Journal of Retailing and Consumer Services ] (]]]]) ]]]–]]]

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Journal of Retailing and Consumer Services

0969-69

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journal homepage: www.elsevier.com/locate/jretconser

Retail fairness: Exploring consumer perceptions of fairness towardsretailers’ marketing tactics

Bang Nguyen a,n, Philipp ‘‘Phil’’ Klaus b,c,1

a Oxford Brookes University, Oxford Brookes Business School, Wheatley Campus, Oxford, OX33 1HX, United Kingdomb ESCE International Business School, Paris, Francec Dr. Klaus & Associates Consultancy, London, UK

a r t i c l e i n f o

Article history:

Received 9 June 2012

Received in revised form

29 November 2012

Accepted 8 February 2013

Keywords:

Fairness

Retailers

Marketing tactics

Trust

89/$ - see front matter & 2013 Elsevier Ltd. A

x.doi.org/10.1016/j.jretconser.2013.02.001

esponding author. Tel.: þ44 1865 485650.

ail addresses: b.nguyen@brookes.ac.uk (B. Ng

p.klaus@gmail.com (P.P. Klaus).

l.: þ33 349 8876196.

e cite this article as: Nguyen, B., Keting tactics. Journal of Retailing an

a b s t r a c t

The concept of fairness has received great attention in consumer behavior research lately. However, the

focus of these studies has mainly been the understanding of fairness in terms of pricing rather than

exploring the consumers’ perceptions of fairness itself. This study explores the consumers’ perceptions

of fairness as an outcome of a retailer’s marketing tactics. Based on 36 in-depth interviews this study

submits a conceptualization of retail fairness from the consumers’ point-of-view. The concept of retail

fairness constitutes of three dimensions and nine sub-dimensions, expanding our knowledge of the

construct. The study posits a crucial link between increased honesty, ethical, and moral behavior and

the understanding of retail fairness. Theoretical and managerial implications are discussed.

& 2013 Elsevier Ltd. All rights reserved.

1. Introduction

Consumers’ perceptions of fairness recently receive great inter-est from firms (Samaha et al., 2011), managers (Groves andLaRocca, 2011), and scholars (Bolton et al., 2010). Questionablemarketing tactics to attract and retain consumers, such as custo-mer tracking systems, information handling, favoring of profitableconsumers, dynamic pricing, hidden fees, and surcharges, raiseconcerns about the fairness consumers receive from retailers (Frowet al., 2011; Nguyen, 2012). Surprisingly, little attention has beengiven to the concept of fairness itself and the marketing tacticsfocusing on fairness.

The purpose of this paper is three-fold:

(1)

to explore consumers’ perceptions of fairness of retailers’marketing tactics;

(2)

to discover consumers’ attitudes towards (un)fair retailing, inorder to;

(3)

define what constitutes the retail fairness construct.

Exploring the construct of retail fairness perceptions from theconsumers’ point-of-view benefits marketers and retailers in anumber of ways: First, retailers will become aware of issues of

ll rights reserved.

uyen),

laus, P.‘‘., Retail fairness:d Consumer Services (2013

(un)fairness and its influence on consumer behavior. Second,creating an understanding of what constitutes retail fairness willallow retailers to amend their policies in order to changeconsumer behavior in a positive fashion, leading to an increasein customer satisfaction and positive word-of-mouth behavior(e.g. Rust et al., 2004; Fornell et al., 2010).

Fairness is of great importance to marketers and retailersbecause of the growing negative perceptions of marketing basedupon unethical and unfair business practices and marketingschemes (e.g. Gershoff et al., 2012). A conceptualization of retailfairness could identify ‘‘best practices’’ for retailers in terms offairness, leading to desirable marketing outcomes, namely increasedre-patronage, better reputation, and loyalty (Brady et al., 2012).While researchers posit fairness as an antecedent of these outcomes(Campbell, 1999), unfairness is suggested to lead to negativeconsequences for the retailer (Cox, 2001; Xia et al., 2004). Thesenegative outcomes include consumer complaints, dissatisfaction,switching behavior, negative word of mouth, distrust, subsequentlydamaging the retailer’s brand (Lo et al., 2007; White et al., 2012).Fairness is also a prevalent theme in different streams of marketingliterature, including customer relationship management, socialmarketing, and corporate social responsibility (e.g. Wu et al.,2012). Today, a company’s focus on fairness is more than just anecessity, it is an increasingly important differentiator betweencompanies (Nguyen and Simkin, forthcoming).

In our study we adopt a holistic view of fairness, highlightingthe positive connotations of the construct with good morals andethical behavior. This is in line with previous studies, whichreferred to fairness as ‘‘equitableness, fair dealing, honesty,

Exploring consumer perceptions of fairness towards retailers’), http://dx.doi.org/10.1016/j.jretconser.2013.02.001i

B. Nguyen, P.P. Klaus / Journal of Retailing and Consumer Services ] (]]]]) ]]]–]]]2

impartiality and uprightness’’ (e.g. Lee-Wingate and Stern, 2007:-400). This definition highlights the essential fairness elements incustomer treatment (Seiders and Berry, 1998), which in turnlead to a consumer’s perception of a retailer and retail fairness(Nguyen, 2012). A definition of retail fairness will provide anexcellent starting point to raise issues of fair treatment ofconsumers in retailing. Subsequently, our study aims at creatingawareness of the increased issues, challenges, and outcomes offair and unfair practices in retailing.

Our paper is structured as follows: First, we present ourtheoretical framing, guiding our exploratory study. Second, basedon our review of the literature and an exploratory study conduct-ing 36 in-depth interviews we present our findings. Next, weintroduce the construct of retail fairness and its dimensions.Finally, we discuss the theoretical and managerial implicationsof our study.

1.1. Literature review and theoretical framing

Any marketing activity shall be focused on three key themes,which are: establishing mutually satisfying exchanges (Raithelet al., 2012); building long-term relationships between the firmsand its customers (Boulding et al., 2005); and deliver theexperiences customers are looking for (Klaus and Maklan, 2011).Webster (2002) suggests that marketing requires customersreceiving value and firms receiving value in return, a process alsoknown as value co-creation (Prahalad and Ramaswamy, 2004;Troye and Supphellen, 2012).

Studies show that marketing practices are, on the contrary,often associated with dishonest and exploitative practices (Frowet al., 2011; Sheth and Sisodia, 2005; Smith, 2005). Someresearchers associate marketing practice with manipulative andquestionable ethics (e.g. Farmer, 1967; Smith, 2005). Consumersperceive, in particular, advertising as a manipulative tool (Pollayand Mittal, 1993). Consumers fear advertising’s manipulative,subliminal techniques, and increased sophistication (Hunt andChonko, 1984). Their perceptions of advertising’s use of incom-plete information, half-truths, and careful deceptions also affectthe credibility of advertising as an industry and communicationtool alike (Pollay, 1986). In a survey conducted by GfK CustomResearch (2008) on consumers’ perceptions of trust, advertiserswere the second least trusted group, after politicians.

Similarly, the issue of fairness has attracted a growing range ofstudies, as researchers raise concern about firms’ use of customerrelationship management (CRM) activities to extract customersurplus (e.g. Deighton, 2005; Namkung and Jang, 2010; Samahaet al., 2011). Specifically, researchers call for a careful considera-tion of fairness issues in areas such as data collection, handling,and data use (Boulding et al., 2005). Furthermore, there is thepotential for favoritism towards profitable consumers, whichrequires increased attention towards fairness issues (Nguyenand Simkin, 2013).

The concept of fairness has been researched in the marketingareas of price (Kahneman and Knetsch, 1986), targeted promo-tions (Lo et al., 2007), service (Mccoll-Kennedy and Sparks, 2003),and CRM (Nguyen, 2012). However, there is an increase inunfairness and in the development of applications that may beregarded as unfair. Retailers are adopting advanced trackingdevices such as RFID tags and face recognition systems as partof a larger monitoring system. This allows retailers to monitor andanalyze consumers’ behavioral intentions even closer. An exam-ple of consumers’ perceptions of unfairness is Amazon’s use ofdynamic pricing. Once exposed, consumers were outraged byAmazon’s practice of changing pricing for a DVD across differentpurchase occasions depending on location, day, and the amountof time spent on their website (Adamy, 2000). This example

Please cite this article as: Nguyen, B., Klaus, P.‘‘., Retail fairness:marketing tactics. Journal of Retailing and Consumer Services (2013

demonstrates how both, the price offered (Cox, 2001) and therationale for offering a certain price (Feinberg et al., 2002), maylead to perceptions of price unfairness (Xia et al., 2004).

Over the years, assessing the quality of firms’ activities hastraditionally been done in many ways, each approach addressinga specific field. Marketers have heavily relied on the SERVQUALmeasurements to understand the level of quality service that theycould provide at certain key moments in customer touch andcontact points (Parasuraman et al., 1988). Despite SERVQUALbeing the most popular tool to measure service quality, criticssuggest that it does not capture all aspects of services and lacksinsights into all aspects of relationship building and customerexperiences (Klaus and Maklan, 2007). In the present discussion,we identify that fairness is one of the concepts that SERVQUALdoes not explicitly enables to measure. We speculate that theconcept of fairness may not have been relevant when theSERVQUAL measure was developed. Nguyen and Simkin(forthcoming) note that the consequences of recent changes inthe present economy require a re-conceptualisation of the notionof fairness in marketing and customer management practices.Hence, to create fairer relationships, marketers should measurefairness of the functional aspects of services such as fairness inthe processes, fairness of the technical aspects including techno-logical developments, the fairness of outcomes as well as emo-tional aspects of the services (Klaus and Maklan, 2012). Thesefairness concepts extend beyond the SERVQUAL. We acknowledgethat many service fairness studies concentrate on the phenom-enon of justice perceptions in the context of service failure andrecovery (e.g. Mccoll-Kennedy and Sparks, 2003). Other studiesexamine service fairness on a more general level e.g. in relation toservice quality (Carr, 2007) or in restaurant environment(Namkung et al., 2009; Namkung and Jang, 2010). In the retailcontext, however, few studies have conceptualized retail fairness,creating a much-needed framework for retailers to pursue fairermarketing tactics. Our study addresses this gap, highlighting therole of fairness in key aspects of the retail marketing.

Fairness is considered a prerequisite for improving relationshipquality between buyers and sellers (Nguyen and Simkin,forthcoming; Oliver and Swan, 1989a,b). Fairness subsequentlyacts as an antecedent of trust (Morgan and Hunt, 1994). Research-ers suggest that fairness is, ‘‘a judgment of whether an outcomeand/or the process to reach an outcome are reasonable, acceptable,or just’’ (Bolton et al., 2003:474). Both equity theory (Adams,1965) and the principle of distributive justice (Greenberg andTyler, 1987) suggest that fairness perceptions are induced when aperson compares an outcome with a comparative other’s outcome.This other may refer to another person, a class of people, a firm, orthe individual’s prior experiences (Adams, 1965; Jacoby, 1976; Xiaet al., 2004; Klaus and Maklan, 2007). The principle of dualentitlement posits that individuals have expectations about whatthey are entitled to because of their personal situation (Kahnemanand Knetsch, 1986). For example, a senior citizen or student mayclaim that the bus ticket is unfair because s/he believes that s/he isentitled to lower prices due to reduced income (Xia et al., 2004).Researchers need to consider the individual’s knowledge, beliefs,and social norms in a society (Jewell and Barone, 2007). Also, theconsumers’ attributions towards a provider play a role in fairnessperceptions (Campbell, 1999). Attributions theory, exploring thisrelationship, posits that people are likely to search for causalexplanations for an event when the event is surprising and/ornegative (Folkes, 1988).

One of the main theories used in exploring the construct offairness is equity theory (e.g. Adams, 1965; Homans, 1961).Equity theory proposes that individuals in social exchange rela-tionships compare with each other the ratios of their inputs intothe exchange to their outcomes from the exchange. Inequity

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exists when the perceived inputs and/or outcomes in an exchangerelationship are psychologically inconsistent with the perceivedinputs and/or outcomes of the referent (Huppertz et al., 1978).For example, a customer may feel that s/he has not receivedenough promotional deals, offers or improved service comparedto the amount of time and money spent with a particular retailer.S/he may therefore feel that there is an inconsistent input versusoutput, and may feel unfairly treated (Haws and Bearden, 2006).Or if a consumer travels first class that consumer may expect toreceive better meals, more space, and an overall better experiencebecause of the high price. If these things are not fulfilledcompared to the last visit or compared to those travellingbusiness or economy class, the consumer will feel that there isan inconsistency between the perceived input and outcomes, andthus, be inclined perceptions of unfairness.

In other words, the concept of equality is related to issues offairness in that equality may lead to fairness, whereas inequalitymay lead to perceptions of unfairness. This is also illustrated bysocial exchange theory, which suggests the importance of powerin an exchange relationship between buyer and seller (Emerson,1976). Whenever a relationship is said to be symmetric, indicat-ing that a retailer and its customers have an equal reciprocalrelationship where both gain equally, this typically leads tofairness. On the other hand, whenever a relationship is said tobe asymmetric, this indicates that a retailer and its customer havean unequal relationship, where one side may have more power ina situation of negotiation (Nguyen, 2012). In such situations, aretailer may have an advantage by collecting consumer informa-tion and not reducing prices to benefit the consumer, but may usethe consumer information to increase their own profits. Thistypically leads to unfairness. This is a related example of theeconomic theory of consumer surplus, which examines consu-mers’ perceived value of a product/service and their willingnessto pay (e.g. Arndt, 1983; Hicks, 1945; Payne et al., 2008).

Scholars identify the relationships between fairness and satis-faction (Lo et al., 2007), relationship quality (Campbell, 1999), andvalue (Oh, 2000). These elements are intricately linked and seenboth as determinants and outcome variables of fairness percep-tions (Rondan-Cataluna and Martin-Ruiz, 2011). According to Oh(2000) fairness perceptions play an important role in the value-perception process. Oh (2000) puts forward the notion of ‘positiveprice unfairness’ which suggest that when there is potential gainfor the consumer, perceived value is more significantly affectedby price rather than by perceived quality (Rondan-Cataluna andMartin-Ruiz, 2011). In contrast, ‘negative price unfairness’ i.e.,potential loss for the consumer, exists when perceived value ismore significantly influenced by perceived quality than by per-ceived price. Oh (2003) concludes that overpricing (i.e. negativeprice unfairness) tends to lower buyers’ perceptions of quality,and that this leads to perceptions of lower value. Furthermore,perceived higher value is often associated with a higher reserveprice in the customer’s mind. According to this perspective,perceptions of fairness arise as a result of variables that areobservable by the consumer, and less related to variables that arenot observable to the consumer, such as the retailer’s inferredprofit margin (Bolton and Alba, 2006).

This is different to the traditional view of fairness, whichemerges as a result of perceptions towards the retailer’s profit(Bolton et al., 2003). This view builds on the principle ofdistributive justice and duel entitlement, which suggests thatthe major determinants’ of perceived price fairness are theconsumers’ perceptions of companies’ profit and their perceptionsof the value they are receiving in terms of the price of a particulargood as compared with an internal ‘reference price’ (Martın-Ruizand Rondan-Cataluna, 2008). It suggests that the fairness of theprice of a good or service is influenced by the perceived costs

Please cite this article as: Nguyen, B., Klaus, P.‘‘., Retail fairness:marketing tactics. Journal of Retailing and Consumer Services (2013

incurred by the retailer. Kahnemann and Knetsch (1986) explainthat the profit could be identified as a critical influencing factor ofperceived price fairness and that fairness is determined by botheconomic and psychosocial components (Campbell 1999;Maxwell, 1999). Even in a situation where retailer costs are absentor less transparent, the consumer make inferences towards theretailers’ costs to make a price that is considered as fair.

Bolton et al. (2003) show that increases in firm costs lead toincreased perceived fairness. Aggarwal and Vaidyanathan (2003)suggest that even cost-justified price increases can be perceivedas unfair when the locus of causality is internal to the seller and/or when the price increase is within the volitional control of theseller. Consequently, this effects the customers’ satisfaction. Forinstance, Homburg et al. (2005) reveal that as customer satisfac-tion increases, the negative impact of the magnitude of a priceincrease is weakened and thus, considered as fairer (Ratchfordand Sinha, 2008). Finally, Bolton and Alba (2006) show that theperceived fairness of the price increase will also depend on thealignability of the cost and price increases, such that alignableincreases are perceived as more acceptable than non-alignableincreases.

Most studies in fairness use distributive justice theory in theirtheoretical framing. In its beginnings, inequality research focusedon issues of distribution. This focus was based on the predomi-nant conceptualisations of fairness in social exchanges, expressedas the balance between outcomes and inputs (Homans, 1961).Later, researchers challenged the conceptual roots of distributiveapproaches through the study of justice (e.g. Folger, 1987;Greenberg and Tyler, 1987; Leventhal, 1980). They posit thatfairness is perceived by the way in which outcomes are deter-mined (Thibaut and Walker, 1975). This notion of proceduraljustice contrasts the distributive tradition, and research soonadopted the procedural notion into organisational settings(Greenberg and Tyler, 1987), performance appraisal processes(Folger, 1987), and prices (Dickson and Kalapurakal, 1994).Procedural justice, unlike distributive, stresses the importanceof the processes to reach an outcome rather than the outcomesitself. The discussion around the procedures in organisationalsettings is closely related to interactional justice, which focuseson the interpersonal treatment people receive when proceduresare implemented (Aryee et al., 2007). This is consistent withThibaut and Walker’s (1975) definition of fairness as a processdetermined from society and behavioural norms. For example,Amazon.com’s process of tracking purchasing behaviour of loyalcustomers enabled them to engage in differential pricing (Cox,2001; Klaus, forthcoming). Customers received this with angerand resentment when it was discovered that the firm had usedcustomer data to find out whether they were willing to pay higherprices. In this case, unfairness was evident because this differ-ential pricing strategy was seen as a violation of society norms.More recently, Rondan-Cataluna and Martin-Ruiz (2011) notethat within a framework in which outcomes are allocated in linewith an individual’s expectations and desired outcomes, he or shewill perceive distributive justice (Johnson et al., 2009).

Although existing literature suggest incidents of unfairnessperceptions of marketers’ tactics and negative attitudes towardsthem, there is little discussion of those incidents grounded inconsumers’ perspectives (Campbell, 2007). This paper attempts toaddress this gap. Consumers’ perceptions of unfairness can lead toconsumers spreading negative word of mouth, complaints,switching, or other misbehavior that may damage the firm(Gregoire and Fisher, 2008; Xia et al., 2004). Consequently,retailers, in their exploration for profits, customer loyalty, andcompetitive advantages, must address concerns for consumerperceptions of unfairness (Homburg et al., 2007). Furthermore,due to the widespread use of social media, retailers operate in a

Exploring consumer perceptions of fairness towards retailers’), http://dx.doi.org/10.1016/j.jretconser.2013.02.001i

Table 1Profiles of interviewees.

Variables Sample profile (36)

Gender

Male 17

Female 19

Age range

18–30 18

31–45 11

46–over 7

Household income

Up to 25,000 18

25,001–40,000 6

40,001–65,000 5

65,001–over 7

Employment status

Full-time 18

Part-time 9

Student 6

Unemployed 3

B. Nguyen, P.P. Klaus / Journal of Retailing and Consumer Services ] (]]]]) ]]]–]]]4

more transparent market. This new consumer-driven interaction,in which consumers get more advice from peers, receive betterprice comparisons from dedicated websites, and profit from wordof mouth from ranking websites, leads to more unfairness as aresult of the transparency. It is therefore vital that concerns aboutretail (un)fairness are not only being raised, but being addressed(Martin et al., 2009). Additionally, as existing empirical studiesare primarily based on experiments and surveys, the currentstudy of consumers’ views would benefit from a primarilyqualitative approach, as explained in the next section. Based onthe literature reviewed above we define retail fairness as:

The successful execution of a fair retail marketing strategybased on consumers’ fairness perceptions of the procedures,interaction, and distributive outcomes. This strategy is built onjustice, trust, and service quality in order to create mutuallysatisfying relationships by delivering equally beneficial out-comes for consumer and retailer alike.

2. Method

This paper aims to explore consumers’ perceptions of, andattitudes towards, and fairness in retailing. This exploration willassist us in determining what constitutes retail fairness from aconsumer’s point-of-view. Using a qualitative approach, weexplore the dimensions of retail fairness and submit a conceptua-lization of retail fairness. Research advocates the use of qualita-tive approaches to explore consumers’ perceptions of constructssuch as experience and fairness (Klaus and Maklan, 2012).

We chose the retailing sector as study context for multiplereasons. The retailing sector is relevant because the environmentenables potential issues of unfairness to arise and, in particularcustomization of marketing practices to flourish (Grewal andLevy, 2009). Due to firms’ ability to detect and utilize consumers’data, this creates an increased use of customization (Simonson,2005) and increased potential for the differential treatment ofvarying consumer groups (e.g. profitable versus non-profitable,favored versus non-favored, etc.).

The retail sector allows us to explore fairness and its theoriesin a natural and realistic setting (Ashworth and McShane, 2012).Furthermore, the retail setting consists of factors vital for theoccurrence of fairness/unfairness, namely: (1) the desire toexchange goods and build relationships between firms and con-sumers, as (un)fairness may strengthen or weaken the relation-ships (Samaha et al., 2011); (2) the extensive use of customizationand personalization tactics, as individual treatment of consumersmay cause favoritism (Nguyen and Simkin, 2013) and inequality(Homans, 1961); (3) the presence of data collection, storing, anduse (Grewal et al., 2012). Monitoring and use of personal data hasbeen suggested as a possible factor to consumers’ perceptions ofunfairness in retailing (Frow et al., 2011), particularly with theuse of advanced technologies (Nguyen, 2012); and, (4) othermarket related criteria stimulating the use of dynamic marketingofferings—including high competition, free market, and switching(Berry, 1995; Gummesson, 1999). Such market characteristicswould increase the likelihood of firms acting in an unfair way,especially due to competitive pressures. Retailing is therefore,based on the high intensity of competition and the use variousmarketing tools/tactics to attract and retain consumers, a desir-able context to explore consumers’ perception of (un)fairness.

We conducted 36 in-depth interviews following a standar-dized open-ended format, in accordance with the exploratorynature of the research (Klaus and Maklan, 2011). The majority ofthe interviews were conducted face-to-face, and in some cases,telephone interview and follow-up email enquiries were used.

Please cite this article as: Nguyen, B., Klaus, P.‘‘., Retail fairness:marketing tactics. Journal of Retailing and Consumer Services (2013

This approach allows flexibility to discuss unexpected and rele-vant topics (Bryman, 2004). It allows the researcher to develop aholistic overview of the context under study by capturing in-depth data based on consumer perceptions (Miles and Huberman,1994; Saunders et al., 2003). The principal researcher conductedthe interviews during Autumn 2009, Winter 2010 and Summer2012. Interviews were conducted at a pre-arranged locationeither at the respondents’ home or work place. For purposes ofanalysis, we voice recorded the interviews on a portable devicewith the respondents’ consent. We briefed all interviewees on thenature of the study and aims of the research prior to the inter-view. We then encouraged the interviewees to describe theirperceptions and experiences as consumers (Churchill, 1995).Table 1 shows the demographic profiles of the sample.

We designed and executed the following interview protocol:First there would be a brief section with introductory questionse.g. general biographical data about the person. This would befollowed by non-directive open-ended questions such as ‘‘whatare your experiences withy?’’ in order to get the respondentsopinions on various subjects in terms of retailing and theirperception of (un)fairness. As the interview took place, differentissues would be presented subsequently. This would allow theinterviewees to talk freely and comment on the various themes/concepts which are presented in this research such as perceptionsof fairness, transparency, or experiences with relationships withretailers etc. Most of the topics were identified from the review ofthe literature, but given the nature of the interview, there wassome flexibility in the direction of the interview as it took place(Kirmani and Campbell, 2004; Dagger et al., 2007).

Generating an initial item pool through qualitative research ispossible with an experience survey conducted with ‘‘a judgmentsample of persons who can offer some ideas and insights into thephenomenon’’ (Churchill, 1979:67). The objective is to create aninitial pool of items, which are scrutinized thoroughly with tests.We achieved data saturation (Glaser and Strauss, 1967) afterconducting in-depth interviews with 36, each interview lasting 45to 60 min. Data saturation refers to the point at which nonew information or themes are observed in the data (Glaser,2002). Guidelines for determining nonprobabilistic are sparse,but according to Guest and Johnson (2006) our sample exceedsthe evidence-based recommendation of 12 interviews. Thus, atotal of 36 in-depth interviews were deemed as an appropriatenumber for a preliminary investigation into this under-researchedarea (e.g. Lemke et al., 2011; Papathanassis and Knolle, 2011;Veal, 1997).

Exploring consumer perceptions of fairness towards retailers’), http://dx.doi.org/10.1016/j.jretconser.2013.02.001i

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The respondents that were chosen included shoppers andbuyers from various retailers; they were ages between 18–60with various jobs, urban, and highly educated including students,PhD researchers, and academics, qualifying them as ‘‘persons whocan offer insights into the phenomenon’’ (Churchill, 1979:67). Themajority were female, residing in the United Kingdom, and have ahousehold income of less than £30,000 p.a. A detailed sampleprofile is attached as Appendix A.

After data collection we transcribed the interviews and codedthe data using NVivo. This enabled us to generate key themes andcompare the data (Clisbee, 2003). Following a grounded approach,a systematic and coding process took place, analyzed in part bycomparing frequencies of responses. Subsequently, we assessedinter-coder reliability (Rust and Cooil, 1994), which confirmedcoding reliability (PRL statistic of .87). Specifically, careful con-siderations were given to the patterns in the transcriptions of theinterviews, and we grouped data together describing the sameviews. Furthermore, attention was given to the recurrence ofwords and phrases that were used by the respondents to describefairness. The analysis of the content highlighted consistencies andmeanings about fairness. Through interpretation, we made reflec-tions about the data in order to enrich the understanding offairness in retailing. This enabled us to provide support to theconceptualization and definition aimed for in this study. A sampletranscript is attached as Appendix B.

The initial stage of analysis involved the naming and definitionof each attribute, followed by a categorization. The attributes andcategory definitions were consistently refined throughout overseveral stages. To maximize the content and face validity of thegenerated dimensions, we asked a group of marketing academicsfamiliar with retail and consumer behavior to review them (Klausand Maklan, 2011). The agreement among the expert judges werehigh, suggesting high reliability (r¼ .89, po .05). This procedureresulted in three main dimensions with nine sub-dimensions, asdescribed next. The coding structure is attached as Appendix C.

3. Findings

The data analysis produced three main and nine sub-dimensions representing of the construct of retail fairness asfollows: (1) product dimension, which constitutes of the sub-dimensions quality products, value for money and good prices,and good reputation; (2) interaction dimension, representing thesub-dimensions honesty, transparency (no rip-offs/exploitation orhidden agenda), and ethical behavior; and (3) service dimension,including the sub-dimensions fair treatment, customer care, andgood services. We will now describe these main, and sub-dimensions in more detail.

3.1. Consumers’ perceptions of retailers’ fairness and their attitudes

towards retail fairness

3.1.1. Product dimension

The product dimension constitutes of three dimensions which arequality products, value for money and good prices, and good reputation.The product dimension describes an essential part of retail fairness,which is the perception of a fair exchange of goods. To achieveconsumer perceptions of fairness, products need to be identified aseither of high quality, delivering good value for money, or associatedwith a favorable (brand) reputation. In the following we willdescribe the three sub dimensions in more detail.

3.1.1.1. Quality products. The data analysis identifies a link betweenconsumers’ (negative or positive) perception of products quality andfairness. This finding suggests that retailers and marketers who

Please cite this article as: Nguyen, B., Klaus, P.‘‘., Retail fairness:marketing tactics. Journal of Retailing and Consumer Services (2013

build relationships with fair trade organizations in order to createfairness branded products are well regarded by the respondents.Examples include Fair Trade products, sustainable (green) products,and retailers supporting charities.

As long as the quality of their products is good, I will be happy tocome back again. In terms of fairness, I like products that supporta good cause such as eco eggs and recyclable/green products. Infact, I often look for the Fairtrade logo when I shop.

3.1.1.2. Value for money and good prices. The respondents state theconnection between value for money/good prices and theirperception of fairness. Amongst returning consumers, thisseems reasonable as their sense of consumer entitlement isusually in the form of lower prices and vouchers. Prices areeasily comparable and influence fairness perceptions when aprice has been decreased or increased. An interviewee explainedthis aspect, prevalent in attributions theory, as follows:

I associate fairness with (receiving) fair prices. I like it when aretailer gives me value for moneyy I always comparebetween several shops before making a purchase.

3.1.1.3. Good reputation. The findings verify that retailers who areperceived to ‘‘act fairly’’ are seen as retailers with a ‘‘good reputation’’.When talking about a good reputation in terms of fairness in retailers’tactics, respondents’ comments began with a list of their positiveperceptions. Most mention the benefits of loyalty programs andtargeted adverts. Other factors, influencing consumers’ perception ofretail fairness and subsequent positive reputation are: time savings,convenience, and the opportunity to compare products and servicesonline. When respondents are asked about negative perceptions,respondents swiftly mention issues with sharing their personal dataand the drawbacks such as spam mails, emails, and annoying phonecalls. Several respondents suggest that they try to avoid spam mailsby reducing the number of loyalty cards with the retailers. Consumersdo not like to give the retailers ‘‘too much’’ information aboutthemselves. As one of the respondent elaborates:

Sometimes, the information that the retailer offers to you isnot what you precisely want. Also, for customers, it is hard toknow that what your data would be used for. Certain compa-nies have a bad reputation around this.

3.1.2. Interaction dimension

The interaction dimension describes the exchange relationshipand dialogue between the retailer and consumer, and constitutesof the sub dimensions honesty and integrity, transparency (no rip-

offs/no exploitation/no hidden agenda), and ethical behavior. Thisdimension is an important fairness element as it distinguishes thecommon use of the word fairness from a more holistic interpreta-tion of fairness i.e. good morals.

3.1.2.1. Honesty and integrity. Honesty and integrity are stronglyidentified to be important for the consumers in defining retailfairness and fair behavior. For example, the use of customer datashows this link between integrity and retail fairness. This is statedby the respondents as they find obtrusive data collection as unfairand even illegal. A respondent state ‘‘firms that store customerdata without the customers’ consent lacks integrity’’. Anotherrespondent further elaborates his skeptical behavior about storingdata and says that, he dislikes ‘‘the idea that they know and storemany things about me (him)’’. However, with few choices, hefinds it necessary to keep using them because the service provideris the only retailer in the area. A respondent elaborates a similarsituation in the online context:

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I’m very skeptical about that [storing data]. Best example isGoogle. I hate the idea that they know and store many thingsabout me. However, as they are for me the number one onlineservice provider, I keep using them. If there is an alternativewhich wouldn’t collect data about myself, I would switch.

However, there are a range of opinions, and respondents arealso surprisingly relaxed about their personal data as they can seethe reason and the returns for why the firm is collecting theirinformation. The below quotes illustrate this:

‘‘Don’t mind if they send useful and valuable info’’; ‘‘That is finefor me, unless they leak my personal information to the thirdparty. If they do, they should inform that party’s name andnature to me.’’; ‘‘I am ok as long as it was voluntarily given andthey don’t share it with other companies or organizations’’.

The data submits that fairness perceptions are moderated ifperceived benefits outweigh the perceived challenges and short-comings. This phenomenon is well-cited in attributions theoryliterature, stating that positive inferences towards the retailerhave a stronger effect than the negative inferences. For example:‘‘If a retailer has a personality, I would like her to be friendly,honest, and trustworthy.’’

Our findings suggest that differential treatment of consumers,although mentioned, is not considered as highly influential in theconsumers’ perception of unfairness. For example:

No harm as we know, customers are differentiated because ofthe volume and value they buy from the firm. It’s a matter ofgetting used to it. In a real business world, everyone does it,favoring their most valuable customers that brings in moreprofit and who can possibly generate more word of mouthsales for the firm.

This indicates that certain practices, initially regarded asunfair, may seem fairer over time. This is in accordance withadaptation level theory, suggesting that exposure to earlierstimuli serves as a frame of reference by which later stimuli arejudged. For example, as the consumers get used to firms’ datacollection or differential treatment, they will perceive them asfair. This finding that has important implications for retailers,which we will discuss later.

Data indicates that consumers accept favoring practices as away of how business was done; the more profitable a consumer isfor a particular firm, the better deals that consumer gets. Asexplained by a respondent in terms of choosing cell phonesubscriptions, ‘‘this happens often, especially when peopleupgrade their monthly contract and bargain for new deals forthe following year.’’ If a consumer is dissatisfied with not getting asimilar offer as a peer, there is always the option of switchingbetween providers.

3.1.2.2. Transparency (no rip-offs/no exploitation/no hidden

agenda).. The data analysis submits that consumers feeling thatthey are being taken advantage of as a key element in their(un)fairness perceptions. There are plenty of examples of thishappening as identified by the respondents. Their experiences ofbeing vulnerable and unfairly treated in the retailing sector areoften evident. Respondents’ answers to what they found as beingunfair provide a range of answers. Examples include post-purchase cooling off period to protect consumers’ rights. Asexplained by a respondent some retailers potentially delay thepost/deliver of their product/service so when consumers receivetheir product/service, the cooling off period expires. While somerespondents feel that they could easily move to another provider,others had different experiences. Examples include firms actingunfairly by not fulfilling their promises and by not being

Please cite this article as: Nguyen, B., Klaus, P.‘‘., Retail fairness:marketing tactics. Journal of Retailing and Consumer Services (2013

transparent about their contractual bonds. These respondentsfeel vulnerable and have little choice to switch. They explainthat this is due to the sunk costs (i.e. the invested time in theexchange relationship). As a respondent explains:

When you buy something online, by law, you have at least7 days cooling off period to protect customers’ right. However,some retailers potentially delay the post/deliver of theirproduct/service. When customers receive their product/ser-vice, the cooling off period expires. It may be not cheating, butat least, unfairness.

Other respondents find that one has got to be careful with thefine print on the conditions etc. Interviewees mention the advertsfor the so-called cheap airline tickets are often found to bemisleading, because the final costs differ significantly from theinitial quote. Consumers do not appreciate associated hiddencosts and fees, no matter in which context. The lack of transpar-ency issue is strongly linked to perceptions of unfairness. Oftenconsumers’ choices to react to this practice are limited, especiallyin the travel industry, where a lack of transparency of costs oftenhappens. Consumers perceive unfair practice if the seller is in anadvantageous position and neglecting the relationship with them,a situation also known as displaying an asymmetric relationship.A respondent notes:

Firms which do not keep their promises regarding delivery anddelivery time. That’s unfair. Because you can’t do anythingabout it.

3.1.2.3. Ethical behavior. The data links consumers’ perception offairness to ethical behavior and morality. This holistic view offairness is adopted in the present study as it links fairness withintegrity, trust, and good morality, whereas unfairness links withdistrust and immoral behavior. A respondent states clearly:‘‘Fairness is the first step towards ethical behavior. We needmore of that today. Morality is lacking’’. Many cases of unfairnessmentioned by our interviewees are triggered by differentialtreatment. For example, a respondent finds it acceptable thatfirms should reward loyal customers, but that if this favoritism isbased on race, color, etc. this is found to be unacceptable. Indeed,such unethical behavior is not well received. For example:

No problem with that. Companies should reward loyal custo-mers. However, if this favoritism is based on race, color, etc.I am totally against it.

Some respondents feel that unfairness is in their control (i.e.they could switch), while others shared their experiences ofunfairness and suggested that this is the reason why the govern-ment is there - to protect the consumers’ rights with regulatedrestrictions. A respondent elaborates on the idea that the govern-ment has the responsibility to set a fair set of laws for industry. Ifunfair behavior happens, consumers may complain and act morestrategically by retaining their information. Examples are given ofcertain firms who lock-in consumers with contracts which con-sumers cannot easily get out from despite the dissatisfaction withtheir services. Other examples relate to exploitation of consu-mers, such as charging higher prices, here in the context of carservice and repair stations. One respondent finds a similaritybetween unfair banks with their charges and fees, and links thiswith the financial crisis, i.e. sub-prime lending. Such dishonestyand neglect of ethics is outrageous, another respondent states.A firm which has more power is a definite source to unfairnessperceptions. If a firm does not portray itself to be acting in a fairway, tighter laws will diminish a firm’s ability to build relation-ships with a consumer with the fear of having too much of anadvantage over the consumers. Thus, if a firm does not consider

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B. Nguyen, P.P. Klaus / Journal of Retailing and Consumer Services ] (]]]]) ]]]–]]] 7

issues of unfairness and belatedly, issues of trust, retailers’ tacticsmay be restricted and not be successfully implemented. On theissue of size and power of the retailer, a respondent state:

Yes, why not? That largely happens in cell phone industry. Butthe condition of that is this industry must be competitive. If itis not, say monopoly market, then that would be absolutelyunfair for customers.

3.1.3. Service dimension

The service dimension constitutes of the sub dimensions fair

treatment, customer care, and good services. The service dimensionidentifies consumers’ perceptions of fair service practices inretailing. A key ingredient of the service dimension is a recollec-tion of services that generates re-patronage and loyalty, asdisplayed by perceptions of fairer consumer treatment, customercare, and good services.

3.1.3.1. Fair treatment. There is a common belief amongstrespondents that treating consumers fair is desired, althoughsome respondents feel that it is not emphasized enough. Theyfeel unfairly treated being a ‘small’ consumer against a large retailfirm. Skepticism is often directed at the retailers’ size and power.Additionally, data collection, particularly the retailers’ use of aloyal consumers’ information are frequently mentioned. The datashows that sending out unsolicited advertisements is not wellreceived. This is followed by cold-calling consumers, especially ifit is not asked for in the first instance. Respondents clearly findthe use of personal data as an issue. This discussion of fairtreatment of data must be considered by retailers whendeveloping new marketing applications.

As a customer I expect to be treated fairly when I talk to thesales person. If I give them my details, I don’t want them toring me up to up-sell me. That is just annoying.

3.1.3.2. Customer care. Nearly all of the respondents mentioned thatfair retailers are those who know their customers and put efforts intocustomer caring. Respondents describe their experiences with fairretailers as those who they have not had any problems with—bothfrom the online retailers to the different service providers. The link tocustomer relationship management schemes is mentioned here,suggesting that a smooth, convenient, and easy transaction is whatexemplifies successful loyalty programs. As one respondent state:

When I buy clothes or shoes online, they sometimes send methe wrong color or the wrong size. Therefore, I will have tocontact their customer service and find out how I can

Fig. 1. Retail fairness c

Please cite this article as: Nguyen, B., Klaus, P.‘‘., Retail fairness:marketing tactics. Journal of Retailing and Consumer Services (2013

exchange the product, and it normally takes about a weekbefore I can actually get the product I ordered. But when theydo it quicker, I feel that they care for their customers.

3.1.3.3. Good services. All respondents indicate that a good shoppingexperience involves good service as a prerequisite to a positiveperception of a retailer’s marketing. Our study finds that fairnessdirectly links with good service. While helpful customer service arepraised, fair retailers provide services beyond the usual package, suchas ensuring time saving procedures and assisting consumerswith budget controlling. A smooth and easy transaction is whatexemplifies successful retailer with good services:

‘‘So far, I haven’t had any problems with any of the retailers orservice providers. We do shop on Tesco frequently as well and onemotivation is of course the fact that we also get points’’.

4. Discussion

This paper explores the consumers’ perceptions of retail fair-ness. Using an exploratory study conducting 36 in-depth inter-views based on a review of the literature, 3 main and 9 sub-dimensional consumer-experienced features of retail fairness areuncovered. Based on the findings, we submit a conceptual frame-work of retail fairness (See Fig. 1).

The dimensions and sub-dimensions of retail fairness found in thisstudy (see Table 2) are different from previous studies in fairness,including Xia et al. (2004), Campbell (2007), and Seiders and Berry(1998). Our findings indicate that it is imperative that rather thanlooking at prices, all aspects of these tactics, including CRM, loyalty-,and bonus programs are researched and implemented properly,reflecting consumers’ perceptions of fairness. Furthermore, based onour findings we posit increased honesty, integrity, ethical, and moralbehavior as drivers of fairness perceptions. These constructs areessential as they echo into customer engagement literatures, socialmarketing practices, and the management of corporate social respon-sibility (Dr�eze and Nunes, 2009; Wu et al., 2012).

Table 3 illustrates the differences between the various fairnessconceptualizations. Based upon the findings of this study, ourdefinition of retail fairness differs from past conceptualizationsbased upon the context of price and service fairness (Mccoll-Kennedy and Sparks, 2003; Xia et al., 2004). The emphasis onhonesty, integrity, transparency, and ethical behavior as part of aretailer’s marketing tactics are contemporary concepts that reflectan age where sophisticated technologies are advancing andtracking and monitoring of customers’ needs and behaviors havebecome the norm. Our conceptualization stresses the importanceof the fair use of such technologies in retailing in order to foster

onceptualization.

Exploring consumer perceptions of fairness towards retailers’), http://dx.doi.org/10.1016/j.jretconser.2013.02.001i

Table 2Dimensions of retail fairness.

Dimension Consumers’ attitudes

Product dimensionValue for money and good prices Respondents felt that fairness equaled value for money and low prices. This seems reasonable as low prices often create a sense

of consumer fairness. Amongst returning consumers, a sense of entitlement for value is often the case

Quality products Numerous examples were given on the link between quality products and fairness—both negative and positive. Indeed, many

marketers have built relationships with fair trade organizations in order to create fair products

Good reputation It is known that retailers that act fairly can build up a good reputation and goodwill. Findings verified this, by indicating that fair

retailers would also have good reputation

Interaction dimensionHonesty and integrity Discussions around issues of honesty as part of fair behavior by the retailers seem to be important for the consumers. Honesty is

found to link with increased trust

Transparency (no exploitation or

hidden agenda)

It was verified that one of the key element in fairness is to avoid ripping off consumers or taking advantage of consumers’

vulnerability. Surprisingly, there are plenty of examples of this happening

Ethical behavior Many found fairness to be closely linked with ethical behavior. The association between fairness, ethical behavior, and morality

was highlighted

Service dimensionFair treatment Treating consumers fair is desired although some felt that it was not emphasized enough, as they often felt unfairly treated

being a ‘small’ consumer against a large retail firm

Customer care Nearly all of the respondents mentioned that fair retailers are those who knows their consumers and put efforts into customer

caring

Good services All respondents indicated that good service was a prerequisite to a positive perception of a retailer’s marketing, and that

fairness directly links with good service

Table 3Differences between fairness conceptualizations.

Measures Dimensions Theories/variables1 Definitions

General fairness Distributive Equity (e.g. Huppertz et al., 1978) ‘‘Equitableness, fair dealing, honesty,

impartiality and uprightness’’

(Lee-Wingate and Stern, 2007:400)

Procedural Justice (e.g. Bies and Shapiro, 1987)

Interactional (Alexander and

Ruderman, 1987)

Inferred motive (e.g. Campbell,

1999)

Procedural fairness (e.g. Collie et al., 2002)

Distributive fairness (e.g. Laczniak and Murphy, 2008)

Interactional fairness (e.g. Oliver and Swan, 1989b)

Dual entitlement (Kahneman and Knetsch, 1986)

Satisfaction (e.g. Oliver and Swan, 1989a)

Norm (e.g. Maxwell, 1999)

Interpersonal treatment and informational justice

(Colquitt et al., 2001)

Price fairness Cognitive Price comparison (e.g. Cox, 2001) ‘‘A judgment of whether an outcome and/or

the process to reach an outcome are

reasonable,

acceptable, or just’’ (Bolton et al., 2003:474)

affective (Xia et al., 2004) Transaction similarity and choice of comparison party (e.g.

Bolton et al., 2003)

Distribution of cost and profit (e.g. Frey and Pommerehne,

1993)

Attributions of responsibility (e.g. Campbell, 2007)

Buyer–seller relationship stage (trust) (e.g. Ordonez et al.,

2000)

Service fairness Negative event Yield management (Kimes, 1994) ‘‘A customer’s perception of the degree of

justice in a service firm’s behaviour’’

(Seiders and Berry, 1998:9)

Conduct Justification (Urbany et al., 1988)

moral principles (Mccoll-Kennedy

and Sparks, 2003)

Service failure or poor service recovery (Mccoll-Kennedy

and Sparks, 2003)

Price, procedural, outcome, and interactional fairness

(Nankang and Jang, 2010)

Accountability (Mccoll-Kennedy and Sparks, 2003)

Systemic service fairness (Carr, 2007)

Retail fairness (based

on our study)

Product Value for money and good prices, quality products, good

reputation.

‘‘The degree of perceived quality, honesty,

and justice a customer has for a retailer’’

Interaction Honesty and integrity, transparency (no exploitation or

hidden agenda), ethical behavior.

Service Fair treatment, customer care, good services.

Variables refer to the attributes affecting fairness perceptions.

B. Nguyen, P.P. Klaus / Journal of Retailing and Consumer Services ] (]]]]) ]]]–]]]8

customer caring treatment for the benefits of long-term relation-ships between retailers and customers alike. We recognize thatMccoll-Kennedy and Sparks (2003) identifies the dimensionmoral principles as part of their conceptualization of servicefairness, however, in their study the fairness is studied from a

Please cite this article as: Nguyen, B., Klaus, P.‘‘., Retail fairness:marketing tactics. Journal of Retailing and Consumer Services (2013

service failure and poor service recovery context. Furthermore,Namkung and Jang (2010) explore both three and five dimensionsof fairness, with several aspects similar to retail fairness. Theconfirmation of these dimensions in a different context, retail,with an emphasis on marketing tactics, can be seen as a

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B. Nguyen, P.P. Klaus / Journal of Retailing and Consumer Services ] (]]]]) ]]]–]]] 9

contribution of our work, extending our knowledge about fair-ness. Our conceptualization differs from past fairness concepts,namely by focusing on retailer’s marketing tactics and therebyextracting fairness dimensions emphasizing morality, honesty,integrity, trust and equality in a single study.

Our study reveals features of retail fairness and how fairnessperceptions are driven by cases of differential treatment, favorit-ism, and data use. The data indicates that consumers perceivelock-in, hidden fees, and charges as unfair practice. Moreover,consumers perceive prices, promotions, services, loyalty schemes,differential treatment, data use, and unethical behavior (exploita-tion, dishonesty, and neglect of trust), as potentially causes ofunfairness. Unsolicited advertisements and cold-calling are alsonot desirable. This is an interesting result as so much effort is putinto providing offers through phone calls, more than everamongst service providers such as gas, electricity, and internetbroadband.

Marketing practices focused on differential treatment i.e.customers receiving different outcomes, are not atypical. Theretail sector has always been implementing differential pricesand services (Martin et al., 2009). Travel agents, for example, havebeen charging different prices for the same service for years.Retailers have been charging consumers with different prices forthe same products/services depending on store location, time ofyear, or types of consumers. Hotels, insurance agents, banks, etc.treat consumers differently depending on various segmentationschemes (Frow et al., 2011). Our findings suggest that consumerscompare offers with their friends, family, or colleagues beforeperceiving an offer as unfair. Indeed, comparison of offers anddeals is the first step to discovering an unfair situation (Xia et al.,2004). The literatures term this comparison standard as a self/other comparison whereas the alternative comparison standard istermed as a self/self comparison (Jacoby, 1976).

It seems that differential treatment of consumers may not besuch a serious problem as initially put forward by Boulding et al.(2005). That is, until consumers perceive these differentialtreatments. The data highlights examples of unfairness percep-tions triggered by favoring of consumers, particularly in terms ofprice customization (i.e. differential prices to different consumersfor the same product). Consumers refer to the online context,where they have more ways to compare various prices andoffers prior to their purchase. With increasing use of social media,more transparency between various retailers’ price points andpromotions exist, thus creating more comparison points, poten-tially leading to more unfairness (Nguyen and Mutum, 2012).From a political economic perspective, continuous marketresearch is necessary to get a sense of consumers’ fairnessperceptions. This view suggests the need to consider bothmicro and macro environmental factors in economics and govern-ance when interpreting marketing exchange outcomes (Arndt,1983). Retailers must learn the tipping point where consumerswill find unfair tactics to be fairer. Indeed, as adaptation leveltheory suggest, consumers can become adapted to an unfairsituation to find it fairer as times go by (Helson, 1948; Porathet al., 2010).

Our findings indicate that the level of shared understanding ofretail fairness is high. This suggests the opportunity to develop acommon definition of retail fairness. For instance, ‘‘good’’ and‘‘non-negative’’-behavior i.e. no exploitation/no rip-offs andtransparency are two traits that can illustrate fairness. This isconsistent with past studies, which emphasize the need toinclude concepts such as opportunistic behavior and transparencyin the study of fairness (Nguyen and Simkin, forthcoming). Issuesof transparency must be highlighted as many respondents reactednegatively to retailers, who distort information or has hidden feesand charges. It seems that consumers are likely to be suspicious

Please cite this article as: Nguyen, B., Klaus, P.‘‘., Retail fairness:marketing tactics. Journal of Retailing and Consumer Services (2013

and infer negatively towards a firm when it comes to issues withhidden charges, invisible costs, and other transparency relatedissues, often evident in banks, airlines, and utility providers(Heath and Heath, 2008; Frow et al., 2011).

Whilst fairness is defined by Bolton et al. (2003:474) as,‘‘a reasonable and acceptable process’’, the importance of specificbehavioral traits is highlighted in this study. This suggests thatretail fairness may be defined by various key concepts that arecritical. Specifically, it is agreed that opportunistic behaviorconstitute unfair behavior. This is seen in examples where aretailer uses their advantageous situation and use information todevelop pricing strategies that puts the consumer in a disadvan-tageous situation. On the other hand, concepts such as transpar-ency, equality, and good offerings (services, prices, etc.) underpintheories of fairness.

For example, fairness in retailing is often associated with fairtrade products, which promotes better trading conditions andincreased sustainability. While fair trade is often in the context ofproducers or BtB, our concept of retail fairness is based on aconceptualisation from the consumers’ perspective and thusdifferent from that of fair trade.

Each concept must be understood before a ‘true’ definition ofretail fairness can be defined and accepted. As the findingsreveal, consumers did not find the issues of differential treatmentand favoritism as serious as first put forward. Thus, a definitionof retail fairness may need to focus on other conceptsthan equality, but rather on trust, honesty, social norm, andopenness (transparency). In other words, there is a need to focuson factors that underpin a good relationship between buyer andseller.

4.1. Re-defining retail fairness

In this competitive environment, retailers are often overlook-ing issues of fairness as a source of increasing their profits. Inmany ways, one could suggest that the financial crisis in theglobal economy was partially caused by unfair and unethicalpractices, including sub-prime mortgage lending (Simkin andDibb, 2012). Inappropriate retailer activities often lead to con-sumers’ perceptions of unfairness, which potentially damage theretailers’ long term reputation and competitive edge. Defining thenature of retail fairness is the first step toward implementingfairer approaches to retailers’ marketing efforts. The suggestedoutcomes are improved buyer-seller relationships, better reputa-tion, and increased loyalty (Fornell et al., 2010). A generaldefinition of retail fairness supports marketers in a number ofways. From a pragmatic perspective, it shows retailers what tostrive for and what to avoid. It further shapes operations anddefines marketing communications i.e. how to market theirofferings fairly. From our review of the concept of fairness, wefind that, despite the fact that some dimensions and concepts offormer studies could be confirmed, it differs noticeably fromtraditional fairness concepts, namely price-, service-, and generalfairness (justice). The main differences in our definition are due tofairness’ inherent foundation related to morality, honesty, integ-rity, trust, and equality—aspects not measured in past studies.Thus, our conceptualization enhances our understanding andcontributes to theory of consumers’ fairness perceptions in thecontext of retailing. Based on our findings we posit the definitionof retail fairness as:

A company’s retail marketing strategy execution aimed atstimulating and manifesting consumers’ perceptions of fair-ness. Retail fairness achieves this through creating mutuallysatisfying relationships by delivering socially acceptable out-comes for consumer and retailer over the three main

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dimensions, labeled product, interaction, and service, and ninecorresponding sub-dimensions of retail fairness, namelyquality products, value for money and good prices, goodreputation, honesty and integrity, transparency (no rip-offs/exploitation or hidden agenda), ethical behavior, fair treat-ment, customer care, and good services.

We shorten our definition as: ‘‘the degree of perceivedquality, honesty, and justice a customer has for a retailer’’,highlighting our key emphasis on product/service quality,honesty and integrity, and procedural, distributive and inter-actional justice.

4.2. Theoretical and managerial implications

In this study, we investigate consumers’ perceptions of (un)fairretail practices. The resulting conceptualization of retail fairnessis based upon a discussion of issues of fairness, trust, honesty,transparency, and includes concepts and theories related to retailfairness. Boulding et al. (2005) note that issues of fairness may befound in differential or preferential treatment of consumers. Ourstudy could not confirm this, as consumers did not associate thedifferential treatment as something negative. But as retailers areincreasingly developing systems and applications that prefer oneconsumer and disliking another, it is vital that this favoritism isnot neglected and continuously monitored (Martin et al., 2009).Such individualized treatment may increase as the use of socialmedia is adopted more vividly.

The findings suggest that marketers need to actively manageconsumers’ fairness perceptions by implementing tactics that areconsidered favorable. This enables companies to build long-lasting and sustainable quality relationships with consumers.If a tactic is incorrectly implemented, it leads to negativeconsumer perceptions and non-favorable marketing outcomes(Patterson and Baron, 2010). For instance, a retailer shouldmanage its reputation by employing tactics such as self-presenta-tion, self-promotion, ingratiation, and other impression manage-ment tactics (Fombrun, 1996). By distributing free newsletters toinform about its achievements and values (including fair con-sumer treatment), a retailer can enhance its uniqueness andcreate an image that is consistent with this research; i.e. treatingconsumers fairly through transparent communication (Fombrunet al., 2000). Our study demonstrates the importance of treatingconsumers fairly in order to sustain a financially rewardingbuyer-seller relationship. To achieve positive consumer percep-tions, trust, equality, honesty, reputation (goodwill), transpar-ency, and the social norm need to be managed throughout. Due tothe fact that they lead to long-lasting, socially acceptable, andrewarding relationship with their customers, retailers need torecognize the importance of the three dimensions and nine sub-dimensions of fairness and incorporate them into their strategiesand tactics.

This paper has implications for retailing marketers, namely,to acknowledge and manage the crucial role of consumersfairness perceptions based on their products, interaction, andservices. Our study is of particular importance to retailers usingand/or developing loyalty and consumer experiences programs.It is acknowledged that a definition of retail fairness will encou-rage the adoption a fairer approach to retailing by creating aclearer path.

In defining retail fairness and its key conceptualizations, it isessential to determine some level of consensus. In particular,there seems to be a clear and shared understanding of thefundamental meaning of retail fairness from a consumer perspec-tive. In this study, it is suggested that a fair retailer adopts allthree dimensions and nine sub-dimensions in order to achieve

Please cite this article as: Nguyen, B., Klaus, P.‘‘., Retail fairness:marketing tactics. Journal of Retailing and Consumer Services (2013

perceived fairness in their marketing tactics, which are: (1) pro-duct dimension: quality products, value for money and good prices,

and good reputation; (2) interaction dimension: honesty, transpar-

ency (no rip-offs/exploitation or hidden agenda), and ethical beha-vior; and (3) service dimension: fair treatment, customer care, and

good services. It is hoped that the definition and conceptualizationwill encourage retailers to consider fairness in their developmentof consumer experience applications and tactics. As the studyshows, unfairness can cause detrimental damage to a retailer’sreputation and brand image. Thus, it is vital that concepts such astransparency, fairness, honesty, trust, and social norm areadopted into retailers’ marketing efforts.

4.3. Limitations and future research

This research makes important contributions for both aca-demics and practitioners. However, limitations of this studyshould be kept in mind when the results are interpreted. First,the study was conducted in a retail setting. It would be proble-matic to generalise the results to other settings. However, itwould be interesting if the study could be replicated into multipleindustries or other industries with high involvement character-istics (e.g. the financial services sector). This would enhance thegeneralizability of the model. Second, the research designconducted for this study is cross-sectional, representing staticrelationships between the variables. Netemeyer et al. (2003)notes that in a cross-sectional study, the causality of thelinkages between the constructs cannot be fully proven, socaution is required when inferring the cause and effect amongthe variables. Longitudinal studies will be more desirable, asthey will allow better insight into customers’ changing atti-tudes over a period of time. Third, a convenience samplingapproach is used. This may result in a respondent bias towardsconsumers of certain retailers and will create issues withgeneralizability. A better way to create a good research designwould have been to choose from a nationwide population,where the sample would be chosen randomly. This samplemight originate from the British Retail Consortium and list allUK shoppers. And lastly, the findings from this study may sufferfrom common method bias, which is likely to happenwhen perceptual data for the independent and dependentvariables are collected from the same source, and the attemptis made to interpret any correlations among them (Podsakoffand Organ, 1986).

The above issues offer interesting avenues for furtherresearch. For example, implementing tracking and monitoringconsumers and their fairness perceptions may cause unfairnessin itself. Whilst this study recognizes that unless it is mutuallybeneficial for both consumer and society, then it may beregarded as unfair. However, marketers should focus on under-standing how marketing might influence consumers’ attitudestowards such tools and applications. Attention should espe-cially be given to exploring both the negative and positiveperceptions of retailers’ marketing tactics. More research iswarranted to understand more about consumers’ views on datacollection itself. Specifically, it may be possible to look intoeach of the different tools (cookies, surveillance, targetedadverts, etc.) and investigate how each of them affect consu-mers’ perceptions of unfairness can be better understood andcontrolled. In addition to this, issues related to privacy andpersonal data is another example warranting further investiga-tion. More research is needed to uncover how consumers’perceive negative or positive of retailers’ tactics and theirassociation with the fairness in differential treatment.

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B. Nguyen, P.P. Klaus / Journal of Retailing and Consumer Services ] (]]]]) ]]]–]]] 11

Appendix A

Detailed profiles of interviewees.

Pleamar

se cite this aketing tactics

rticle as: N. Journal of

guyen, B., KRetailing an

laus, P.‘‘.,d Consum

No

Initials ofinterviewee

Position

Method Duration(min)

Interviewdate

1

ML Consumer Face to face 90 Oct 2009 2 AM Consumer Face to face 50 Oct 2009 3 MT Consumer Face to face 20 Oct 2009 4 FL Consumer Face to face 45 Oct 2009 5 EG Consumer Face to face 60 Oct 2009 6 WB Consumer Face to face 60 Oct 2009 7 LYP Consumer Telephone

interview

90 Oct 2009

8

PN Consumer Telephoneinterview

70

Oct 2009

9

CH Consumer Telephoneinterview

150

Oct 2009

10

BG Consumer Face toface/Email

65

Oct 2009

11

TI Consumer Face toface/Email

65

Oct 2009

12

AP Consumer Face toface/Email

80

Oct 2009

13

MJ Consumer Face to face 60 Feb 2010 14 SG Consumer Face to face 45 Feb 2010 15 CYF Consumer Face to face 145 Feb 2010 16 BN Consumer Face to face 60 Feb 2010 17 JC Consumer Face to face 50 Feb 2010 18 NXS Consumer Face to

face/Email

70 Feb 2010

19

SK Consumer Face toface/Email

170

Feb 2010

20

JM Consumer Telephoneinterview

70

Feb 2010

21

JT Consumer Face to face 60 July 2012

22

BS Consumer Face to face 60 July 2012

23

CA Consumer Face to face 60 July 2012

24

LW Consumer Face to face 60 July 2012

25

ROS Consumer Face to face 60 July 2012

26

TS Consumer Face to face 60 July 2012

27

PK Consumer Face to face 50 July 2012

28

PN Consumer Face to face 60 July 2012

29

GF Consumer Face to face 60 July 2012 30 QW Consumer Face to

face/Email

60 Sept 2012

31

CJ Consumer Face toface/Email

55

Sept 2012

32

YT Consumer Face to face 50 Sept 2012 33 MM Consumer Face to face 60 Sept 2012 34 AJ Consumer Face to face 60 Sept 2012 35 DR Consumer Face to face 60 Sept 2012 36 RR Consumer Face to face 60 Sept 2012

Appendix B

Interviewer:

What are your experiences with CRM (e.g. tescoloyalty cards, online shopping as a registereduser, online banking) and/or other forms ofrelationships with a retailer?

Retail fairness: Eer Services (2013),

Respondent:

xploring conshttp://dx.doi.

I try to avoid to get spam mails. I only haveloyalty cards with those retailers I do mostbusiness with. For the rest I don’t have a loyaltycard because I don’t like to give them too muchinformation about myself. The few Pounds Iwould save are not worth getting spam mailswith offers I don’t really need.

Interviewer:

What would you say are the benefits for you? Respondent: Regarding CRM? Mhy only that I get slightly

better deals.

Interviewer: Have you encountered any problems? What

problems have you encountered?

Respondent: Spam mails, emails and phone calls. Interviewer: What is your opinion about firms collecting,

storing, and using your data?

Respondent: I’m very skeptical about that. Best example is

Google. I hate the idea that they know and storemany things about me. However, as they are forme the number one online service provider, Ikeep using them. If there is an alternative whichwouldn’t collect data about myself, I wouldswitch.

Interviewer:

What do you think about firms which favors somecustomers over others based on a particularcustomer’s potential to generate more profits?

Respondent:

If done correctly, the best thing a company can doto grow and to gain more profits. If done wrong, ithas disastrous consequences for the firm.

Interviewer:

Have you experienced anything in thisconnection? For example, your friend may havereceived better offers/promotions than yourself?Do you think that’s fair?

Respondent:

Yes. A friend has a platin contract with Vodafonein Germany. It is the highest value a customercan get. I don’t have any problems with that.

Interviewer:

Do you think firms are acting fair in general? Why? Respondent: Not sure. I believe that some, in particular

smaller firms, cross sell personal data. For thatreason, I don’t give away personal information ifnot absolutely needed.

‘Interviewer:

What is a good customer relationship in youropinion?

Respondent:

Keeping customers happy, informed and goodafter sales service, can be trusted upon when weneed help, open two way communication, knowby name and always keep the customer updatedon any service changes etc.

Interviewer:

What is a bad customer relationship in youropinion?

Respondent:

Poor customer service, below the industrystandards, never keep their promise, not easilycontactable when we need them, hard to reachetcy.giving excuses, sounds like trying to usedelay tactics in resolving your problem.

Respondent:

I can give an example. There are a number ofcompanies that promise a lot to their potentialcustomers and then ignore them completelywhen they sign up. The old customers feeldissatisfied and move on to another competingfirm. Sadly most companies in the UK seem tobe focused on a one-off selling rather thandeveloping long term customer relationships.

Interviewer:

Have you experienced anything you felt wasunfair whilst buying online?

umer perceptions of fairness towards retailers’org/10.1016/j.jretconser.2013.02.001i

B. Nguyen, P.P. Klaus / Journal of Retailing and Consumer Services ] (]]]]) ]]]–]]]12

Respondent:

Please cite thmarketing tac

Not really as I always have the choice of movingto another service provider. However, I feel thatads for the so-called cheap airline tickets aremisleading as we ultimately find out that in theend the final costs includes really heavy taxeswhich were not mentioned earlier.

Interviewer:

What do you think about firms which favorssome profitable customers over others

Respondent:

No harm as we know, customers aredifferentiated because of the volume and valuethey buy from the firm. Matter of getting used toit. In a real business world, everyone does it,favoring their most valuable customers thatbrings in more profit and who can possiblygenerate more word of mouth sales for the firm

Interviewer:

What is fairness to you? Respondent: Fairness is good for business ethics. We should

not charge differently for the same productthough we can be differentiated in terms ofpersonalized service.

Interviewer:

How important is trust in a relationship? Respondent: Very important, as ‘truthfulness is the

foundation of all human virtues’, we need tohave trust and sincerity in our relationship

Interviewer:

Do you think firms are acting fair in general? Why? Respondent: Basically, I prefer to say Yes. Although sometimes,

the offer may change from different groups, theystill have a general logics and internal rules forcontrolling this. They cannot break the basicregulations/ laws set by industry committee/government. (Of course, the condition for myanswer is, the regulations must be set fairly)

Appendix C

Coding structure.

Dimensions

Attributes

Goodreputation

Image, goodwill, positive word of mouth

Goodservices

Convenience, time saving, good facilities,efficient

Fairtreatment

Fairness, special treatment, equal value,consistency

Value formoneyand goodprices

Low prices, budget, value, offers, discounts

Customercare

Good after-sales service, nice employees,pleasurable experience

Qualityproducts

Quality, usefulness, utilitarian, hedonic

Transparency

Open, data collection, communication Honesty Trustworthy, integrity, respectful Ethical

behavior

Law abiding, sustainability, good morals,virtuous

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