The objective of this research is to develop a measure of consumer-based retailer brand equity. The research process starts with the definition and the conceptualization of the construct and leads to the evaluation of the measure using confirmatory composite analysis. Results suggest retailer brand equity is a second-order reflective-formative construct with eight sub-dimensions that retailers can leverage to enhance the value offered to consumers and consequently to build brand equity. Relevant theoretical and methodological considerations are proposed for academics, and implications for practitioners are summarized to facilitate multiple comparisons and benchmarking strategies across outlets.

Introduction

Along with promoting specific products and services, major brands now spend millions of dollars and massive effort to promote the brand itself as a global brand (Steenkamp, 2014). Their aim is to develop valuable experiences and build a strong relationship with customers. In this regard, they are focusing on increasing brand equity, which is the “added value” a given brand endows a product (Farquhar, 1989), including “the enhancement in the perceived utility and desirability a brand name confers on a product” (Lassar et al., 1995) or more basically, “the power of the brand name” (Stahl et al., 2012). This objective is also worth pursuing for firms that develop brands in the retail industry. Hence, retailers should build brand equity to enhance the power of their name. Measuring retailer brand equity (RBE) is a challenging issue for academics because “the rise of the retailer as not just a retail outlet but also as a brand provides perhaps one of the most critical trends in the retailing field” (Grewal and Levy, 2009). Retailer brand equity is a valuable and intangible asset that affects consumer behavior and retailer performance (Grewal et al., 2009; Keller and Lehmann, 2006). A clear example of the importance of retailer brand equity is evidenced by the conclusion in the Global Powers of Retailing annual report (Deloitte, 2012): “retailers will have to find ways to distinguish themselves from competitors in order to succeed. That means having strong brand equity, offering consumers superior shopping experiences, and being clearly differentiated from competitors. The latter can entail unique merchandise offerings including private brands, unique store formats and designs, and unusual customer experiences”. That means that in fierce competition markets (Kahn et al., 2018) brands should differentiate from contenders to increase their market share. The digital evolution with the internet of things technologies, mobile commerce and social media clearly enhance this development (Verhoef et al., 2015; Grewal et al., 2017). Low prices are no longer enough for retailers to prosper; they must develop branding strategies to bring more value to consumers.