The Influence of Department Stores' Price Promotion Strategy Toward Consumers' Repurchase Intentions: A Moderation Model of Perceived Risks

Introduction

According to the Statistics Bureau of the Ministry of Economy of Taiwan, the annual turnover of domestic integrated commodity retailing in 2021 was $1,302 billion (NT$, New Taiwanese Dollars), of which department stores were $342.6 billion (26.3%), supermarkets were $248 billion (19.1%), chain convenience stores at $361 billion (27.8%), retail outlets were $244 billion (18.7%), and other retail sales of $106 billion (8.2%). As known in the above data, department stores play an important role in the domestic integrated commodity retailing industry. They also contribute considerably to the promotion of employment opportunities and national income. In 2021, although department stores’ turnover declined by 1.0% compared to that of 2020, in recent years, the government has promoted market internationalization, economic liberalization, and other initiatives. Thus, foreign logistic operators also seize the Taiwanese market for its financial advantages and advanced business technology. Additionally, because of the rise of hypermarkets, hypermarkets now threaten domestic department stores with considerable price competition. In recent years, domestic department store operators were in fierce competition with Japanese systems. In addition, operating costs are rising as prices rise, and price competition has also become a problem in the operation of department stores.

Therefore, from a practical point of view, how to reinforce satisfaction, purchase intention, repurchase intention, loyalty, store atmosphere, product quality, price, service quality, and promotion activities, are all directions the department stores industry should pursue. Thus, many studies emphasized exploring how to enhance customers’ satisfaction (Fredericks & Salter, 1995; Pizam, 2016; Leninkumar, 2017); how to enhance customers’ purchase intention (Raghubir & Corfman, 1999; Mirabi, 2015; Hussian, 2015; Younus, 2015); how to enhance customers’ repurchase intention (Zeithamal et al., 1996; Zboja & Volrhees, 2006; Lin, 2014; Suhaily, 2017); how to enhance customers’ loyalty (Patrick & Beckman, 2002; Nuseir, 2015; Themba, 2019); how to reinforce service quality (Carman, 1990; Fisk et al., 1993; Themba, 2019); and how to conduct market positioning and marketing strategy (Erickson & Jonansson, 1985; Mitchell, 2001). However, there is little research to explore the impact of department stores’ price promotions on repurchase intentions.

According to Baker et al. (2002), the customers’ intention to repurchase is an important indicator of consumer behavior. Mitchell (2001) points out that there are many variables affecting consumers’ purchase decisions, such as category, brand name, payment methods, service, purchase locations, store image, price, and promotion of products. Raghubir & Corfman (1999) also points out that price promotion allows consumers to pay with less money and for the replacement of equivalent products or services, which also stimulates consumers’ buying amount. In addition, Della Bitta et al. (1981) also notes that retailers usually take advantage of lower prices and higher comparisons to facilitate positive benefits for customers’ purchase decisions. Besides, promotion activities help stimulate communication between customers and companies and may provide certain incentives to attract customers to promote their repurchase intention (Raghubir & Corfman, 1999).