Assortment

The assortment or merchandise attribute is contained and mentioned in almost every paper and literature regarding store image attributes and satisfaction, which is quiet natural since a retailer’s reason for existence is based on selling merchandise⁶⁴. The choices of the overall merchandise categories offered at the store can be said to initiate all other aspects of being a retailer, since the assortment puts the retailer in a category themselves, e.g. grocery store, furniture outlet or an optician store. The assortment attribute alone encompasses many different factors, but the most repeated and discussed are quality and the depth and breadth of the product assortment.

Quality

When reviewing the literature, it is apparent that quality of the assortment has influence on store image, which is due to the fact that the product brands images are also projected on to the image of the retailer. Empirical findings imply that a retailer can improve its image by

62 Levy, Michael; Weitz, Barton A. (2009) ’Retailing Management’ p. 516

63 Keller, Kevin Lane; Ailawadi, Kusum L (2004) ’Understanding retail branding: conceptual insights and research priorities’

64 Swoboda B; Morschett F.H.D.; Schramm-Klein H. (2007) ‘An Intersection analysis of the relevance of service in building a strong retail brand’

offering product brands which are evaluated favorable by the consumers, but on the other hand offering less favorable product brands or even brands with bad images could also damage the retailer⁶⁵. It is therefore very important that the retail brands continuously study the customers’ product brand preferences and keep the assortment aligned and updated, and ensure assortment at all times meets the needs and expectations of the costumers. The task of having the right brand mix offerings in the stores is therefore a very critical task for the optician retail brand, but when done successfully it can also have great advantages and help building a strong differentiated image, which enhance store traffic and turnover.

A possibility for an optician retail brand could be to ensure exclusive rights for certain product brands and designers. If consumers have strong preferences for a particular product brand, they might be prepared to visit the store offering this product brand only because of the presence of that brand. The projection of the product brand images would also be even more profound and only achievable for the retailer, which possesses the exclusive rights. In some case paying an extra fee to the manufactures or license agencies could therefore be beneficial and profitable. In a highly competitive market like the optician retail sector, this seems as a relevant possibility worth treating, which is why we will look further into this in connection to Thiele’s positioning strategy and when looking upon the recommendations of Thiele’s differentiated store image.

Assortment Breadth and Depth

When focusing on the breadth and depth of the assortment, the cross-category assortment is in nature of less importance, since we focus on optician retailers, which are within the category of specialty stores. However, it does seem important that a particular optician retail brand offers at least the product category selection, which is expected by consumers when thinking of a certain retail category. If a retailer’s breadth of assortment is too distinguished or limited compared to the competitors’ and the sector in general, consumers might not consider the retailer in their store choice decision-making⁶⁶. In regard to the optician retail sector, this

65 Mazursky, David; Jacoby, Jacob (1984) ‘Linking brand and retailer images – do the potential risks outweigh the potential benefits?’

66 Keller, Kevin Lane; Ailawadi, Kusum L (2004) ‘Understanding retail branding: Conceptual Insights and Research priorities’

could indicate why an optician retail brand offer glasses, sunglasses and contact lenses and also eye examinations and sight tests to be truly accepted and build salience among the consumers.

According to Keller and Ailawadi⁶⁷ (2004) the depth of a retailer’s assortment is also an important dimension of store image and a key driver of store selection. First of all, a great depth and large category selection increases the likelihood that consumers will be aware of the store and thereby ensure that they consider the store in the first place. Moreover, a wide-ranging assortment will also enhance consumers’ belief in that they will find the item they desire and thereby convince them that the visit will be worthwhile. If consumers perceive the assortment of brands, designs and sizes to be extensive, the variety seeking consumers will additionally perceive greater utility and consumers with uncertain preferences will also believe they have more flexibility in their choices⁶⁸. Offering an almost unlimited category selection is however not only costly for the retailer, but can also affect the consumers negatively. Consumers will not be able to process all the information regarding the range of the assortment anyway, in fact it might only disturb consumers’ instinctive attempt to create an overview when deciding which store to visit. A too extensive selection might also impact the customers at the store in such a way, that they end up feeling overloaded, insecure and confused and actually decrease the likelihood of purchase⁶⁹. An optician retail brand therefore has to find the right balance, and the staff must not overwhelm the customers with too many alternatives and selection information.

Some studies have shown that consumers rarely have perfect information regarding a retailer’s assortment, either in regard to the breadth or depth of the assortment or the product brands offered within different categories⁷⁰. In addition, Porter and Claycomb⁷¹ (1997) demonstrate that having an anchor product brand or few product brands with high recognition is more significant in enhancing a retailer’s image, than having a broad selection of brands

67 Keller, Kevin Lane; Ailawadi, Kusum L (2004) ‘Understanding retail branding: Conceptual Insights and Research priorities’

68 Kahn, B. E.; Lehmann, D. R (1991) ‘Modeling Choice among assortments’

69 Kahn, B.E.; Huffman, C. (1998) ‘Variety for sale: mass customization or mass confusion?’

70 Amine, Abdelmajid; Cadenat, Sandrine (2003) ‘Efficient retailer assortment: a consumer choice evaluation perspective’

71 Porter, Steven S.; Claycomb, Cindy (1997) ‘The influence of brand recognition on retail store image’

with high recognition. In summery, it could therefore seem to be most advantageous for an optician retail brand to focus on a few product brands or designers with high recognition, which are strongly favored by consumers and perceived to be of high quality. This does not only make sense from an economical perspective but after reviewing the literature, it is also considered to possibly have the most positively effect on the store image of the optician retail brand. In our consumer analysis, we will examine both the importance of the assortment attribute and also try to see if the participants have any awareness of different designer brands and if so, whether or not the brands are connected to any particular optician retail brand.

Private Labels

In the literature, one specific aspect of optimizing a retailer’s assortment has got much attention and that is the questions concerning private labels. In the majority of retail sectors, the retailers mainly carry manufacturer product brands, but increasingly, many retailers also choose to offer private labels, and some even exist only on the basis of private labels such as the English Mark and Spencer. The explanation behind the increasing use of private labels should properly be found in the numerous advantages provided by the addition of a private label in the assortment. In the literature, three arguments are especially speaking in favor of introducing a private label. First of all private labels typically provide retailers with higher percent margins, and secondly having a private label in many cases shift powers towards the retailers when negotiating with manufactures. Thirdly having a well-recognized private label, which is perceived to be of high quality or more precisely as a value for money alternative, could enhance retail image and loyalty⁷². The challenges connected with introducing a private label are though not straight-forwarded or without risks. The investment needed to introduce a successful private label is above all the biggest barrier, since a private label must have a certain salience in the consumers’ mind, and furthermore be perceived and considered as a real alternative to the existing product brand offerings. The needed expertise to introduce and promote a private label might not be present within the retailer’s organization, and the needed resources to build awareness and an image might be inadequate to make the launch successful. If the launch ends up being unsuccessful, it could furthermore not only mean that the retailer has lost a lot of capital but also result in damaging the store image. Just as a

72 Keller, Kevin Lane; Ailawadi, Kusum L (2004) ‘Understanding retail branding: Conceptual Insights and Research priorities’

established private label could improve the image of the retailer, the opposite could also happen and for some retailers the risk of damaging an otherwise strong image could be enough of a reason to reject the idea of introducing a private label.

In summary, the implications of having private labels in the optician sector are considered to be just as complex as discussed above, and the strategically decision whether or not to introduce a private label should be made by the top management based on heavily analysis regarding the customers’ preferences and the competitive situation among the existing brand products offered in the stores. In other words, the decision whether or not to introduce a private label seems even more comprehensive and related to higher risks compared to deciding whether or not to add a new service, make some in-store design changes or perhaps take in an additional manufacturer product brand. In our market analysis, we will look into which optician retail brands have introduced a private label and discuss the implications of this introduction. However, we will not thoroughly examine the private label collection introduced by Thiele, since such an analysis is beyond our scope of this thesis.