Consumers' brand decision: a matter of social risk

Abstract

Purpose

This study aims to investigate the impact of social risk and inter-tier brand competition across traditional retailers and discounters on consumers' purchase intentions in the UK.

Design/methodology/approach

The authors conduct a 2 (social risk) × 3 (brand type) × 2 (retailer type) between-subjects design (n = 309; UK) experiment employing a Qualtrics online panel in the UK.

Findings

The study shows that while premium private labels (PPLs) are on par with national brands, discounter's PPLs outperform mainstream retailer's PPLs. Furthermore, consumers appear to purchase standard private labels and PPLs for themselves when shopping at a discounter but turn to national brands when shopping for socially risky situations.

Research limitations/implications

While Tesco's premium (Tesco Finest*) and standard private label (Tesco Everyday Value) explicitly make reference to the retailer's name, for Lidl's premium (Deluxe) and standard private label (e.g. Milbona), the discounter's name is not visible. This is something this study did not control for.

Practical implications

Given that Lidl has opened its first US store in 2017 with ambitious expansion plans, our findings provide in particular practical guidelines for how to promote PPLs in countries where the discounter landscape is less saturated than in Germany.

Originality/value

This study provides insights into the understanding of the influence of social risk on purchasing intentions of premium private labels vs standard private labels vs national brands offered by mainstream retailers or discounters in the UK.

Citation

Loebnitz, N., Zielke, S. and Grunert, K.G. (2020), "Consumers' brand decision: a matter of social risk", International Journal of Retail & Distribution Management, Vol. 48 No. 6, pp. 575-589. https://doi.org/10.1108/IJRDM-02-2019-0062