Master Thesis for theMaster of Science in Business Administration
“Does Loyalty towards Channels Affect Brand Loyalty in
Multichannel Environment?”
Student: Luisa Frosini, 10734899
Study: Master of Science in Business Administration, Marketing Track Email: luisa.frosini90@gmail.com
Supervisor: MSc. Umut Konuş Word count: 17,521 Faculty: Faculty of Economics and Business Pages: 61
STATEMENT OF ORIGINALITY
This document is written by Luisa Frosini who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
TABLE OF CONTENT Abstract ... 1 Acknowledgement ... 2 1. INTRODUCTION ... 3 2. LITERATURE REVIEW ... 7 2.1 Customer Loyalty ... 8 2.1.1 Behavioral Loyalty ... 9 2.1.2 Attitudinal Loyalty ... 9
2.1.3 The Four types of Customer Loyalty ... 10
2.2 Firm Loyalty ... 11
2.3 Brand Loyalty ... 12
2.4 Channel Loyalty ... 14
2.5 Loyalty toward Store, Online, and Mobile Channels ... 15
2.5.1 Loyalty toward Physical Store Channels ... 15
2.5.2 Loyalty toward Online Channels ... 16
2.5.3 Loyalty toward Mobile Channels ... 17
2.6 Channel Loyalty’s impact on Firm and Brand Loyalty ... 18
2.7 Channel Loyalty in Multichannel Environment ... 19
2.7.1 Multichannel Environment ... 19
2.7.2 How to gain more Channel Loyalty and Brand Loyalty ... 21
2.8 Gaps and Research Question ... 22
2.8.1 Gaps ... 22
2.8.2 Moderators of the Channel Loyalty – Brand Loyalty Relationship ... 23
2.8.3 Research Question ... 24
2.9 Contributions ... 24
2.9.1 Theoretical Relevance ... 24
3. CONCEPTUAL FRAMEWORK ... 27
3.1 Model and Hypothesis Development ... 27
3.1.1 Channel Loyalty’s impact on Brand loyalty ... 27
3.1.2 Moderators’ impact on Channel Loyalty – Brand Loyalty Relationship ... 31
3.1.3 Channel Benefits and Attributes ... 31
3.1.4 Psychographic Traits ... 32 3.1.5 Demographic Traits ... 33 4. METHODOLOGY ... 35 4.1 The Sample ... 35 4.2 Research Design... 36 4.2.1 Survey Structure... 37 4.2.2 Measures ... 38 4.3 Statistical Procedure... 39 4.3.1 Pilot Study ... 40 4.3.2 Main Study ... 40 5. RESULTS ... 40 5.1 Preparations ... 41
5.1.1 Channel Loyalty Variable ... 41
5.1.2 Dummy Variable ... 41
5.1.3 Reliability ... 42
5.1.4 Correlation Check ... 43
5.2 Model Testing ... 43
5.2.1 Multiple Regression Analysis with Dummy Variables ... 44
5.2.2 Multiple Regression Analysis with the Actual Channel Usage Level ... 46
5.2.3 One-Way ANOVA... 47
5.2.4 Simple Moderation... 49
5.2.4.1.1 Bank Industry – H3, H4 ... 50 5.2.4.1.2 Airline Industry – H3, H4 ... 51 5.2.4.2 Psychographic Variables ... 51 5.2.4.2.1 Bank Industry – H5 ... 51 5.2.4.2.2 Airline Industry – H5 ... 52 5.2.4.3 Demographic variables ... 52 5.2.4.3.1 Bank Industry – H6, H7, H8 ... 53 5.2.4.3.2 Airline Industry – H6, H7, H8 ... 53 6. DISCUSSION ... 54 6.1 Findings ... 54 6.2 Managerial Implications ... 56
6.3 Limitations and Further Research ... 57
7. CONCLUSION ... 59
References ... 62
INDEX OF TABLES
Table 1: The four types of Customer Loyalty ... 12
Table 2: Most Popular Studies involving Channels ... 15
Table 3: Reliability of Scales ... 43
Table 4: Means, Standard Deviations, Correlations ... 45
Table 5: Regression Results – Bank and Airline Industry ... 46
Table 6a: One-Way ANOVA – Bank Industry ... 47
Table 6b: Post Hoc Tests – Bank Industry ... 48
Table 7a: One-Way ANOVA – Airline Industry ... 48
Table 7b: Post Hoc Tests – Airline Industry ... 48
INDEX OF FIGURES Figure 1: Conceptual Framework ... 35
ABSTRACT
This study investigates the existence of customer loyalty toward channel(s) and its influence on brand loyalty. Channel loyalty can be defined as the commitment that customers feel toward a particular channel, and its sources can be multiple. The existing literature provides solid evidences to show that channel loyalty is a significant contributor for the enhancement of brand loyalty. First, the research examines, whether channel loyalty has a positive impact on brand loyalty. Secondly, it assesses whether this relationship can be moderated by benefits that customers derive from channel usage and attributes, by psychographic characteristics and by demographic variables.
A quantitative research was conducted. The analysis of an online survey with 150 participants resulted in the following findings: on the one hand, for the banking sector, even though the effect was not significant the analysis showed a tendency of store channel customers to positively influence brand loyalty. On the other hand, significant results were obtained from the analysis of the airline industry, where the online channels were found to positively affecting brand loyalty. Furthermore, basing on the kind of industry, the type of channel(s), which managers should focus major attention on to impact brand loyalty may vary.
The study concludes with discussions, managerial implications, limitations of the findings and possible directions for future research.
ACKNOWLEDGEMENT
I would like to thank several people for their guidance to support me in writing this Master Thesis. First, I wish to offer my sincerest gratitude to my supervisor Professor Mr. Dr. Umut Konuş for his continuous support, patience, motivation and immense knowledge during this thesis development process. I attribute the level of my Masters degree to his encouragement and without him this thesis, too, would not have been completed. Furthermore, I would like to thank my parents and my brother. They were always supporting me and encouraging me with their best wishes.
I hope you enjoy reading this thesis,
1. INTRODUCTION
The field embracing this entire research is the one of customer loyalty. It represents the main strategic business goal that firms constantly strive to achieve (Reichheld, 1996; Reichheld, 2001). High customer loyalty provides organizations with considerable economic benefits explaining the differences in profitability among competitors
(Reichheld, 1992). The description that best highlights that meaning of customer loyalty is “ a deeply held commitment to repurchase a product or service in the future, causing
repetitive same brand set purchasing, despite situational influences and marketing efforts having the potential to cause switching behaviour.” (Oliver, 1999, p. 34). As suggested, loyalty has two different dimensions: behavioural and attitudinal. Behavioral loyal customers keep on purchasing the same products or experience the same services from the same company only out of habit (Ehrenberg 1988; Fader and Hardie 1996; Griffin, 2002). On the other hand, attitudinal loyalty includes intentions, affective commitment and attitudes to stay with the company. Attitudinal loyal customers fully trust the company and do not see any substitutes for the purchased brand. (Allen & Meyer, 1990;
Griffin, 2002). The existing literature has analyzed loyalty in relation to customers,
brands, channels, and service or product provider. The whole research explores loyalty with the main regard to the fields of channels and brands. In particular, part of the research will focus on examining whether channel loyalty occurs. So far the literature did not address carefully the theme of channel loyalty. However, even though the lack of research on it, the literature provides evidences about it. Channel loyalty can be defined as the commitment or stickiness that customers feel toward a particular channel. As emphasized by the literature review, evidence of store loyalty, online channel and mobile channel loyalty have been provided. The source of channel loyalty can be multiple. In particular, the multichannel environment, influencing most of the organizations, has offered more proactive ways to engage customers and positively affect customer loyalty
(Griffin, 2002). The fast proliferation of channels has characterized the unceasing competitive environment where companies compete and continuously provided firms with higher challenges (Sawhney, 2001; Stone, Hobbs, and Khaleeli, 2002; Kumar, 2005). It is essential for marketers to be conscious about the several potentials and benefits of the multichannel they deal with to be able to gain the best profitable outcome. More channels mean more touch-points through which companies can interact with their customers. This does not only mean more touch points to sell products or deliver services, but also more channels to provide customers with information, advertise products, implement viral marketing or marketing buzz, and more interactions through employees. In particular, all these activities, due to multiple touch points, can take place in both offline and online environments such as stores, telephone call centers, company’s online web sites, and mobile applications. The more touch points create more customer experience and more engagement with the firm. However, the adoption of multiple channels does not have to be considered the only feasible antecedent of channel loyalty. Each single channel can generate and be the source of loyalty regardless of the company’s use of many channels, but due to certain reasons related to the channel itself or to customers. An individual channel could be very appealing and in a very good fitting with customers’ needs. Consequentially, channel loyalty can be the result of the ideal match between right channel characteristics and right customers with the right benefits to be fulfilled. In other words, reaching the perfect understanding of customers’ expectations and the perfect fit between the latters and one channel can result in channel loyalty. All those interactions, engagements, experiences are supposed to be key antecedents behind channel loyalty and brand loyalty.
The existing literature provides solid evidences to show that channel loyalty behaviors or intentions are significant contributors for implementing brand loyalty. This research aims to study and analyze the validity of this relationship. Providing evidence of
the influence of channels’ loyalty on brand loyalty would significantly contribute to implement marketers’ strategies in numerous ways. Firms at the forefront of consumer marketing constantly make many efforts in order to create loyal customers. They usually invest massive amounts of money to keep valuable customers, advertise their products, offer promotions, implement and market loyalty and rewards programs. They implement those actions in an attempt to satisfy their customers, create firm and brand loyalty and consequently grow their business. “Across all industries, companies spend $2 billion annually on loyalty programs.” (Gallup, 2011). Moreover, companies usually have limited available resources to create brand loyalty. If the effectiveness of the under-investigated relationship would be proven, this would mean that companies should invest their money also in their channels to implement channel loyalty and consequently create firm and brand loyalty. Therefore, if there is evidence of channel loyalty’s impact on brand loyalty, firms should revisit and implement a novel management of their resource allocations and investments on channels. Furthermore, the study will shed light on the particular channels that are more likely to create brand and firm loyalty. This is extremely relevant in order to further clarify exactly into which channels (e.g. store, online or mobile channels) the resource allocation should be focused. Additionally, there can be differences between females’ and males’ usage and preference of channels. Accordingly, many interesting implications can be derived from this search and its findings.
Therefore, this paper examined whether and how customer loyalty towards different channels (i.e. offline, conventional online, mobile online) impacts brand loyalty and whether perceived benefits of channels, psychographic and demographic traits moderate this relationship. In particular four channels were included: physical stores, online shopping websites, smartphone and tablet applications. To test in which circumstances the channel loyalty – brand loyalty relationship can be strengthened or weakened the study involved three categories of moderating variables: perceived direct
benefits of channels, psychographic and demographic traits. The understanding the moderators’ influence on the relation provided further insights about its mechanisms. To
be able to properly conduct this research, a one-time cross-sectional online survey was
adopted, addressing the banking and flying industry.
Overall, the current study is aimed at closing the existing gaps in the literature by answering to the following research question: “Is there a loyalty formation toward channels (i.e. offline, conventional online, or mobile), which can be defined as channel loyalty, and whether and how does this channel loyalty impact brand loyalty? What is the impact of direct perceived benefits of channels, psychographic traits, and demographic features on this relationship?”
Theoretical Contribution
The relation between channel loyalty and brand loyalty has never been deeply analyzed so far. Understanding the mechanisms behind it is highly relevant and contributes to the theory and existing academic literature, providing insights into novel issues. Thus, further understanding of the capabilities of both channels and brand loyalty, and the relationship between the two are provided. For researchers finding evidences about a link between channel loyalty and brand loyalty and, therefore, about a new path to reach brand loyalty, creates new perspective on the construct. This new perspective may uncover further areas of research that deserve attention.
Managerial Contribution
Besides theory, organizations and managers are going to gain important strategic marketing recommendations and insights from the researched topic. Recommendations to tackle the challenges caused by single and multiple channels are of major interests to the majority of the organizations. The results from this study could actually reveal that through the enhancement of the loyalty toward channels, companies can create and intensify brand loyalty. This issue would be particularly relevant for service providers
with either single or multiple channels and multiple brands. Marketers would have new opportunities to be seized. First, if the channel-brand loyalty relationship is demonstrated, companies should proactively invest and allocate their resources not only on product-service quality, advertisements and customer engagement, but also on channels, in particular on the ones proven to have a stronger impact on brand loyalty. Second, firms would be able to reach one of the most desired and important goals: achieving brand loyalty. The study results would shed light on one of the few tools that can accomplish this purpose. Overall, channels’ relevance would be increased. They will not be considered only a useful vehicle to create more contacts between new or existing customers and the firms. They would also attain the objective of brand loyalty. Further managerial relevance will be emphasized in following sections of the thesis.
Thesis Overview
In the next chapter, a review of the literature on the key concepts of customer, firm, brand, channels’ loyalty and multichannel environment is presented. Based on this literature review, specific gaps are identified and a research question is developed. Furthermore, a conceptual framework with eight hypotheses about expected relationship among the set of variables (e.g. channel loyalty, brand loyalty) are developed. This framework is examined in the field research. The methodology and analysis’ results are explained, respectively, in chapter four and five. Finally, a discussion of the empirical findings, managerial implications, limitations and suggestions for further research is derived and a conclusion is presented.
2. LITERATURE REVIEW
This chapter is structured as follows. The following paragraphs review the literature relevant to customer loyalty, firm loyalty, brand loyalty and channel loyalty, with particular regard to the physical store, online channels and mobile channels. Then channel loyalty in the multichannel environment is addressed. Exploring these concepts
will help to show up the relevant gaps in the existing literature and consequently lead to the research question. Finally, since it is the purpose of this paper to contribute to the existing literature and provide practical implications, managerial and theoretical contributions will be discussed.
2.1 Customer Loyalty
Customer Loyalty represents one of the main engines of great leadership and business success. The principles and rules of loyalty are at the heart of every company with an enduring record of high profits, productivity, growth and expansion. (Reichheld, 1996; Reichheld, 2001). High customer loyalty provides organizations with considerable economic benefits explaining the differences in profitability among competitors.
Loyalty’s rewards are long term and cumulative: the longer a customer remains loyal to the company, the more profits the firm can achieve from the single customer. (Reichheld, 1992). Beyond profit margins, loyalty brings cost savings in different areas, some of which are: reduced customer acquisition costs, reduced customer turnover expenses,
increased cross-selling success, and more positive word-of-mouth. (Griffin, 2002). The
literature addressing customer loyalty issues is very wide. Accordingly, numerous descriptions of loyalty have been provided during the past years. The description that best represents the intrinsic meaning of loyalty was provided by Oliver (1999), who defined loyalty as “a deeply held commitment to rebuy or repatronize a preferred product or service consistently in the future, thereby causing repetitive same-brand or same brand set purchasing, despite situational influences and marketing efforts having the potential to cause switching behaviour.” (Oliver, 1999, p. 34). This definition incorporates commitment to repurchase. Besides this factor, loyalty includes affective commitment such as emotional attachment, identification with the product or brand, and involvement (Allen & Meyer, 1990). Thus, it is widely acknowledged that loyalty has two different dimensions: behavioural and attitudinal. It is important to distinguish and examine both
forms of loyalty since they represent a strategic tool for companies to identify truly loyal customers and those who are showing only behavioral loyalty (Baloglu, 2002). To take a closer look at the three conceptualizations of customer loyalty, please see Appendix B.
2.1.1 Behavioral Loyalty
The first of the two factors that loyalty needs in order to flourish is repeat patronage or purchase (Griffin, 2002). Behavioural loyalty refers to repeated purchases of a brand. Many researchers (Ehrenberg 1988; Fader and Hardie 1996; Kahn et al., 1988; Massy et al., 1970) have defined customer loyalty only from a behavioural perspective. They believe that repeated purchasing represents true loyalty of a customer towards the product of interest (Bandyopadhyay & Martell, 2007). The behavioral dimension relies on customer’s actual conduct of purchasing a product and then continuing to purchase it, regardless of any internally held attitudes. From the behavioral perspective, loyalty is the result of brand preference and not the source of it. Companies aiming to increase behavioral loyalty will focus on strategies such as improving customer satisfaction and product quality, which will increase the amount of repurchase behavior. (Bandyopadhyay & Martell, 2007; Caceres & Paparoidamis, 2007).
2.1.2 Attitudinal Loyalty
The second dimension of loyalty is known as attachment or commitment to the product or service. Many authors (Day 1969; Dick et al., 1994; Jacoby et al., 1978; Foxall et al., 1994; Mellens et. al. 1996; Reichheld, 1996) stated that a strong attitudinal commitment toward a product is necessary for true loyalty to exist (Bandyopadhyay &
Martell, 2007). The attitudinal definition of loyalty implies a favorable set of stated
beliefs towards the brand. Therefore, a customer is loyal to a company, product, or brand when he or she owns a positive, preferential attitude toward it. This means that customers who are willing to pay a premium price for a product X over another product Y, even when the two products perform the same function, are loyal to product X. Attitudinal
loyalty is highest when the customer differentiates the product from the potential competitive alternatives, and has strong preference for it (Griffin, 2002). Therefore, the emphasis is not on actual behaviour, but on attitude, preference and willingness. The strength of these attitudes represents the predictor of a brand’s purchase and repeated patronage. From the attitudinal perspective, each company aiming to increase loyalty will focus on enhancing any features of the customer journey and experience, in order to stay constantly a step ahead of competitors. (Bandyopadhyay & Martell, 2007; Caceres &
Paparoidamis, 2007; Uncles, Dowling & Hammond, 2003).
2.1.3 The Four Types of Customer Loyalty
Griffin (2002) and Baloglu (2002)discussed four distinct types of customer loyalty, resulting from the comparison between low and high relative attachment and low and high repeat purchase frequencies. Those four types of loyalty, exhibited in table 1, had been originally identified and discussed in study conducted by Dick & Basu (1994). The two dimensions upon which the cross-classification of loyalty was based are the already explained behavioral loyalty (low or high repeat behavior) and attitudinal loyalty (low or high commitment). The first of the four loyalty archetypes (Baloglu, 2002) is called transactional or no loyalty, which occurs when both repeat purchase and commitment are weak. The second one is the spurious or inertia loyalty that is expressed in high repeat purchase behavior and low attachment. Those customers are usually likely to buy similar products from different vendors (e.g. supermarkets), without showing a specific attachment towards any of them. On the other hand, a low repeat purchase combined with high relative attitude produces latent loyalty. Customers with latent loyalty have strong commitment towards the specific vendor but a weak repeat purchase behavior, determined by either situational effects (e.g. lack of sufficient resources), which cannot be usually influenced by the firm, or by the company’s accessibility, distribution system, and price. The highest and most preferable type of loyalty, known as premium or true
loyalty, is obtained when repeat purchase and high level of attitudinal attachment coexist. Those customers patronize a specific company and are less vulnerable to alternative and competitive offerings. Premium loyalty is definitely the most leverage-able of the four types of loyalty, and the most difficult to achieve. In order to achieve a successful loyalty program, it is necessary to focus on both repeat purchase behaviour and attitudinal loyalty. (Dick & Basu, 1994; Griffin, 2002, Baloglu, 2002). According to one of the most influential research on consumer loyalty, premium or “true loyalty cannot be achieved as a reasonable goal by many providers” (Oliver, 1999, p. 33). True customer loyalty emerges as a combination of several mechanisms, requiring perceived product superiority, personal fortitude, social bonding, and their synergistic effects. (Oliver, 1999). These findings provide interesting contributions also in the field of loyalty measurement. One of the most popular customer loyalty metric developed in the last years is the Net Promoter Score. This consists of a single survey question about customers’ willingness to recommend a product or service to someone else. (Reichheld, 2003).
All in all, loyalty has been the core of strategic marketing planning and provides a basis for creating and developing a sustainable competitive advantage (Dick & Basu, 1994; Uslu & Cam, 2012). In the next sections firm loyalty, brand loyalty, and channel loyalty are discussed, as they constitute key elements in this research.
2.2 Firm Loyalty
Customer loyalty defines a stable set of customers for a firm's product or service. When companies adopt a loyalty-focused culture customers not only keep doing business with the organization, but also are willing to pay higher prices, recommend the company to their friends, relatives, and colleges, generate positive word-of-mouth among other customers and provide positive feedback to the provider itself (Durkin, 2005). Customer firm and retail loyalty is a critical objective for marketers. In line with the customer
loyalty’s conceptualization, previously exposed, customer firm or retailer loyalty has been defined as the customers’ attitudinal and behavioral preference for the particular firm and retailer when compared with available competitive alternatives. (Wallace, Giese & Johnson, 2004; Oliver, 1999).
Table 1: The four types of Customer Loyalty
High Behavioral Loyalty Low High
Attitudinal Loyalty
Low
Note. Adapted from Customer Loyalty, how to earn it how to keep it (2nd ed.), p. 22, by J. Griffin,
2002, United States: Jossey-Bass.
2.3 Brand Loyalty
The concept of brand loyalty has aroused a great interest among both practitioners and academicians in the field of consumer behavior, consumer brand choices and marketing strategy (Jensen & Hansen, 2006). In order to fully understand the meaning of brand loyalty, it is essential to look first at the concept of brand equity, strictly related to brand loyalty itself. A variety of definitions, trying to express the meaning of brand equity, are available. Some of them consider the physical components of the brand, such as brand’s name or symbol, that are not connected to the customers or the audience (Aaker, 1996); others see the audience as a necessary factors for the existence of brand
Premium/True Loyalty High relative attitude
toward the brand
Intensive re-purchase behavior. Latent Loyalty Strong commitment Weak repeat patronage due to situational effects Spurious/Inertia Loyalty Products are
re-purchased out of necessity, convenience, etc. Low attachment Transactional/No Loyalty Weak repeat purchase behavior Weak commitment
equity (Keller, 1993). Moreover, brand equity is recognized to be one of the three key drivers of customer equity, together with value equity and relationship equity (Lemon, Rust, Zeithaml, 2001). In general brand equity is defined in terms of specific marketing outcomes or effects coming from the product or service because of the brand name, and uniquely attributable to the brand (Keller, 1993). Studying brand equity is essential in order to estimate the value of a brand more correctly for financial and accounting purposes as well as from a strategic point of view to improve marketing productivity. “The long-term success of all future marketing programs for a brand is greatly affected by the knowledge about the brand in memory that has been established by the firm’s short-term marketing efforts” (Keller, 1993, p.2). One of the main assets on which brand equity is based is brand loyalty, which represents the core of brand equity itself. Brand loyalty is a complex multi-dimensional concept (Uslu & Cam, 2012) that measures the attachment or commitment that customers have towards a brand and how likely they would be to change and switch to another brand (Aaker, 1991). When customers keep buying the brand even in the face of other competitors with price and any convenience, they recognize value in the brand itself and highly emphasize it. Developing loyalty to a particular brand means that customers have strong commitment to that brand, which they view as being more satisfactory than other ones. This brand assessment is reinforced with several and repeated use. (Day, 1969; Jacoby & Chestnut, 1978; Aaker, 1991; Holland & Baker, 2001). Therefore, this conceptualization sheds light on the two elements are at the basis of brand loyalty definition: the behavioral and attitudinal one. Both of them are requirements for true loyalty to occur (Jensen & Hansen, 2006). Consequently brand loyalty represents a favorable commitment or attitude toward a brand resulting in repeated purchase of that brand over time (Aaseal, 1992). This consistent purchase behavior is a function of psychological and emotional processes (Jacoby, 1971) and not just an arbitrary response. Creating and maintaining brand loyalty over time constitute an
enormous challenge for companies. Although this is a complex process, once achieved, company’s efforts are rewarded with favorable word of mouth and positive revenue generation (Agrawal & Siddharth, 2010).
2.4 Channel Loyalty
In the context of multichannel, loyalty has been and remains an interesting subject of discussion and analysis. However, the term channel loyalty did not appear very often in the literature so far. Mentioning channel loyalty involves several debates that should be carefully considered. As a matter of fact, it can be hasty to refer to something called channel loyalty when there are no concrete or empirical evidences that prove its existence. The existing literature did not address this theme in great depth so far, but provides evidences about the existence of some dynamics or mechanisms, which we can refer to as channel loyalty. With regards to it, the existing research aims to investigate whether customers can be loyal to a channel independently from being loyal to a brand, firm or a product. Therefore, when we refer to channel loyalty, we mean the commitment or stickiness that a customer feels toward a particular channel.
Table 2 provides a brief review of the most common researches involving channels. As the table shows, the main topics (i.e. customer channel migration and channel free
riding) discuss the opposite phenomenon that this research aims to investigate, i.e.
consumers propensity to stick to a particular channel and therefore to be loyal to it.Seock
et al. (2007) studied the impact of the attitudes toward Internet websites on the intentions
to search for information and purchase from those websites. The findings revealed a direct, positive effect of the attitude on the intensions. Related to this topic is the
research-shopping phenomenon. Verhoef, Neslin and Vroomen (2007) aimed to deepen
the understanding of research shopping behavior in multichannel customer management, developing a model for understanding the antecedents of it. The framework examined how customers choose channels for either search or purchase. The authors identified three
mechanisms that guide research shopping: attribute-based decision-making, lack of channel lock-in, and cross-channel synergy. According to their findings, those mechanisms contribute in making Internet search-store purchase the main form of research shopping. Channel lock-in is defined as the degree to which search attractiveness or higher attitude toward searching on a specific channel translates into purchase attractiveness of that channel, and vice versa (Verhoef, Neslin & Vroomen, 2007). The actual study aims to move one step further and examines whether what the previous authors call attractiveness and attitude could be translated into loyalty toward the channel.
Table 2: Most popular studies involving Channels Reference Theme
Valentini, Montaguti, & Neslin, 2011 Customer channel decision process and its evolution. Dholakia, Kahn, Reeves, Rindfleisch, Consumer behavior in multichannel environment. Stewart, & Taylor, 2010; Balasubramanian,
Raghunathan, & Mahajan; 2005
Dholakia, Zhao & Dholakia (2005) Multichannel Retailing: A case study of early experiences
Seock, & Norton, 2007 Attitude toward web sites, online information search, and channel choices for purchasing.
Verhoef, Neslin and Vroomen, 2007 Research-shopping phenomenon.
Ansari, Mela, & Neslin, 2008 Customer channel migration.
Heitz-Spahn, 2013 The phenomenon of the cross-channel free riding: switching channels during the decision-making process.
2.5 Loyalty towards Stores, Online, and Mobile Channels
Since this study deals with four channels (i.e. smartphone, tablet, online websites, and physical store), it is essential to refer to the relevant literature that examines customer loyalty toward each of those channels to gain a deeper understanding of the topic, and of each channel’s impact on brand loyalty. This will contribute to properly develop the conceptual framework and the hypotheses.
A few years ago the focus and analysis of relationship marketing and customer loyalty converged in the retail context (Reynolds & Arnold, 2000). In the retail marketplace there are several relationships that are established between different marketing actors. In particular, the interaction between customers and stores and the brands that stores support has received considerable attention (Dodds, Monroe & Grewal, 1991), recognizing such strategic interaction as a key to build long-term customer loyalty (Reynolds & Arnold, 2000). Many authors propose that in the customer to firm relationship scenario, commitment exists as loyalty to the stores (Morgan & Hunt, 1994). For instance, Dick and Basu (1994) provided an integrated perspective of store loyalty in their conceptual model, which focused on the strength of customer attitude and repeat
purchase behavior. Firms are constantly aiming to improve service quality and build store
loyalty by developing and enforcing salesperson-customer relationship programs (Beatty, Morris, Mayer, Coleman, Reynolds & Lee, 1996). Macintosh and Lockshin (1997) developed a store loyalty model, which reveals the existence of multi-level relationships between stores and customers and the way in which those relations link to store loyalty. The conceptualization the authors provide of store loyalty is based on both the strength of positive attitude and repeat purchase behaviour. In a retail context, a relationship between customers and salesperson is strongly related to store loyalty and reveals additional positive effects such as shares of purchase, word of mouth and competitive resistance. By concentrating on such relations, retail firms differentiate their offerings and gain several advantages (Reynolds &Arnold, 2000).
2.5.2 Loyalty toward Online Channels.
Chief executives care deeply about customer commitment and are aware of the fact that it represents the key to the success of online operations as much as of offline operations. Loyalty represents an economic necessity whose lack might cause even the best-designed e-business model’s failing and collapse (Reichheld & Schefter, 2000).
Researchers have defined e-loyalty or online-loyalty as the customer loyalty to a website. In other words, e-loyalty is the consumers’ favorable attitude toward an electronic business resulting in repeat buying behavior. It represents the central theme in establishing companies’ sustainable competitive advantage. (Anderson & Srinivasan
2003; Cui & Lai, 2013; Cyr, 2008; Gremler, 1995). So far customer loyalty toward online
channels has been analysed in different contexts such as content-based web sites, online communities, auction web sites, internet banking etc. Moreover, several articles contribute to e-commerce research by investigating the determinants of e-loyalty. For instance the importance of trust as a mediator in building customer loyalty in content-based web sites was demonstrated (Gummerus, Liljander, Pura, & Van Riel, 2004; Cui & Lai 2013). Similarly Chiu, Lin, Sun & Hsu (2009) focused on exploring the motivations behind customers’ loyalty intentions towards online shopping websites. Perceived usefulness and satisfaction were found to have significant influence on customers’ loyalty intention towards online shopping. Furthermore, in the context of online communities, feelings of affection and attachment to subgroups can increase users’ e-loyalty.
(Tausczik, Dabbish, & Kraut, 2014).
2.5.3 Loyalty toward Mobile Channels
Since the technological changes of the last years, researches provided an overview of m-commerce development by examining its impacts on business world and the implications to mobile commerce users and providers. Mobile commerce, defined as “a technology process that involves an active interaction between users and technology” (Kumar & Mukherjee, p.24, 2013), encompasses shopping via mobile devices, such as smartphones and tablets, which represent the new retail channels. (Zeidler, 2009; Kumar et al., 2013). Those new available portable devices have revolutionized daily activities and how people used to perform them. (Mobile behaviour report, 2014; Fender &
Wolfley; 2014) As a result of the advances in wireless technology the number of mobile device users increased significantly (Siau, Lim &Shen, 2001; Lin & Wang, 2006). Moreover, the literature recently shed light on the empirical validation of a customer loyalty study in a mobile commerce context. Lin & Wang (2006) have largely contributed in this field, validating a customer loyalty model for m-commerce. Indeed, as already stated for the e-loyalty, without customer loyalty even the best mobile business would fall apart. This research successfully applies the usual conceptualisation of customer loyalty to the new mobile commerce field. Keeping into account the definition of loyalty for online websites (Cyr, 2008), mobile loyalty can also be defined as perceived intention to revisit or re-use an application and purchase from it in the future (Cyr et. al, 2006).
2.6 Channel Loyalty’s impact on Firm and Brand Loyalty.
Due to the mobile communication development of the last years, and the massive increase in the number of channels or touch points that firms use, the topic of channel loyalty is only in its infancy, and provides many opportunities for further strategic experimentation. Furthermore, managing these channels presents a series of challenges for the brand management. In particular firm and brand loyalty management research has been investigated within the multichannel environment (Bellman, Potter, Hassard, Robinson, Varan, 2011; Keller, 2010). The literature provides evidence that the active involvement of customers in using channels influences their propensity to be firm and brand loyal (Holland & Baker, 2001). Marketing channels and use of channels are recognized to have persuasive impacts on consumers, through the increasing effects on the favorability of brand attitude (Bellman et al. 2011; Keller, 2010). These studies represent the first attempts of the literature to explore the relationship between the multichannel context and brand loyalty. Moreover, they recognize the persuasive impacts that marketing channels have on consumers, through the increasing effects on the favorability of brand attitude. Further research still needs to be run to understand how
channels can be adopted to maximize company’s profitability and apprehend their contributions in building long-term brand loyalty. Therefore, if channel loyalty and its positive influence on brand loyalty occur, companies would be aware of extremely important advantages they can gain from their channels. First of all, marketers should manage each of their channels in order to maximize both their direct and indirect sales and brand equity effects. Marketing channels can have persuasive effects on consumers and through these effects they build brand equity. Consequently consumers have the possibility to learn about the brand and understand what it does specifically. Any channels have the ability to influence five specific hierarchical branding factors, which are brand awareness, brand associations, brand attitudes, brand attachment, and brand activity. Channels affect brand awareness since they are used to promote the brands; they are beneficial in managing the imagery associations of the brand; the ability to use a channel enhances positively customers’ brand judgments and feelings; channels, in particular the online ones, affect brand attachment; finally, they critically impact brand activity through the additional information that they provide. Second of all, marketers should also develop and implement channel and communication options in order to obtain profitable synergistic sales, and firm and brand loyalty effects. (Keller, 2010). Comprehending how channel loyalty and its impacts can be maximized is a priority and a key topic for future research.
2.7 Channel Loyalty in Multichannel Environment 2.7.1 Multichannel Environment
In order to give a categorization of the technological advances, many researches have classified the 1980s as the decade of the personal computer (PCs), the 1990s as the decade of the Internet, and the first part of the 21st century as the decade of mobile commerce, considered the main driving force for the next computing development (Mahatanankoon, Wen & Lim, 2005). Clearly, these advanced technologies have caused
a variety of changes in people’s lives, and in particular in the way in which marketers used to conduct their business (Barnes, 2002). Indeed, the recent advancement in technology contributed to the fast proliferation of multi-channels. More channels mean more touch points through which both marketers and customers benefit exclusively. On the one hand, firms, adopting a multichannel strategy, provide several and distinct touch-points to customers, such as the Internet, ATMs, call centers, catalogs, mobile channels and so on (Griffin, 2002; Konuş, 2010; Neslin. et. al., 2006). Consequently they make use of multichannel to sell product, create more interaction, engagement, customer experiences, and manage their whole business online and offline. On the other hand, customers are provided with more touch points to purchase products or services, research and gain information about the firm and its offerings, and actively interact with the company more easily (Ansari, Mela & Neslin, 2008; Kunuş, Verhoef, Neslin, 2008; Neslin, 2006; Ngai, Gunasefaran, 2007). This led to the emergence of a new field: the multichannel customer management. It refers to “the design, deployment, coordination, and evaluation of channels to enhance customer value through effective customer acquisition, retention, and development”. (Neslin, Grewal, Leghorn, Shankar, Teerling, Thomas & Verhoef, p.96, 2006). A channel is defined as a mean or a contact point between the firm and the customer. In particular, besides the shopping at the physical stores, traditional outlets (Verhagen & Dolen, 2009), nowadays the channels that are assuming an increasingly dominant role are the Internet (e-shopping or commerce), and mobile (m-commerce) ones.
In the last years multichannel environment has been studied from a variety of perspectives. A series of studies focused on the understanding of consumer-decision-making among modern and traditional channels, including the e-commerce, in-store and m-commerce (Hsiao, 2009; Miles, 2012; Maity & Dass, 2014). Furthermore, consumer perception of mobile applications was explored and the importance of focusing on the
effects of using channels on consumer value, customer loyalty, and brand loyalty has been recognized (Wallance, Giese, Johnson, 2004; Mahatanankoon et al., 2005; Konuş et al., 2008; Barnes, 2002). Customer loyalty encloses both loyalty to the retailer and loyalty to the brand (Day, 1969; Jacob & Chestnut, 1978; Oliver, 1997). Customers’ active involvement in channel usage positively enhances and influences their attitude toward the firm and the brand (Holland & Baker, 2001; Keller, 2010; Bellman et al., 2011). To gain a comprehensive overview over the main researches concerning multichannel environment, please see Appendix B.
2.7.2 How to gain more Channel Loyalty and Brand Loyalty
One powerful way to engage customers and gain positive impacts on firm and brand loyalty is going multichannel (Griffin, 2002). Until some years ago firm and brand loyalty were mainly originated by customers’ attachment toward the product or service provider and the physical store location, which was the only available channel for the companies. Nowadays, the multichannel environment and the proliferation of touch-points, through which companies and customers interact, enhanced the complexity of this topic. Therefore, multiple channels are involved in the loyalty formation. Customers, having several channels at their disposal, can get in touch with the organizations through different routes. As a result, they may or may not become loyal and attached to the particular channel they use when purchasing a product or a service, but since the number of connections with the organizations have risen, there are higher chances for loyalty formation. Therefore, as many evidences from the literature revealed, adopting multi-channel and feeling a strong commitment to a particular or several multi-channels can be expected to generate loyalty toward the firm and the brand itself.
However, this multichannel environment is not the only source of channel loyalty. An individual channel can lead to channel stickiness, regardless the firms’ adoption of multiple channels. A channel can own some specific features, which, fitting customers
expectations or characteristics, lead to create customer’s channel loyalty. For instance, an individual channel could be characterized by extra benefits and be very appealing and in a good fitting with customers’ needs. A firm with a single channel may be able to create higher loyalty than the one originated by a multichannel competitor. A perfect example is Amazon.com, Inc. Amazon sells its products only through an online channel while its main competitors, i.e. Barnes & Noble and Waterstones, make use of both offline and online channels. Although Amazon has a single channel to enter in touch with customers and sell its products, when compared to its main competitors, it has a much higher customer loyalty. (Bhasin, 2011). Therefore, channel loyalty can also derive from the ideal match between right channel features and right customers with the right benefits to be fulfilled. Reaching the perfect understanding of customers’ expectations and the perfect fit between them and one channel can result in channel loyalty.
2.8 Gaps and Research Question
Loyalty, denoting the most discussed strategic marketing issues, embraces our whole research, with the main regard to the fields of multi-channels and brand. Previously, we have emphasized evidences from existing literature on these themes and how their relevance is becoming so strategically attractive for marketers. In spite of the large volume of literature on these topics, we identified some particular gaps that, if properly addressed together, could provide appealing theoretical and managerial contributions that will be emphasized afterwards.
2.8.1 Gaps
First of all, the existing researched literature did not extensively shed light on the theme of channel loyalty. The articles previously discussed represent the main contributions that the literature provides so far on that theme. Moreover, channel loyalty issue is examined by considering loyalty towards the single channels, which are treated individually in each paper. Indeed, an illustration of articles that deal with loyalty toward
stores, online web sites, and mobile channels was provided. Therefore, it is interesting to notice that channel loyalty has never been addressed while examining all those channels into one sole conceptual framework, treating the entire theme as a whole. A comparison between channels in the loyalty context is missing and requires particular attention. This research purpose is positioned to fill this gap in the literature. Given the relevance of the topic, the study proposes to examine channel loyalty in a model, which includes the main adopted channels (e.g. stores, online, and mobile channels).
Second of all, the available literature is not exhaustive in exploring the relationship between channel loyalty and brand loyalty. This theme has received less attention in the academic studies. However, the literature provides enough evidence to address the positive influence of channel loyalty on brand loyalty. In particular Keller (2010), Bellman et al. (2011) and Holland et al. (2001) researched the customers’ involvement in channel usage and its influence on brand loyalty and brand equity management.
Taking everything into account, nowadays people are more easily engaged, involved, and in close contacts with firms and their brands. Those customer-company interactions and experiences, enhanced by this multichannel context, are supposed to represent key antecedents of brand loyalty. Moreover, when high satisfaction and loyalty with these channels occurs, this impact on brand loyalty can even be enhanced. The existing literature provides enough evidence to show that channel loyalty is a significant contributor to the brand loyalty. However, no researches linked this proliferation of channels and channel loyalty, with the achievement of brand loyalty. Therefore, this study focuses on channel loyalty occurrence and investigates whether it has a significant impact on brand loyalty.
2.8.2 Moderators of the Channel-Brand Loyalty Relationship
The explored relationship can be influenced by lots factors. The current and previous researchers on customer channel choice and multi-channels have always investigated the validity of their conceptual models taking into account the influencing
role of certain moderators. Most commonly, firm marketing efforts, channel attributes, channel integration, individual differences, psychographic and demographic factors represent the variables that were taken into consideration in previous researches. (Neslin et al., 2006; Konuş et al., 2008; Mcgoldrick & Collins, 2007). In order to gain deep insights of the relationship that we aim to examine, we need to investigate whether the effect of channel loyalty on brand loyalty turns out to be strengthened or weakened when the influence of other factors occurs. The inquired moderators of the conceptual framework are the following: ease of use, price value, innovativeness, impulsiveness, age and gender.
2.8.3 Research Question
In light of the outlined gaps, we aim to focus on the following research questions: Is there a loyalty formation toward channels (i.e. offline, conventional online, or mobile), which can be defined as channel loyalty, and whether and how does this channel loyalty impact brand loyalty? What is the impact of direct perceived benefits of channels, psychographic traits, and demographic features on this relationship?
2.9 Contributions
The research question aims to explore and understand the insights of the relationship between the multichannel customer loyalty and brand loyalty, specifically how the first one impacts the second one. Significant contributions, both theoretical and practical, can be achieved through this study.
2.9.1 Theoretical Relevance
Channel loyalty and its impact on brand loyalty have been rarely addressed so far. Understanding the mechanisms behind the relation is thoroughly relevant and contributes to the theory and existing academic literature, providing insights into novel issues such as the customer loyalty toward particular channels and its influence on brand loyalty. Researchers can benefit from this study since new perspective on channel loyalty, brand
loyalty, and the link between the two is provided. In particular, if such link exists researchers can focus on it, deepen its mechanisms, and understand how it can be managed. In other words, researchers can concentrate their attention on how brand loyalty can be handled by using channels, and by influencing channel loyalty. Furthermore, the analysis is expected to develop interesting findings due also to the presence of moderating variables of the conceptual framework. All in all, the research addresses an extremely innovative topic. The new insights and perspective may uncover further areas of research that deserve attention.
2.9.2 Managerial Relevance
The researched topic provides major practical contributions concerning, in particular, managers, marketers, and practitioners. The majority of organizations have to strategically deal with the challenges offered by multichannel environment. In order to stay consistently one step ahead of the competition, organizations need to learn how to deal with the several channels, especially with the more innovative ones, i.e. mobile ones. The research aims to study the occurrence of channel loyalty and, moving further, explore whether the loyalty toward a channel can influence brand loyalty. Marketers and practitioners who manage one or multiple channels and brands would extremely benefit from this research, gaining insights of how both channel and brand loyalty do interact (Shankar, et. al., 2003). Companies would benefit on a variety of fronts. First, providing evidence of the existence of channel loyalty means that customers can feel strong stickiness and commitment toward a particular channel. If customers perceive channel loyalty, firms can be expected to gain several advantages (e.g. firm or brand loyalty). Second, if the study reveals that channel loyalty generates brand loyalty, managers and firms should not focus only on their products or service to create brand loyalty. On the contrary, besides factors such as product or service quality, advertisements and customer engagement, companies would have to emphasize and concentrate their attention on the
available channels since those would represent a significant source from which brand loyalty could be raised. If channel loyalty occurs and the effectiveness of the relationship is demonstrated, companies should proactively invest their financial resources on channels, in particular on the ones proven to have a stronger impact on brand loyalty than the others. Firms should revisit and implement a novel management of their resource allocations and investments on channels. Third, brand loyalty represents one of the main challenges for any organization. Companies have limited available resources to create brand loyalty. Once proven the effectiveness of the under-investigated relationship, marketers would be aware of a new source to achieve brand loyalty. Therefore, since this analysis provides an additional mean to achieve brand loyalty it constitutes an essential tool for marketers and practitioners. Finally, gaining insights of which factors are able to impact the channel-brand loyalty relation, contributes additionally to let managers aware of which personal traits can reinforce mostly the relationship itself. Once understood how to relocate their financial resources among the several channels, firms can focus primarily on certain categories of people. In particular, companies can concentrate mostly on customers owning certain psychographic or demographic features, which are demonstrated to more strongly impact the channel-brand loyalty relation. Consequently, companies would be able to develop and successfully implement superior strategies in order to further enhance brand loyalty.
All things considered, from a channel loyalty perspective, the relationship illustrates an additional strategic usage that firms and marketers could do of their channels and the relevance of focusing and investing on them in order to gain brand loyalty advantages. From the brand loyalty perspective, the framework represents an innovative way to build, develop and enhance brand loyalty. A new strategy to build brand loyalty: channel loyalty as a new mean to reach brand loyalty.
3. CONCEPTUAL FRAMEWORK
In this section the researched conceptual framework is introduced, accompanied by a detailed description of all its components. Upon the critical evaluation conducted on previous literature, and the identified gaps, eight hypotheses are formulated and proposed. Hypothesis’ validity is going to be subsequently tested in the data collection analysis.
3.1 Model and Hypothesis Development
Considering the gaps identified through the literature review on the researched fields (i.e. loyalty, brand loyalty, channels’ loyalty, and multi-channels), we developed a research question. We present in figure 1 the conceptual framework that illustrates the channel loyalty – brand loyalty relationship and all the constructs of the research question. The framework seeks to examine whether and how the loyalty toward channels (i.e. mobile, online, and stores), creates or impacts brand loyalty, and investigates the main variables that moderate the relation itself. Besides explaining the building blocks that characterize our model, this section proceeds further to the formulation and discussion of eight hypotheses about the effects of channel loyalty on brand loyalty and the impact of moderating variables on the relationship itself.
3.1.1 Channel Loyalty’s impact on Brand Loyalty
As anticipated, in order to analyze channel loyalty’s effect on brand loyalty, we will take into account the four channels that today are most in vogue, i.e. mobile applications or smartphone & tablet applications, online shopping websites, and physical stores. Until few years ago the focus of relationship marketing and customer experiences and loyalty was on the retail context. Indeed, customers used to make their purchases by going only into the stores (Griffin, 2002). Then with the advent of the Internet and more advanced technologies, the main interest shifted toward online shopping websites, through which a higher number of marketers started to sell their products. (Reynolds & Arnold, 2000).
Analysis found out that by the end of 1999, the percentage of customers remaining store-only buyers started to decrease significantly, while the one of customers purchasing on the retailer’s Internet sites was rising (Griffin, 2002). Furthermore, in recent years, due to the new changes and more innovative technologies that have occurred, the main focus has shifted again, this time towards the mobile channels (Mahatanankoon, Wen & Lim, 2005). Other then physical and online stores, mobile shopping applications represent the new touch-points that mainly have attracted the attention of marketers and researchers. The dramatic increase in the number of the Mobile Internet devices (MIDs) affected consumers’ shopping patterns, and their presence in the retail environment motivated changes to point-of-purchase displays; more and more shoppers are turning to MIDs to make purchases (Spaid, & Flint, 2014). Digital mobility and connectivity are growing more important every day. Mobile devices, e.g. tablets and smartphones, have revolutionized daily activities and how people do usually perform them. Many reports tried to track mobile users for long period of time, in order to understand how they use their devices to have access to mobile web and in particular to mobile shopping applications. Around 85% of people interviewed by the recent mobile behavior report (2014) affirmed that mobile devices are a central part of everyday life. Mobile channels include a variety of devices. (Mobile Behavior Report, 2014). As our model shows, with regards to mobile channels, we will investigate channel loyalty towards smartphone and tablet applications, which are highly spread nowadays. A smartphone is a mobile phone with more advanced computing capabilities and connectivity than basic featured phones. It includes many characteristics like mini handheld computers. Modern smartphones provide text messaging, e-mail, Web browsing, cameras, MP3 players, and run both free and paid applications.
For some respects, a tablet is nothing more than a smartphone, with a larger screen and without calling abilities. However, many differences between tablets and smartphone
are identifiable. Tablet connectivity, for instance, tends to be more limited than smartphone one. Indeed, while all smartphones, nowadays, have Wi-Fi and 3G connectivity, most tablets only have Wi-Fi access. In line with the scope for which they have been created, i.e. deliver a unique multimedia experience and more computational capabilities, tablets are mostly used for reading e-books, watching videos, multimedia, and surfing the Internet. On the other hand, smartphone primary function is connectivity.
(Fender & Wolfley, 2014). An important common point between the two devices is represented by the applications that people can download and use in both smartphones and tablets. Even though there are some apps that only run in tablets and not in smartphones, most of them, in particular the shopping mobile ones, own the same outline, design, and functionality in each devices. Differently from smartphones, tablets have received less attention from researches. Therefore, the insertion of tablets in our conceptual framework represents an additional source of innovativeness for the research.
As previously discussed, loyalty represents an economic necessity that if missing, even the best-designed business, e-business, and m-business model would fail and collapse (Reichheld & Schefter, 2000). Channel loyalty is still in its infancy, and even though the articles presented before addressed it considering each channel singularly,
there is the need for a further and deep study on it. Many authors (Mahatanankoon et al.,
2005, Konuş et al., 2008, and Barnes, 2002) recognized the importance of studying the effects of using channels on consumer loyalty. In particular Konuş, Verhoef, Neslin (2008) highlight the need of further understanding of the effects of using those innovative channels on consumer loyalty. Customer loyalty incorporates both loyalty to the retailer and loyalty to the brand (Day, 1969; Jacob & Chestnut, 1978; Oliver, 1997). Since evidences showed that customer satisfaction with a channel translates into having loyalty to the provider of that channel (Wallance, Giese, Johnson, 2004), we suggest that the latter can be stretched until influencing brand loyalty. Additionally, Holland and Baker
(2001) illustrated that consumers’ tendency in visiting a website (for either a specific task or just for experience) affects their propensity to be loyal to the brand that marks that online website itself. Therefore, we aim to underline the following issue: since the literature provides evidences that the reality of channel(s) is able to create and influence brand loyalty, we propose that being loyal toward a specific channel contributes in turn to create brand loyalty. Therefore, we advance the following hypothesis:
HP 1: Loyalty towards mobile, online, or physical store channels has a positive impact on brand loyalty.
Furthermore, we expect that among the four channels of our conceptual framework (i.e. smartphone & tablet applications, online shopping websites and physical stores), there are some of them that are more likely to have a stronger impact than others on brand loyalty. Through the adopted research strategy this aspect will be investigated.
When retailers began to add Internet channels the percentage of customers who remained store-only buyers began to decrease and a significant portion of buyers started to purchase through the retailers’ Internet website (Griffin, 2002). In turn, with the advent of mobile channel that has the capacity of serving customers in wireless environment for business, pleasures, and shopping motives, many people started to make their purchases through mobile shopping applications. The mobile Internet has increased at an impressively fast rate, and is expected to overcome the Internet websites in few years. The mobile devices will become the key access factors for all types of services. (A. Aarnio, A. Enkenberg, J. Heikkila, S. Hirvola, 2002; Cyr, Head & Ivanov, 2006). Additionally, analysts of ForeSee.com have recently carried a research in order to compare mobile devices and personal computers for media usage and consumption. The findings of the conducted survey showed that, on a 100-point scale, smartphones and tablets scored 77, while PCs only 65. Mobile devices seem to be a more captivating
account, we expect mobile channels’ loyalty being more likely to influence brand loyalty
than other channels. Therefore, these findings suggest a second hypothesis:
HP 2: Loyalty towards mobile channels is likely to have a stronger impact on brand loyalty than other channels.
3.1.2 Moderators’ impact on Channel Loyalty-Brand Loyalty Relationship
Studying the validity of those two hypotheses will answer in part to the examined research question, and enhance our knowledge of channel loyalty and its impact on brand loyalty. However, in order to gain further insights of the channel loyalty – brand loyalty relationship, it is necessary to examine whether this effect results to be stronger or weaker when the influence of other factors occurs. As already stated, several variables are able to moderate the relationship between channel loyalty and brand loyalty. We have selected three classes of moderators: direct benefits expected from channels, psychographic traits, and demographic features. Then, from each of these categories, we have picked two variables, reaching a total of six moderators. To take a closer look at the six moderators and the existing literature on them, please refer to Appendix B.
3.1.3 Channel benefits and attributes
The first group is constituted by both benefits that customers derived from channel usage and channel attributes (Neslin et al., 2006). They represent what people are expecting from channels in terms of benefits. The two items addressed are channels’ ease of use and price. Perceived ease of use of online systems positively influences behavioral intentions to use new technology (Subramanian, 1994). With regards to price, some channels can provide relative cheap and convenient purchase occasions and consequently create more values and benefits for customers. Particularly for price sensitive people, this would produce a positive influence on the impact of channel loyalty on brand loyalty, which would be additionally strengthened. On the other hand, high prices are expected to reduce and weaken the impact of channel loyalty on brand loyalty.
