Exploring the relationship between customer experience and customer value in grocery retailing. Case: A K-Citymarket Grocery Store

Abstract

As competition, especially in grocery retail has increased in the last decade, retailers have begun to compete primarily with price often forgetting its customers and their needs. While price can be the main purchase motivator for certain customers, it is a unique customer experience that creates competitive advantage that is difficult to imitate as several academics such as Rintamäki et al. (2006) and Grewal et al. (2009) have pointed out. However, despite the importance of understanding the link between customer experience and customer value the field has been under researched during the past decade, despite the adoption of new technologies that has led to fundamental changes in the industry. Especially the relationship between customer experience and customer value has not been empirically studied in marketing academia. This raises the question of what consumers want from their retailer and whether the retailer's customer experience match the needs of the consumer. Thus, the aim of this thesis is to understand the value drivers of Finnish consumers and how grocery retailers are able to create value for them through the in-store customer experience that they offer. The findings of this study contribute towards customer value theory and develop future research topics for marketing researchers as well as business opportunities for Finnish grocery retailers, especially K-Group and the K-Retailers.

The research methodology used in this consumer research is focus group discussions as per the structure defined by Goodyear (1986). Three focus group discussions were conducted with the customers of one grocery store, K-Citymarket that is a part of K-Group in order to gain a deep understanding of the needs and expectations of its customer base. In addition to the focus group discussions two in-depth interviews were held with a loyal customer and the K-Retailer of the store.

The findings of the study show that customer experience creates value for customers in grocery retailing. Based on the empirical findings, economic value plays a less important role in store choice or the purchase situation when shopping at a grocery store with customer experience creating primarily functional as well as emotional value for consumers. While price consciousness depends significantly on the customer segment and life situation; it is a combination of economic, functional and emotional value that serves as the primary motivator for the purchases. A key theoretical contribution of this thesis that extends prior research is that trust is a key facilitator of value creation and it can also alienate customers if they are not able to trust that their retailer is able to meet their expectations as well as needs. This raises the need for further research on the topic in order to understand the role of trust in grocery shopping as well as extend the study to a wide range of retail contexts both in Finland and abroad in order to comprehensively understand the value combinations of different customers as well as their grocery purchase behavior.