The role of retailer mindset and promotional resources in strengthening online brands Received (in revised form): 25th April 2012
Deborah A. Colton
is an Associate Professor of Marketing and International Business at the E. Philip Saunders College of Business, Rochester Institute of Technology. Her research interests include online marketing strategies and international marketing. She has articles published in the Journal of International Marketing, the Journal of World Business and the International Journal of Electronic Marketing and Retailing. With co-authors, her papers have earned awards at the American Marketing Association’s Educators’ conferences and is the 2009 recipient of the S. Tamer Cavusgil Award. She earned her doctorate from the University of South Carolina’s Moore School of Business.
ABSTRACT The power of brands is well recognized. Studies considering brands on the Internet generally do not to distinguish between pure play (Internet only) and bricksand-clicks (operate in brick-and-mortar and online channels) brands. Understanding how bricks-and-clicks strengthen their brands is worthy of investigation as they are inherently different than their pure play competitors. Framed from a resource-based perspective, this study considers the effects of retailer mindset (market orientation and willingness to cannibalize) and promotional resources (afﬁliate network size and advertising budget) on online brand strength. A sample of 85 bricks-and-clicks retailers provided the data to test a moderated regression model. The ﬁndings show that retailer mindset and promotional resources positively impact online brand strength but market turbulence does not moderate the relationships. The contributions of this study are the identiﬁcation of resources that may help fortify brands and the focus on bricks-and-clicks retailers.
Journal of Brand Management (2012) 20, 28–40. doi:10.1057/bm.2012.29; published online 1 June 2012 Keywords: online brands; willingness to cannibalize; market orientation; afﬁliates
Online retailing has captured the attention of companies and academics alike. This is not surprising given that online retailing in the United States alone has grown 420 per cent from 2000 to 2009 when online retail sales reached US$145 billion (U.S. Census, 2010). However, online retail sales account
Correspondence: Deborah A. Colton, E. Philip Saunders College of Business, Rochester Institute of Technology, Rochester, New York 14623, USA
for less than 4 per cent of total US retail sales indicating that additional growth opportunities still exist. The Top 500 Internet retailers in 2009 generated $126.4 billion in sales globally, representing 88 per cent of all online retail sales.1 Therefore, the remaining 12 per cent of online sales was spread across hundreds of thousands of
© 2012 Macmillan Publishers Ltd. 1350-23IX Journal of Brand Management
Vol. 20, 1, 28–40
The role of retailer mindset and promotional resources
online retailers. What separates the Top 500 from the rest of the online retailers? How does an online retailer differentiate itself in such a crowded marketplace? The top brands in online retailing, such as Amazon, Apple, Dell, Staples, Walmart, CDW and HP, are well known. However, the majority of online retailers have little or no brand awareness. Branding allows retailers to differentiate themselves from competitors. In retailing, branding is important given the intense competition and the inﬂuence it has on store choice (Ailawadi and Keller, 2004). Brands are extrinsic cues to quality (Zeithaml, 1988). They help reduce search costs and uncertainty (Rowley, 2004). In the online retail selling where there is no direct contact between the company and the customer, brands may play an important role in communicating quality and beneﬁts. We know that brands are important and that consumers consider them in patronage...