Anne O. Peschel, Lina F. Jacobsen and Sascha Steinmann*

*Aarhus BSS, Department of Management, Fuglesangs Allé 4, 8210 Aarhus V, Denmark, sst@mgmt.au.dk

Keywords: Diversity communication, retailing, construal-level theory, psychological distance, social identity, retailer brand image.

Abstract

Today’s marketplaces are becoming increasingly multicultural, but marketers are struggling with their intercultural competency (Demangeot et al. 2013). Almost all retailers implement a diversity & inclusion statement as part of their marketing communications (Burns et al. 2021), but academic research investigating their effectiveness on creating value for consumers is scarce. The aim of this project is to understand how diversity communication in retailing can influence consumer perception. We follow Demangeot et al. (2013) in adopting a broad lens of multicultural marketplaces by recognizing that society consists of different groups, which may vary in ethnicity, beliefs, disabilities, sexual orientation or simply lifestyles (Friedman et al. 2007).

We assume that consumers’ evaluation of diversity and inclusion statements in retailing is influenced by their social identity (Tajfel 1974). This implies that consumers’ group affiliations will determine how they react to different communication initiatives (Sierra and McQuitty 2007). Consequently, the individual consumer perceives him/herself as a member of an in-group of similar others and distinguishes him/herself from out-groups of dissimilar others. Diversity communication might attract out-group consumers to new marketplaces, which is likely perceived as a threat by in-group consumers (McGowan et al. 2019). Diversity communication might therefore have positive (e.g., increased value perception by previously excluded consumers) and negative (e.g., decreased value perception by in-group consumers) consequences that are hard to predict based on existing research. Drawing on Construal Level Theory (Trope and Liberman 2010), we propose that consumers will evaluate diversity initiatives based on their perception of social and psychological distance. We differentiate between diversity initiatives in retailing presented to consumers at an abstract (i.e., far distance) vs. concrete (i.e., close distance) level. We initially predict a positive effect of the abstract communication on retailer perception as it is in line with current acceptable values in society (e.g., Burns et al. 2021), but negative consequences of the concrete diversity communications as they provide indication that out-group consumers indeed will enter the specific retail space and thereby increase dissociative concern with the retailer. To test the previously discussed relationships, we conducted a between-subjects online experiment investigating the impact of the communication of retailer diversity actions on retailer perception.

In the online experiment diversity is communicated on the abstract level as a general corporate value of a hypothetical retailer. At the concrete level, diversity is communicated as either diverse product assortments (e.g., international, halal and kosher products) targeting different consumer groups or floor staff representing different social, ethnic, or religious backgrounds or sexual orientation. A representative sample of 561 Danish consumers participated in the study and were exposed to either one of the diversity communications and then rated, their perceived psychological distance (PD) (Loebnitz et al. 2020), their dissociative concern (DC) with the retail outlet (White and Dahl 2006) and their perception of the retailer on the three-dimensional Retailer Brand Image (RBI) scale by Kremer and Viot (2012).

We ran a serial mediation analysis (Hayes 2017, model 6) with PD and DC as mediators for all three dependent variables. We compare abstract vs concrete communications as well as both concrete communications with each other. Due to space limitations, we only present results for the value (RBIv) and price (RBIp) dimension of the RBI scale. RBIv as a general measure of customer value creation and RBIp as retailer price image is an important antecedent for store choice (Hamilton and Chernev 2013). The results for the third RBI supply dimension follow a similar pattern. The results show that generally, the more concrete communications were perceived at a closer PD compared to the abstract communication (β=.71, p<.001). We do not observe a difference between the two concrete communications. Also, we observe that more concrete communications lead to a higher DC with the retail outlet (β=.29, p<.05). Moreover, we observe that a closer PD leads to a lower DC (β=-.22, p<.001). In addition, we observe a perceived closer PD leading to higher RBIv and RBIp (β=.32, p<.001) and higher DC leading to lower RBIv (β=-.18, p<.001) and RBIp (β=-.10, p<.001). Importantly, we also observe a direct effect of concrete communications to reduce RBIv (β=-.44, p<.001), relative to abstract communications. The indirect effect of abstract vs concrete communications remains significant throughout both models, suggesting partial and full mediation of the effect on RBIv and RBIp respectively through PD and DC.

These results support our prediction in that abstract communications have a positive effect on retailer perception. In addition, they support our assumption in that more concrete communications are perceived at a closer PD. The results are not in line with our expectations, as they suggest that concrete communications reduce DC and thereby increase retailer perception.

The results of our experimental study suggest that a more abstract diversity communication provides a higher retailer value as well as a better price perception. However, when communications are more concrete, but perceived at a closer psychological distance, they will also improve value and price perception. This is due to the effect of reducing dissociative concern through perceived psychological closeness. This suggests that by accommodating one specific minority group, other minority groups and the majority group feel less spoken to by the retailer and therefore might see less value in choosing this specific retailer. Abstract statements might be less controversial for the retailer and leave room for interpretation, but concrete statements will enhance the likelihood of in-group and out-group consumers visiting the retail setting simultaneously and engaging with each other. This engagement will in turn positively influence Retailer Brand Image and foster multicultural marketplace well-being.

Retailers have to be aware of the impact of the level of psychological distance and dissociative concern as well as the related expectations they create in their target segment when implementing diversity and inclusion in their market communications as well as in their business practices (e.g., assortment, staffing). More concrete statements bear more risk as they will be easier to verify by consumers. Retailers will have to live up to the expectations they create in order to prevent backlash (Mukherjee and Althuizen 2020).

References

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