Understanding Customer Loyalty for Retail Stores and Influencing Factors

Abstract

Retailing in India is witnessing a revolution. Retailers in an emerging market like India are facing new challenges in the form of informed consumers, demographic changes, changing consumer tastes and preferences, Internet retailing and new formats of stores. In order to address customers with varying tastes and preferences, new retailers with newer ways of servicing are entering the market at a rapid pace. The retail market is now a red ocean market and retailer’s need to innovate and create differentiation. Each customer has become important and retailers have to hold on to its existing customers along with understanding ways to add new ones. Hence, the issue of loyalty, satisfaction, retention comes into the picture.

The purpose of this paper is to focus on customer loyalty towards retail stores and various aspects associated with it. The retail store as an entity has various elements attached to it and these elements influence consumer behavior. It starts from the products – its variety, quality, amount; the store ambiance – light, sound, cleanliness; the service – personnel, easy location; the location of the store – near consumer homes, availability of parking space and so on. These factors have varying degrees of influence on customers. The satisfaction of consumers depends on how these factors combine to serve in the best possible way.

Though it is assumed that a satisfied consumer will be a loyal consumer, research studies have shown that such assumptions may not be true. A satisfied consumer might not be loyal and might defect to other stores. Hence, satisfaction is not the only aspect that leads to loyalty. There are many other factors which combine to result in store loyalty. This paper makes an attempt to understand and highlight these factors.

Keywords:  Customer Loyalty, Store Loyalty, Attributes of store, Consumer Behavior,