The effects of a private domain strategy on retail sales performance

• Main Author: CHEN, Jianzhong
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2023
• Subjects: private domain strategy; private domain degree; sales performance; store grade; brand category; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/etd_coll/538; https://ink.library.smu.edu.sg/context/etd_coll/article/1536/viewcontent/GPBA_AY2019_DBA_CHEN_JIANZHONG.pdf
• Institution: Singapore Management University

The proliferation of Internet technology has led people to become increasingly accustomed to online consumption, thus forming a substitution effect for offline consumption. In particular, the development of social media helps retailers circumvent public domain platforms and develop their own controllable private domain channels to cultivate emotionally connected loyal consumers and finally realize the monetization of emotional relationships. Through empirical study of the quarterly data of 244 self-operated stores of Sanse Corporation in the fourth quarter of 2022, this research obtained the following results: 1. The implementation of private domain marketing strategies, including private domain membership development strategies, live conversion strategies, and active promotion strategies, is conducive to improving the retail customer average transaction value (ATV) and sales. Among them, the membership development strategy plays the most significant role. 2. The impact of the private domain marketing strategies on the sales performance is achieved by enhancing the private domain degree. 3. The private domain strategies are more effective in promoting the sales performance of unknown brands, that is, the brand category will moderate the indirect relationship between the private domain strategies and the sales performance through the private domain degree. In the realm of private labeling, the impact on sales performance of proprietary brands is greater. 4. Private domain strategies have a greater impact on sales for lower-level stores, that is, store level will adjust the indirect relationship between private domain strategies and sales through private domain degree. However, store level has no significant moderating effect on the indirect relationship between private domain strategies and customer ATV. The empirical results show that the advancement of social media technology has created an opportunity for retailers to open up private domain traffic outside of public domain traffic. The implementation of private domain strategies provides an opportunity for small brands, or those unknown weak brands, to catch up with the sales performance of strong brands. This study empirically tested the mechanisms of the influence of private domain strategies on the sales performance of retailers, exploring the heterogeneity of different brands and store levels, and constructing an integrated logical framework, which is a significant contribution to the existing literature on privatization. This study focused on the impact of private domain strategies on the sales performance of retailers, and holds significant implications for the privatization transformation of the Chinese retail industry. First, retailers can use a variety of private domain tools to enhance sales performance by implementing private domain membership development strategies, live conversion strategies and active enhancement strategies, as well as the superimposing of various strategies. Second, a weak retailer could promote the privatization transformation of marketing channels, and even implement it as a dominant marketing strategy. Third, providing low-cost private domain tools and operational services to retailers will be a very promising emerging market.