The importance of consumers' perceived risk in retail strategy

Gaining and sustaining a strategic competitive advantage in retailing requires knowledge of the attributes consumers value and use to discriminate between stores and why those attributes are important. Although many store image studies define discriminant attributes, few have attempted to explain either how these attributes lead to the satisfaction of personal shopping motives or how knowledge of these can be used to focus and reinforce a strategic position. The purpose of this article is to propose and examine a method to help retailers understand grocery consumers' store choice processes as a function of the linkages between store attributes, shopping motives and risk dimensions which can help them develop a more coherent and clearer positioning strategy.

Means‐end chain analysis is used to explore how grocery customers build a mental link between store attributes, the consequences of not having those attributes, and the motives for seeking them.

The findings suggest that shoppers' motives are linked to only four main risk dimensions, namely time, financial, psychosocial and physical, and we present evidence for reassessing store positioning strategies, giving more emphasis to the risks involved.

The article suggests that the prime heuristics that consumers use to compare grocery stores are the four main risk dimensions. While consumers may think heuristically (i.e. deal in general perceptions of stores rather than comparing stores in every detail), retailers act in detail, and knowledge of how store attributes are related to these risk dimensions is therefore useful to retail marketers in developing and positioning stores. The findings also confirm the usefulness of means‐end chain analysis as a methodology for assessing retail store motivations, because it allows researchers to define all the store attributes which are important to respondents, gain responses in the respondent's language, and examine the underlying motives to which tangible and intangible attributes are related. Furthermore, the constructs/elements elicited can be used to feed into Kelly's repertory grid analysis, which is useful in positioning studies for determining a company's competitive position on one of the four main positioning dimensions.

The work extends the theory of means‐end chains by highlighting the relationship between the terminal values it produces and risk dimensions. The research is relevant to retail marketers in terms of store development and personnel training, and to consumer researchers interested in risk measurement.