(a) Purpose:
Considering the increasing competition and channel diversity due to retail modernization we aim to study the channel switching behavior progress in a long horizon and the customer-related factors as influencers of channel switching.
(b) Design/Methodology/Approach:
Major channel switching behaviors of households are analyzed during six years, using household panel data covering grocery purchases from supermarket, local market and traditional channels in Turkey. Household demographics and behavioral variables are induced from dataset and Logistic regression model is employed to measure the effects of customer-related variables on the probability of channel switching.
(c) Findings:
Traditional channel still keeps the highest loyal customer base in Turkey. Loyalty to both traditional channel and supermarkets decreases, while to local markets increases by time. Households loyal to traditional channel transfer either a small amount of their purchases to modern channels or make modern channels their major channel occasionally. In any case, there is a transition period experienced in Turkish grocery retail market. A multi-channel usage behavior or higher adoption to modern channel might me the result of this transition.
(d) Research Limitations/Implications:
Channel level analysis limits to define channel-related variables, such as price, place, product-variety specific to each channel format. Excluding these variables might explain partially the low explanatory power of the model.
(e) Practical Implications:
Analyzing channel-switching behavior, its progression and explaining determinants is important for retailers and producers in predicting the future of market structure, modern retail customer base and in designing the growth strategies. The variables influencing channel switching help to explain some barriers of modern retail development
