University at Buffalo - The State University of New York

School of Management researchers found that consumers preferred buying premium items, like truffles, from specialized confectionary stores and were not averse to paying higher prices for them, compared to similar items at supermarkets.

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By CATHY WILDE

Published: Nov. 8, 2012

Specialty stores do not have to compete with supermarket prices to increase sales, according to a recent study by the School of Management.

Researchers found that consumers are not concerned about higher prices when shopping at specialty stores and that they are more likely to buy items related to their main purchase than at a supermarket.

In addition, specialty stores’ customers are more apt to respond to holiday promotions than to sale prices.

The study was conducted by Ram Bezawada, assistant professor, and Minakshi Trivedi, professor, in the Department of Marketing, along with SOM graduates, Ashish Kumar, assistant professor of marketing, Aalto University, Finland, and Karthik Sridhar, assistant professor of marketing, Ashland University.

Specialty retailers can benefit from the study by adjusting their sales strategy to focus on premium selection, cross-category items and holiday promotions, rather than price cuts, to increase sales, the researchers say.

The researchers analyzed data from 225 households, comparing candy sales in supermarkets to sales in specialized confectionary stores. They found that consumers preferred buying premium items, like boxed chocolates, from the specialty stores and were not averse to paying higher prices for them in comparison to similar items at supermarkets.

The results also showed that consumers were more likely to buy additional premium candies when at confectionary stores than when shopping at supermarkets.

Finally, the researchers found that promotions featuring sale prices at the specialty stores did not have as great an effect on increasing sales as similar lower-price promotions at the larger markets. Instead, consumers responded more favorably to promotions featuring seasonal or holiday themes, such as Valentine’s Day or Easter.