Determining retail buyers' negotiation willingness for automatic replenishment programs

The purpose of this study was to empirically evaluate a modified version of Sheth's model (1981) of buying behavior, in order to determine retail buyers’ willingness to trade off on negotiation variables when placing items on automatic replenishment (AR). A total of 103 usable questionnaires were returned from corporate buyers from five major department store chains located throughout the USA, yielding a 41 percent response rate. Multiple regression analysis indicated that the modified portion of Sheth's model used in this study was satisfactory in exploring relationships that exist between buyers and vendors when determining what products can be placed on AR. The model was significant and respectable in explanatory power, and the significant or highly related variables were: merchandise driven mentality; price/value; color; design; and type of merchandise category. These were all significant or highly related to the buyer's willingness to trade off on the negotiation variables (price, packaging, delivery and assortment). Future research is needed to explore the development of a model that explains the process and decision criteria for successful AR programs.