This study aims to focus on the role of niche brands in online retailer assortments and the general market positions of niche brands, no prior study has explicitly focused on if and when brick-and-mortar retailers should include niche brands in their category assortments.
The authors empirically analyze the category performance implications of focusing assortments on niche brands, at the expense of mainstream brands, in two product categories that have significant niche brand presence, namely, coffee and beer. The empirical data include sales, distribution and marketing tactical information for 50 US geographic markets from 2001–2011.
This research finds that a mainstream brand focus has a generally positive impact on category performance. However, a store’s strategic shift toward niche brands is beneficial in certain cases such as when a store has higher average prices or product form variety or when they are part of a powerful chain. The authors also find that a niche brand focus strategy is becoming increasingly viable over time for brick-and-mortar retailers.
Little is known about the parameters that might make a brick-and-mortar retailer more or less likely to pursue a niche brand focus strategy and when doing so might improve category performance. This analysis helps clarify the conditions under which a brick-and-mortar retailer may experience category level sales increases from focusing assortments on niche brands.
The authors wish to graciously thank the external financial support provided by a pair of sources: The Monty and Christine Botosan Bridge to Practice Doctoral Thesis Award Fund and the Product Development Management Association's Innovation Doctoral Consortium Speed Funding Competition held at the University of Illinois-Chicago.
Hoskins, J.D. and Griffin, A. (2020), "How a brick-and-mortar retailer’s strategic focus on niche (versus mainstream) brands influences category sales", Journal of Product & Brand Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JPBM-12-2019-2673Download as .RIS
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