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You own a digital-native brand and you want to set up a physical brand store? Read this first

Despite the cannibalizing impact on their own online channel, brand stores are an effective means to increase a brand’s top-line sales. Digital natives in startup or growth markets that aim to draw investors’ attention can try to improve their valuation through brand stores and the corresponding sales growth.

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Multichannel retailing has become crucial to the sales strategy of any brand, including digital-native brands that started retailing as online-only. Digital-native brands like Quip in the U.S. and Myprotein in Europe have partnered with independent retailers to offer consumers an in-person retail option. But some brands—especially those in the fast-moving consumer goods (FMCG) category—have opened their own brand stores to create a bigger physical footprint.

Researchers from Erasmus School of Economics at Erasmus University Rotterdam, KU Leuven, Universität zu Lübeck, Christian-Albrechts-Universität zu Kiel, and FoodLabs published a new Journal of Marketing article that investigates the multichannel impact of brand stores by digital-native FMCG brands.

The study, appearing in the Journal of Marketing, is titled “Assessing the Multichannel Impact of Brand Store Entry by a Digital-Native Grocery Brand” and is authored by Michiel Van Crombrugge, Els Breugelmans, Florian Breiner, and Christian W. Scheiner.

Brand stores are brick-and-mortar stores owned and operated by the manufacturer. They carry only the brand’s products and are designed to sell them profitably in a brand-centric environment.

Van Crombrugge explains that “these stores offer physical exposure, which digital-native brands might struggle to attain on supermarket shelves given the steep competition from mass-market brands.”

Brand stores increase brand awareness, which in turn can increase sales in the company-owned online channel and independent supermarkets.

“Brand stores can also spark distributor interest and prompt supermarkets to distribute more of the brand on their shelves. Since the number of brand stores that a digital-native FMCG brand can open is limited, increasing breadth and depth of supermarket distribution can further drive brand sales,” adds Breugelmans.

Yet brand stores also entail risks. Sales in this channel may cannibalize sales in the incumbent channels if consumers migrate to the newly opened brand store. If brand stores signal the manufacturer’s encroachment, supermarkets might reduce their distribution of the brand. Finally, opening and operating brand stores is expensive and these substantial operational costs put pressure on profits.

The Supermarket Effect

This research uncovers a substantially different impact of brand store entry on own-online channel sales than on sales in independent supermarkets. In areas in the vicinity of brand stores, the brand’s online channel sales decreased, yet its supermarket sales increased. This is because for customers seeking a more elevated consumption experience, brand stores offer an interesting alternative, which causes cannibalization of its own online channel.

In supermarkets, on the other hand, buyers are mainly concerned with price and convenience. For them, brand stores offer an opportunity to discover a digital-native brand that otherwise would have remained anonymous between bigger mass-market brands, which in turn causes supermarket sales to increase.

Brand Distribution

The research team also discovers that brand stores spark distributor interest and prompt supermarkets to start distributing the brand on their shelves. Indeed, part of the supermarket sales increase that brand stores bring about is driven by brand stores’ positive effect on the number of supermarkets that carry the brand. This increase in distribution breadth is an important component to drive sales since brands cannot open brand stores everywhere.

“We find that brand stores generate an influx of own brand store sales that more than make up for any online losses. This is not necessarily surprising because their strong local visibility, typically in locations with high foot traffic, and their appeal to customers who lack opportunities or motivations to visit the online channel or supermarket make brand stores an attractive sales channel on their own,” Scheiner says.

Despite the cannibalizing impact on their own online channel, brand stores are an effective means to increase a brand’s top-line sales. Digital natives in startup or growth markets that aim to draw investors’ attention can try to improve their valuation through brand stores and the corresponding sales growth.

However, opening and running brand stores is a capital-intensive operation due to factors such as store rental cost and sales staff wages. Breinder warns that “our analyses show that nearly half of the brand stores under study were not able to turn a profit. Brands therefore need to carefully weigh brand stores’ top-line gains against their high operational expenses to justify the investment financially.”

These findings offer important insights and caveats to digital-native brands that consider opening brand stores to increase their physical footprint beyond supermarkets. The upside is that brand stores can help digital natives reach potential consumers and gain additional physical exposure that FMCG brands especially require. Yet brand stores are not without risks: they may hurt the brand’s sales in the online channel where the digital native started and further impact brand profitability if the influx of new sales is not great enough to cover those online losses and the brand stores’ own substantial operating costs.

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Reversible words can lower consumer disbelief in ads

A simple word choice in marketing messages can significantly impact how confident consumers feel about believing – or not believing – a claim.

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It’s estimated that consumers experience hundreds if not thousands of marketing messages daily. While the exact number can depend, how much someone believes the message can be more important for marketing success than the number of messages they see. 

A new study reveals that a simple word choice in marketing messages can significantly impact how confident consumers feel about believing – or not believing – a claim. Researchers found that when words differ in their “reversability,” or how easily people can think of their opposites, it can trigger different mental processes when consumers evaluate marketing language. 

Imagine the messaging options for a new sunscreen designed specifically for those who like a strong scented product. The first product description reads, “The scent is prominent,” while the second notes, “The scent is intense.” The word “prominent” is uni-polar, meaning people tend to negate it by adding “not” to the original statement.

“Intense,” though, is a bi-polar word, meaning readers can easily come up with its opposite meaning and negate the statement by replacing it with its antonym. In this example, “The scent is mild,” instead of, “The scent is intense.” 

“When people encounter easily reversible words, like ‘intense’, in messages processed as negations (mild), they experience lower confidence in their judgements compared to words that are hard to reverse, like ‘prominent,’” explained Giulia Maimone, a postdoctoral scholar in marketing at the University of Florida Warrington College of Business. 

Across two experiments of more than 1,000 participants, the research demonstrated that this effect occurs because negations of bi-polar, or reversible, words engage a more elaborate cognitive process requiring additional mental effort, resulting in lower confidence of the statement’s truthfulness. 

Based on their findings, the researchers suggest that marketers take this advice when crafting language: for new products, use affirmative statements with easily reversible words, like ‘The scent is intense’ in the sunscreen example, which most consumers will judge as true with high confidence. Importantly, this language would also minimize the confidence of consumers who will be skeptical about the message, as they will process it via a more complex cognitive process that reduces confidence in those consumers’ disbelief. 

“This simple lexical choice could help companies maximize confidence in their desired messaging and minimize confidence among the doubters,” Maimone explained. 

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If you’re a perfectionist at work, your boss’ expectations may matter more than your own, research finds

Help your employees by clarifying expectations through regular feedback and performance conversations to reduce role ambiguity, as doing so can provide employees with a better understanding of role expectations and enhance mutual understanding of those standards.

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If you’re among the 93% of people who struggle with perfectionism at work, new research suggests that your experience may depend less on your own high standards and more on whether those standards meet your supervisor’s expectations. 

Researchers from the University of Florida Warrington College of Business found that whether perfectionism helps or harms employees depends largely on whether employees’ personal standards align with their supervisors’ expectations. 

Specifically, they looked at the connection between employees’ self-oriented perfectionism, or the expectations of flawlessness they set for themselves, and supervisors’ other-oriented perfectionism, which reflects the extent to which they set excessively high standards for and critically evaluate their employees’ performance. 

Using data from more than 350 employees and about 100 supervisors, the researchers found that perfectionism’s impact depends on whether employees’ standards align with what their supervisors expect and how clearly those expectations are understood. 

When employees’ personal standards are aligned with their supervisors’ expectations, they tend to experience less role ambiguity, meaning they have less uncertainty about the expectations and standards for their role, why those standards matter and the consequences of not meeting them. This clarity in their work is linked to better performance, lower burnout and higher job satisfaction. 

“Problems between employees and their supervisors are more likely to arise when these expectations don’t match,” explained Brian Swider, Beth Ayers McCague Family Professor.

The most difficult situation occurs, Swider and his colleagues found, is when supervisors expect higher levels of perfectionism than employees expect from themselves. In these cases, employees reported greater uncertainty about their roles, along with worse work outcomes including higher burnout and lower job satisfaction.

“If you’re an employee who struggles with perfectionism at work, our findings suggest that understanding your supervisor’s expectations may be just as important as managing your own tendencies towards perfectionism,” Swider said. “Talking to your supervisor about priorities, standards and how your performance will be evaluated can help reduce uncertainty and ensure you both share a clear understanding of what success looks like.”

The researchers have similar recommendations for employers: help your employees by clarifying expectations through regular feedback and performance conversations to reduce role ambiguity, as doing so can provide employees with a better understanding of role expectations and enhance mutual understanding of those standards.

The researchers also recommend that organizations should consider how employees and supervisors are paired, as mismatched expectations can increase stress, reduce job satisfaction and ultimately impact performance. 

The research, “The influence of employee-supervisor perfectionism (in)congruence on employees: a configurational approach,” is published in Organizational Behavior and Human Decision Processes

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Study shows scaling startups risk increasing gender gaps

Founders with HR‑related education counteract these challenges. In ventures led by founders with HR training, the odds of hiring a woman increase by more than 30 percent, and the odds of appointing a woman to a managerial role increase by 14 percent for the same level of scaling.  

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When startups scale quickly, founders often make hurried hiring decisions that unintentionally disadvantage women, according to new study from the Stockholm School of Economics in Sweden. The study shows how the pressures of rapid growth increase the likelihood that founders rely on mental shortcuts and make biased decisions. 

Drawing on large‑scale Swedish data, the study shows that scaling—when companies hire far more people than their usual growth trend would predict—puts pressure on founders to decide swiftly, which increases the use of mental shortcuts. These shortcuts can activate gender stereotypes, shaping who gets hired and who moves into managerial roles.  

“During those moments of rapid growth, even well‑intentioned leaders can fall back on familiar stereotypes when assessing who they believe is best suited for the role,” says Mohamed Genedy, co-author and Postdoctoral Fellow at the House of Innovation, Stockholm School of Economics. 

Reduced odds of hiring female managers 

His research analyzes more than 31,000 new ventures founded in Sweden between 2004 and 2018. It finds that in male‑led startups, scaling reduces the odds of hiring a woman by about 18 percent, and the odds of appointing a woman to a managerial position by 22 percent.  

These patterns emerge even in a highly gender‑equal national context, making the findings especially noteworthy.  

Crucially, the study reveals that founders with HR‑related education counteract these challenges. In ventures led by founders with HR training, the odds of hiring a woman increase by more than 30 percent, and the odds of appointing a woman to a managerial role increase by 14 percent for the same level of scaling.  

“When founders have experience with structured hiring practices, the gender gaps shrink, and in some cases even reverse,” Genedy says.  

“This shows that getting the basics of HR right early on really pays off. When things start moving fast, founders with HR knowledge are less likely to rely on biased instincts and more likely to hire from a broader talent pool.”  

Prior experience in companies with established HR practices also helps, though less so. It raises the likelihood of hiring women as the new ventures scale, but does not significantly affect managerial appointments. 

Differences persist in female-led ventures 

The study additionally shows that these patterns are not driven by founder gender alone. Even solo female‑led ventures display similar tendencies when scaling, though to a somewhat lesser degree.  

And in female‑dominated industries, scaling increases the hiring of women for regular roles but still reduces the likelihood that women are appointed into managerial positions.  

“When scaling accelerates, cognitive bias kicks in for everyone,” says Mohamed Genedy. “Female founders are not immune to these patterns.”  

Together, these results point to underlying cognitive mechanisms that shape decisions under time pressure.

The study, Scaling with Bias? The role of founders’ HR knowledge and experience in hiring and managerial appointments, was published in Human Resource Management.

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