Relative effects of store traffic and customer traffic flow on shopper spending

Abstract

This article examines the relative effects of store traffic and customer traffic flow on shopper spending in a single study. An analysis of Croatian hypermarket survey data indicates that store traffic alone does not adequately explain shopper spending. Instead, gross customer traffic flow and realized customer traffic flow are stronger drivers of money spent. The article contributes to the retailing literature by clarifying the respective roles of store traffic and customer traffic flow. Recognizing the greater revenue-generating effect of in-store traffic flow, retailers should better design their store layout and merchandizing strategies to optimize traffic movement and boost store performance.

Keywords:

• retailing
• shopper behavior
• store traffic
• customer traffic flow
• shopper spending

Notes

1. This situation is known as crowding (Lam, Vandenbosch, and Pearce 1998). When the number of people, objects, or both, in a limited space restricts or interferes with an individual's activities and goal achievements, shoppers will experience a feeling of crowding (Machleit, Eroglu, and Mantel 2000). While not enough traffic makes the store look empty and casts doubts in shoppers' minds, dense/crowded retail environments tend to induce tension, confusion, or frustration, which lead to less favorable evaluations of the shopping experience, avoidance behavior, and actual sales loss (Harrell, Hutt, and Anderson 1980; Hui and Bateson 1991; Underhill 1999).

2. Although such a measure is strictly ordinal in nature, in a recent review of the literature on this topic, Jaccard and Wan (1996) summarize that for many statistical tests, even severe departures from intervalness do not seem to affect Type I and Type II errors dramatically. Other studies showing the robustness of correlation and other parametric coefficients with respect to ordinal distortion include Labovitz (1967, 1970), Kim (1975), Binder (1984), and Zumbo and Zimmerman (1993).

3. Researchers have applied different methods to capture customer traffic flow data (Uotila and Skogster 2007). In-store interviewing helped us to gain an inclusive picture of customer's shopping experience and to combine in-store traffic flow data with store traffic, time and demographic variables at the disaggregate customer-level. Most respondents did not have difficulty recalling their movements after seeing the layout, and they willingly checked the categories they purchased against their receipts.