The Effects of Visual Merchandising, Layout, Store Facility, Store

Atmosphere on Store Patronage

Andreas Wijaya and Ongky Alex Sander

Bunda Mulia University, Lodan Raya No 2, Jakarta, Indonesia

Keywords: Visual Merchandising, Layout. Store Facility, Store Atmosphere, Store Patronage.

Abstract: This study examines the effects of a visual merchandising, layout, store facility, and store atmosphere

effects on store patronage in Transmart Carrefour Cempaka Putih Central Jakarta. Using the purposive

sampling, 85 complete samples were obtained via field questionnaire survey. The research model was tested

using Smart PLS02 and the result of correlation test of store atmosphere variables was 64.98% influenced

by a visual merchandising, layout, and store facilities and the rest of 35.02% were influenced by other

variables not examined in this study. Store patronage variables were influenced by the store atmosphere by

9.60%, while the remaining 90.4% influenced by other variables not examined in this study. The result of

the hypothesis test is H1 accepted, which means that the store atmosphere variable has a significant

influence on the variable of store atmosphere. H2 is rejected, which means layout variables does not have a

significant influence on the store atmosphere. H3 is accepted, which means store facilities variables have a

significant influence on the shop atmosphere. H4 is accepted, which means that the store atmosphere

variables have a significant influence on store patronage.

1 INTRODUCTION

In such a dynamic environment, preserving retail

businesses is important. To maintain their business

activity, retailers had to formulate the strategy to

attract consumer patronage intention to face the

intense competition. Research on patronage

intentions has been an important concern since a

long time ago, recorded by several researchers from

(Donovan, 1982; 1994) (Finn and Louviere, 1996),

(Pan and Zinkhan, 2006), (Teller and Schnedlitz,

2012). They have investigated the antecedent factors

of patronage, product selection and store

atmosphere. Another studied by (Kelley and

Stephenson, 1967), (Stephenson, 1969) in their study

explored the important components of patronage

motives: merchandise and service. According to

(Bitner, 1992); (Yoo, 1998); (Sherman, 1997);

(Baker, 2002) the layout can give a positive

impression to consumers and persuade patronage.

The other factors from a research conducted by Cox

and Brittain (1993); (Danic et al., 2005) observed

that good arrangement display of merchandises can

make consumer easier to see. (Moschis,1992); states

that patronage behaviour involves consumer

motivation for selecting a retail store and motivation

dimensions for shopping patronage a decision-

making process regarding place and product. (Shim

and Kotsiopolus,1992) defines shop patronage as

involving the tendency of the same store selection

over other stores. Consumers will decide to enter the

store through the evaluation of retail format.

Furthermore (Oppawel,2012) states the selection of

patronage through the format of retail and location

was a concern in the desire of consumers to visit.

By looking at the problems that exist above, the

researcher interested to conduct research on

patronage motives especially in a modern market.

According to Nielsen Global Survey (2015), there is

a difference between consumer behavior to choice

format retailing. Developed countries preferred to

shop at a supermarket, where in developed markets,

80% of sales come from large supermarkets,

hypermarkets, and convenience stores. And for

developing countries, people preferred to shop at a

traditional shop.

One of the main topics discussed to investigate

other variables from (Wijaya, 2016): product

assortment, price, and promotion and this research

also aimed to examine the mini theory that has been

done in previous research by (Sander and Wijaya,

2017) about store patronage. The objective of this

Wijaya, A. and Sander, O.

The Effects of Visual Merchandising, Layout, Store Facility, Store Atmosphere on Store Patronage.

DOI: 10.5220/0008490301850190

In Proceedings of the 7th International Conference on Entrepreneurship and Business Management (ICEBM Untar 2018), pages 185-190

ISBN: 978-989-758-363-6

185

research seeks to extend understanding of store

patronage in supercenter format, and sample will be

taken who had been purchased in store in Carrefour

Transmart. Our consideration in choosing Transmart

Carrefour is because it has a different concept

compared to its competitors' retailers, and this

involved the latest format from supermarket to

become supercenter. The new concept in Transmart

Carrefour store also corresponds with the theory of

retail according to (Hollander's, 1966;1981). The

history of retail development seems to demonstrate

an accordion pattern. Domination by general line,

wide-assortment retailers alternates with the

domination by specialized, narrow-line merchants.

But other researchers (Brown,1987) states that the

evolution of retail formats also consider the

consumer behavior such as one-stop shopping on a

wide store that provides a variety of merchandises

alters to a smaller store called specialty stores that

provide specific merchandise for consumer needs.

Currently, Transmart Carrefour presents the latest

concept in the world of retail which is the concept of

one-stop shopping. The latest concept of Transmart

Carrefour is a 4 in 1 concept where supermarkets not

only meet the needs of the community but are

equipped with lifestyle facilities such as theme

parks, mini trans studios, restaurants, cafes, and

cinemas. (www.marketeers.com)

2 LITERATURE REVIEW

2.1 Store Patronage

Store patronage is defined by several researchers.

Based on perception, image and consumer attitudes

(Burnkrant and Page, 1982) store patronage is

formed by experience, information, and needs.

Consumer patronage intentions are driven by a

combination of purchasing attitudes and normative

beliefs and behavioral motivations. This is also in

line with a research by (Haynes et al., 1994) that

defines patronage as how individuals choose an

outlet to visit rather than other stores, Another

definition of (Manning and Reece, 2004) that reveal

store patronages are a motive or a perception that

affects consumers buying goods in a store that is

facilitated by the seller. Patronage motives are also

one of the reasons consumers choose a store where

retailers should pay attention to merchandise that

will be sold as this is an important factor that affects

consumer purchase outcomes (Damir and Vouk,

2005). Significant factors that affect consumers in

store patronage are the value. Values can change

consumer attitudes and behaviors in terms of

selecting products, brands and retail stores to visit

(Kusnaeny et al., 2013).

2.2 Visual Merchandising

The visual merchandising can be used to beautify

the store view. (Diamond & Diamond, 2003) defined

as the presentation of a store and its merchandise in

ways that will attract the attention of potential

customers and motivate them to make purchases.

(Khan, 2014) Adds attractive visual merchandising

can attract more consumers to visit the store.

Ha1: Visual merchandising has a significant positive

influence on store atmosphere

2.3 Layout

The layout is very prominent in the retail business.

Research (Spies et al., 1997) reveals the layout

should be simple and can provide unexpected

surprises, so the consumers can experience an

impressive shopping experience, and if the design

layout of the front store is poorly, it would give a

negative impression to consumers (Jones, 1999);

(Baker et al., 2002)

Ha2: Layout has a significant positive influence on

store atmosphere

2.4 Store Facilities

Store facilities are services offered by stores to

provide convenience for consumers who shop (Levy

and Weitz, 2014). This is equally in accordance with

the research from (Berman and Evans, 2013),

whereby providing shop facilities can provide a

positive impression for consumers.

Ha3: Store facilities have a significant positive

influence on store atmosphere

2.5 Store Atmosphere

Customer attitude to Store Atmosphere, according to

(Levy and Weitz, 2001), is the design of an

environmental design through visual

communication, lighting, color, music, and smell to

stimulate perceptions and emotions from customers

and ultimately influence their spending behavior.

According to (Berman and Evans, 2013), the

atmosphere of the store is the atmosphere of the

store environment based on physical characteristics

that are typically used to build an impression and

persuade customers. Meanwhile, according to

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(Lamb, 2001), the atmosphere of the store represents

a whole that is delivered by the physical layout,

decoration and the surrounding environment.

Ha4: Store atmosphere has a significant positive

influence on store patronage

Figure 2.1: Research Framework.

3 METHODOLOGY

A field questionnaire survey was adopted to collect

data of 85 samples using a structured questionnaire

with closed questions and 5-point Likert response

scale. The sampling procedure was taken by

purposive sampling method, a tool for taking

samples with certain criteria. The Criteria of the

selected respondents at least had shopping one time

at Transmart Carrefour Cempaka Putih. The relevant

research used in this study is by (Turley and

Milliman, 2000) in Atmospheric effects on shopping

behaviour: A review of the experimental evidence.

They conclude patronage motives are influenced by

various factors such as location, layout, appearance

and store atmosphere, (Baker et al., 2002) in The

Influence of Multiple Store Environment Cues on

Perceived Merchandise Value and Patronage

Intentions stated shop patronage is influenced by the

arrangement of goods and (Banarjee and Yadav,

2012) in Analysis of visual merchandising: effect on

consumer buying behaviour reveals visual

merchandising can provide patronage intentions and

purchasing impacts.

4 DATA ANALYSIS AND

FINDING

Data had been analysed with SmartPLS02 to

describe outer model test including validity and

reliability test, and inner model involving the

coefficient of determination test and significance of

path coefficients test.

Figure 4.1: Path Model.

4.1 Outer Model

The outer model involves examining individual

indicator reliabilities fo reach construct’s composite

of measures as well as the measures convergent and

discriminant validity.

4.1.1 Validity Test

Validity test in PLS using convergent validity and

discriminant validity.

Convergent Validity Test:

Table 4.1: Convergent Validity Test.

AVE Communality

Visual Merchandising 0,652034 0,652034

Layout 0,721811 0,721811

Store Facility 0,608251 0,608251

Store Atmosphere 0,673110 0,673110

Store patronage 0,938341 0,938341

The convergent validity test evaluation was

carried out by using convergent validity which was

like the used measurement (outer) models. The

amount of loading factor of 0.5 for each variable in

AVE and communality is defined (Ghozali, 2011).

Discriminant Validity Test:

Table 4.2: Discriminant Validity Test.

VM L SF SA PS

VM1

0,854

0,612

0,689

0,655

0,234

VM2

0,885

0,582

0,705

0,638

0,427

VM3

0,666

0,512

0,442

0,397

0,270

0,454

0,796

0,401

0,434

0,196

0,660

0,836

0,615

0,601

0,325

0,645

0,913

0,600

0,582

0,299

The Effects of Visual Merchandising, Layout, Store Facility, Store Atmosphere on Store Patronage

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Table 4.2: Discriminant Validity Test. (cont.)

VM L SF SA PS

SF1

0,697

0,581

0,796

0,723

0,203

SF2

0,499

0,478

0,748

0,563

0,275

SF3

0,633

0,487

0,828

0,601

0,271

SF4

0,565

0,453

0,745

0,495

0,410

SA1

0,555

0,571

0,652

0,826

0,244

SA2

0,557

0,549

0,502

0,717

0,145

SA3

0,619

0,556

0,641

0,884

0,297

SA4

0,639

0,534

0,708

0,852

0,244

SA5

0,567

0,444

0,662

0,813

0,323

PS1

0,408

0,313

0,358

0,300

0,969

PS2

0,335

0,325

0,335

0,301

0,969

4.1.2 Reliability Test

Table 4.3: Reliability Test.

Cronbach’s Alpha

Composite

Reliability

Visual Merchandising 0,733128 0,847115

Layout 0,808032 0,885828

Store Facility 0,786709 0,861077

Store Atmosphere 0,877297 0,911093

Store patronage 0,934289 0,968190

The reliability test can be extracted from

composite reliability with PLS calculations. The

value of a variable is reliable if the composite

reliability value is > 0.70 and the result of all the

items have been met as a rule of thumb (Ghozali,

2011).

4.2 Inner Model

Evaluation for inner model involving coefficient

determination test and estimating the path

coefficient.

Coefficient Determination Test.

Table 4.4: Coefficient Determination Test.

R Square

Visual Merchandising

Layout

Store Facility

Store Atmosphere 0,649899

Store patronage 0,096059

The results are: Store Atmosphere variables had

been affected by the visuals merchandising as well

as layout and store facilities by 64.98%, the rest of

the 35.02% were from other variables not examined

in this study. Patronage Motive variables were

influenced by the store atmosphere at 9.60%, while

the remaining 90.4% was influenced by other

variables not examined in this study.

Significance of Path Coefficient.

Table 4.5: Significance Of Path Coefficient Test.

T Statistics (|O/STERR|)

Visual Merchandising -> Store

Atmosphere

2,064841

Layout -> Store Atmosphere 1,842815

Store Facility -> Store

Atmosphere

5,066661

Store Atmosphere -> Store

patronage

3,238372

Referring to the results of hypothesis test

researched in this study is H1 is accepted, which

means that the store atmosphere variable has a

significant influence on the variable of Store

Atmosphere. H2 is rejected, which means Layout

variables do not have a significant influence on the

store atmosphere. H3 is accepted, which means

Store Facilities variables have a significant influence

on the shop atmosphere. H4 is accepted, which

means that the store atmosphere variables have a

significant influence on Patronage.

5 CONCLUSIONS

This research aimed to examine the mini theory

from previous research by (Sander and Wijaya,

2017) about store patronage and also aims to

investigate extended variable in store patronage

(Wijaya, 2016). Based on the results, the following

conclusion is taken: the visual merchandising has a

significant effect on store atmosphere, because

consumers feel the existing product arrangement in

Carrefour Transmart Cempaka Putih is already neat

and always available to support the comfortable

shop atmosphere. The layout does not have a

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significant effect on store atmosphere variables; the

consumers feel the layout that exists in Carrefour

Transmart Cempaka Putih is wide enough, so the

consumer finds it quite difficult to find the product.

Store facility has a significant effect on store

atmosphere variables; the consumers feel the

existing storage facilities in Carrefour Transmart

Cempaka Putih such as air conditioning, toilets,

trolly, and EDC machines make a more convenient

atmosphere for store patronage. Store atmosphere

has a significant effect on store patronage; the

consumers feel the existing storage facilities in

Carrefour Transmart Cempaka Putih such as

lighting, music, scent, cleanliness, and color can

attract shop patronage. We suggested to another

researcher to find other variables in patronage

research such as location, access, and service.

6 DISCUSSION AND

LIMITATION

The result of this research has some limitation. The

sample taken was just 85 samples and was obtained

on weekends. We suggest another researcher to

increase samples and investigate another method of

collecting data in a weekday and weekends to see

consumer buying pattern and patronage motive as

well as adding some additional variables such as

location, promotion, and other situational variables.

Another interesting factor in this research is

technology environment. Many businesses now tried

to promote and advertise on the internet channel. We

suggest for another researcher to find out the

technology area. Such as the relationship from the

ease of technology with interest in store patronage,

whether to increase or decrease interest in store

patronage in terms of showrooming or free-riding

phenomenon.

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