Retail quality, market environment and business survival in the retail Apocalypse: an investigation of the sporting goods retail industry

Abstract

Purpose In the era of the retail Apocalypse, the surge of e-commerce has transmuted the competitive landscape for many traditional retailers that heavily rely on brick-and-mortar stores. This study examines the relationship among retail quality, market environment and businesses' survival in the context of the sporting goods retail industry. Design/methodology/approach Based on a data set from yelp.com, the authors examine the survival of 1,360 stores within 306 zip codes in the United States using mixed effects logistic modeling. Findings (1) Retail quality is positively related to survival, but the relationship is nonlinear; (2) the author find a null relationship between market competition and survival, which is subject to several competing interpretations; (3) 10% of the individual variation in survival is due to systematic differences between zip codes and (4) chain stores and stores with more heterogenous reviews have a higher closure rate. Originality/value This study contributes to the literature by offering an empirical testing of the relationship between retail quality and business survival and examining the impact of trading area in the modern marketing milieu. The findings have practical implications for site selection and designing a service quality program.

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