Retail spatial structure in paid memberships: how store size, sister-stores density and competition influence paid membership acquisition

Abstract

Purpose Despite the extensive use of paid membership programs in marketing practices, little is known about how retail spatial structure affects the acquisition of paying members. This study aims to investigate the effect of store size, sister-store density and spatial competition on customers’ subscription to paid membership programs. Design/methodology/approach In this study, the authors collected a unique data set from a major Chinese retailer comprising 74,424 customers across 37 brick-and-mortar stores. The authors used logistic regression to investigate the relationship between retail spatial structure and the acquisition of paying members. The authors then conducted several robustness checks, using alternative approaches and measurements. Findings The authors find that as store size increases, customers exhibit reduced propensity to join the paid membership program. In addition, when the number of surrounding sister stores increases, customers are less likely to become paying members. In contrast, customers are more inclined to become paying members when stores are in areas with intensified spatial competition. Practical implications The findings provide guidance for retailers to design membership strategies based on store-specific attributes, improve in-store service efficiency and optimize sister-store distribution. The results also help managers align membership design with local competition levels to enhance customer engagement and membership subscription. Originality/value This study enriches research on paid membership programs by incorporating retail spatial structure into paid membership acquisition and highlights the role of physical store environments in the effectiveness of paid membership program.