The Unraveling Loyalty Model of Traditional Retail to Suppliers for Business Sustainability in the Digital Transformation Era: Insight from MSMEs in Indonesia

The development of fast-moving consumer goods (FMCGs) retail has demonstrated an evolution of buyer–seller interactions. In the era of digital transformation, FMCGs and micro, small, and medium enterprises (MSMEs) can easily use website applications to shop for various products from suppliers, make payments, and access a wider variety of products with more efficient delivery. However, empirical studies on loyalty drivers on B2B relationships for business sustainability in the retail industry have not received much attention. This research aimed to examine the factors that influence loyalty and analyze the mediating role of MSME loyalty by discussing a new conceptual framework designed based on the buyer–seller relationship theory and relational marketing. Data were collected from 500 owners or managers of FMCG retail stalls in various provinces in Indonesia and analyzed using structural equation modeling (SEM). The results showed that merchandising, website quality, commitment, and satisfaction have a positive effect on loyalty, as opposed to service quality and trust. There are also different roles in the mediating variables of trust, commitment, and satisfaction on retail store loyalty. These findings were useful for policymakers, managers, and practitioners to clarify the influence of service quality, merchandising website quality, and the role of relationship quality on loyalty in the era of digital transformation.

[1]  Muhammad Saqib Khan,et al.  Examining the relationship between the level of logistics service quality, relationship quality and repurchase intention in e-retail sector of Pakistan , 2021 .

[2]  Anil Bilgihan,et al.  Exploring the impact of personality traits on perceived relationship investment, relationship quality, and loyalty in the retail industry , 2020, The International Review of Retail, Distribution and Consumer Research.

[3]  Osarodion Ogiemwonyi.  The Relationship between Service Quality Dimensions and Customer Satisfaction towards Hypermarket in Malaysia , 2020 .

[4]  R. Karim.  Influence of Service Quality on Customer Satisfaction and Customer Loyalty in the Private Banking Sector of Bangladesh: A PLS Approach , 2020, Journal of Marketing and Information Systems.

[5]  Kim Byoungsoo,et al.  Effects of Perceived Value and Value Congruence on Loyalty about Products or Services Provided by Social Enterprises: Focused on Commitment and Trust , 2020 .

[6]  Idayanti Nursyamsi,et al.  Effect of Customer Value and Experiential Marketing to Customer Loyalty with Customer Satisfaction as Intervening Variable (Case Study on Gojek Makassar Consumers) , 2020, The Asian Journal of Technology Management (AJTM).

[7]  I. Gil-Saura,et al.  How to measure B2B relationship value to increase satisfaction and loyalty , 2019, Journal of Business & Industrial Marketing.

[8]  H. Hartoyo,et al.  Marketing Mix Effect Towards Customer Satisfaction and Loyalty: Case Study of Rejuve Cold-Pressed Drinks , 2019, Indonesian Journal of Business and Entrepreneurship.

[9]  Keni Keni,et al.  The Effect of Website Design Quality and Service Quality toward Repurchase Intention in the E-commerce Industry: A Cross-Continental Analysis , 2019, Gadjah Mada International Journal of Business.

[10]  M. Simanjuntak,et al.  How Commitment, Satisfaction, and Cost Fluctuations Influence Customer Loyalty , 2019, GATR Journal of Management and Marketing Review.

[11]  A. Kusumawati,et al.  THE IMPACT OF WEBSITE QUALITY ON CONSUMER SATISFACTION AND PURCHASE INTENTION (Study Case of E-Commerce Lazada Indonesia in Malang City) , 2019 .

[12]  Joseph F. Hair,et al.  When to use and how to report the results of PLS-SEM , 2019, European Business Review.

[13]  Norfadzilah Rashid,et al.  Assessing the effects of service quality on customer satisfaction , 2019, Management Science Letters.

[14]  Palto Datta,et al.  An investigation into the relationship between customer relationship marketing and customer retention: superstore retailing context in Bangladesh , 2018, Journal of Business & Retail Management Research.

[15]  Salina Rasli,et al.  The Effect of E-Business Website Quality on Customer Satisfaction , 2018 .

[16]  Solimun Solimun,et al.  The mediation effect of customer satisfaction in the relationship between service quality, service orientation, and marketing mix strategy to customer loyalty , 2018 .

[17]  L. N. Yuliati,et al.  The Effects of VPTI's Corporate Image and Service Quality on Satisfaction And Loyalty of The KSO SCISI Customers , 2018 .

[18]  Qais Almaamari,et al.  Factors Affecting on Customer Loyalty in Service Organizations , 2018 .

[19]  S. Hati,et al.  ANALYSIS OF PRICING AND MERCHANDISING EFFECT TO CUSTOMER SATISFACTION AND IT’S AFFECTED TO CUSTOMER LOYALTY IN PURI BATAM MINIMARKET , 2017 .

[20]  A. N. Sah,et al.  Customer Satisfaction as Mediator Between Website Service Quality and Repurchase Intention: An Emerging Economy Case , 2017 .

[21]  B. Suharjo,et al.  AN ANALYSIS ON CUSTOMER SATISFACTION, TRUST AND LOYALTY TOWARD ONLINE SHOP (A CASE STUDY OF TOKOPEDIA.COM) , 2017 .

[22]  V. Thusyanthy,et al.  Antecedents and Outcomes of Customer Satisfaction: A Comprehensive Review , 2017 .

[23]  Noronha Ajay Kaushik,et al.  Effect of Website Quality on Customer Satisfaction andPurchase Intention in Online Travel Ticket BookingWebsites , 2017 .

[24]  E. Izogo,et al.  Correlates of the determinants of relationship marketing in the retail sector: the Nigerian case , 2016 .

[25]  Dheeraj Sharma,et al.  Does relationship marketing matter in online retailing? A meta-analytic approach , 2016 .

[26]  J. Antunes,et al.  The Effects of Trust, Commitment and Satisfaction on Customer Loyalty in the Distribution Sector , 2016 .

[27]  B. Suharjo,et al.  The Influence of Customer Satisfaction, Trust and Information Sharing on Customer Loyalty of Professional Services Company: An Empirical Study on Independent Surveyor Services Industry in Indonesia , 2016 .

[28]  E. V. Tonder.  Trust And Commitment As Mediators Of The Relationship Between Quality Advice And Customer Loyalty , 2015 .

[29]  David C. Yen,et al.  E-commerce web site loyalty: A cross cultural comparison , 2014, Information Systems Frontiers.

[30]  Apostolos Giovanis,et al.  The role of service fairness in the service quality – relationship quality – customer loyalty chain , 2015 .

[31]  Morad Benyoucef,et al.  User preferences of social features on social commerce websites: An empirical study , 2015 .

[32]  Nazila Babakhani,et al.  An application of European Customer Satisfaction Index (ECSI) in business to business (B2B) context , 2015 .

[33]  Y. Matsui,et al.  The Relationship between Service Quality and Customer Loyalty in Specialty Supermarkets: Empirical Evidence in Vietnam , 2014 .

[34]  U. Sumarwan,et al.  Model Pelayanan Pelanggan pada Toko Eceran Tradisional Customers Service Model For Traditional Retail Store , 2014 .

[35]  M. Sandada,et al.  Customer Satisfaction, Trust and Loyalty as Predictors of Customer Intention to Re-Purchase South African Retailing Industry , 2013 .

[36]  Barbara Caemmerer,et al.  Customer Loyalty Development: The Role Of Switching Costs , 2013 .

[37]  Maria Dharmesti,et al.  The Antecedents of online customer satisfaction and customer loyalty , 2013 .

[38]  Mu-Chen Chen,et al.  The impact of website quality on customer satisfaction and purchase intention: perceived playfulness and perceived flow as mediators , 2012, Inf. Syst. E Bus. Manag..

[39]  C. Grönroos.  From Marketing Mix to Relationship Marketing , 2012 .

[40]  P. A. Dabholkar,et al.  Consumer participation in using online recommendation agents: effects on satisfaction, trust, and purchase intentions , 2012 .

[41]  C. Tundui,et al.  Survival, Growth Strategies and Performance of Women Owned Micro and Small Businesses in Tanzania , 2012 .

[42]  C. M. Wawire,et al.  Shoppers Perception of Retail Service Quality: Supermarkets versus Small Convenience Shops (Dukas) In Kenya , 2012 .

[43]  Ilyoo B. Hong,et al.  The impact of consumer trust on attitudinal loyalty and purchase intentions in B2C e-marketplaces: Intermediary trust vs. seller trust , 2011, Int. J. Inf. Manag..

[44]  S. S. Alam,et al.  Retail Loyalty Programs in Malaysia: The Relationship of Equity, Value, Satisfaction, Trust, and Loyalty among Cardholders , 2011 .

[45]  Euphemia F T Yuen,et al.  The effect of retail service quality and product quality on customer loyalty , 2010 .

[46]  K. Chung,et al.  The antecedents and consequents of relationship quality in internet shopping , 2010 .

[47]  Yongsu Lee,et al.  A study on the customer satisfaction and customer loyalty of furniture purchaser in on‐line shop , 2010 .

[48]  Tracey S. Dagger,et al.  Service quality, trust, commitment and service differentiation in business relationships , 2010 .

[49]  Barbara Čater,et al.  Relationship‐value‐based antecedents of customer satisfaction and loyalty in manufacturing , 2009 .

[50]  Su Qin,et al.  Impacts of customer service on relationship quality: an empirical study in China , 2009 .

[51]  I. Gil-Saura,et al.  The value of B2B relationships , 2009, Ind. Manag. Data Syst..

[52]  Patricia Huddleston,et al.  Customer satisfaction in food retailing: comparing specialty and conventional grocery stores , 2009 .

[53]  Dianne Cyr,et al.  Web site design, trust, satisfaction and e-loyalty: the Indian experience , 2008, Online Inf. Rev..

[54]  Fang Gao,et al.  An empirical study of online shopping customer satisfaction in China: a holistic perspective , 2008 .

[55]  D. Olaru,et al.  From customer value to repurchase intentions and recommendations , 2008 .

[56]  N. Mat,et al.  The Application of Structural Equation Modeling (SEM) in Determining the Antecedents of Customer Loyalty in Banks in South Thailand , 2008 .

[57]  Ruben Chumpitaz Cáceres,et al.  Service quality, relationship satisfaction, trust, commitment and business‐to‐business loyalty , 2007 .

[58]  N. Ndubisi.  Relationship marketing and customer loyalty , 2007 .

[59]  Viltė Auruškevičienė,et al.  Modeling relationship quality in the parcel delivery services market , 2007 .

[60]  Papassapa Rauyruen,et al.  Relationship quality as a predictor of B2B customer loyalty , 2007 .

[61]  C. Droge,et al.  Service quality, trust, specific asset investment, and expertise: Direct and indirect effects in a satisfaction-loyalty framework , 2006 .

[62]  Anna S. Mattila,et al.  How Affective Commitment Boosts Guest Loyalty (and Promotes Frequent-guest Programs) , 2006 .

[63]  Andreas Eggert,et al.  Relationship value and relationship quality: Broadening the nomological network of business‐to‐business relationships , 2006 .

[64]  S. Hunt,et al.  The explanatory foundations of relationship marketing theory , 2006 .

[65]  Robert L. Carraway,et al.  Making the transition to collaborative buyer–seller relationships: An emerging framework , 2006 .

[66]  Matthew K. O. Lee,et al.  Acceptance of Internet-based learning medium: the role of extrinsic and intrinsic motivation , 2005, Inf. Manag..

[67]  Samuel Olu Adeyoyin,et al.  Strategic planning for marketing library services , 2005 .

[68]  David J. Closs,et al.  THE DIGITAL TRANSFORMATION: TECHNOLOGY AND BEYOND , 2005 .

[69]  Venkatesh Shankar,et al.  Customer value, satisfaction, loyalty, and switching costs: An illustration from a business-to-business service context , 2004 .

[70]  Richard T. Vidgen,et al.  Measuring Web site quality improvements: a case study of the forum on strategic management knowledge exchange , 2003, Ind. Manag. Data Syst..

[71]  J. Heskett.  Beyond customer loyalty , 2002 .

[72]  L. Lyberg,et al.  Sample Surveys: Methods , 2001 .

[73]  David M. Szymanski,et al.  E-satisfaction: an initial examination , 2000 .

[74]  R. Oliver.  Whence Consumer Loyalty? , 1999 .

[75]  C. Dumas.  Training for Microenterprise Creation: The Case of the Center for Women and Enterprise , 1999 .

[76]  Joseph P. Cannon,et al.  An Examination of the Nature of Trust in Buyer–Seller Relationships: , 1997 .

[77]  Joseph O. Rentz,et al.  A measure of service quality for retail stores: Scale development and validation , 1996 .

[78]  C. Fornell,et al.  The American Customer Satisfaction Index: Nature, Purpose, and Findings , 1996 .

[79]  J. H. Davis,et al.  An Integrative Model Of Organizational Trust , 1995 .

[80]  S. Hunt,et al.  The Commitment-Trust Theory of Relationship Marketing , 1994 .

[81]  A. Parasuraman,et al.  SERVQUAL: A multiple-item scale for measuring consumer perceptions of service quality. , 1988 .

[82]  F. Dwyer,et al.  Developing Buyer-Seller Relationships , 1987 .

[83]  A. Parasuraman,et al.  A Conceptual Model of Service Quality and Its Implications for Future Research , 1985 .