Impact of customer loyalty and service operations on customer behaviour and firm performance: empirical evidence from UK retail sector

Ramanathan, Usha; Subramanian, Nachiappan; Yu, Wantao; Vijaygopal, Rohini

Abstract

Retail networks are striving to achieve competitive advantage by increasing value through loyalty and efficiency with a focus on service operations. As sales promotions have become an integral part of the retail supply chain planning, customer behavioural aspects based on loyalty and service operations have been challenged greatly. Subsequently, management capabilities, such as planning and timely replenishment, have become complicated tasks for many retail store managers. This study develops a model integrating retail network value and efficiencies with customer behaviour and performance. We validate the model using survey data from prominent U.K. retail store customers. Our data analysis shows that both loyalty and service operation attributes have positive significant impact on customer behaviour, while the service operation mediates the relationship between loyalty and customer behaviour. This result gives a new outlook to build managerial capability based on customer loyalty and service operations. Our results specifically show that the service operation attributes will indirectly influence the customers’ buying behaviour even in the presence of loyalty attribute such as promotion schemes. This result sends a strong signal to retail supply chain managers to offer customised promotions considering local community rather than having uniform sales promotion nationwide.

• Journal Article Type: Article
• Acceptance Date: Jun 28, 2016
• Online Publication Date: May 16, 2017
• Deposit Date: Jan 23, 2018
• Publicly Available Date: Jan 23, 2018
• Journal: Production Planning & Control
• Print ISSN: 0953-7287
• Electronic ISSN: 1366-5871
• Publisher: Taylor & Francis Open
• Peer Reviewed: Peer Reviewed
• Volume: 28
• Issue: 6-8
• DOI: https://doi.org/10.1080/09537287.2017.1309707
• Keywords: Retail network performance; service operations; customer loyalty; customer behaviour; management capabilities
• Public URL: https://nottingham-repository.worktribe.com/output/860550
• Publisher URL: http://www.tandfonline.com/doi/full/10.1080/09537287.2017.1309707
• Additional Information: This is an Accepted Manuscript of an article published by Taylor & Francis in Production Planning and Control on 16 May 2017, available online: http://www.tandfonline.com/10.1080/09537287.2017.1309707.