Abstract

This study examines the impact of product quality and online shopping experience (OSE) on consumer loyalty through customer satisfaction in the context of local skincare products. Findings reveal that both product quality and OSE significantly influence consumer loyalty, with OSE having the strongest effect. Perceptions of lower prices on e-commerce platforms are crucial. The study integrates Social Presence Theory with product quality, customer satisfaction, and Flow Theory in understanding the OSE. These insights can help businesses enhance customer loyalty and satisfaction in the local skincare industry. Overall, the research objectives of this study are geared toward uncovering the relationship between product quality, OSE, customer satisfaction, and consumer loyalty in the local skincare industry. By achieving these objectives, the study aims to provide valuable insights for businesses to enhance customer loyalty and develop effective strategies for success in the market.

Introduction

The COVID-19 pandemic has significantly impacted customer satisfaction with skincare products in Indonesia. With the shift to online shopping due to lockdowns and social distancing measures, customers have faced challenges physically experiencing and testing products. However, skincare brands that offer detailed information, virtual consultations, and seamless online experiences have the opportunity to enhance customer satisfaction. The demand for skincare products in Indonesia has shown steady growth, with sales of health and personal care reaching US $5.93 billion in 2020, US $6.34 billion in 2021, and projected to reach US $7.23 billion in 2022 which is skincare amounting to US$2.05 billion, according to Statista (Mutia, 2022) and expected to grow every year by 5.81%. This underscores the importance of customer satisfaction in driving sales and capturing market share in the skincare industry.

Customer satisfaction is vital in the skincare industry as it directly impacts sales and consumer loyalty. Satisfied customers are more likely to purchase and recommend products, while dissatisfied customers may switch to other brands, potentially losing sales. With intense competition in the skincare market, meeting customer expectations and providing a positive shopping experience is crucial for building a loyal consumer base and driving sales. Additionally, negative experiences can quickly harm a brand’s reputation in the age of social media and online reviews. Prioritizing customer satisfaction helps maintain a competitive edge and fosters long-term customer relationships.

Conclusion

From the results of this study, it can be concluded that online shopping experience has a stronger influence, directly or indirectly, on consumer loyalty. This means that companies selling online need to ensure consumers have a good experience when shopping online. This experience can be formed from the ease of using an application or website, ease of access, language, and ease of seeing the appearance of skincare products that can make consumers feel good when using the website or application. Looking at the product quality variable, product quality can also have an effect, but not as strong as online shopping experience, so to maintain product quality, skincare brands can continuously monitor the expiration date of skincare products, make testimonials from skincare users to prove quality. skincare products and ensure that skincare products are safe by obtaining a halal label from the government.

Abstract

Purpose
The Bed and Breakfast (B&B) enterprises generally lack sufficient human resources and time to conduct research on important social media marketing factors for visitors’ satisfaction and visitors’ intentions. Therefore, this study aims to provide crucial social media marketing and factors and service quality elements for improving customer satisfaction and customer loyalty in B&B sectors. This study also provides some recommendations for attracting more visitors and increasing customer satisfaction and customer loyalty through social media.

Design/methodology/approach
First, social media marketing factors and service quality elements were identified through the systematic literature review. Then these identified factors and elements were used to design a survey questionnaire for collecting data. The research data included responses of 64 B&B enterprises and 625 customers. The collected data was analyzed by feature selection approaches including Decision Tree algorithm and Information Gain to identify the key factors for improving customer satisfaction and customer loyalty.

Findings
The findings of this study determined that featured choice is an important social media marketing factor, and assurance is the common service quality element for both B&B enterprises and their customers in terms of satisfaction and loyalty.

Originality/value
This study adds a value to the growing literature on customer satisfaction and loyalty in B&B sectors by exploring key social media marketing factors and service quality elements. The study reveals several implications for theories and practices. The findings hopefully help B&B enterprises better social media marketing with less workforce and budget.

Introduction

     In recent decades, tourism is one of the global major service industries and has made significant contributions to the worldwide economy (Parvin, Tavakolinia, Mosammam, & Razavian, 2022). For this reason, many governments in general, and Taiwanese in particular, are actively promoting the growth of this so-called “chimney-free industry” (Chen, Lin, & Kuo, 2013). However, the COVID-19 pandemic had a significant impact on the growth of the tourism sector (Parvin et al., 2022) because people preferred staying in congested areas such as towns and metropolitan cities for safety during the COVID-19 pandemic. Recently, when the COVID-19 pandemic is controlled, tourism has returned to normal (Biju & Kumar, 2022), and Bed (i.e. sleeping for a night) and Breakfast (i.e. a meal in the morning) (B&B) services, provided by guest houses and hotels (Zhang, Li, Huang, & Hua, 2022a, Zhang, Williams, Li, & Liu, 2022b), are becoming popular.

     In addition, the rapid development of social networking websites has become popular social media on the internet. Social networking websites, such as Facebook, TripAdvisor and Twitter, have become the main platforms for communicating, discussing and exchanging information among social site members (Dehghani & Tumer, 2015). On these websites, online users transmit information and interact with each other through available characteristics of media. Consequently, these social networking websites could be called “social media” (Adeola, Hinson, & Evans, 2020). Community websites have become an important source of information for many people. Tourists can share their travelling experiences with others and respond to related comments. This many-to-many interaction spread through the internet can be called electronic word of mouth (e-WOM) (Chen, Shang, & Li, 2014). The forms of e-WOM include one-to-one emails, one-to-many distributed emails, instant messages, Web pages, blogs, discussion forums, chat rooms and online communities (Sigauke & Erdis, 2018).

Conclusions

     The present study’s main objective is to identify factors of social media marketing and SQEs in the B&B sector. We used two feature selection methods, IG and DT, to recognize the key factors for increasing satisfaction and building loyalty, respectively. This study provided the set of social media factors and SQEs to the B&B enterprises and customers. In addition, the findings are useful for both enterprises to improve customer satisfaction and customers when they will choose B&B services. The contributions of this study to social media marketing research are, first, the traditional conceptualization of customer loyalty was successfully applied in the social media marketing context; second, our methodology contributing to theory, could be applied in different sectors or on issues to generate different dimensions in a single study; and third, this is the first study to determine the key social media factors and SQEs in terms of customer satisfaction and loyalty based on the customers and B&B enterprises opinions in the B&B sector.

Abstract

Keywords

1. Introduction

2. Literature review

3. Method

4. Analysis and results

5. Discussion

6. Implications

Funding

References

Abstract

Drawing on service encounters and experiential marketing theories, this study examined the relationship between geriatric service, memorable experience, emotional intelligence, and senior customers’ attitudinal and behavioural responses. The research was conducted at geriatric hotels in Portugal. The results showed that, compared to impersonal encounters, employee service has a significantly greater effect on customer satisfaction, memorable experience, and customer loyalty. In addition, customers’ memorable experiences mediated the relationship between different service encounters and organisational outcomes. However, customers’ emotional intelligence had minimal effects on these relationships. The discussion and implications of these findings are offered to researchers and practitioners.

1. Introduction

An increase in the ageing population drives the demand for retirement accommodations of senior citizens, which generally include retirement villages/homes and aged care homes (Cheek et al., 2007). While being different in terms of care options (self-care vs nursing care) (Yeung et al., 2017), facilities, and funding (self-funding vs government subsidised), retirement villages and aged care homes are often integrated with facilities catering to all senior citizens, who can opt for short- and/or long-term stay in some countries (e.g., Portugal). This integrated entity or accommodation is referred to as a geriatric hotel for this study. Recently, more geriatric hotels have sprung along with the increase in the aged population, which provides more options for senior citizens; simultaneously, it has driven competition among the hotels. Like in any other business, the key strategy to gain competitive advantage for a service provider or organisation is to attain customer satisfaction and loyalty (Prentice, 2014), which has become a performance metric for most service organisations and is referred to as organisational service performance (see Prentice, 2019a).

The antecedents of customer satisfaction and loyalty have been extensively discussed across industries and contexts in the relevant literature. From the perspective of service organisation, providing quality service is one of the most effective initiatives used to satisfy customers and generate customer loyalty and retention. Numerous studies have provided empirical evidence of a chain relationship between service quality, customer satisfaction, and loyalty (e.g., Olorunniwo et al., 2006; Prentice, 2013a, 2014; Shi et al., 2014). However, service quality is not necessarily directly related to customer satisfaction, as the level of overall quality service is expected unless some service elements (tangible or intangible) exceed customer expectations and are transferred into memorable experiences (Prentice, 2013a, 2014). Consumers opt to purchase and consume the service to acquire such experiences (Sandstrom ¨ et al., 2008). These memorable events that occur during service encounters affect their attitudes (e.g., satisfaction) and behaviours (e.g., purchase, loyalty behaviours) toward the service provider (Williams et al., 2020). Therefore, customers’ memorable experiences likely play a role in the relationship chain of service quality, customer satisfaction, and loyalty.

Abstract

     Research offers some indication that the online customers’ shopping experience (OCSE) can be a strong predictor of online impulsive buying behavior, but there is not much empirical support available to form a holistic understanding; whether, and indeed how, the effects of the OCSE on online impulsive buying behavior are affected by customers’ attitudinal loyalty and self-control are not well understood areas of research. In this study, we examine how functional and psychological dimensions of the OCSE influence online impulsive buying within e-commerce platforms. We will investigate customers’ attitudinal loyalty as a mediator between the OCSE and online impulsive buying behavior, and the customers’ self-control as a moderator between customers’ attitudinal loyalty and online impulsive buying. To analyze these relationships we will conduct an online survey (n = 1489) with customers of two leading Chinese e-commerce platforms: Jindong and Taobao. The findings from structural equation modeling indicate a positive relationship between the tested dimensions of the OCSE and customers’ online impulsive buying. We also find a mediating role of customers’ attitudinal loyalty and negative moderation of customers’ self-control. Theoretically, the findings contribute to the literature regarding online impulsive buying and the online customer experience. For managers, the findings stress the importance of ethical management with regard to the online shopping experiences.

Introduction

     Online shopping is a common, globally found activity (Erjavec and Manfreda, 2021; Shao et al., 2022). In 2020, retail e-commerce sales worldwide amounted to 4.28 trillion United States (U.S.) dollars and this is projected to grow to 5.4 trillion U.S. dollars in 2022 (Coppola, 2021). Within this vast market, customers will often make spontaneous, unplanned, unreflective and unthoughtful purchases (Habib and Qayyum, 2018; Kimiagari and Malafe, 2021) and this is referred to as ‘online impulsive buying’ (Wu et al., 2020). For instance, customers in the United Kingdom (U.K.) spend approximately £1 billion per month on impulsive buying (Bushi, 2020) and eighty percent of adolescents in the U.S. are estimated to have made impulsive purchases online (Carter, 2018). Other studies reveal that up to 40% of all online purchases worldwide can be classified as impulsive (Chan et al., 2017; Verhagen and van Dolen, 2011).

Results

5.1. Direct effects

     Results related to all hypotheses for direct effects are presented in Table 4. All of the hypotheses are supported. Firstly, the results indicate that all four functional components of the OCSE (i.e., interactivity, informativeness, visual engagement, navigation, and search ease) significantly affect online impulsive buying from e-commerce platforms (H1). Secondly, the findings reveal that customers who trust e-commerce platforms and find them more convenient and enjoyable to undertake their purchasing process are likely to make more impulsive buying decisions (H2). Hence, H1 and H2, which respectively state that the functional and psychological dimensions of the OCSE significantly impact online impulsive buying, are fully supported. We also found that components of the functional and psychological dimensions of the OCSE have a significant positive impact on customers’ attitudinal loyalty towards an e-commerce platform, demonstrating support for H3 (a, b, c, and d) and H4 (a, b, and c). Finally, the findings show that customers with greater attitudinal loyalty towards the e-commerce platform are more likely to engage in online impulsive buying, and this finding supports H5.

1- Introduction

2- Study context

3- Literature review

4- Methodology

5- Findings & discussion

6- Theoretical contributions

7- Managerial implications and future research

References

Abstract

This study examines, for the first time, the influence of national culture and industry structure on customer loyalty in grocery retailing. Grocery retailers have a long and continued history of international expansion and it is vital to understand how loyalty can be nurtured in different contexts. Thematic analysis of focus groups conducted in the culturally and structurally disparate countries of the United Kingdom and Sri Lanka provide unique insights. Key differences have been identified around consumer preferences and perceptions of loyalty programmes and the key drivers of different loyalty types. Theoretical and managerial implications are discussed.

Introduction

This study investigates the influence of national culture and industry structure on customer loyalty towards grocery retailers. The importance of customer loyalty to the performance, profitability and perhaps even survival of retailers is well known (Maggioni, 2016). This stands true for grocery retailing, the largest retail sector across the world. Scholarly research has focused on various antecedents and influences on customer loyalty towards grocery retailers. There is, however, a paucity of research examining how national culture and industry structure influence these phenomena. The limited existing literature (see Table 1) provides contradictory and inconclusive evidence which is concerning for a number of reasons. Firstly, it is widely accepted that national culture influences many aspects of consumer behaviour (de Mooij, 2017). Therefore, it is important for retailers continuing or planning their international expansion efforts to be mindful of cultural differences between markets (Pederzoli and Kuppelwieser, 2015). Secondly, many retailers, including the world’s largest retailer Walmart, have struggled in international markets, with the lack of cultural understanding being identified as a key reason (Hunt et al., 2018). Retailers moving into new markets also need to contend with structural conditions different to their home market (Laaksonen, 1993; Pederzoli and Kuppelwieser, 2015) and their performance depends on these conditions (Chan et al., 2011). It is therefore important to have strong knowledge of local market conditions if retailers are to be successful (Schu and Morschett, 2017). Structural conditions in Western countries, for example, tend to be more advanced compared to developing markets; resulting in different retailer assortments, varied retailer focus and industry concentration levels (Reardon et al., 2012). Despite the influence of disparate cultural and structural conditions, how such conditions influence grocery retail customer loyalty is not currently understood (Chan et al., 2011; Khare et al., 2014). This knowledge gap is critical for internationalising grocery retailers as well as those seeking to serve increasingly diverse consumers in their home markets and motivates the research objective of this study; namely to understand the influence of national culture and industry structure on grocery retail customer loyalty. Through the achievement of this objective valuable new insights are provided that make not only clear theoretical contributions but also, practical propositions to guide grocery retailers. The UK and Sri Lanka were selected as the setting for this study as they demonstrate acutely contrasting national cultures according to Hofstede et al.’s (2010) dimensions of national culture and domestic retail structures. The UK has a highly advanced grocery retail structure and has spawned several successful international retailers. Further, given the UK’s decision to leave the European Union, South Asia has been identified as an alternative region for expansion due to economic growth and increasing consumer spending power (Financial Times, 2017).

1- Introduction

2- Literature review

3- Research Model and methods

4- Results

5- Conclusions

References

Abstract

In Korea, traditional retail districts face a serious situation whereby businesses in downtown areas face collapsing as local population declines: resulting in a decrease in self-employed sales and a declining local economy. Traditional retailers use ambiguous accounting and are reluctant to use credit cards, and thus, the overall reliability of their customer data is low. This paper solves this problem by applying the concept of customer equity (CE). We conducted an empirical analysis through questionnaires to identify differences in CE between traditional and new retail formats. The questionnaire consisted of questions related to CE (value equity, brand equity, relation equity), satisfaction, loyalty, and demographic characteristics. CE and satisfaction were measured on a 5-point Likert scale. A total of 400 surveys were completed, resulting in 391 usable returns for analysis in this study. In the regression analysis between CE and customer satisfaction, both old and new retail firms showed statistically significant effects. In the traditional retail industry, value equity and brand equity were statistically significant, while relation equity were not.

Introduction

Over the last 50 years smaller formats have been put under pressure both by large format, sometimes multinational, retailers and by the internet. In many countries (Murcott et al., 2013) loss of traditional local shops has created under-served markets or, worse, Food Deserts where essential provision cannot be sustained. There is a clear social welfare agenda if members of the public cannot easily access food (Hallsworth and Coca-Stefaniak, 2018) and a loss of past investment when businesses fail. So a second key agenda concerns the retailers themselves: there are benefits if the self-employed continue to be independent, and achieve sustainable growth by satisfying customers. As much as anything, such innovations safeguard past sunk costs in traditional locations. However, this sector is under-researched not least because there is no reliable way to know how much the self-employed who work in the traditional retail sector sell, or how much profit they make. Unfortunately, some of the self-employed never report their sales or net profit numbers publicly. This is because not only do they prefer to transact in cash, but they may also report figures lower than their actual sales whenever they have been investigated by the government. This paper addresses this challenge by applying the concept of customer equity (CE). As customer-oriented marketing strategies that took hold in the 1960s were emphasized in the literature, related marketing theories and practices also received constant attention (Vavra, 1997). Recently, a customer-centered viewpoint, such as customer satisfaction and customer value, was implemented as a concept in marketing management (Bolton and Drew, 1991). That said, the concept of customer lifetime value (CLV) has attracted more attention in recent years. CLV has been discussed in many academic research articles over the past decade, and has been used as a practical tool to measure business success (Gupta et al., 2006). As an extension of the CLV concept, CE is defined as the discounted lifetime values from all customers (Rust et al., 2000). (see Figs. 1 and 2) CE usually consists of value equity, brand equity, and relationship equity (Rust et al., 2001; Vogel et al., 2008). CE is perceived as a strategic framework that links customers and businesses and creates new sources of revenue (Lemon et al., 2001).

Even though the banking industry across the globe has undergone tremendous transformations especially digitalisation, research has barely kept pace with these changes especially as it has to do with marketing communication strategies. Thus, this paper examined how customers’ perceptions of banks marketing communication tools influence customer loyalty. 313 valid responses were obtained from Nigerian bank customers through a survey questionnaire. The partial least squares structural equation modelling (PLS-SEM) procedure was utilised to examine the measurement model and test the research hypotheses. The results indicate that elements of bank marketing communication including advertising, sales promotion, public relations and personal selling are significant predictors of customer loyalty, but direct marketing is not. This study has implications for the update of marketing communication and formulation of customer loyalty policy in commercial banks in Nigeria and other emerging economies with similar business and economic history. The contributions of the study were discussed.

Introduction

Banks are the most important savings mobilisation and financial resource allocation institution in every economy. Modern economies depend on a thriving financial system which is believed to account for around 20% of the GDP [45]. Hard numbers show that three financial services sectors including retail banking generate approximately $6.6 trillion in global financial annual revenue and has tended to grow at a 6% over the preceding decade [40]. Therefore, the quest to keep to the promise of making the banking industry the engine of every economy has made the banking industry across the globe to witness tremendous transformation because the industry has become highly complex and competitive whilst the services and products offered by banks slightly differ, making differentiation difficult [5]. In Nigeria in particular, the impact of the Internet economy and digitalisation in the banking industry is seen in the increased move to retail banking and use of e-banking channels. This has further led to improvements in financial inclusion. Thus, without innovative services, financial services providers especially banks can rarely thrive. This might be why Barnes and Howlett [4] earlier argued that customers of financial services are unlikely to be overly impressed by core product attributes when all companies are providing similar offerings because many of such services are parity offerings. One of the key strategies that financial services firms especially banks can employ to distinctively set themselves apart from competitors is well articulated marketing communication programmes that match the current developments in the banking sector. However, a recent research by Mintel shows that while smart financial services firms are increasingly investing in marketing communication, significant others are still stuck in their traditional spending habits which is far from suitable for delivering scintillating experiences to consumers of financial services nor winning over new ones [32]. Worst still, research has barely kept pace with the recent developments in the banking sector. It has been argued that customer-centric communications capabilities aided by social media lead to customer loyalty [44]. Additionally, good communication quality, which is timely, relevant, and reliable can facilitate customer loyalty [37]. However, there is limited research on how the marketing communication tools influence marketing outcomes especially customer loyalty.

1- Introduction

2- Literature review

3- Method and results

4- Discussion

References

Abstract

The goal of this research is to develop and validate a multi-dimensional scale measure of brand fidelity. This paper reports the rigorous process of scale development, through two separate studies involving 592 US consumers. Study 1 involves scale item generation, content validation and scale purification, while Study 2 involves a two-wave data collection method, evaluating the refined brand fidelity scale within a nomological network of relationships. The results demonstrate the 20-item brand fidelity scale to have strong construct validity as a first-order reflective, second-order formative scale. The findings suggest that if consumers engage in the behaviours/cognitions (as defined within the brand fidelity scale), then consumer/brand relationships are likely to be stable and predictable; are likely to endure the ravages of time; and, importantly, are likely to remain monogamous. For practitioners, the overall brand fidelity score can be used to track brand performance over time and for industry benchmarking purposes. Additionally, the measured brand fidelity dimensions provide specific direction upon which remedial marketing action can be implemented.

Introduction

Well established in the literature is the notion that building strong and sustainable consumer/brand relationships is the cornerstone to contemporary marketing success. In fact, understanding how consumers respond to brands has dominated the marketing literature for decades. Early research was more product-focussed and centred around the understanding and measurement of customer satisfaction and perceived product performance (Anderson, 1973; Day, 1977), thus, providing insight into consumer response variables, through cognitive paradigms. The evolution of brand research, in the 80s and 90s, resulted in the focus turning to long-term consumer response variables, such as brand involvement (Beatty et al., 1988), brand loyalty (Amine, 1998), brand commitment (Morgan and Hunt, 1994) and, more recently, brand love (Albert and Merunka, 2013; Carroll and Ahuvia, 2006), underpinned by psychological and interpersonal theory. On this basis, Fournier and Yao (1997) were the first to proffer brands as ‘relationship partners’, with the view to understanding the dynamics of establishing stable and durable consumer/brand relationships. While it is important to have a thorough understanding of the complexities of consumer/brand relationships, the meaningful measurement of such relationships is paramount for brand practitioners to strategize effectively. However, the current literature does not offer clarity in this respect. Problems associated with the interchangeability of construct terms and definitions, the blurring of construct dimensional specifications (e.g. Rossiter, 2012 vs Batra et al., 2012), and the inconsistencies of nomological positioning (e.g. Albert and Merunka, 2013 vs Loureiro et al., 2012) plague the literature. In addition, the validity of data is highly dependent on the subjects’ (i.e. consumers) ability to self-report on psychological constructs that often have different meanings for different people (Gross and John, 1997). In an attempt to address these challenges, Grace et al. (2018) propose a focus on consumer/brand relationship maintenance behaviours as the potential key to effective measurement, over and above self-reported desires and emotions (e.g. brand commitment, brand love). It is on this basis, they coined the term “brand fidelity”, specified as a multi-dimensional cognitive and behavioural framework, which assists in understanding what consumers do when they are highly committed or in love with the brand (Grace et al., 2018).

1- Introduction

2- Related literature

3- Method

4- Results

5- Discussion and implications

References

Abstract

Purpose – The purpose of this paper is to investigate the effect of four types of cause-related marketing (CRM) strategies on consumer responses to a fashion brand and to assess the relative effectiveness of each.
Design/methodology/approach – An experiment was conducted with young adult consumers (n ¼ 344) and undergraduates (n ¼ 415). Using a between-subject design, each participant was randomly assigned to one of four CRM scenarios and completed a questionnaire.
Findings – Across all CRM conditions, the effect of CRM strategy on consumer responses (e.g. perceived brand distinctiveness/credibility/attractiveness, customer–brand identification, brand attitude, customer loyalty) was significant. The effect of corporate social responsibility image on perceived brand distinctiveness was strongest for cause-related event marketing, followed by cause-related experiential marketing, transaction-based CRM and sponsorship-linked marketing. Practical implications – By providing information about the relative effectiveness of four types of CRM strategies, this research aids fashion marketers in their selection of the CRM strategy that generates the best performance. Adding an event component to their CRM activity would increase the effect of CRM strategies on consumer responses.
Originality/value – This research contributes to the extant literature on CRM by identifying types of CRM strategies, their relative effectiveness, and key variables (e.g., C–B identification) that explain the impact of CRM strategies on consumer responses.

Introduction

Over the past decade, corporate social responsibility (CSR) has evolved from a “nice-to-have silo” to a “fundamental strategic priority” for businesses (McPherson, 2017). CSR as a concept refers to the idea that corporations should take responsibility not only for the economic consequences of operating a business but also for any impacts that the business has on social and environmental issues (Australian Human Rights Commission, 2008). One strategy that falls under the umbrella term of CSR is cause-related marketing. Cause-related marketing (CRM) involves mutually beneficial cooperative efforts between a company and a non-profit organization (NPO) designed to promote the company’s sales and the NPO’s cause (Grantspace.org). CRM impacts consumer’s behavior as the 2017 Cone Communication CSR report noted 87 percent of US consumers are likely to purchase a product from a business that advocated for issues they cared about. Then, can companies “do well by doing good” through strategically practiced CRM? Companies engage in CRM for several reasons such as improving their image (Vanhamme et al., 2012), enhancing consumer’s attitudes (Melero and Montaner, 2016) and increasing customer loyalty (Park et al., 2017). Consumers also directly benefit from companies that engage in CRM initiatives. Participating in a brand’s CRM can result in consumers’ experiencing positive emotions as well as enhancing self-perceptions.

1- Loyalty programs as competitive tools

2- Personalized offers

3- Rewards

4- Beyond offers and rewards

5- Summary

References

Abstract

For industries with low switching costs, customer loyalty programs (LPs) have potential to drive differentiation and sustain a competitive advantage. However, incentives provided through LPs also have a potential to escalate into costly price wars. In this article, we discuss how to design successful customer loyalty reward programs that bring value to participants and that cannot be emulated by competitors easily. We focus on three distinct aspects of improvement: personalization, reward types, and additional services. Through personalization, companies can leverage the knowledge they already have on their customers to tailor offers that they find relevant and appealing. For the reward structure, we argue in favor of a certain degree of opacity. We also encourage loyalty programs to consider giveaways that are unique and difficult to imitate and to use all the information they have available to provide rewards that fit with each customers’ idiosyncratic situation or preference. Finally, competitive LPs should look beyond offers and rewards. In addition to purchases, LPs can reward participants for other desirable behaviors; they can also provide additional services that impose minimal costs on firms, but bring value to customers.

Loyalty programs as competitive tools

On April 11, 2016–—the day before Starbucks launched its new loyalty program–—Dunkin’ Donuts rolled out a new app and loyalty plan. It was a highly unlikely coincidence. The two coffee shop chains, together covering more than 66% of the U.S. market, are using their loyalty plans to fend off competition (Lal & Bell, 2003) and keep their customers hooked. Loyalty programs are tools for building brand equity (Lemon, Rust, & Zeithaml, 2001; Uncles, Dowling, & Hammond, 2003). The specific mechanisms through which these programs achieve their goal can vary widely, from decreased priced sensitivity and increased share of wallet to increased resistance to service failures and increased propensity to engage in word-of-mouth on behalf of the brand. We focus on switching costs (Hartmann & Viard, 2008; Kim, Shi, & Srinivasan, 2001), a mechanism that puts loyalty programs into a competitive perspective. Once a consumer has accumulated a certain amount of points with the focal company, the approaching reward–—in the form of a gift or a status upgrade–—is likely to keep them committed to that company. Competitors need more alluring offers to sway a consumer who is very close to gaining a reward. In this way, LPs can be used as competitive tools, especially in industries with low or nonexistent switching costs (e.g., retail, hospitality, air transport).

This study provides novel insights into the way loyalty behaviour to the performing arts is formed. Research in this area has predominantly relied on either demographics or motives to understand audience behaviour and we have provided a theoretically robust explanation for the psychological processes that connect occupation, income and education (SES) to loyalty. Based on a sample of 196 concert attendees aged between 20 and 50, and using an adapted a model of motivation, we showed that basic psychological need (BPN) satisfaction plays a pivotal role in transferring the effects of SES to loyalty for this important demographic through utilitarian and hedonic attitudes. These findings highlight the importance and potential application of a universal needs concept for expanding and deepening consumer behaviour theory. The implications of the findings for research and practice are addressed throughout and the study concludes with recommendation for further research.

Introduction

Attendance at classical music concerts has been declining (Allday, 2012) for well over a decade. Intense competition from more popular entertainment forms, coupled with economic uncertainty have influenced demand trends (Anning, 2016) and increased production costs and reduced public subsidies have put pressure on supply. Moreover, audiences are getting older, with a recent study in the United Kingdom reporting that 37% of patrons in that country are aged over 61, 42% between 41 and 60 and only 7% aged under 31 (Bradley, 2017). Cleary, performing arts practitioners are facing challenging times and while retaining current audiences is important, strategic actions to energize younger audiences must be prioritized and central to this is understanding the factors that influence the next wave of classical music consumer behaviour. From a cultural sociological perspective (Bourdieu and Nice, 1984), preferences for the arts are posited to reflect and reinforce social class distinctions (Newman et al., 2013) and while the line between traditional highbrow/lowbrow positions has blurred (Peterson and Albert, 1992) a considerable amount of research supports an association between socioeconomic status (SES) and performing arts attendance patterns (Kraaykamp et al., 2010; NEA, 2015;Yaish and Katz-Gerro, 2012). Others however believe that socioeconomic factors alone do not adequately account for audience participation and suggest that researchers broaden the focus to consider ‘lifestyle’ variables (Seaman, 2005). Gofman et al. (2011) for example found that young people on lower incomes were attracted to museums for fun and social interaction reasons and Manolika et al. (2015) reported that the ability of education, occupation and income levels to predict performing arts attendance was significantly increased when intrapersonal motives were included in their model.

With the spread of smartphones and the growth of Internet retailing, new possibilities for social commerce have opened up within existing social network services (SNSs). Within SNSs, any individual can sell and promote goods as a retailer. Therefore, unlike in other electronic commerce, consumers’ trust in the individual vendor has become important, and now the individual vendors can make their customers loyal to them rather than to the platform. For the purpose, in this study we determine whether the trust of both platform and individual vendor affects customers’ attitudes and accumulates customer loyalty. In addition, we categorize word-of-mouth into heuristic and systematic groups and investigate the effect of those factors on the intention to buy and on actual purchasing behavior. The results show that the individual vendor’s trust has no significant effect but customer loyalty is accumulated by individual vendors. In addition, heuristic factors have a significant effect on purchasing behavior, whereas systematic factors have a significant effect on attitude and intention to buy.

Introduction

The emergence and development of the Internet brought commerce into the online world. Electronic commerce (e-commerce) has made it easier for consumers to find information about goods and compare prices. In addition, vendors can now more easily market themselves and their products by using the Internet. Based on these advantages, according to Meeker (2018), e-commerce exceeded 14% of US retailing in 2018, and according to the 1421 Consulting Group (2018), China’s ecommerce transactions are expected to exceed $1 trillion by the end of 2019. However, e-commerce became commonplace only by overcoming there were many obstacles. The biggest hurdle was how to provide trust to consumers (Reichheld and Schefter, 2000). Within the e-commerce environment, the consumer must trust the vendor more than in off-line purchases because the consumer cannot directly identify the purchase, decision, payment, and delivery processes (Christine Roy et al., 2001). Therefore, Gefen (2000), Jarvenpaa et al. (1998), Jarvenpaa et al. (1999), McKnight et al. (2000) and other have studied the concept of trust in e-commerce. According to Doney and Cannon (1997) and Gefen and Straub (2004), consumers are more influenced by their trust in providers for shopping platforms such as Amazon.com and eBay, as opposed to smaller vendors, because small-scale vendors are more limited in their ability to provide trust to consumers. Large platform providers are also more successful in gaining consumer loyalty after the purchase. Because of customer loyalty, 66% of Amazon.com sales are from repurchasing customers (The Economist, 2000), and eBay is attracting new customers because of its referral system based on loyal existing customers (Reichheld and Schefter, 2000).

Systemic changes are transforming traditional brick-and-mortar retailing, with some venerable retailers closing some or all of their stores, others reinventing store layouts and shopper engagement tactics, and, interestingly, the migration of erstwhile online-only retailers to the physical retail landscape. Given these changes, it is imperative for brick-and-mortar retailers to identify newer customer relationship mechanisms that motivate patronage intentions. Drawing from research on consumer-brand relationships, this study introduces store attachment as a second-order relational construct comprising of store-self connection and store prominence. Subsequently, for store attachment, cognitive and emotional antecedents as well as consequent influence on store patronage intentions are hypothesized and tested. Based on the findings, implications are offered for retailing researchers and practitioners.

Introduction

In recent years, the retail environment has witnessed systemic changes that have irreversibly transformed the face of traditional, brick-and-mortar retail stores. In the US, in the recent few years alone, several retailers have either announced closure of poorly-performing store locations or exited the industry permanently. According to some estimates, more than 6000 stores were closed in 2017 and an additional 3600 closures are expected in 2018 (Business Insider, 2017; Fortune, 2017). Yet, the future of brick-and-mortar retailing is not entirely bleak. Traditional retailers like TJ Maxx, Target, and Nordstrom have announced new store openings, albeit with smaller footprints as compared to existing stores. Shopping malls, which have been in decline for years, are reinventing themselves by focusing on customer experience, entertainment, technology, and design (McKinsey, 2014, 2017). Meanwhile, erstwhile online-only retailers such as Amazon, Bonobos, and Wendy Parker have opened brick-and-mortar stores designed to focus on customer engagement and experiential value. In fact, Amazon, the online retailing giant, is making inroads into the offline realm by establishing pop-up stores, bookstores, delivery lockers embedded within stores, and most recently, a brick-and-mortar retail store called Amazon Go, where there are no cashiers or registers and shoppers can charge their purchases to their Amazon accounts as they shop (Business Insider, 2018). These developments point toward a distinctive retailing future, where brick-and-mortar retailers must battle for relevance by engendering customer engagement through outstanding customer experience, emotional connections, and shared identity (e.g., Grewal et al., 2009; Grewal et al., 2017a, 2017b).