interests of the firm andthat which is required by law (McWilliams and Siegel, 2001,p. 117)’’ or as a company’s ‘‘status and activities’’ regarding itsresponsiveness to its perceived societal obligations (Brown andDacin, 1997, p. 68). A company is obligated to take actions to‘‘protect and improve both the welfare of the society as a wholeand the interest of organizations (Davis and Blomstrom, 1975,p. 6).’’
Stakeholder theory offers a comprehensive explanation of acompany’s motivation to comply with these societal expectations(Argandona, 1998; Harvey and Schaefer, 2001; Post, 2003; Rufet al., 2001). The premise of this theory states that organizationalsurvival and success is linked to successfully meeting boththe economic (e.g. profit maximization) and non-economic (e.g.corporate social performance) objectives of its respectivestakeholders. A stakeholder is ‘‘any group or individual who canaffect or is affected by the achievement of the organization’sobjectives (Freeman, 1984, p. 46).’’ Primary stakeholder groupsthat significantly influence company action are investors, employ-ees, customers, suppliers, other public entities (Clarkson, 1995),trade associations and environmental groups (Donaldson andPreston, 1995). These groups are interdependent amongst eachother, and with the firm itself (Donaldson and Preston, 1995), aseach plays a crucial role in firm survival and success. Therefore,‘‘there is a natural fit between the idea of CSR and anorganization’s stakeholders (Carroll, 1991, p. 43)’’: if corporateperformance is an ‘‘end’’, engaging in economic and CSR activitiesare ‘‘means’’ to that end.
Companies complying with stakeholder demands to be moresocially responsible are rewarded in several ways. A significantbenefit for socially responsible firms lies in a weak yet positiverelationship between CSR and overall financial performance of theorganization (Preston and O’Bannon, 1997; Ruf et al., 2001;Simpson and Kohers, 2002). CSR also helps attract and retainhigh quality employees (Fombrun and Shanley, 1990; Turban andGreening, 1997), with actions related to environment, communityrelations and diversity dimensions found to be the strongestdeterminants of employer attractiveness (Backhaus et al., 2002).
Like other stakeholder groups, consumers also appear toprovide greater support for companies that are socially respon-sible (Brown and Dacin, 1997; Creyer and Ross, 1997; Ellen et al.,2003; Murray and Vogel, 1997; Sen and Bhattacharya, 2001).Consumers’ purchase intent is positively correlated with thedegree to which the perceptions of a company’s ethical behaviorexceeds their expectations (Creyer and Ross, 1997). CSR has alsobeen linked to consumers’ perception of positive company image(e.g. Aupperle et al., 1985; Simon, 1995; Smith, 1994; Vance, 1975),leading to enhanced product evaluation (Brown and Dacin, 1997)and overall customer support (Handelman and Arnold, 1999).
1.2. Retail store image and CSR
Overall, there is consensus in retailing literature that storeimage is ‘‘the way in which the store is perceived by shoppers (Panand Zinkhan, 2006, p. 231)’’ and a ‘‘function of the salientattributes of a particular store that are evaluated and weightedagainst each other (Bloemer and de Reyter, 1998, p. 501).’’ Outsideof retailing, Brown and Dacin (1997) argue that for companies in
general, the construct of ‘‘corporate evaluation’’, or the consumer’simage or perception of a firm, is made up of two distinctcomponents: corporate ability (CA) and CSR. CA reflects thecompany’s skill in manufacturing and delivering the product orservice, while CSR is exemplified by the company’s support ofsocial issues.
Within the retailing context, however, the related construct ofstore image (corporate evaluation) does not include CSR, and hasbeen defined in terms of the CA perspective primarily byemphasizing the attributes of the retailing mix (i.e. the product/brand assortment, service, store layout, etc.). For example,a representation of such functional or store attribute-based(Keaveney and Hunt, 1992) components contributing to thisCA-type aspect of store image might include the type and qualityof products sold, store appearance, level of customer service, andthe store’s external marketing activities. Lindquist (1974–1975)identified nine attribute-based dimensions of store image:merchandise, service, clientele, physical facilities, comfort, pro-motion, store atmosphere, institutional, and post-transactionsatisfaction, Doyle and Fenwick (1974–1975) identified fiveattribute dimensions: product, price, assortment, styling andlocation, and Bearden (1977) recommended price, quality ofmerchandise, assortment, atmosphere, location, parking facilities,and friendly personnel as attributes of store image. Ailawadi andKeller (2004) offer five dimensions that include store access, in-store atmosphere, price and promotion, cross-category product/service assortment and within-category brand/item assortment.
More recently, store image has been defined as a cumulativeassessment of the store as a brand, and the choices of store andmanufacturer’s brands offered by the store (Grewal et al., 2004).Store location, easy access to the store and safe parking,appropriate merchandise, correct pricing, good levels of serviceand effective promotion have also been identified as criticalattributes that help shape store image (Ou and Abratt, 2006).However, a common omission across all of these functionalconceptualizations of store image is that each solely captures theCA dimension of corporate evaluation with no emphasis on theCSR dimension of corporate evaluation.
Other contributing components to this CA aspect of corporateevaluation go beyond the physical to also include psychological oraffective (Keaveney and Hunt, 1992) store attributes. Theseattributes include the consumer’s emotion toward the store,stereotypes about store personnel (Oxenfelt, 1974–1975), andconsumer inferences about the store experience. Store imageassessments have also been shown to include the resultingconsumer attitudes toward the store’s attributes, and toward thestore itself (James et al., 1976; Marks, 1976). One such conceptua-lization offered by Doyle and Fenwick (1974–1975, p. 40) proposesthat ‘‘the term [image] is used interchangeably with attitudetowards the store to describe the overall impression a consumerhas to it.’’ Similarly, James et al. (1976, p. 25) suggest that storeimage is a ‘‘set of attitudes based upon evaluation of those storeattributes deemed important by consumers.’’ Further, Keaveneyand Hunt (1992, p. 168) argue that measuring store image solelyin terms of attributes (piecemeal-based processing) ‘‘ydo[es] notadequately represent the gestalt or holistic perspectives thatunderlie store image conceptualizations.’’ More recently, Hartmanand Spiro (2005) have argued that store image should instead beconceptualized in terms of store equity which is ‘‘the differentialeffect of store knowledge on customer response to the marketingof the store (p. 1114).’’ According to these authors, while thetraditional measure of store image captures the gestalt view of thestore in the consumers’ mind, store equity instead focuses onmeasuring ‘‘yif and how this image is shared with other stores(p. 1117).’’ And, in a recent empirical study, Martenson (2007)showed that the construct of store image was mostly explained by
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consumers’ perception of the store as a brand (quality ofrelationship with customers, neatness of the store, productassortment, and low price which offered value for money).
However, these definitions of store image also fail to considerthe role that CSR policies play in consumer perceptions of thestore and shopping experience. In an attempt to broadenthe definition of the store image construct, Arnold et al. (1996)use institutional theory to argue that consumers perceive storeimage not only in the context of the attributes of the store but alsoin the context of the store’s role in the larger social environment.Specifically, ‘‘consumers look for retailers to provide not only lowprices and wide assortment but also to act in ways supportive ofcommunity norms (p. 234).’’ In some cases, symbolic or institu-tional actions (like CSR programs) have been shown to be evenmore diagnostic than performative actions (store attributes), sincethey allow the retailer to prove its commitment to communitynorms. Organizations become legitimatized or institutionalizedby adopting the expected social conduct and gain rewards fromcustomers through increased legitimacy and patronage (Arnoldet al., 1996; Handelman and Arnold, 1999). In one case, the role oftraditional store image attributes was shown to pale in compar-ison to the influence of symbolic actions and community normcompliance: ‘‘ylow prices, value for money, convenient location,fast checkout service, and helpful advertising all became lessrelevant to store choice y when a retailer was judged as the onemost congruent with community norms (Arnold et al., 1996,p. 237).’’
A brief scan of the marketplace shows that retailers haveembraced this concept of going beyond the attribute-basedaspects of the store image construct by developing CSR initiativesto enhance their image, supplement their traditional marketingactivities, and promote their role as good corporate citizens. Asexamples of this phenomenon, Target donates one percent of theirtotal store credit card purchase to a school selected by thecustomer (www.target.com), British Petroleum has organized acompany wide effort to focus on environmentally responsible oilsearch and production (www.bp.com), and Wal-Mart has exhib-ited its commitment to hiring diversity by becoming the largestprivate employer of African Americans and Hispanics in thecountry (www.walmart.com). In this context, CSR programs act asattribute-based cues to signal store image (e.g. Target is a goodcorporate citizen because it supports children’s literacy) as well asaffective cues for consumer evaluation of the retailer (e.g. I feelgood about Target because is supports children’s literacy). There-fore, a more comprehensive measurement of the store imageshould capture both the CA and CSR components, presenting atruly holistic evaluation of the efforts retail companies make toestablish a presence and personality in the mind of the consumer.
1.3. Retail store image, customer satisfaction, and customer loyalty
Including CSR as an institutionally relevant attribute in storeimage assessments should lead to more positive perceptions ofthe retailer, and in turn, enhance the consumer’s commitment tothe organization (Arnold et al., 1996). Measures of customercommitment can take many forms including shopping expendi-tures, travel time commitment, and frequency of store visits(although these measures revealed no link with store image)(Ou and Abratt, 2006; Ou et al., 2007, 2006); a meta analysis ofretail patronage showed store choice and frequency of visitrepresented the most common measures used by researchers tostudy store patronage (Pan and Zinkhan, 2006). Bloemer and deReyter (1998) offer evidence demonstrating that store imagedefined in terms of functional attributes is a significant predictorof customer satisfaction, which in turn enhances customer loyalty.
Findings demonstrate that ‘‘manifest’’ satisfaction, based on theexplicit evaluation of a store, and ‘‘true’’ loyalty, or the repeatvisiting behavior accompanied by maximum commitment, arepositively related to the consumer’s image of the store (see alsoKoo, 2003; Martenson, 2007).
Within the context of CSR and retailing, Handelman andArnold (1999) show that consumers extend other forms of supportfor the retailer for its socially responsible actions by indicating agreater intention to shop at CSR-motivated stores or by increasingtheir positive word-of-mouth activity about the retailer. Evidencein the more generalized CSR literature (Creyer and Ross, 1997;Ellen et al., 2000, 2003; Sen and Bhattacharya, 2001) also suggeststhat CSR initiatives are closely tied not only to consumerpatronage behaviors, but also to higher levels of satisfaction andconsumer loyalty. This paper responds to a call for empiricalresearch investigating the relationship between store image andretail patronage (Ou and Abratt, 2006) by examining theconsumer response in terms of overall store satisfaction and storeloyalty, and using these responses as indicators of the consumer’sperception of the retailer’s overall store image.
Customer satisfaction, often considered the predecessor tostore loyalty (Bitner, 1990), has a variety of definitions. It can beviewed as ‘‘the outcome of the subjective evaluation that thechosen alternative (the store) meets or exceeds expectations(Engel et al., 1990, p. 481),’’ or more broadly as the process ofmatching of expectations and perceived performance (Oliver,1980). Oliver (1997, p. 34) defines satisfaction as ‘‘pleasurablefulfillment,’’ or the perception that the end result providespleasure against some standard in the consumer’s mind. Oliverfurther argues that cumulative satisfaction must occur in order tobuild a track record of satisfactory performance. In this way,satisfaction will be one important element affecting a consumer’sloyalty.
Customer loyalty definitions are generally grouped into twocategories: process and psychological (Oliver, 1999). The process(Oliver, 1999) or operational (Dick and Basu, 1994) definitionemphasizes the behaviors consumers perform in order to becomeloyal (Oliver, 1999), and is generally measured in terms of repeatpurchasing frequency or relative volume of same brand purchas-ing (see Jacoby and Chestnut, 1978 for a review; Tellis, 1988). Thepsychological (Oliver, 1999) or theoretical (Dick and Basu, 1994)definition suggest that loyalty is best understood in terms of aninternal disposition on part of the consumer to repeatedlypurchase the same brand (Day, 1969). The psychological ortheoretical perspective combines both the attitudinal and beha-vioral measures of loyalty (Jacoby and Chestnut, 1978; Jacoby andKyner, 1973) and represents a more holistic view of loyalty; it isthis view that is adopted in this paper.
Fundamentally, consumer satisfaction and loyalty are expectedto stem primarily from the CA dimension of store image;performative actions (i.e. CA dimension of store image) of thestore have been shown to influence store patronage in terms ofwillingness to buy, shopping likelihood and willingness torecommend to others (Baker et al., 2002). These tangible,functional attributes (i.e. product selection, customer service,price, shopping environment, advertising, etc.) are hypothesizedto be key drivers of consumer commitment in terms of higherlevels of satisfaction and loyalty. Therefore, it is expected that,
Hypothesis 1. Store satisfaction will be greater when the CAdimension of store image is positive than when it is negative.
Hypothesis 2. Store loyalty will be greater when the CAdimension of store image is positive than when it is negative.
However, as argued in the literature, and as is evident from thenumerous examples of retailers’ social responsibility initiatives,
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Table 1Respondents per condition
Condition Number of respondents (% of
completed invites)
High CA, high CSR 79 (41%)
High CA, no CSR (control) 77 (39%)
High CA, low CSR 80 (39%)
Low CA, high CSR 77 (38%)
Low CA, no CSR (control) 74 (39%)
Low CA, low CSR 73 (39%)
Total 460
S. Gupta, J. Pirsch / Journal of Retailing and Consumer Services 15 (2008) 516–526 519
consumers have also come to expect retailers to be sociallyresponsible, based on the multi-dimensional role of the individualas economically driven consumer, community member, and acitizen. For example, Thomas et al. (2002) shed light on theimportance of ethical actions performed by retail serviceproviders in shaping ethical assessments and satisfaction judg-ments of the retailers by consumers. In two experiments, theauthors found that subjects responded negatively to unethicalactions by the retailer by significantly lowering their ethicalassessments of the store and their satisfaction ratings of theservice provided. In another study, retailer’s CSR activities(community support and care for the environment) were foundto have a limited but significant influence on town shoppingcenter attractiveness as a place to shop (Oppewal et al., 2006). Acommitment to CSR by retailers should therefore lead to increasedstore satisfaction and store loyalty (e.g. Arnold et al., 1996), resultsemblematic of a positive retail store image.
Hypothesis 3. Store satisfaction will be greater when the CSRdimension of store image is positive than when it is negative.
Hypothesis 4. Store loyalty will be greater when the CSRdimension of store image is positive than when it is negative.
CA and CSR dimensions have also been shown to interact withone another, affecting the outcome responses among consumers(Brown and Dacin, 1997). Positive CSR has been shown to enhancethe influence of CA on consumer store patronage in some cases(Arnold et al., 1996), while negative CSR has been shown to lowerconsumer commitment to the company, even when the retailerexcels in its CA-related attributes (Creyer and Ross, 1997;Handelman and Arnold, 1999). From a practical standpoint, thisbrings the role of the valence of CA into question. When CA ispositive (prices are considered reasonable, store shopping condi-tions are favorable, personnel are knowledgeable), consumers areexpected to reward the retailer with higher level of commitmentbehaviors. This supports current literature in store image that hasdemonstrated the predictive ability of CA-based store image indriving store patronage.
The influence of positive CA-based store image is expected tobe enhanced by socially responsible initiatives pursued by theretailer (Handelman and Arnold, 1999). Consumers are expectedto reward retailers with a positive CSR program; consumers mayperceive such activities as a means to meet the egoistic oraltruistic motivations that drive behavior for the benefit of others(Bendapudi et al., 1996). Consumers may also use positive CSRactivities (community involvement and environmental responsi-bility) as a means of supporting their store brand choice (Arnold etal., 1996). Alternatively, rewarding the retailer because of theirCSR program can enhance the overall legitimacy of the retailer inthe community in which it operates (Arnold et al., 1996).
Conversely, when a retailer with a positive store image isperceived as having negative CSR (for example, through lack ofenvironmental friendliness or through perceived unequal hiringor pay practices), consumers are expected to withdraw theirsupport. Research shows that this negative impact on store imagethrough a poor CSR profile makes the retailer undistinguishablefrom retailers with negative CA (Handelman and Arnold, 1999).Therefore, it is hypothesized that:
Hypothesis 5. CSR will moderate the relationship between CAand store satisfaction. The positive influence of high CA on storesatisfaction will be greater when CSR is high than when it is low.
Hypothesis 6. CSR will moderate the relationship between CAand store loyalty. The positive influence of high CA on store loyaltywill be greater when CSR is high than when it is low.
2. Method
2.1. Sample
To test the hypotheses, an Internet-based experiment wasconducted. An online sample (n ¼ 460) was recruited from anInternet panel owned by a private marketing research company.The subjects represented the general population (and were notexclusively university students), contributing to the externalvalidity of the study results. No specific consumer criteria wereused to recruit the sample. Subjects were invited to participatethrough e-mail, which provided a link to the web survey. Table 1presents the response rate and the number of respondents percondition.
Each subject in the sample answered questions about theirstore evaluations of and their level of satisfaction and loyalty tothe retailer presented in the scenario. In order to assess therespondents’ comfort level with taking an online survey, each wasasked to rate his or her technical proficiency with a computer(1 ¼ not very proficient, 7 ¼ very proficient) and to report thenumber of hours per week spent on line, either for work orpersonal use. Results showed a fairly sophisticated technicalgroup (M ¼ 5.45 in proficiency) who spend an average of 22.6 h/week on line. Respondents consisted of 230 (50.0%) men and 230(50.0%) women ranging in age from 22 to 88 years old (M ¼ 45.4).Thirty-five percent had at a 4-year college degree, 24.5% a 2-yeardegree, and 21% a high school education. The remaining 20.5% hadearned a masters degree or higher. The majority of respondents(62.3%) earned $50,000 or more annually.
2.2. Stimuli development
This study examines the contributory role of CSR in buildingstore image. Evidence to support this argument was generated bymeasuring differences in store satisfaction and loyalty for retailstores with positive, negative and no CSR programs. Two retailstore stimuli were used, Target and Kmart, to represent the highCA (Target) and low CA (Kmart) scenarios. These stimuli wereselected based on a pretest of six retail store pairs administered to47 subjects to test the evaluations of CA and CSR perceptions foreach pair. Target and Kmart were chosen as the CA assessment ofeach store presented the most significant contrast in store image(t ¼ 6.167, po0.05, Target ¼ 5.65, Kmart ¼ 3.33).
2.3. Manipulation check
In order to check for successful manipulation of the CA variable,a one-way ANOVA compared the means of post-treatment CAbetween the Target and the Kmart groups. Results showed that theCA manipulation was effective (F (1, 458) ¼ 82.254, po0.05,MTarget ¼ 5.148, MKmart ¼ 4.075). A separate one-way ANOVA that
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compared the means for post-treatment CSR was also conductedto check for the successful manipulation of the CSR variable.Results showed that the CSR manipulation was also effective(F (1, 307) ¼ 79.963, po0.05, MPositive CSR ¼ 5.332, MNegative
CSR ¼ 4.005).
2.4. Design and procedure
The hypotheses were tested using a 2 (positive/negativeCA)�3 (positive/negative/control CSR) between subjects experi-mental design. Six written scenarios were created each illustrat-ing a different combination of CA and CSR attributes. Therefore,three groups (n ¼ 236) were exposed to the Target scenario(positive CA) with positive CSR, negative CSR, and no CSR and theother three groups (n ¼ 224) were exposed to similar treatmentswith the Kmart (negative CA) scenario. The written scenarios arepresented in Appendix A. Subjects were randomly assigned to anyof the six groups. A one-way ANOVA that compared the means forCA-based pre-treatment store image perceptions for the Target(M ¼ 5.185) and Kmart (M ¼ 4.308) subjects showed a significantdifference between the retail store perceptions of these twogroups (F (1, 458) ¼ 69.113, po0.05).
The first question in the survey was used to screen therespondents and select only those Target and Kmart shoppers whohad shopped at each store, respectively, in the last 6 months. Toensure the level of familiarity with each retailer, respondentswere assessed on three questions on a 1–7 (strongly disagree tostrongly agree) Likert scale: Target/Kmart is familiar to me, Irecognize the name Target/Kmart, Target/Kmart is a store I haveheard of. A Cronbach alpha of 0.935 showed the store familiarityscale was reliable, and an overall mean for these three questionsof 6.53 indicated a high level of familiarity with the retailersamong the response groups.
Next, respondents were asked to assess the retailer’s CA (storeimage) and CSR program, as well as their loyalty to andsatisfaction with the retailer. Respondents were then exposed toone of the six scenarios describing the retailer’s position withrespect to both CA and CSR. The CA dimension of store image wasoperationalized across 12 items, while four items measured theCSR dimension (community involvement and support, employeediversity, fair treatment of employees, and environmental respon-sibility). Following exposure to the treatment, respondents wereagain asked to indicate their levels of satisfaction and loyalty tothe retail store in order to measure the changes in their responsesas a result of the treatment. At the end of the questionnaire,respondents were thanked for their participation and informedthat the scenario read about Target or Kmart was hypothetical innature. Scale references, items and corresponding reliabilityscores for the all independent and dependent variables are shownin Table 2.
3. Results
Responses were analyzed using the full ANOVA model with CA,CSR and their interaction as independent factors. All the analysisconducted examined significance at the 95% confidence level.
3.1. CA dimension of store image
A one-way ANOVA showed that store satisfaction significantlydiffered between the positive (MTarget ¼ 5.269) and negative(MKmart ¼ 4.455) CA conditions (F (1, 307) ¼ 21.813, po0.05). Thisresult supported Hypothesis 1, which suggests that store satisfac-tion would be greater under the condition of positive CA than
under the negative CA condition. Similar to store satisfaction,store loyalty also significantly differed between the positive(TargetMean ¼ 4.882) and negative (KMartMean ¼ 4.118) CA condi-tion (F (1,307) ¼ 38.203, po0.05). This result supported Hypoth-esis 2, which predicted that store loyalty would be greater underthe condition of positive CA than under the negative CA condition.
3.2. CSR dimension of store image
In order to test whether CSR is an important aspect of storeimage, two separate ANCOVAs examined the influence of CSR onstore satisfaction and loyalty (Hypotheses 3 and 4), using theconsumer’s initial perception of store image (before beingmanipulated by the study) as a covariate. This method wasselected in order to control for the influence of any pre-existingstore image perceptions on post-manipulation store image.
Results show that variance in store satisfaction is significantlyinfluenced by CSR-related differences (F (1, 456) ¼ 6.964, po0.05;MPositive CSR ¼ 4.984, MNegative CSR ¼ 4.762, and MControl CSR ¼ 5.082),holding initial store image constant (F (1, 456) ¼ 453.501, po0.05).Though the mean for store satisfaction in the control condition ishigher than the positive condition, the difference was notsignificant (p ¼ 0.925). Therefore, results show that store satisfac-tion is influenced by the CSR-based dimension of store image(Hypothesis 3). Similarly, store loyalty is also significantly influ-enced by CSR (F (1, 456) ¼ 7.873, po0.05; MPositive CSR ¼ 4.589,MNegative CSR ¼ 4.432, and MControl CSR ¼ 4.711), holding initial storeimage constant (F (1, 456) ¼ 484.867, po0.05). Similar to storesatisfaction, though the mean for store loyalty in the controlcondition is higher than the positive CSR condition, the differencewas not significant (p ¼ 0.564). Therefore, results show that storeloyalty is influenced by the CSR-based dimension of store image(Hypothesis 4).
Hypothesis 5 stated that the positive influence of positive CAon store satisfaction would be greater when CSR is positive thanwhen it is negative. To test this hypothesis, an ANOVA with twolevels of CA (positive and negative) and three levels of CSR(positive, negative, and control) plus the interaction term wasconducted. The results revealed that the interaction term(CA�CSR) in the ANOVA was not significant (F (2, 454) ¼ 0.428,p ¼ 0.652). There was no difference in store satisfaction for thosecustomers who were exposed to the positive CSR condition(MPositive CA Condition ¼ 5.336, M Negative CA Condition ¼ 4.622) versusthose customers who were exposed to the negative CSR condition(MPositive CA Condition ¼ 5.202, M Negative CA Condition ¼ 4.280),indicating no support for Hypothesis 5.
However, a post hoc pair wise comparison of all six groups inthe between subjects experimental design revealed interestingresults (see Table 3). As indicated by the interaction results, forretailers with a positive CA, no difference in satisfaction existsbetween positive or negative CSR. In other words, stores with apositive CA-based store image do not experience a lower level ofstore satisfaction when CSR is negative compared with positiveCSR (in contrast to the findings of Creyer and Ross, 1997;Handelman and Arnold, 1999). Second, the contributory influenceof positive CSR is greater when CA is positive than when it isnegative. Third, retailers with positive CA-based store image withno CSR enjoy a higher level of satisfaction than retailers with anegative CA and either positive or negative CSR. Lastly, under thenegative CSR condition, retailers with a positive CA achieve ahigher level of satisfaction than retailers with a negative CA.
Hypothesis 6 stated that the positive influence of positive CAon store loyalty will be greater when CSR is positive than when itis negative. Similar to H5, this hypothesis was also tested byconducting an ANOVA with two levels of CA (positive and
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Table 2Measurement scales
Variable Source Number of itemsa Chronbach alpha
Store image Wu and Petroshius (1987)b 1. Has a pleasant atmosphere
2. Has well-known brands
3. Has high-quality products
4. Has good service
5. Has knowledgeable sales clerks
6. Has unlimited selection of products
7. Has helpful sales clerks
8. Attracts upper class customers
9. Has an attractive layout
10. Is prestigious
11. Has informative advertising
12. Is pleasant to shop in
0.963
CSR Brown and Dacin (1997),
Sen and Bhattacharya
(2001)
1. Stores are involved in and support the community in which they operate
2. Stores try to hire a diverse pool of employees
3. Stores are good to their employees
4. Stores are environmentally responsible
0.943
Satisfaction Eroglu and Machleit (1990),
Spreng et al. (1996)
Overall, how do you feel about your shopping experience at ___?
1. Dissatisfied–satisfied
2. Displeased–pleased
3. Unfavorable–favorable
4. Unpleasant–pleasant
5. I did not like it at all–I like it very much
6. Frustrated–contented
7. Terrible–delighted
0.982
Loyalty Sirgy et al. (1991);
Reichheld (2003), Kamins
and Folkes (1999)
1. How often do you shop at ___?
2. How would you characterize your loyalty towards ___?
3. How would you rate ___ as compared with your ideal store?
4. How likely is it that you would recommend ___ to a friend or colleague?
5. I think that ___ deserves my loyalty.
6. How likely is it that you will continue to purchase products/services from
___?
0.890
a All items for each of the above variables were measured on a scale of 1–7.b One item asked respondents to evaluate the quality of dress of the employees. The authors removed this item from the scale, as this retail format (discount mass
merchandisers) does not require employees to wear business dress, and therefore employees are almost always dressed very casually.
S. Gupta, J. Pirsch / Journal of Retailing and Consumer Services 15 (2008) 516–526 521
negative) and three levels of CSR (positive, negative, and control)along with the interaction term. The results showed that theinteraction term (CA�CSR) in the ANOVA was also not significant(F (2, 454) ¼ 0.092, p ¼ 0.912). There was no difference in storeloyalty for those customers who were exposed to the positiveCSR condition (MPositive CA Condition ¼ 4.970, MNegative CA Con-
dition ¼ 4.199) versus those customers who were exposed to thenegative CSR condition (MPositive CA Condition ¼ 4.795, MNegative CA
Condition ¼ 4.034), indicating no support for Hypothesis 6.However, a post hoc pair wise comparison of all six groups in
the between subjects experimental design revealed other inter-esting results. Table 4 presents findings that highlight therelationship between CA and CSR where the mean differencebetween the two groups was significant at a po0.05. First, storeswith a positive CA with no CSR experience higher levels of storeloyalty than stores with a negative CA and positive, negative, or noCSR. Second, stores with a positive CA and positive CSR arerewarded with higher levels of store loyalty than stores with anegative CA and positive, negative or no CSR. Third, stores with apositive CA and a negative CSR image enjoy higher levels of storeloyalty than stores with a negative CA and positive or negativeCSR. All of these significant group differences point to theconclusion that the contributory role of CSR on store loyaltybecomes salient only under the condition of positive CA. However,
contrary to the study conducted by Handelman and Arnold, 1999,retailers with a positive CA-based store image did not experiencea lowering in consumer patronage when categorized as a negativeCSR store. Last, when CA is negative, prosocial behaviors by theretailers do not produce any advantage in terms of store loyalty.
Finally, in addition to the results demonstrating the influenceof both CA and CSR on store satisfaction and loyalty, a factoranalysis with varimax rotation was also conducted. The analysis of12 items used to measure CA and four items to measure CSRproduced a two factor solution. Table 5 presents the factorloadings for each item: after rotation, the first factor (CA)accounted for 53.43% and the second factor (CSR) for 24.14% ofthe variance in the store image construct. This final analysis showsstore image is a bi-dimensional construct made up of two distinctaspects: CA and CSR.
4. Discussion
Results from this study produced strong support for the centralthesis of this paper that the consumer’s retail store image isformed through an assessment of both the retailer’s CA and CSRactivities. These results provide significant evidence to extend thecurrent construct of store image as it exists in retailing literature
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Table 3Multiple means comparisons for store satisfaction
Dependent variable: store satisfaction
Tukey HSD
(I) Groups (J) Groups Mean difference (I�J) Std. error Sig.
*The mean difference is significant at the 0.05 level.
Table 4Multiple means comparisons for store loyalty
Dependent variable: store loyalty
Tukey HSD
(I) Groups (J) Groups Mean difference (I�J) Std. error Sig.
Target no CSR Target positive CSR 0.0709 0.1771 0.999
N ¼ 77 Target negative CSR 0.2461 0.1765 0.731
M ¼ 5.041 Kmart no CSR 0.6719* 0.1800 0.003
Kmart positive CSR 0.8418* 0.1782 0.000
Kmart negative CSR 1.0072* 0.1807 0.000
Target positive CSR Target no CSR �0.0709 0.1771 0.999
N ¼ 79 Target negative CSR 00.1752 0.1754 0.918
M ¼ 4.970 Kmart no CSR 0.6010* 0.1789 0.011
Kmart positive CSR 0.7709* 0.1771 0.000
Kmart negative CSR 0.9362* 0.1795 0.000
Target negative CSR Target no CSR �0.2461 0.1765 0.731
N ¼ 80 Target positive CSR �0.1752 0.1754 0.918
M ¼ 4.795 Kmart no CSR 0.4258 0.1784 0.163
Kmart positive CSR 0.5957* 0.1765 0.010
Kmart negative CSR 0.7611* 0.1790 0.000
Kmart no CSR Target no CSR �0.6719* 0.1800 0.003
N ¼ 74 Target positive CSR �0.6010* 0.1789 0.011
M ¼ 4.369 Target negative CSR �0.4258 0.1784 0.163
Kmart positive CSR 0.1699 0.1800 0.935
Kmart negative CSR 0.3352 0.1824 0.443
Kmart positive CSR Target no CSR �0.8418* 0.1782 0.000
N ¼ 77 Target positive CSR �0.7709* 0.1771 0.000
M ¼ 4.199 Target negative CSR �0.5957* 0.1765 0.010
Kmart no CSR �0.1699 0.1800 0.935
Kmart negative CSR 0.1654 0.1807 0.942
Kmart negative CSR Target no CSR �1.0072* 0.1807 0.000
N ¼ 73 Target positive CSR �0.9362* 0.1795 0.000
M ¼ 4.034 Target negative CSR �0.7611* 0.1790 0.000
Kmart no CSR �0.3352 0.1824 0.443
Kmart positive CSR �0.1654 0.1807 0.942
*The mean difference is significant at the 0.05 level.
Table 5Factor loadings
Factor
1 2
17a: Store has pleasant atmosphere 0.884 0.27417b: Well-known brands 0.743 0.31517c: High quality prods 0.821 0.33317d: Good service 0.904 0.26717e: Knowledgeable clerks 0.860 0.28517f: Unlimited selection of prods 0.752 0.27518a: Stores have helpful clerks 0.854 0.25118b: Upper class customers 0.752 0.24218c: Attractive layout 0.879 0.21618e: Prestigious reputation 0.785 0.31318f: Informative advertising 0.732 0.33818g: Pleasant shopping environment 0.877 0.31319a: Stores support community 0.229 0.90019b: Hire diverse employees 0.326 0.80919c: Environmentally responsible 0.224 0.91219d: Good to employees 0.469 0.758
Extraction method: maximum likelihood.
Rotation method: varimax with Kaiser normalization.
S. Gupta, J. Pirsch / Journal of Retailing and Consumer Services 15 (2008) 516–526522
to include the component CSR along with the CA attributes of theretailer. The addition of the CSR component to the conceptualiza-tion of store image recognizes the increasingly important role thatCSR programs have come to play for US businesses, and in thiscase, for retailers in particular. This suggests that consumers notonly pay attention to the traditional marketing program of thestores (products, prices, services offered, etc.), but also to howretail stores are executing their marketing plans within thegreater societal network. These results support the Brown andDacin (1997) framework as a measure of the consumer’s overall,holistic assessment of corporate image, recognizes the relevanceof the corporate evaluation model to the retailing industry, andsupports research suggesting there is a strong link between storesatisfaction and store loyalty and the store image construct(Bloemer and de Reyter, 1998).
In addition to the main effects of CA and CSR on storesatisfaction and loyalty, the interaction of these two terms wasalso investigated. The lack of significance of this term in thecurrent study was notable, in that it contrasts with findings fromHandelman and Arnold (1999). Handelman and Arnold’s (1999)research indicates that the interaction between performative (CA)and institutional (CSR) actions had a significant effect onorganizational support: positive CA firms benefited from positiveCSR but experienced a lower level of support under the negativeCSR condition.
One explanation for this contrasting result stems fromthe institutional orientation used in the study by Handelmanand Arnold (1999) to measure consumer support of theorganization that is different from the specific store, productor brand choice variable adopted in this study. From aninstitutional perspective, ‘‘support reflects a multi-constituency
perspective (p. 44)’’ where the members of the societyperform roles beyond that of an economically minded consumer.Subsequently, individuals use norms reflective of their multiplememberships (i.e. family, community, and nation) whenevaluating the actions of an organization. In contrast, this studyassumed the role of the consumer to be driven by economicneeds and measured store patronage in terms of customer
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satisfaction and loyalty, reflective of a specific store choice as avariable.
Alternately, the inconsistency between study results might liein the choice of variables used to manipulate CSR (institutional-ism). Handelman and Arnold (1999) used a retailer’s familyorientation (in terms of making shopping for toys parent-friendly), community involvement and nationalism/patriotism(flying the flag, buying American) as positive and negativeinstitutional/CSR variables, while this study used treating employ-ees fairly, hiring a diverse employee pool, demonstrating environ-mental responsibility, and making community contributions. It ispossible that the Handelman and Arnold variables were morerelevant or relatable to the consumer, and touched their retailingexperience more closely than the variables used in this study. Inother words, respondents were better at integrating the effect ofthe retailer’s family orientation or level of patriotism into theiroverall CSR perception of the retailer than integrating the ideathat the retailer hires diverse employees. Consumers may stillbelieve that hiring a diverse group of employees is important, butthey are more willing to give a positive CSR evaluation to acompany whose CSR actions have a more emotional, everydayappeal (flying the American flag).
If this is the case, marketing managers should take note ofwhat resonated most with consumers across both studies. Thecontrasting study results propose a hierarchy of importance ofCSR components for consumers, suggesting that retailers shouldtake the time to determine through market research the valuetheir own particular customers place on these various compo-nents, and structure their CSR campaigns accordingly. Pursing thisstrategy may make CSR appeals not only more relevant toconsumers, but also more effective in generating a positive retailstore image, and enhancing the retailer’s CA activities.
While the interaction term was not significant overall for CAand CSR, as noted in the results section, several interestingdifferences did exist between the groups. Most significantly, underthe condition of positive CSR, the satisfaction and loyaltymeasures were higher under the positive CA condition than thenegative CA condition. This means that companies who areperforming well in terms of CA will particularly benefit from apositive CSR program. Conversely, companies who are performingpoorly in terms of CA will not benefit from investment in CSRinitiatives.
This difference in the effects of a positive CSR program onsatisfaction and loyalty for the two CA conditions could exist for anumber of reasons. Given that satisfaction and loyalty essentiallystem from the process of comparing performance to expectation,customers may focus first on CA actions (i.e. location of the store,hours of operation, pricing, or product selection) when makingtheir assessments. In the case of the positive CA retailer,consumers may then believe that since the store is meetingexpectations for the consumer’s CA measures, the store is justifiedin, and even expected to, make investments in CSR. In the case ofthe negative CA retailer, consumers may believe that directingresources to a CSR program detracts from the store’s CA resources;this would lead to a less satisfying shopping experience, and alower level of store loyalty. This concept is supported by findingsby Sen and Bhattacharya (2001) who state ‘‘consumers whobelieve that companies trade off CA for CSR will react lesspositively, in terms of both company evaluations and productpurchase intentions, to a company’s CSR efforts than those who donot’’ because ‘‘ythey believe that such CSR efforts, in general,detract (in terms of available resources) fromy rather thanreinforcey its CA development (p. 234).’’
At the other end of the equation, the negative CA store wasseen to have a significantly lower level of consumer satisfactionand loyalty under the negative CSR condition than the positive
CSR condition. In other words, the negative CA store was punishedmore significantly by consumers if a negative CSR event occurred,while the positive CA store was, to some extent, ‘‘cut a break’’ bytheir shopping customers. This result could stem from the overallpredisposition of the customer for a particular store. If customersare feeling that their store is meeting their CA needs, they aremore likely to let slide a negative CSR event. On the other hand, ifcustomers believe the retailer is not meeting their CA needs (lowlevel of CA performance), a negative CSR event fits neatly intotheir more negative perception of the retailer (‘‘what else wouldyou expect from a store like this?’’) (in contrast with findings byHandelman and Arnold, 1999).
Overall, these findings carry important implications formarketing managers in the retail industry. In general, managersshould recognize that in addition to offering great products, pricesand value, consumers also value how retailers behave in themarketplace, and are more satisfied with and loyal to thoseretailers who give back to their community, treat their workerswith dignity, and offer a diverse workplace.
Results from this study also suggest it is imperative thatretailers make a concerted effort to proactively inform consumersthrough their marketing communications about the store’s socialresponsibility initiatives. One solution to effectively target con-sumers could come from increased point of purchase informationemphasizing the retailer’s CSR policies. For example, retailerscould use on-shelf signage in the school supply aisle to point outtheir program of donating paper, pens, and notebooks to under-funded schools in the community. Or, grocers could use on-floorsignage pointing customers to bins where they can contributecanned goods to local food banks for the grocer-sponsoredprograms. Interactive, on-site techniques such as these couldeffectively enhance consumers’ level of awareness of the retailer’sCSR program in an effective, front-of-mind way, and positivelycontribute to retail store image.
Additionally, these findings suggest that while CSR programsare effective means of improving store satisfaction and loyalty forpositive CA companies, CSR programs produce no incrementalbenefit for retailers suffering from a weak CA-based store image.Managers contemplating budgetary decisions for weak CAcompanies may wish to channel more of their marketing dollarsinto effective CA development rather than CSR efforts, ascustomers shopping at these stores seem to value the company’sefforts in developing its performative actions more significantly tohelp justify their store brand choice. Given the popularity of CSRas a strategic tool, managers faced with declining retail brandperception and decreasing sales might be tempted to divertfunding for CSR programs in their effort ‘‘to keep up with the
Joneses.’’ This study reveals that such a strategy would beunproductive, as these investments would produce no incremen-tal benefits for the store. CSR only helps when the retailer isperforming, and under that condition, significantly contributes tothe consumer’s satisfaction and loyalty in the retail marketplace.
4.1. Limitations and future research
One limitation of this study, which the authors believe to be alimitation of all CSR studies, is the structure of the questionsthemselves that may result in demand artifacts. In order toinvestigate the influence that CSR programs have on consumers, itis of course necessary to ask specific questions about the CSRprogram. The concern is that such questions force the consumer tofocus undue attention on these programs, and therefore may givean unrealistic picture of the degree to which consumers noticeand are affected by the presence of CSR initiatives. Intrinsically,therefore, studies like this one must make the assumption that
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consumers notice CSR programs or initiatives being pursued bycompanies in the marketplace. Additionally, the social desirabilityissue comes into play, as consumers may be motivated to answerquestions in a way that they believe is ‘‘expected’’, given the socialstandards of the day.
A second limitation of this study was the issue of real retailstores. Though the use of real retail stores (unlike the use ofhypothetical retail stores in the Arnold et al., 1996; Handelmanand Arnold, 1999 studies) significantly enhance the externalvalidity of the study, pre-existing store assessments couldpotentially create biases at the same time. The lack of supportin this paper for the effect of a negative CSR reducing consumercommitment under the positive CA condition could have beenconfounded by the pre-experiment positive store image in thesubjects’ minds. It is possible that the respondents who wereexposed to the positive CA condition (Target stores) were soconvinced of the retailer’s positive social responsibility initiativesthat the CSR manipulations presented in the form of the studyscenarios were unsuccessful in changing their perceptions.
As is always the case with an experimental study, severalinteresting future research projects arise from its limitations. Forexample, the results in this study failed to support research(Arnold et al., 1996; Handelman and Arnold, 1999) that has arguedthat there is a significant interaction between CA (performative)and CSR (institutional) actions on organizational support (wherepositive CA firms benefit from positive CSR but experience a lowerlevel of support under the negative CSR condition). This studyused satisfaction and loyalty as dependent variables, while thestudies cited above used different dependent variables, rangingfrom frequency of shopping, intention to shop, word of mouth andintention to boycott to support for zoning. A future project couldmeasure a broader range of dependent variables in order todetermine whether the interaction results cited in these twosignificant studies could be replicated.
A second future project could explore the generalizability ofthese findings to different retail channels. An option would be tocompare results across different retail store types, in order toinvestigate whether responses to CSR programs differ based onthe type of store studied. A third project could use qualitativemethods to explore why shoppers are unwilling to reduce supportfor a retailer with a positive CA but negative CSR-based storeimage, and why consumers shopping at negative CA stores foundthe addition of a positive CSR program to be insignificant ininfluencing their store satisfaction and loyalty. Fourth, it would behelpful to understand if store image is more significantlyinfluenced by CSR as a stand-alone initiative (i.e. one-timecharitable donations), or by more strategically integrated CSRpolicies. In one study, Pirsch et al. (2007) show that aninstitutionalized CSR program that is strategically integrated intothe company’s overall marketing approach and business policyevokes a more positive corporate evaluation by the consumerstakeholder group than a more tactical, promotion-based CSRprogram. Finally, future research could investigate how satisfac-tion and loyalty translate into actual purchase habits by trackingcustomers via scanner data and subsequent surveys or interviews.This extension could also examine the effectiveness of POPadvertising of CSR, and see whether this method of pointing outCSR elements directly to the consumer at the decision makingpoint influences their overall store image and commitment.
5. Conclusion
The findings of this research suggest that a retailer’s ability tooffer up-to-date products and relevant selections in conjunctionwith their ability to do so in a socially responsible way are both
important elements in determining the consumer’s retail storeimage, and in contributing to the consumer’s overall level ofsatisfaction and loyalty toward the store. Including a retailer’s CSRprogram into a more ‘‘holistic’’ definition of the construct of storeimage suggests that companies should not only add but alsopromote their CSR programs actively to consumers, as CSRprograms are an important part of the mental image thatconsumers form about a retail store.
Appendix A. Treatment scenarios
A.1. Positive CA+positive CSR
Target is a retail store where one can ‘‘expect more, pay less.’’The store appeals to a diverse group of customers—families,adults, kids, teenagers—who are looking for style but do not wantto pay department store prices. With its stylish advertisementsand designer brand names like Isaac Mizrahi and Eddie Bauerclothing and Calphalon cooking supplies among others, Target hasemerged as a retailer that offers the exclusive products generallyavailable in expensive retail stores at low prices. The stores areopen, brightly lit, and clean, with wide aisles, neatly arrangedmerchandise and employees who are knowledgeable and friendlytowards the customers.
As part of its promise to ‘‘expect more’’, Target donates $1million weekly to charitable organizations throughout the com-munities in which it operates. The company also funds numerousnational non-profit organizations such as Habitat for Humanityand St. Jude’s Children Hospital. Target also supports racialdiversity in its workforce by hiring employees to reflect thecommunities they serve. And, for the past 2 years Target has wonthe ‘‘Waste Wise Very Large Business Program Champion’’ awardgiven out by the Environmental Protection Agency in recognitionof its efforts to reduce packaging for its products. Nearly 100% ofclothing and 95% of all shoes arrive in the stores with no excesspackaging, keeping millions of pounds of pins, tissue, cardboardinserts, and plastic out of the waste stream and landfills.
A.2. Positive CA+negative CSR
Target is a retail store where one can ‘‘expect more, pay less.’’The store appeals to a diverse group of customers—families,adults, kids, teenagers—who are looking for style but do not wantto pay department store prices. With its stylish advertisementsand designer brand names like Isaac Mizrahi and Eddie Bauerclothing and Calphalon cooking supplies among others, Target hasemerged as a retailer that offers the exclusive products generallyavailable in expensive retail stores at low prices. The stores areopen, brightly lit, and clean, with wide aisles, neatly arrangedmerchandise and employees who are knowledgeable and friendlytowards the customers.
Recently, Target has had to close several stores due to poor siteselection, leading to a high unemployment rate, the lowering ofproperty values and a decrease in quality of life in communitieswhere these stores are located. Unlike other retailers, Target doesnot encourage or support its employees to volunteer in neighbor-hood or community organizations, nor does it make significantcharitable donations to local charities. Earlier this year, Witnessfor Peace, an international human rights organization, initiated aboycott of Target. The company was found guilty of buying clothesfrom suppliers that employed child labor under poor workingconditions at sweatshops in Nicaragua, Guatemala, Mexico. Inaddition, Target has been criticized for a lack of racial and genderdiversity in its work force. Finally, since 1999, Target has been on
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the Environmental Protection Agency’s caution list of worstpolluters, and has paid over $50 million as fines for violations ofthe US Government’s Clean Air Act and Clean Water Act.
A.3. Negative CA+positive CSR
K-Mart, a discount retailer, is a well-known brand that hasbeen struggling financially for the past several years. In January2002, K-Mart made history by becoming the biggest retailerto ever file for bankruptcy. As a result, the company laid off 20% ofits employees and closed many stores. Compared with itscompetitors like Wal-Mart and Target, Kmart stores are out-datedand lack the stylish merchandise of Target and the extremelylow prices of Wal-Mart. Kmart stores are also notorious forrunning out of sale priced merchandise, and their storesare generally considered to be cluttered and poorly lit, withemployees who are unwilling or lack the knowledge to helpcustomers find merchandise.
As part of its promise to be ‘‘the stuff of life’’, Kmart donates $1million weekly to charitable organizations throughout the com-munities in which it operates. The company also funds numerousnational non-profit organizations, such as Habitat for Humanityand St. Jude’s Children Hospital. Kmart supports racial diversity inits workforce by hiring employees to reflect the communities theyserve. And, for the past 2 years Kmart has won the ‘‘Waste WiseVery Large Business Program Champion’’ award given out by theEnvironmental Protection Agency in recognition of its efforts toreduce packaging for its products. Nearly 100% of clothing and 95%of all shoes arrive in the stores with no excess packaging, keepingmillions of pounds of pins, tissue, cardboard inserts and plasticout of the waste stream and landfills.
A.4. Negative CA+negative CSR
K-Mart, a discount retailer, is a well-known brand that hasbeen struggling financially for the past several years. In January2002, K-Mart made history by becoming the biggest retailer toever file for bankruptcy. As a result, the company laid off 20% of itsemployees and closed many stores. Compared with its competi-tors like Wal-Mart and Target, Kmart stores are out-dated and lackthe stylish merchandise of Target and the extremely low prices ofWal-Mart. Kmart stores are also notorious for running out of salepriced merchandise, and their stores are generally considered tobe cluttered and poorly lit, with employees who are unwilling orlack the knowledge to help customers find merchandise.
Frequent Kmart store closings have lead to a high unemploy-ment rate, the lowering of property values and a decrease inquality of life in communities where Kmarts are located. Unlikeother retailers, Kmart does not encourage or support its employ-ees to volunteer in neighborhood or community organizations,nor does it make significant charitable donations to local charities.Earlier this year, Witness for Peace, an international human rightsorganization, initiated a boycott of K-Mart. The company wasfound guilty of buying clothes from suppliers that employed childlabor under poor working conditions at sweatshops in Nicaragua,Guatemala, and Mexico. In addition, K-Mart has been criticized fora lack of racial and gender diversity in its work force. Finally, since1999, K-Mart has been on the Environmental Protection Agency’scaution list of worst polluters, and has paid over $50 million asfines for violations of the US Government’s Clean Air Act andClean Water Act.
Fifth and sixth scenarios are positive CA (Target) with no CSR(control CSR condition) and negative CA (Kmart) with no CSR(control CSR condition), respectively.
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