Journal of Retailing 80 (2004) 249–263
Customer retailer loyalty in the context of multiple channel strategies
David W. Wallace
, Joan L. Giese
, Jean L. Johnson
Department of Marketing, College of Business, Illinois State University, Normal, IL 61790-5590, USA
Department of Marketing, College of Business and Economics, Washington State University, Pullman, WA 99164-4730, USA
With an increasingly competitive retail environment and decreasing customer switching costs, customer retailer loyalty is a critical goalfor merchants of all types. We investigate customer retailer loyalty in the context of multiple channel retailing strategies. Results show thatmultiple channel retail strategies enhance the portfolio of service outputs provided to the customer, thus enhancing customer satisfaction andultimately customer retailer loyalty. These results suggest that multiple channel retailing can be a useful strategy for building customer retailerloyalty.© 2004 New York University. Published by Elsevier. All rights reserved.
Customer loyalty; Multiple channel retailing; Internet marketing
Customer loyalty generates numerous beneﬁts and henceis a critical aim of many marketing strategies (Jacoby &Chestnut 1978). Most importantly, customer loyalty createsa stable pool of customers for a ﬁrm’s product or service(Oliver 1997). A small shift in customer retention rates canmake a large difference for earnings, and this inﬂuence ac-celerates over time. Loyal customers buy more, are willingto pay higher prices, and generate positive word of mouth,thussuggestingastronglinkbetweenloyaltyandproﬁtability(Reichheld 1993;Wright & Sparks 1999;Zeithaml, Berry, &
Parasuraman 1996).Customer loyalty encapsulates both loyalty to the retailerandloyaltytothebrand.Brandloyalty,inparticular,hasbeenextensively studied (Day 1969;Jacoby & Chestnut 1978;
Oliver, 1997); however, little research has been conductedon the critical role of retailer loyalty. Customer retailer loy-alty is of extreme interest to merchants, because high cus-tomer acquisition costs are difﬁcult to recoup without repeatpurchasing. This is ironic, particularly with the advent of In-
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ternet retailing, because increased competition and minimalcustomer switching costs make customers increasingly dif-ﬁcult to retain (Srinivasan, Anderson, & Ponnalovu 2002).Thus, efforts to enhance customer loyalty may be a criticaldefensive strategy for retailers: the existing customer base isboth retained for the retailer and denied to its competitors(Fornell 1992;Jacoby & Chestnut 1978).
Our key research question concerns the implications of amultiple channel interface for building customer retailer loy-alty. Do merchants who invest in multiple channels receivea payoff in terms of customer loyalty? Do these multiplechannels inﬂuence the drivers of customer satisfaction andultimately loyalty? This question is surprisingly unansweredto date; empirical research has not adequately consideredmarket-level responses to multiple channel retailing strate-gies (Homburg, Hoyer, & Fassnacht 2002;Reinartz, Krafft,
&Hoyer,2004).Thisisacompellingissueandofutmostim-portanceto researchers (Peterson & Balasubramanian 2002),as well as practitioners (Reda 2002b).Multiple channel retailers simultaneously employ an ar-rayofchannelsconsistingofretailstores,mailordercatalogs,and web sites often targeting the same customer. Merchantsmay undertake multiple channel strategies for a variety of reasons: to gain legitimacy with key stakeholders (DiMaggio& Powell 1983); to respond to competitor actions within theindustry (e.g.,Grewal, Comer, & Mehta 2001); to save ontransaction costs (Dutta, Heide, Bergen, & John 1995); and
0022-4359/$ – see front matter © 2004 New York University. Published by Elsevier. All rights reserved.doi:10.1016/j.jretai.2004.10.002