The Effects of Store Environment and Merchandise to Customer Responses : an Empirical Study

This study aims to determine the relationship between store environments consisting of social cues, design cues, ambient gestures, and merchandise cues and their impact on cognitive and affective consumer evaluations of stores and merchandise that will influence approach behavior. The retail industry in Indonesia has increased inevitably. This development is predicted to continue to increase to 8% by 2018. As a result, stores are competing to offer new and unique experiences for both cognitive and affective customers. Over the past decade, similar research has rarely been done. In addition, item cues variables are also rarely mentioned in previous studies. Therefore, this study aims to explain more about merchandise cues. The basis of this research is quantitative method, using descriptive research type with research object Foodmart Primo Maxxbox Lippo Village. The sample size involved 200 respondents selected by applying purposive sampling. After data collected, the data were analyzed by using structural equation modeling (SEM). There are three out of 12 hypotheses that were not supported in this study. The three hypotheses are the relationship between ambient cues with consumers’ cognitive evaluation of the store, and no relationship between consumer cognitive evaluation and approach behavior. Theoretical and managerial implications and suggestions for further research are also discussed in this study. Info Article History Article: Received December 2017 Approved February 2018 Published March 2018


INTRODUCTION
Retail industry has been a major industry in this country nowadays.In Banten province itself, according to Badan Pusat Statistik (BPS) per February 2015, there are 511 mini markets, 219 restaurants, 1311 food stalls, and 1494 grocery stores.With the large amount of stores and it will be rapidly increasing throughout the years, a store should have a competitive advantage to be able to survive in this high competition.
To survive the competition, a company or a shop store must understand the market itself.According to Barata and Halim (2016), the retail industry in Indonesia is experiencing significant growth of 6% in 5 years between 2013 and 2018.As a result, competition in the market becomes tighter and consumers are increasingly selective in choosing places to shop (Kumar & Kim, 2014).Because of the increasingly rapid and high competition, marketers are competing to achieve customer satisfaction in order for consumers to be loyal to their products.
Despite all the retail industry competition above, in the past decade, there were only several similar researches about the relationship between store environments to customer responses.Moreover, if there are, previous research only conducted their research with three main variables for store environment such as social cues, design cues, ambient cues.But, according to Kumar and Kim (2014), there is one variable that cannot be separated from the store environment.This variable is merchandise cue (Table 1).
As seen on the Table 1, the research had been conducted for more than 8 years.Moreover, there were only several researches about merchandise cues.So, this study will discuss more about merchandise cues variable and also will examine more about the model from Floor (2007) in a retail context.and Rossiter (1982) Barata and Halim (2016) stated that retail is a business activity from the producers to consumers including products or service that often used for individuals or families.On the other hand, according to Zentes (2016) retail is a process of buying products from an organization to be then resold to other consumers without any transformation.Furthermore, according to Kumar and Kim (2014), a retail store represents a brand itself that will strengthen the customer's emotional and rational relationships.Emotional affective process will be achieved if the customer feels a pleasant and exciting sensation in the store.While the cognitive process occurs when the shopping process feels easy and customers have the impression and also a positive opinion towards a store.This is measured by several factors such as: First, social cues associated with store employees such as service, appearance.Second, the design cues related to lighting, display stores.Third, ambient cues associated with the facility, the music played.Fourth, merchandise cues related to the type of goods sold, as well as the quality of goods sold.Kumar and Kim (2014) showed that Stimulus-Organism-Response (SOR) model applied in store environment which is a stimulus in this SOR model consist of: First, social cues, design cues, ambient cues, and also merchandise cues.Second, affective and cognitive evaluation that discusses consumer perceptions and evaluation towards store and merchandise.Third, approach behavior that will discuss about consumer response to an environment, that is, approach behavior.

Donnovan
According to the Psychology Dictionary; Kumar and Kim (2014); Barata and Halim (2016), approach behavior includes or positive responds of customer towards a store environment.Moreover, Chen and Hsieh (2011) stated that approach behavior was a positive interaction, impressions, and positive identification towards a store that makes a person want to go back to that store.In this interaction involves cognitive and affective evaluation.Chen and Hsieh (2011) stated that cognitive evaluation towards merchandise is a confirmation whether good or bad the expectations or quality of mer-chandise, as well as physiological activities in which sensory stimuli can turn into meaningful information.
On the other hand, Barata and Halim (2016) stated that cognitive evaluation is divided into three aspects: First, product components (consistency of product quality, product range).Second, the store service (service speed).Third, the promotional component (relationship with the supplier).In this study, two aspects involving cognitive evaluation are the cognitive evaluation towards store and the cognitive evaluation towards merchandise.If the consumers' opinion that a store has good terms of merchandise, it will affect the cognitive evaluation towards merchandise and if the consumer believes that a store has social cues, design cues and a good ambient cues, then it will affect the evaluation cognitive towards the store (Kumar & Kim, 2014).
On the other hand, according to Palacios et al. (2016), affective evaluation is a response of a person that includes a feeling and emotion.In this study, the subject of affective evaluation is divided into two parts: the affective evaluation towards store and the affective evaluation towards merchandise.Affective evaluation towards store is a response from a person when entering a store from comfort, attraction, value, pleasure and likes (Kumar & Kim, 2014).While affective evaluation towards merchandise is the response of a person to a good if there has been physical contact such as excitements.
There are four cues in store environment: store, social, design, and ambient cues.Chen and Hsieh (2011) stated that social cues are factors that related to people in an environment.In this study, social cues include employees as well as customers.According to Barata and Halim (2016), social cues reflect employees who are well-groomed, friendly, cooperative with customers, and knowledgeable about the product.When employees have a friendly and wellgroomed attitude, this will have a good impact on consumers 'cognitive evaluation of both the store and merchandise and create a positive impression on consumers' minds (Kumar & Kim, 2014).

Hypothesis Development Relationship between Store Environments towards Cognitive Evaluation
Design cues refer an aesthetic feeling that can be perceived directly by customers (Lin & Chiang, 2010).The design cues in this case study relate to aesthetic factors in a store that include spatial, color palettes, arrangement of goods, architecture, and decoration contained in the store.According to Kaltcheva (2014), the layout of the goods is important to note as it can increase the value of the goods.
Ambient cue refer to factors that can influence the potential of customers and may affect product evaluation (Olahut et al., 2012).These factors including the type of music played in the store, the lighting used to highlight the merchandise.Moreover, according to Holey (2012), a store value is determined by consumers from the atmosphere of the store.
Olahut et al. ( 2012) stated merchandise cues are items contained in a shop that are quickly updated in accordance with the latest styles that will create a competitive advantage.Competitive advantage can be created when a store meets all the requirements of goods include quality goods, variants of goods, the latest goods that can form a store image.A store image will appear if there is consistency of the terms of the goods.This will lead to a cognitive evaluation of the consumer towards merchandise (Purwa & Yasa, 2014).
Store environment that consists of social cues includes the appearance of the employee; the employee's manner will highly affects the cognitive evaluations of consumer.H1a: There is a positive relationship between social cues and cognitive evaluation towards the store.
Not to mention, the design cues which refers to the layout is an important factor in a store where it affects consumers to choose goods with a good layout (Kumar & Kim, 2014).For example, if the goods are placed neatly on top of them, they will be clearly visible to the consumer's eye so that the consumer is more interested in purchasing the goods than buying the goods on the downside display.This is what affects the cognitive evaluation of the consumer.Based on the above explanation, hypotheses can be developed: H1b: There is a positive relationship between design cues and cognitive evaluations towards the store.
In addition, ambient cues, according to Chebat and Michon (2003) the retailers must set the terms of atmosphere that consists of lighting, music played in the store as well as possible because the condition of the atmosphere is one of the least expensive technique that can be used to improve the positive evaluation of the customer.If consumers feel comfortable with the music and arrangement in a store, this will stimulate consumers to come back again.Therefore, a hypothesis can be drawn: H1c: There is a positive relationship between ambient cues and the cognitive evaluation towards store.
Furthermore, merchandise cues according to Newman and Patel (2004) are among the factors that influence cognitive evaluation.This is because the condition of the goods is a variable that determines whether the product sold in the store has a good quality, has a good variance.So, it can be expected that: H1d: There is a positive relationship between merchandise cues and cognitive evaluations towards store.

Relationship between Cognitive Evaluations and Affective Evaluations
Cognitive evaluation variables are divided into two.First, cognitive evaluations towards stores and cognitive evaluations towards merchandise.Moreover, affective evaluation is divided into affective evaluations towards stores and cognitive evaluation towards merchandise.According to Kumar and Kim (2014), when a person enters a store, the first thing that comes to their mind is the cognitive evaluation of the store measured by how comfortable a person in the store.Next, affective evaluation will appear when they found that the atmosphere is interesting, fun, unique.Furthermore, merchandise cues, when a consumer looking at goods in a store, then the cognitive evaluation will stimulate into the mind of consumers about the goods sold whether the quality is good or not, after it is stimulated, it will appear other stimuli that affect the emotions of people whether it feels that the product is unique or quality.H2a: There is a positive relationship between the cognitive evaluation towards store and the affective evaluation towards the store.H2b: There is a positive relationship between cognitive evaluation towards merchandise and affective evaluation towards merchandise.

Relationship of Cognitive Evaluation to Approach Avoidance Behavior
According to Kumar and Kim (2014), there are several studies that suggest that store environments affect the affective evaluation of a consumer as in (Donovan & Rossiter, 1982;Yoo et al., 1998;Rubin & Babbie, 2012).However, Kumar and Kim (2014) argue that if the store environment affects the cognitive evaluation of consumers so consumers pay attention to whether the product is sold quality, the environment around the store so that consumers have the desire to shop longer.H3a: There is a positive relationship between cognitive evaluation towards stores and approach behavior.H3b: There is a positive relationship between cognitive evaluation towards merchandise and approach behavior.

Affective Evaluation Relationship to Approach Avoidance Behavior
An emotion from a consumer greatly affects the relationship between store environ-ments and also approach behavior.If a consumer feels that a store has a good atmosphere and has a good product, it will stimulate consumers to last longer somewhere and visit the store again (Levy & Weitz, 2012).H3c: There is a positive relationship between the affective evaluation towards store and approach behavior.H3d: There is a positive relationship between the affective evaluation towards merchandise and approach behavior.

Relationship of Cognitive Evaluation and Affective Evaluation
Cognitive evaluation which is a way of thinking consumers towards a store and merchandise affect consumer emotions directly.It is converted in the form of a fun and also an exciting situation (Lam, 2001).However, although this has never been done before in a retail store, however, according to Namkung and Jong (2008), conducted a study in a restaurant stating that a product quality (cognitive evaluation) to the affective evaluation of the emotions of the consumer.H4a: There is a positive relationship between cognitive evaluation towards stores and cognitive evaluation towards merchandise.H4b: There is a positive relationship between the affective evaluation towards store and the affective evaluation towards merchandise.

Research Type
This research applied a quantitative paradigm where the aim is to test the hypothesis.The type of research used is descriptive research type in order to describe a situation.The research object used is Foodmart Primo Maxxbox Lippo Village with individual analysis which students from a private university in Tangerang as research respondents.The store was chosen based on the results of preliminary study in selecting research object.Specifically, respondents in the preliminary study was asked which store that they feel has a unique store environment.Most respondents answered Foodmart Primo Maxxbox Lippo Village for that question.

Measurement and Data Collection
All the variables used were taken from previous research and replication of Kumar and Kim (2014) research model with the modified indicator.The data collection method is using questionnaires with interval scale which is 5 point Likert scale.

Sampling
In this study, researchers decided to use non probability sampling which is purposive sampling with 100 samples for pretest and 200 samples.

Reliability and Validity Tests
Using the data already obtained, this study uses IBM SPSS Statistic software with   Note: SS: social cues, SD: design cues, SSU: ambient cues, SB: merchandise cues , KOGB: cognitive evaluation toward merchandise, KOGT: cognitive evaluation toward store, AFT: affectve evaluation toward store, AFB: affecive evaluation toward merchandise, AAB: approach behavior.
Cronbach's Alpha standard of 0.7 and item-tototal colleration of 0.3.As for the validity used is construct validity which has two terms namely discriminant validity and also convergent validity.Specifically, Exploratory Factor Analysis (EFA) and Pearson correlation (Santoso, 2011).

Data Analysis
Researchers use structural equation model (SEM) to examine the relationship between these variables.SEM is an analytical technique that is cross-sectional, linear and general.SEM consists of factor analysis, path analysis, and regression (Sarwono, 2012).SEM also consists of measurement models and structural models.

RESULT AND DISCUSSION
In this study, the researchers distributed questionnaires of 200 questionnaires and questionnaires that returned as much as 180.A fairly high percentage of 90% obtained from the results of methods conducted by researchers using the method personally administered where the researchers themselves who directly spread the questionnaire.
Pilot study was conducted to establish the goodness of research measures.Specifically, reliability test was assessed through Cronbach Alpha.The results of that assessment shows that the Cronbach Alpha values ranged between 0.64-0.79.The validity test was then conducted  (Hair, 2010).After pilot study was conducted, then the questionnaires were distributed to the actual respondents.Data was analyzed again through reliability (Table 1) and validity assessments (Table 2 and 3) before hypotheses testing.Table 2 shows that discriminant validity was achieved and Table 3 shows that convergent validity was obtained.In other words, the validty test show that construct validity was established in this research.
Hypotheses testing was assessed through Structural Equation Modeling.Spoecifically, this research applied SmartPLS3 program to test the T test and also p-value in order to determine the relationship between variables (Table 4).
Hypothesis H1c shows the relation between atmosphere cues to the cognitive evaluation of the store with a statistical t value of 0.344 and p value of 0.731 declared not supported or rejected in this study.There are several possible reasons why this hypothesis is not supported.First, because of the respondents in this study the majority of teenagers aged 18 years who do not care about the environment (Muhazir & Ismail, 2015).Age 18 years is a Z generation born in 1998 to 2009, where this generation grows in the era of technology.This generation tends to focus more on gadgets than on the real world so that this causes the generation to have a low level of concern for the environment.Secondly, when viewed from the statistical point of view, the average of ambiguity indicator indicators is "neutral" while the mean of the cognitive store evaluation variables is "agree".Therefore, this hypothesis is not supported in this study.The results of this study are similar to studies conducted by Pitchayapa and Kim (2016).
H3a hypothesis explains the store's cognitive evaluation of approach behavior.In this study, this hypothesis is not supported because it has a statistical t value of 1.486 and p value of 0.138.There are several possible reasons why this research is not supported.Firstly, because the respondents in the study were dominated by 18-year-olds who were inconsistent in decision-making and tended to follow friends or parents (Darlon, 2007).Therefore, it affects the approach behavior variable.Second, when viewed from the side of statistics, the average indicator of cognitive evaluation variables on the store answered "agree" while the average indicator approach behavior answered "neutral".
Hypothesis H3c which shows a relationship between cognitive evaluation of goods to approach behavior in this study is not supported.There are several possible reasons why this hypothesis is not supported.First, because the value of t statistics and p value that does not meet the requirements of 0.318 and 0.750.Second, when viewed from the side of descriptive statistics, then the results obtained is the average value on the cognitive product evaluation variable is "agree", while the average value of the approach behavior variable is "neutral".Third, this hypothesis is not supported the cause is because Foodmart Primo Maxxbox Lippo Village more provide goods -goods quality import.This causes the mind that first appeared in the minds of consumers is an expensive price so that consumers feel afraid to go into the store (Halim & Barata, 2016).Third, similar results are also found in research conducted by (Chen & Hsieh, 2011;Kumar & Kim, 2014;Halim & Barata, 2016).

CONCLUSION AND RECOMMENDATION
There are three out of twelve hypotehses that were not supported in this research.Those hypotheses are: (1) the relationship between ambient cues and cognitive evaluation toward store, (2) the relationship between cognitive evaluation toward store and approach behavior, and (3) the relationship between cognitive evaluation toward merchandise and approach behavior.
This research has several limitations.First, this study deals only with social cues, design cues, atmosphere cues, item cues in some indicators only.In fact, there is still much to be gleaned from these gestures as first on social cues that address hospitality, indicators of willingness, responsiveness in helping.
Second, design cue indicators that can include building architecture, color composition.Third, the atmosphere cues that can include the type of music, the intensity of light, the intensity of music, the smell of the smell in the store.Fourth, cues of goods that can be translated into a product that is a trend, ease of use of products, and product packaging.However, the indicators used in this study have represented these variables.The second limitation is regarding the respondents.In this research the researcher only use student and student from Universitas Pelita Harapan as sample.However, this limitation does not make this research unfavorable since most studies only use students in one university only.
The third limitation, the limitation of the object of research.So, the research object used only Foodmart Maxxbox Lippo Village from the many supermarkets spread in Lippo Karawaci.This is because the researcher wants to focus the research only to one object and of course the scope of the respondents is very limited ie only students / university students of Pelita Harapan University.
There are several recommendations for further reseach.First, researcher suggests that further researcher should explore more indicators that define and represent the design cues, ambient cues, merchandise cues in a store.Even though in this research the indicators already represent each variables, but, there are more things that need to be explore in a store.Second, in this research, there is only one research object which is Foodmart Primo Maxxbox Lippo Village, and not to mention, there are lots of other supermarkets that need to be explored.Third, the scope of respondents.Specifically, this research only applied students from one private university in Tangerang.Therefore, future research may apply different unit analysis/ respondents.
Figure 1.Research model

Table 3 .
Exploratory Factor Analysis