Pers Ubiquit Comput (2013) 17:14691474

DOI 10.1007/s00779-012-0582-6

ORIGINAL ARTICLE

A study on the promotion of the business service for regional retail

store using smart technology
Hong Joo Lee

Received: 14 November 2011 / Accepted: 25 April 2012 / Published online: 20 July 2012
Springer-Verlag London Limited 2012

Abstract Recently, large supermarkets causing new

changes in the domestic distribution structure with price
break and large store operation are expanding their
advancement of super supermarket (SSM) into smallamount purchasing customers and causing frictions with
regional retail stores. So the government passed the
Large, Small and Medium-sized Enterprises Co-prosperity
Cooperation Promotion Law (Win-Win Law) at the
National Assembly in November 2010 to protect traditional
markets and has been making a lot of effort to find solutions to the problem of coexistence of the SSM with
regional retail stores. So this paper attempts to explore the
ways for regional retail stores to secure competitiveness
against SSM amid the changes in the domestic distribution
environment caused by the advancement of SSM.

1 Introduction
Today, changes in the large supermarket-oriented distribution environment have been diversifying customers
consumption patterns, and the advancement of SSM into
the community markets has become great threats to
regional retail stores lagging behind in terms of economies
of scale and price competitiveness. So, in order to resolve
the crisis of regional retail store in the regional markets that
are confronted with SSM, this research analyzes the
advantages and disadvantages of SSM through analyzing
preceding researches and explores the solutions to the
problems.

2 Literature review
2.1 Review of super supermarket and regional retail
store
2.1.1 Current conditions of SSM
According to the Influence of the Entry of SSM on Smalland Medium-sized Distributions issued by Korean Federation of Small- and Medium-sized Businesses in 2009 [1],
79.0 % of small- and medium-sized businesses responded
that their overall business deteriorated with the entry of SSM.
Particularly, 41.0 % responded that their business seriously
deteriorated, indicating that the overall business of smalland medium-sized businesses seriously worsened with
the entry of SSM. According to business data, average
daily sales of small- and medium-sized businesses
decreased to 34.1 %. The average daily number of customers
also decreased from 127.8/day to 80.8/day, a decrease of
approximately 36.7 %. Meanwhile, as the survival strategy,
the highest number of respondents cited no countermeasures (68.3 %), followed by delivery service (22.7 %),
competitor-level price reduction (13.7 %), and mileage
service (12.3 %). In other words, the analysis showed that
currently, the regional retail stores had no particular business
strategies against SSM (Fig. 1).
Accordingly, it can be said that it is urgent to explore the
practical ways to vitalize the business of the regional retail
stores.
2.1.2 Analysis of SSM

H. J. Lee (&)
Department of Industrial and Management Engineering,
Kyonggi University, Suwon, South Korea
e-mail: blue1024@kgu.ac.kr

The concept of SSM is somewhat unfamiliar to the United

States or Europe, and since it was born due to the geographical characteristics of Japan and Korea, its definition

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Fig. 1 Survival strategies to

cope with the entry of SSM.
Source Kbiz, the influence of
the entry of SSM on small and
medium distributions [1]
(unit: %)

or scope is not unified and varies depending on scholars.

Today, cutthroat competitions for SSM among big distribution corporations, which are more competitive in terms
of establishment cost, establishment conditions, and operational efficiency than large supermarkets, are accelerating
[2]. And convenience store businesses transform themselves into super-type convenience store and gradually
show the appearance of supermarkets dealing not only with
the existing convenience store goods but also with fresh
food such as fruits and vegetables [3]. Meanwhile, consumers tend to choose the stores that satisfy their purchase
needs in the same manner as they choose goods and brands.
This means that manufacturing companies and distribution
companies are bound to fall behind competition if they fail
to reflect consumers tastes and emotional changes [2]. In
other words, when considering these facts, the regional
retail stores are required promotion plan to establish differentiated strategy.
2.1.3 Critical success and failure factors of SSM
Recently, many researchers show great interest in the
business of regional retail stores, but researches on SSM
have not been very active. Particularly, SSM is unfamiliar
to the United States or Europe, so its definition or scope
differs, depending on scholars [2]. So, this paper analyzed
the research data of SSM and derived its success factors
and, based on this, attempted to present business ideas that
enable the regional small businesses to be equipped with
comparable competitiveness. To achieve this, I investigated the preceding researches as follows. According to
Park et al. [4], the advantages of SSM are the product
strategy in which the products most suitable to consumers
needs are arranged, the information capabilities based on
data, and the location competitiveness of commercial areas
adjacent to residential areas with a large floating population. And according to the analysis, it is more advantageous to establish many stores due to realization of
economies of scale. According to Chae et al. [2], most of
SSMs are run by big corporations capital, so they have
the advantages of supplying goods to consumers by
lowering the product prices. According to Yoon et al. [5],
success factors for SSM are easy accessibility from the

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surrounding commercial sphere and marketing for securing

loyal customers. According to Shin [6] analysis, the failure
factors for SSM are the governments restriction to establish SSM, consumers inconvenience due to limited business hours, and inadequate parking facilities due to the
location close to residential areas. He also asserted that the
governmental regulating policy for regional retail stores
can be a primary scheme to defend but can provide a reason of
trade conflicts. Therefore, to solve this problem, he suggested
that is social agreement procedures and development such as
the distribution governance system (Table 1).
2.1.4 Success and failure factors for small businesses
Park et al. [4] asserted that the greatest success factor for
regional retail stores are short-distance walk to shopping
center, enabling consumers to do small-amount purchases,
and making consumers feel that they are respected through
active communication between consumers and sellers.
According to Chae et als [2] research, most customers
consider relationship and communication with retail store
to buy items. Choi et al. [7] expected that regional retail
stores will gradually be declining along the trends of distribution structures due to their obsolete facilities and
product quality, not very cheap prices, and new generation
housewives pursuit of convenience. Yoon et al. [5] also
cited the shopping environment that is not pleasant, inadequate service, small shelves, and display of products with
low turn-over rate as failure factors. Hwang et al. [8]
presented inadequate public relations and sales promotion
and the lack of high-quality products as the problems of
regional retail stores (Table 2).
2.2 Review of customer purchase
2.2.1 Self-determination theory
Self-determination theory (SDT) represents a broad
framework for the study of human motivation and personality. The theory articulates a meta-theory for framing
motivational studies, a formal theory that defines intrinsic
and varied extrinsic sources of motivation, and a description of the respective roles of intrinsic and types of

Low
price

Variety
of products

Yoon et al. [5]

Cohen [26]

Baron et al. [25]

Shin [6]

Park et al. [4]

Jia [24]

Mascarenhas et al. [23]

Peterson [21]
Rodrguez et al. [22]

Palmer [20]

Mroszczyk [19]

Thanassoulis [18]

s
s

s
s

Inventory
management

McLaughlin et al. [17]

Product
quality

Self-service

Economy
of scale

Wallace et al. [16]

Bell [15]

Miller et al. [14]

Chae et al. [2]

Klemz et al. [13]

Berman et al. [12]

Brand
value

Table 1 Critical success factors for SSM

Clear and
safe store

s
s

Good
service

Staff
training

Customer
relationships

s
s

Convenient
location

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Table 2 Failure factors for

regional retail stores

Product
diversity

Products with
low turn-over
rate

High
price

Poor
location

Poor business
environment

Choi et al. [7]

Hwang et al. [8]

Spillan et al. [27]

s
s

Berges et al. [29]

extrinsic motivation in cognitive and social development

and in individual differences. Perhaps more importantly,
SDT propositions also focus on how social and cultural
factors facilitate or undermine peoples sense of volition
and initiative, in addition to their well-being and the quality
of their performance. Conditions supporting the individuals experience of autonomy, competence, and relatedness
are argued to foster the most volitional and high quality
forms of motivation and engagement for activities,
including enhanced performance, persistence, and creativity (Table 3).

Bailey [28]
Yoon et al. [5]

Obsolete
facilities

3 Product purchase model

Flow is the mental state of operation in which a person in

an activity is fully immersed in a feeling of energized
focus, full involvement, and success in the process of the
activity. To buy some items in a market, many customers
are searching items. This activity is optimal experience of
customer to purchase in market.

In this paper, based on the theoretical backgrounds, I

derived two factors for moderation effect of product purchase intention. These are intimateness and convenience
(Table 4).
Most customers want to do easy shopping and have
good communication with sellers. This paper developed
purchase intention model through two factors as shown in
Fig. 2.
If sellers provide convenience to customer, many customers will enjoy the shopping through convenience service from the seller. Also, intimateness means good
relationship between seller and customer. Regional retail
store will build good relationship with customer in the
trading of goods and services. And, customer will be
immersed in relationship with convenience by developing
it. If customers are feeling convenience and intimateness in
shopping, customers will be feeling satisfaction about
purchasing goods and service.

2.2.3 Satisfaction

3.1 Anymarket

Satisfaction is the customers fulfillment response. It is a

judgment that a goods/service feature, or the goods or
service itself, provided a pleasurable level of consumptionrelated fulfillment, including levels of over-fulfillment.

3.1.1 Virtual store

2.2.2 Flow

Homeplus is one of the biggest retailers in Korea [30]. Last

year, Homeplus created virtual stores in subway stations

Table 3 Definition of SDT Factors

Factors

Definition

Autonomy

Autonomy refers to the motivation of individuals to pursue their personal values and interests

Competence

Competence refers to the development of key skills and abilities

Relatedness

Relatedness refers to a sense of belonging in groups or close relationships with friends and family

Table 4 Definition of SDT Factors

Researcher

Factors

Berman et al. [12], Miller et al. [14], Palmer [20], Mascarenhas et al. [23], Park et al. [4], Chae et al. [2]
Chae et al. [2], Bell [15], McLaughlin et al. [17], Yoon et al. [5], Palmer [20], Park et al. [4], Jia [24], Shin [6], Baron et al. [25],
Cohen [26]

Intimateness
Convenience

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Fig. 2 Customer purchase model

hoping to blend into peoples everyday lives. The displays

were designed to look exactly like those in actual stores,
from display layout to the merchandise. Customers were
able to use their smart phones to scan QR codes, putting
goods in their online carts [9, 10].
When the online purchase was transacted, shopping was
delivered to the door right after customers reached their
homes (Fig. 3).
3.1.2 Limitation of virtual store
These days, virtual store provided by Homeplus has the
disadvantage. It is the place of purchase that is limited by
subway or bus stop station. For this reason, in the paper, I
suggested Anymarket.
From the Anymarket idea, customers purchase goods
anywhere in the desired location using beam projector in
Anymarket. Thus, Anymarket will be providing marketing
channel to connect customer and goods by low fixed cost.
Also, Anymarket has easy ordering system for customers
who find it difficult to do online shopping. Figure 4 shows
the location of Anymarket installation on street.
Also, customers will find it easy to purchase goods than
before by regional retail stores using business network
(Fig. 5).

4 Discussion
The results of analyzing the preceding researches in this
research showed that the advantages of SSM included low
price sale, economies of scale, marketing and product
strategies, efficiency of distribution system, short-distance

Fig. 4 Location of Anymarket

location strategy, pleasant interior environment, diverse

groups of products, service competitiveness, retention of
customer database, and convenient availability for customers. And inadequate parking facilities, lack of human
touch, limited business hour, the government regulation as
improvement factors for SSM were derived from the
analysis on the preceding researches. Particularly, many
researchers presented the recently reinforced government
regulations as the factors for hindering the growth of SSM.
On the other hand, low personnel expenses, adjacent
location, communication, and social relationships were
cited as the advantages of small businesses. Park [11]
emphasized that the regional attachment-type business, in
which attachment with key loyal customers is accumulated,
is important for small businesses that exercise target marketing, rather than mass marketing that large supermarkets
exercise. And as the disadvantages of small businesses that
fall behind in the competition with SSM, high prices, lack
of modernized facilities, lack of sales promotion and public
relations, lack of diversity in the products, limited information about the products, lack of educational and government supports, and inadequate service were cited.
Also, I suggested conceptual model of Anymarket for
regional retail store.

Fig. 3 Virtual store. Source

Homeplus

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Fig. 5 Business process of

Anymarket

5 Conclusion
This paper analyzed the advantages and disadvantages of
SSM and the advantages and disadvantages of regional
retail distribution businesses through analyzing the preceding researches. Through the research, the regional retail
distribution businesses can benchmark SSM and develop
new business ideas. However, more practical researches
through interviews with consumers and survey should
continue to be made.

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