Explaining retail offer adaptation through psychic distance

Abstract

Purpose The purpose of this study is to examine empirically the relationship between psychic distance and adaptation of the retail offer across a range of countries. Design/methodology/approach Data were collected using a mail survey of randomly selected non‐food retailers that operated stores in at least three foreign countries. Findings Findings of this study suggest that a substantial proportion of retail offer adaptation is explained by psychic distance. In particular, differences in market structure, business practices and language between the home and foreign market significantly increase the extent to which retailers adapt their offer. Research limitations/implications The research findings may be limited in terms of their generalisability across retail sectors, as the study focused on non‐food retailers only. Practical implications These results have implications for researchers and managers in suggesting that we need to go beyond consumer behaviour differences to explain fully the degree to which international firms standardise or adapt their strategies in foreign markets. Originality/value Much of the existing research into standardisation and adaptation is limited in terms of geographic scope and a focus on the marketing strategies of manufacturing and export firms. Thus, this paper addresses a substantial gap in existing research by empirically examining the relationship between psychic distance and adaptation in a retail context and across a range of countries.