Postprint version. Published in Journal of Retailing and Consumer Services, Volume 11, Issue 2, March 1, 2004, pages 95-107. © 2003 Elsevier Science Ltd. All rights reserved. The definitive version can be found online at http://dx.doi.org/10.1016/S0969-6989(03)00009-2.
According to one theoretical approach, the primary economic function of retailers is to deliver products together with distribution services. We use this framework to identify competitive niches for smaller retailers competing against big box stores. We compare the distribution services offered by the Home Depot versus smaller retailers using both in-store measures and consumer perception data, and the relative importance of distribution services as determinants of store choice. The results show that the Home Depot’s superiority in pricing and assortment attracts a significant market, but smaller retailers can secure niche markets by delivering higher levels of ambiance and information.