Concluding Discussion, Theoretical Implications, and Future Directions

Our results contribute to the theoretical understanding of flagship store-fueled brand experience creation and its effect on brand cognitions, consumer-brand relationship strength, and favorable consumer reactions. We demonstrate that national brand flagship stores in the FMCG industry positively affect brand experiences and stimulate favorable consumer reactions. This is particularly important for national brands of the FMCG industry, as the majority of sales through retailers are likely not able to be replaced by company-operated distribution channels (Amrouche and Yan 2012). In addition, national brands in the FMCG industry are placed under great pressure by the increasing consumer acceptance of private label brands (Cuneo et al., 2012; Vahie and Paswan, 2006). Therefore, it is vital that a flagship store visit stimulates future brand purchases at the retailers and generates word of mouth through brand experience, brand equity, and consumer-brand relationships (brand attachment). It is further important for covering the costs of operating a flagship store and to strengthen the national brand’s position in relation to competing brands and private labels.

In addition, our findings reveal that flagship stores are not limited to the realm of premium services or luxury and fashion brands from the industries that have primarily been associated

with successful flagship store concepts (e.g., Dolbec and Chebat, 2013; Doyle et al., 2008;

Kozinets et al., 2002; Manlow and Nobbs, 2013). Our results from the two national brands from different FMCG categories reveal that the actual flagship store visit had two different effects on brand experience: visiting the cosmetics brand’s store enabled the creation of a strengthened flagship store-fueled brand experience, while a visit to the chocolate brand’s store only reinforced brand experiences. These contrasting findings are surprising and raise awareness of the strategic interpretation of flagship stores: while flagship stores can drive brand experience, they can also merely reinforce brand experiences. Nonetheless, in our FMCG setting, we find positive effects of operating flagship stores for brand experience reinforcement and acceleration. What remains unknown is what prevented the chocolate brand’s flagship store from creating flagship store-fueled brand experiences. One possibility is that the in-store attractions, information, or entertainment are not different enough from what consumers know from advertisement and previous interactions with the brand.

Therefore, our findings highlight that the effectiveness of flagship stores must be investigated and verified between industries and even within categories in terms of flagship store-fueled brand experience creation. As the qualitative and quantitative findings in the current marketing literature (e.g., Diamond et al., 2009; Dolbec and Chebat, 2013; Manlow and Nobbs, 2013) cannot be completely generalized and transferred, we encourage researchers to examine the effectiveness of flagship stores in further industries in which the operation of flagship stores is seen as rather unusual.

Furthermore, our findings encourage the research field of flagship stores to identify in-store attractions and assess their impact on creating brand experiences for types of brands or products (e.g., Sands et al., 2009; Yoon, 2013). In this research, we were unable to gather information about which specific in-store attractions create an improved augmented brand display and strengthen flagship store-fueled brand experience. As the in-store attractions that

influence the augmented brand display could vary among industries, it could be interesting to identify further drivers of the augmented brand display.

We find evidence that recurring visits and inherently the acquisition of new stimuli from the augmented brand display do not necessarily create an even stronger flagship store-fueled brand experience. This implies that the creation of brand experience in flagship stores is not a dynamic, time-dependent process, which is contradictory to the commonly held but unverified view of brand experience dynamics (e.g., Verhoef et al., 2009). One explanation for this could be that consumers recognize all stimuli of flagship store-fueled brand experiences through the augmented brand display simultaneously.

We also found that flagship store-fueled brand experience has a strong impact on creating brand attachment. This finding is consistent with that of Dolbec and Chebat (2013), even though FMCG brands usually lose out to higher involvement products in obtaining consumers’ attachment, such as in the fashion or furniture industries. A positive effect is also found with brand equity, which we conceptualized as superiority. Consequently, flagship stores in the FMCG industry present suitable communication vehicles and marketing-tools for creating positive brand cognitions and brand-relationships with potential consumers. Hence, the resulting larger brand attachment and brand equity achieved from flagship store-fueled brand experience (cosmetics national brand) and reinforced brand experience (chocolate national brand) foster favorable consumer reactions to the brand. This encourages word of mouth, as consumers’ experience enlarge personal identification with the brand (Park et al., 2010). While Dolbec and Chebat (2013) capture this relationship theoretically and predict its application to flagship stores, this study is the first to quantify the effect of brand attachment on word of mouth in flagship stores. It is important to note that the influence of brand attachment on word of mouth is greater than the gain from brand equity. This outcome can be explained by a common desire to express belonging to a certain peer group or lifestyle by

spouting expertise about an identity-defining brand, while being unwilling to expose the actual process of consumption (Brown et al. 2005; Jayasankaraprasad and Kumar 2012;

Saenger, Thomas, and Johnson 2013). Therefore, flagship stores in the fast-moving consumer goods industry enable spillover effects for advertising the brand (Keller and Fay 2012). As we found, the effect of flagship store-fueled brand experience on word of mouth is mediated through brand attachment and brand equity, emphasizing the importance of the experiences made in flagship stores for generating word of mouth (Dolbec and Chebat 2013; Riivits-Arkonsuo and Leppiman 2014). This can occur through either increased brand experience (cosmetics national brand) or reinforced brand experience (chocolate national brand), which then translate into favorable consumer reactions.

Furthermore, our findings reveal that in industries in which sales are generated primarily through retailers, flagship stores foster future sales. Hence, operating an experiential store, such as a flagship store, enables a brand to generate potential revenue streams in traditional distribution channels. Our results indicate that both brand attachment and brand equity enable the stimulation of intended future brand purchases at retail stores. These conclusions are consistent with results of revenue stream antecedents (Keller and Lehmann 2003; Mishra, Dash, and Cyr 2014; Park et al. 2010). However, our dependent variable (future brand purchases at the retailer) only measures intended consumer reactions. It would be interesting to find out how strongly the flagship store visit changes actual behavior. In our research setting, privacy guidelines prohibited us from collecting longitudinal data on the behavior of flagship store visitors. In a setting where this would be permitted, we encourage researchers to monitor consumers to verify our findings through actual behavioral outcomes. In addition, we were unable to capture direct sales from the flagship store itself. The number of products sold and the height of the sales slip would be of interest for uncovering a flagship store’s effect on direct sales and revenue.

Lastly, it is important to note that flagship store-fueled brand experience does not directly influence a consumer’s intention to purchase the brand at retail stores in the future (Brakus et al., 2009; Dolbec and Chebat, 2013). The effect of flagship store-fueled brand experience on future purchases and loyalty comes from increased brand equity and brand attachment. This mediation through brand relationships and brand cognition constructs is supported by Iglesias et al. (2011). Hence, the implication is that future research on brand experience in experiential stores should integrate and identify the vehicles of brand experience rather than directly linking brand experience to increased consumer loyalty and revenue streams.