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Managing Service Quality: An


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customer loyalty from e-tail store
image attribute...
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Managing Service Quality: An International Journal
Developing cust omer loyalt y f rom e-t ail st ore image at t ribut es
Zee-Sun Yun Linda K. Good
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Zee-Sun Yun Linda K. Good, (2007),"Developing customer loyalty from e-tail store image attributes",
Managing Service Quality: An International Journal, Vol. 17 Iss 1 pp. 4 - 22
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Gwo-Guang Lee, Hsiu-Fen Lin, (2005),"Customer perceptions of e-service quality in online shopping",
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Ruby Roy Dholakia, Miao Zhao, (2010),"Effects of online store attributes on customer satisfaction and
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MSQ
17,1 Developing customer loyalty from
e-tail store image attributes
Zee-Sun Yun and Linda K. Good
4 Michigan State University, East Lansing, Michigan, USA

Abstract
Purpose – The purpose of this paper is to investigate e-tail store attributes that develop customers’
positive perceptions of e-tail store image, and determines whether or not they develop a sense of
loyalty to an e-tailer.
Design/methodology/approach – Acknowledging the importance of customer retention, this
paper is designed to examine e-customer loyalty intentions toward the e-tailer. To understand the
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concept of loyalty toward an e-tailer, this study focuses on the importance of the final stage of the
customer decision-making process: post-purchase evaluation. This paper develops a model that
describes the extent to which e-tail store image (derived from a set of e-tail store attributes) indicates
patronage intentions and finally predicts customer loyalty. We use the structural equation modeling to
test the model and hypotheses.
Findings – Results in this paper indicate that e-tail store image is derived from e-merchandise,
e-service, and e-shopping atmosphere attributes, all of which support the way consumers shop. A
favorable e-tail store image positively influences e-patronage intentions, which thus leads to e-loyalty.
Originality/value – The research in this paper provides a conceptual model that will help e-retailers
better articulate how and why consumers may be e-loyal shoppers. Second, the research identifies
attributes, unique to online shopping that serve as the basis for conceptualizing e-tail image as a
second order factor.
Keywords Services, Electronic commerce, Customer loyalty, United States of America
Paper type Research paper

Introduction
The internet provides a marketplace where buyers and sellers conduct transactions
directly, interactively, and in real-time beyond the physical limitations of traditional
brick and mortar retailers (Brynjolfsson and Smith, 2000; Butler and Peppard, 1998;
Griffith and Krampf, 1998; Peterson et al., 1997). As a result, retailing on the internet –
or e-tailing – is maturing quickly as a channel for communicating store information,
distributing information about products and services, and executing transactions. For
example, US internet usage grew 115.3 percent from 2000 to 2005 and internet users hit
205 million by the end of 2005 (Internetworldstats.com, 2006). Nielsen/NetRatings
reported that 18 percent of the online buying population account for 46 percent of total
online spending (Nielsen/NetRatings News Release, 2005). According to the Jupiter
Research forecast, US online retail sales will reach $95 billion in 2006, and a 12 percent
annual growth rate will bring sales by 2010 at $144 billion (Miller, 2006). Even if the
Jupiter report estimates such online retail sales, which is still just 5 percent of the $2.1
trillion US retail sales, the report signifies that the more important impact may be on
Managing Service Quality the internet’s ability to affect off-line sales.
Vol. 17 No. 1, 2007
pp. 4-22 Although numbers of new online shoppers are growing, a result of both rapid
q Emerald Group Publishing Limited
0960-4529
growth and fierce competition on the internet is that e-tailers are finding it difficult to
DOI 10.1108/09604520710720647 maintain customer attention toward their marketing messages, and also finding it a
challenge to prevent customers from buying competitor products and services Developing
(Hoffman and Novak, 2000; Licata, 2000; Reichheld and Schefter, 2000). Although there customer loyalty
are certainly challenges shared by both traditional retailers and e-tailers, e-tailers face a
set of demands specific to online retailing, including the fact that on the internet a
competitor is only a click away. Further, research on the browsing habits of web users
indicate that individuals move fairly quickly from page to page, and from site to site.
Attracting and retaining the attention of shoppers who skim virtual shelves is not an 5
easy task. Without a strong incentive for shoppers to visit a site and without an anchor
to keep customers on a site, e-tailers may struggle in an increasingly competitive
e-market.
Developing and managing customer loyalty (e.g. customer retention) is very
strongly related to the profitability and the long-term growth of a firm (Reichheld,
1993, 1995). Small increases in customer retention rates can dramatically increase
profit (Heskett et al., 1997; Hosmer, 1998; Huffmire, 2001). Loyal customers visit their
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favorite web sites twice as often as non-loyal customers, and loyal customers spend
more money (Dialscore.com, 2000); according to analysts, 35 to 40 percent of
e-commerce site sales revenue comes from repeat visitors (Rosen, 2001). As such, it is
not surprising that customer’s e-loyalty has been found to be a critical asset in e-tailers.
To be competitive in the virtual marketplace, e-tailers must determine how to create
exceptional value for customers and how to maximize the value for loyal consumers.
Acknowledging the importance of customer retention, the purpose of this study,
therefore, is to explore consumer’s e-customer loyalty intentions toward the e-tailer.
The study focuses on the importance of the effects of post-purchase evaluation factors
in online consumer behavior and implications for customer loyalty. This research will
contribute to an increased understanding of online consumers’ shopping behavior, to
determine the key antecedents that influence customer loyalty, and to provide
marketing strategies for internet retailers.
This paper is structured in the following manner. First, existing body of knowledge
on consumer’s post-purchase behavior and Mehrabian and Russell (1974)
Stimulus-Organism-Response (S-O-R) model that includes all three aspects
considered important in studies of environmental psychology: environmental
stimuli, emotional reactions to the stimuli, and shopping response (behavior).
Second, according to our proposed research model extended from S-O-R model,
hypotheses are formulated on the role of e-tail store image and e-patronage intent on
customer behavior and e-store loyalty. Third, the research design and the empirical
data are described. Fourth, the study results of the data analysis, discussion, and
managerial implications are presented. The paper concludes with avenues for future
research focusing on online consumer loyalty.

Conceptual framework
The effect of post-purchase evaluation factors
In the post-purchase phase, the consumer evaluates a retailer and its products and
services and decides whether he/she develops ongoing relationships with them. The
major components of the post-purchase process include: the use of products, services,
and stores the formation of post-purchase attitudes toward the product, service, and
store the establishment of patronage (behavioral) intention (Mowen, 1987). If a
consumer builds up patronage intentions during a customer’s relationship with a
MSQ company and its products and services, moving through the sequence of purchase,
17,1 post-purchase evaluation, and the decision to repurchase, a repurchase loop forms that
may be repeated a few times or hundreds of times (Griffin, 1995). More specifically,
consumers form an overall impression or image of a retail store and determine their
attitudes, which are believed to simultaneously account for behavioral intentions and
actual behavior (Doyle and Fenwick, 1974/1975; James et al., 1976; Lutz, 1991;
6 Mazursky and Jacoby, 1986). Considering patronage intentions or loyalty toward an
e-tail store, consumers will decide to continue or discontinue maintaining the
relationship with the e-tailer in the post-purchase evaluation stage.
In the patronage intention and loyalty literature regarding post-purchase behavior,
customer satisfaction is generally identified as an antecedent of store loyalty intention
(Caruana, 2000; Chang and Tu, 2005; Koo, 2005). However, much research suggests that
store image attributes are the primary determinants of customer satisfaction (Bloemer
and Odekerken-Schroder, 2002; Chang and Tu, 2005; Koo, 2005) and can often lead
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directly to store loyalty without having to operate through customer satisfaction (Chang
and Tu, 2005; Koo, 2005). In fact, Koo (2005) found that store image attitudes toward
service, atmosphere, and merchandise had a stronger impact on store loyalty than on
satisfaction. Therefore, in this study, we did not focus on customer satisfaction, which
results from the evaluation of the perceived discrepancy between expectations and
performance (Tse and Wilton, 1998). We were interested in examining the power of
another well-documented concept expressed as “You never get a second chance to make
a first impression;” therefore, we examined the relationship between store image which is
described as a “total impression” of a store (Dichter, 1985) and loyalty intention.
Mehrabian and Russell (1974) developed a framework for analyzing the effects of
environments on individuals, emphasizing the role of nonverbal responses to
environmental factors as a major determinant of behavior. They suggest that
environmental stimuli affect an individual’s emotional states which in turn affect
approach or avoidance responses (S-O-R model). While Mehrabian and Russell (1974)
conceptualized their model as relevant to a variety of environments, the model has been
specifically adapted to the retailing environment by a number of marketing scholars
(Baker et al., 1992; Donovan and Rossiter, 1982; Mummalaneni, 2005; Roy and Tai,
2003; Sweeney and Wyber, 2002). As no research has evaluated all three stages of the
S-O-R model simultaneously in a post-purchase decision context, this study extends the
Mehrabian-Russell environmental psychology model to include store image (which
represents an emotional reaction in the Organism) as a higher-order dimension of the
e-tail store attributes (Stimuli), resulting in e-loyalty intentions (Response). Our model
specifically suggests that e-tail store image is derived from a set of e-tail store
attributes (customers’ perceptions of and merchandise quality, service quality, and
store shopping atmosphere, in the context of an online store).

E-tail store image


Since Martineau (1958) proposed that a retail store has a personality, retailing
researchers have examined the store image construct, including its conceptualization
(e.g. Darden and Babin, 1994; Kasulis and Lusch, 1981; Keaveney and Hunt, 1992) and
operationalization (e.g. Chowdhury et al., 1998; Golden et al., 1987; Keaveney and Hunt,
1992). The continuous interest in store image research has not only contributed to
knowledge development, but it has also generated several academic debates
concerning the theoretical paradigm and research method of the store image construct. Developing
Researchers have conceptualized store image as an overall impression of a store as customer loyalty
perceived by a consumer. Retail store images have been viewed as a composite, a total
impression, an idiosyncratic cognitive configuration and a gestalt (Arons, 1961;
Dichter, 1985; Lindquist, 1974/1975; Mazursky and Jacoby, 1986; Oxenfeld, 1974;
Zimmer and Golden, 1988). There are several measurement approaches for the store
image construct, but researchers argue that measures are not adequate and cannot 7
capture the nature of the originally conceptualized store image (Chowdhury et al., 1998;
Keaveney and Hunt, 1992). A number of complicated issues remain unclear and have
resulted in inconsistencies between the conceptualization and operationalization of
store image.
A number of researchers adopted the overall composite view of store image and
attribute-based approach. For example, Lindquist (1974/1975) described that store
image means “a structure of some sort that is tying together the dimensions that are at
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work (p. 30).” A clearly defined construct does not exist for retail store image but we
can safely assert that the attributes of specific goods, services, and stores work
together to create a shopping experience for customers; this shopping experience
affects the perceptions of the store image customers have about a particular store –
what characteristics they associate with a particular store, or its image (Dickson and
MacLachlan, 1990; Kunkel and Berry, 1968).
Pinpointing how customers develop a store image is, however, complicated and a
myriad of variables affect customer perceptions. Over the years, researchers have
attempted to identify key store image attributes (James et al., 1976; Lindquist,
1974/1975; Mazursky and Jacoby, 1986; Yoo et al., 1998). Three types of store image
attributes (i.e. merchandise attributes, service attributes, and store shopping
atmosphere attributes) are consistently used by customers to evaluate the overall
retail shopping quality and provide an overall impression of a store. In evaluating
merchandise related aspects, cues such as product quality, selection or assortment,
styling or fashion, guarantees, and pricing appear to be salient to customers. Service
related aspects of store image include salesclerk service, presence of self-service, ease
of merchandise return, and delivery service. Retail store shopping atmosphere is
related to the ambient aspects of a retail store like physical facilities, shopping
convenience, congeniality of staff, and pleasantness of shopping.
According to Keaveney and Hunt (1992), traditional attribute-based approaches
could not explain the gestalt view of store image. While attribute-based approaches
capture a subset of the store image (i.e. salient attributes of retail stores, their
importance, and relationships among them), the store image concept goes well beyond
store attributes. Store image attributes can evoke cognitive perceptions and emotional
responses and consist of a combination of functional factors and psychological factors
that consumers may unconsciously or consciously connect to a shopping experience or
to a store (Chang et al., 2001; Lindquist, 1974/1975; Martineau, 1958; Yoo et al., 1998).
For example, hearing piano music playing in the background while shopping in an
immaculately clean store (e.g. “the Nordstrom experience”), might generate image
perceptions of cleanliness, contentment, or luxury. Thus, store image (e.g. A store is
clean, secure, friendly, etc.) can be described as the overall look of a store and the series
of mental pictures and feelings it evokes within the consumer. For the retailer,
developing a powerful store image through effective store merchandising, service, and
MSQ shopping atmosphere provides the chance to embody a single message, stand out from
17,1 the competition, and be remembered.
All of these past studies have focused on traditional retailers; however, these
attributes – merchandise, service, and store atmosphere – can be translated to the
realm of e-tailing (Yun and Good, 2002). In online space, a clean, easy-to-navigate
interface with eye-catching graphical information and an easy-to-use electronic
8 shopping cart might generate image perceptions of trust and security. A few studies
were conducted to identify e-features/attributes that can facilitate the acquisition and
retention of customers and the resulting profitability of an e-tail store. For
merchandise-related attributes on the internet, product information is crucial, as
customers cannot see or touch the actual merchandise. As Ostrom and Iacobucci (1995)
note, when it is more difficult for customers to evaluate the quality of a product,
consumers are more likely to consider value-added services and information that often
indicate e-tailers’ commitment and credibility. Thus, textual and visual description is
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crucial, and provides a sense of quality, price information, manufacturer name, brand
name, product review (by former purchasers or objective third parties), and guarantee
(Ghose and Dou, 1998; Jarvenpaa and Todd, 1997; Shelton, 1999; Spiller and Lohse,
1997; Szymanski and Hise, 2000; Vellido et al., 2000).
Understanding the impact of service-encounter constructs such as service quality
and the array of services on behavioral intentions has been an important focus of
service industry researchers for more than two decades (Lovelock, 1983). Besides the
enormous amount of support in the service quality literature for a link with customer
loyalty and future purchases (e.g. Cronin and Taylor, 1992; Zeithaml et al., 1993), the
idea that customers prefer greater service quality is intuitive, particularly if price and
other cost elements are held constant. In online space, service quality dimension can be
identified by product attribute information and content on the e-tailor’s web site. In
other words, adequate and accurate amounts of information are considered key
elements of e-service. Maybe this is due to the lack of interaction with “live”
salespeople and the “do-it-yourself” mentality that results from having to rely on one’s
own abilities to locate and purchase merchandise online. Service quality in online
realms is generated by a variety of e-tail characteristics, including general accessibility
of information, frequently asked questions (FAQ) areas, prominent and accessible
company information, and feedback sections. Other online service features include
customer-support facilities (e.g. order tracking), keyword search functions, and
promotions such as electronic coupons and prizes (Ghose and Dou, 1998; Spiller and
Lohse, 1997; Sally et al., 1999).
Because e-tail is a “flat” realm, where customers interact with products and services
via their computer screens, the shopping atmosphere of an e-tail site is much different
from that of a traditional store (Vrechopoulos and Siomkos, 2002). Whereas features of
traditional stores that enhance store environment include such aspects as wide aisles,
accessible shelves, less “traffic” or aisle congestion, and fast check-outs (Huddleston
et al., 2003), all of the features described in the preceding paragraphs affect e-tail
atmosphere: E-tailer’s shopping atmosphere is created by the attractiveness of the
e-tailer site and how goods and services, service-specific features, and the entire
interface of an e-tail site are presented. The most crucial e-tail atmosphere components
seem to be convenient site design and ease of use and navigation (Jarvenpaa and Todd,
1997; Spiller and Lohse, 1997; Szymanski and Hise, 2000; Tarafdar and Zhang, 2005;
Vellido et al., 2000; Vrechopoulos and Siomkos, 2002). Richard (2005) identified six Developing
important factors of web atmospheric cues (e.g. structure, organization, customer loyalty
informativeness, effectiveness, navigational characteristics, entertainment). The
expectation that an e-tail website is easy to use and facilitates the locating of
merchandise is a dimension that is different and more specific than service quality
dimensions previously identified for traditional retail stores.
9
E-patronage intentions
Intentions are affected by the store attributes we described and often predict
customer-shopping behavior – in both traditional retail venues and in online shopping
spaces. Behavioral intent is the degree of conscious effort a person will exert to perform a
behavior. Intent has a strong effect on determining shopper decisions such as which
store is selected for shopping and willingness to switch stores. Koo (2005) found that
store image attributes significantly affect store loyalty intentions (i.e. intention to revisit
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and commitment). Intention shapes customer willingness to try, purchase, adopt, or


reject a product, brand, service, or store, and the willingness to repurchase, the
willingness to purchase more in the future, and the willingness to recommend the store to
others (e.g. word-of-mouth or recommendations) (Ostrom, 1969; Sirohi et al., 1998). As
consumers become loyal, as a result of the good impression they form from their
experiences with shopping, they share their experiences with other individuals and are
the best advocators of any company or its products (Greenleaf and Lehmann, 1993).

E-loyalty behaviors
As store image shapes post-purchase behavior, it is treated as one of the retailers’ most
valuable assets (Steenkamp and Wedel, 1991). Perceptions of store image are typically
generated over time: regular use of goods, services, and stores generates customer
perceptions of store image, which determines whether or not customers develop a sense
of loyalty to a good/service or retailer (Donovan and Rossiter, 1982; Doyle and
Fenwick, 1974/1975; James et al., 1976; Kunkel and Berry, 1968; Mazursky and Jacoby,
1986). Although Reynolds et al. (1974) viewed customer loyalty as the tendency for a
person to continue, over time, to show similar behaviors in situations similar to those
previously experienced, mere willingness to repurchase and even actual repurchasing
does not, however, directly predict true loyalty. Customers may instead be spuriously
loyal to an e-tailer – willing to shop at a specific location, but also willing to shop
elsewhere if persuaded to do so (Huddleston et al., 2003). Therefore, the development of
customer e-loyalty during post-purchase evaluation is crucial for e-tailers who desire
close relationships with their customers. Although repeat behavior does not directly
equate with loyalty, repeat behavior is an important characteristic for an e-tailer to
promote among customers. According to Staats and Staats (1963), the probability of
shopping again at a given store increases when reinforcing stimuli (e.g. a favorable
store image) are presented. Positively perceived store image attributes give rise to a
favorable store image, which may enhance customer loyalty (Kunkel and Berry, 1968).

Hypotheses development
We argue that patronage intentions may be the most important functional element
leading to loyalty toward an e-tailer. If patronage intentions play a central role in
predicting future loyalty, e-tail store image attributes are critical variables predicting
MSQ the probability of consumer loyalty toward an e-tailer. Decisions that reflect an
17,1 unwillingness to continue shopping via the internet may then be the consequence of
unfavorable reactions to site attributes (i.e. merchandise, service, and atmosphere)
rather than a general lack of interest in shopping online.
One goal of our study is to better understand the relationship between e-patronage
intentions and e-loyalty. Another goal is to examine the respective roles of e-tailer
10 image attributes, which, we propose, form a more general e-tail store image and predict
e-patronage intentions. Based on our discussion, the following three broad hypotheses
are suggested and Figure 1 shows the development of the online post-purchase
intentions model to investigate the predictors of e-loyalty.
H1. A favorable e-tail store image will be derived from favorable e-merchandise,
e-service, and e-shopping atmosphere attributes.
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H2. A favorable e-tail store image will positively predict consumer e-patronage
intentions.
H3. E-patronage intentions will lead to e-loyalty behaviors.

Method
Sampling and data collection
To test the hypotheses, we surveyed college students in a large mid western university
who had made purchases via the internet at least two times in the previous 12 months.
College students are important target consumers, particularly for online retailers, since
college students are generally comfortable with making purchases online and they
represent a lifetime of potential buying power and brand loyalties. According to
comScore Networks reports (Rainie et al., 2002), the vast majority of online purchases
were made by US consumers’, with college students accounting for 4.3 percent. College
students spend more money online than any other demographic segment in the US
(O’Donell and Associates, LLC, 2004).
Our study employed a web-based survey: we prepared announcements that
requested participation and included the URL for the web survey. Participants were
solicited through several sources: advertisements posted in the university newspaper,
postings in residence halls and computer labs, and announcements displayed on the
overhead projectors in a variety of larger university classes. Volunteers who met the
study requirement (i.e. of shopping and making purchases online at least twice in the
previous 12 months) completed the self-report questionnaire posted on the web.

Figure 1.
Proposed model using
e-tail store image as a
second-order factor
Measurement Developing
The survey used previously developed scales derived from the literature on in-store customer loyalty
and non-store retailer research, modified when necessary. Merchandise, service, and
atmosphere items representing e-tailer features and characteristics were selected (GVU
Center, 1998; Lindquist, 1974/1975; Lohse and Spiller, 1999; Yoo et al., 1998).
Merchandise attributes included product offerings, such as dependability, value,
quality, and pricing. Service attributes focused on customization, delivery, sales or 11
service representative contact, and description of product/service information with
pictures/images. E-shopping atmosphere attributes encompassed privacy and security,
ease of navigation, shopping convenience, and friendly site design and layout.
Response format for the items were arranged on a seven-point Likert scale
(1 ¼ strongly disagree; 7 ¼ strongly agree) that measured subjects’ acquisition of
knowledge about their favorite e-tailer and also asked them to indicate their degree of
agreement as to whether or not their favorite e-tailer adequately provided each
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attribute (e.g. “Your favorite e-tailer provides customized service”). We used the
terminology of favorite e-tailer because we needed to assess the attributes of a single
e-tailer and we determined that having multiple experiences with an e-tailer would
provide a better context within which to evaluate the attributes.
As discussed earlier, store image is a complex heuristic construct. No single model
of store image factors has been suggested to conceptualize and measure retail store
image theories. Instead, store image has been defined as the result of previous
differential reinforcement (Kunkel and Berry, 1968), a type of attitude (Doyle and
Fenwick, 1974/1975; Engel and Blackwell, 1982; James et al., 1976), and a cognitive
component (Hirschman, 1981; Mazursky and Jacoby, 1986). Because store image has
not been consistently defined, and because no universally accepted models exist for
store image, our ability to create a generalizable and usable body of knowledge is
impeded (Keaveney and Hunt, 1992). Therefore, in this study, a store image measure
was developed by a second-order factor representing an e-tail store image construct
derived from three first-order factors (i.e. e-merchandise, e-service, and e-shopping
atmosphere attributes).
A seven-point Likert-type scale (1 ¼ strongly disagree; 7 ¼ strongly agree) with
three items was used to measure e-patronage intentions: willing to recommend this
e-tailer to friends and family via word-of-mouth (Wu, 1999) and reluctance of switching
from this e-tailer to another e-tailer (GVU Center, 1998). E-loyalty behaviors were
assessed by the second-order factor. Respondents were asked to indicate e-loyalty
toward a favorite e-tailer based on responses to three single-item questions, such as
number of times they purchased, total amount they spent, and number of people they
have referred to a favorite e-tailer (GVU Center, 1998; Sirgy et al., 1991). All items
included on the questionnaire are shown in the Table I.

Results
Respondent characteristics
The sample consists of 203 students who provided complete and usable responses and
is fairly evenly divided between males and females. The age of respondents ranges
from 17 to 60 years old, with a median age of 23; 76 percent are undergraduates and 91
percent are single/never married. Half of the respondents report spending between
$100 and $500 on products purchased via the internet over the last 12 months, and over
MSQ
Latent Vs Observed Vs Item description
17,1
E-merchandise M1 Dependable products
Attributes M2 High quality products
M3 High value products
M4 Fair/competitive prices
12 E-service S1 Customized service
Attributes S2 Descriptive info/application
S3 Ease of contact
S4 Delivery/shipping/tracking
E-shopping atmosphere A1 Privacy and security
Attributes A2 Convenience/time saving
A3 Search/navigation
A4 Design/layout
E-patronage P1 Hesitate to switch
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Intentions P2 Recommend to friends


P3 Recommend to family
E-loyalty TM How many times have you purchased from your favorite
e-tailer in the past 12 months?
Behaviors AM What is the amount you spent with your favorite e-tailer in
the past 12 months?
Table I. RF How many people have you referred to your favorite
Figure 1 description note e-tailer?

one-third spent more than $500. With the exception of gender, our sample is
representative of the university demographics. Our sample contained proportionally
more females than the university.

Confirmatory factor analysis and scale reliability


AMOS 4.0 was employed to conduct structural equation modeling using a two-stage
analysis whereby the measurement model is estimated first, then reliabilities are fixed
in the structural model (Jöreskog and Sörbom, 1996). Before conducting a test of the
structural model, we used Confirmatory Factor Analysis (CFA) to test the
measurement model. To confirm a hierarchical relationship proposed in H1, we
examined CFA of the proposed measurement model, which include the second-order
factor, e-tail store image. The CFA fit indices of the competing model are x 2 (126,
N ¼ 203) ¼ 196.53, p , 0:001; CFI ¼ 0.97, NFI ¼ 0.92; RMSEA ¼ 0.05 (see Figure 2).

Figure 2.
CFA three-factor
measurement of proposed
model
The proposed measurement model of H1 consisted of one unobserved exogenous Developing
construct, three unobserved endogenous constructs, and 12 observed endogenous customer loyalty
variables. In other words, the three first-order factors (i.e. e-merchandise, e-service, and
e-shopping atmosphere attributes) have direct effects from a second-order factor,
which represents an e-tail store image construct that has no indicators.
From the confirmed hierarchical measurement model, all factor loadings of the
indicators for each construct (e-merchandise, e-service, and e-shopping atmosphere 13
attributes) were statistically significant and sufficiently high, demonstrating that the
indicators and their underlying constructs were acceptable (loadings ranged from
l ¼ 0:65 to l ¼ 0:95, all p , 0:001). The results suggest reasonable overall
convergent validity, especially for the first-order factors. A hierarchical relationship
exists: the direct effects of the e-tail store image (higher-order factor) on the
lower-order factors (attributes) are very strong. H1 suggested that a favorable e-tail
store image was dependent upon e-merchandise attributes (g ¼ 0:86), e-service
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attributes (g ¼ 0:97), and e-shopping atmosphere attributes (g ¼ 0:99), and is


significantly and strongly supported (all p , 0:001). Factor loadings of the
e-patronage intention construct were statistically significant and acceptable
(loadings P1 l ¼ 0:51, p , 0:01; P2 l ¼ 0:94; P3 l ¼ 0:93; p , 0:001). For the
CFA, the e-loyalty construct was treated as the second-order factor and the three
single-item scales were first-order factors. A hierarchical relationship also exists
here: the direct effects of the e-loyalty construct on the lower-order factors (e.g.
number of times they have purchased) are acceptably strong (loadings ranged from
l ¼ 0:42 to l ¼ 0:49, all p , 0:001). Chronbach’s coefficient alphas for first order
variables were acceptable from 0.73 to 0.92 (Table II).

Model and hypotheses testing


Following the successful CFA, the structural model was estimated to test the
hypotheses. A correlation matrix was used for estimating the model (Table II).
Maximum likelihood (ML) was employed as the estimation procedure. Fit indices of the
structural equation modeling obtained for the theoretical model show that the model
was well fitted to the data (x 2 (127, N ¼ 203) ¼ 199.09, p , 0:001; GFI ¼ 0.90,
AGFI ¼ 0.87; CFI ¼ 0.97, NFI ¼ 0.92; RMSEA ¼ 0.05) presents the model and
structural path coefficients for each relationship (see Figure 3).
Our results indicate support of all proposed hypotheses. H1 suggested that a
favorable e-tail store image was dependent upon e-merchandise, e-service, and
e-shopping atmosphere attributes and was supported by CFA results. H2 predicted a
positive relationship between e-tail store image and e-patronage intentions, and is also
supported, with a significant and positive path coefficient (g ¼ 0:52; p , 0:001). H3
predicted a positive relationship between e-patronage intention and e-loyalty
behaviors, and is also supported (b ¼ 0:28; p , 0:02). We thus found support for
the roles played by e-tailer image attributes (including e-merchandise, e-service, and
e-shopping atmosphere), e-tail store image, and e-patronage intentions in predicting
e-loyalty behaviors.

Discussion and implications


Increased competitive forces are challenging e-tailers to assess their image, make
necessary changes, and alter marketing strategies to attract and develop loyalty
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reliabilities (n ¼ 203)
Correlation matrix and
Table II.

14

17,1
MSQ
E-loyalty
E-tail store image E-patronage behaviors
E-merchandise attributes E-service attributes E-shopping atmosphere attributes intentions TM AM RF
M1 M2 M3 M4 S1 S2 S3 S4 E1 E2 E3 E4 P1 P2 P3 TM AM RF

M1 1.00
M2 0.90 1.00
M3 0.77 0.80 1.00
M4 0.56 0.50 0.53 1.00
S1 0.46 0.50 0.38 0.46 1.00
S2 0.55 0.58 0.42 0.43 0.52 1.00
S3 0.50 0.51 0.46 0.38 0.40 0.48 1.00
S4 0.60 0.56 0.49 0.49 0.46 0.54 0.64 1.00
E1 0.65 0.65 0.56 0.51 0.50 0.60 0.64 0.77 1.00
E2 0.71 0.68 0.64 0.60 0.43 0.50 0.54 0.63 0.65 1.00
E3 0.75 0.74 0.69 0.57 0.50 0.61 0.59 0.65 0.69 0.80 1.00
E4 0.71 0.71 0.62 0.56 0.50 0.62 0.55 0.63 0.68 0.78 0.86 1.00
P1 0.18 0.19 0.15 0.09 0.07 0.09 0.14 0.10 0.06 0.13 0.15 0.21 1.00
P2 0.46 0.40 0.48 0.36 0.40 0.44 0.42 0.27 1.00
P3 0.43 0.37 0.44 0.44 0.31 0.34 0.37 0.37 0.36 0.38 0.42 0.44 0.28 0.88 1.00
L1 2 0.07 20.05 2 0.01 20.05 0.01 0.01 0.00 20.04 20.08 20.06 20.09 20.17 0.18 0.13 1.00
L2 0.10 0.13 0.15 0.04 0.04 0.10 0.15 0.05 0.06 0.05 0.05 20.03 20.02 0.12 0.08 0.27 1.00
L3 2 0.02 20.02 2 0.02 20.06 0.01 0.05 0.05 20.06 20.06 20.02 20.01 0.06 0.08 0.11 0.12 0.11 0.18 1.00
a No. of item) 0.89 (4) 0.80 (4) 092 (4) 0.73 (3) (1) (1) (1)
Developing
customer loyalty

15

Figure 3.
Proposed structural model
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and hypotheses test


results

among targeted customers. The objective of this study was to examine the contribution
of e-store attributes, e-store image, and e-patronage intention in creating e-loyalty. Our
finding regarding the significant effect of store image on patronage intention was
consistent with earlier studies on store loyalty (e.g. Koo, 2005). Significant relationships
were found between e-store image and e-store attributes, suggesting many
opportunities for retailers to improve the internet shopping experience for
consumers and to give a personality to an e-store. For example, consumers are
likely to revisit an e-tailer that gives them a good impression, offering a high-quality
product (an e-merchandise attribute), providing reliable shipping, delivery, and
tracking service (an e-service attribute), and having easy-to-find products via
navigable sites (an e-atmosphere attribute).
Depending on how one categorizes store image attributes, our three dimensions of
e-store image attributes (e-merchandise, e-service and e-shopping atmosphere attributes)
are broadly identified as online service industry components (e.g. Kim et al., 2006;
Semeijn et al., 2005). There has been increasing academic attention to online service
quality, however, little commonality exists among the scales developed to provide tools
to measure online service quality. Developing a comprehensive scale which can provide
enough information to allow researchers and practitioners to classify service attributes
fully is necessary so that online retailers can provide relevant services to their target
consumers, and to ensure the successful provision of service.
As mentioned previously, conceptualizing and measuring store image has been
treated as complicated and intuitively employed in retail store image research. Our
proposed model, developed by a second-order factor representing an e-tail store image
construct derived from three first-order factors shows a very good fit and provides an
alternative measurement of store image.
Our study also focused on whether e-tailers might use e-patronage intentions as an
index to indicate the probability of e-loyalty behaviors, and we found support for this
relationship. Willingness to recommend the e-tailer to friends and family and
reluctance of switching from this e-tailer to another e-tailer are an indication of
MSQ e-patronage intentions, leading to e-loyalty behaviors indicated by purchase frequency,
17,1 volume, and word-of-mouth.
Customer loyalty (retention) is strongly related to the profitability and the long-term
growth of a store, therefore managing customer loyalty and using it as a competitive
advantage is critical. In order to develop long-term, secure relations between e-tailers
and their customers, they should continue to target and attract first-time online
16 shoppers as part of their customer-acquisition efforts, as well as focus on retention
marketing efforts in order to increase profit after a consumer’s initial purchase. We
found consumers’ amount spent, purchase frequency and word-of-mouth are important
determinants of customer loyalty. E-tailers may need to target less frequent shoppers
with internet characteristics that are different than those for more frequent shoppers.
For instance, Burke (2002) found that less frequent shoppers responded to
informational technology applications, such as expert product reviews and
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suggestions and information search engines. Frequent shoppers responded to


transactional technology applications such as using a saved purchase list, short-term
markdowns, and sophisticated credit card technologies.
The internet can provide the opportunity to deliver more efficient and effective
direct-to-consumer marketing programs to build customer relationships and reinforce
e-tail store loyalty. When developing marketing strategies for e-tailing operations,
customer relationship management (CRM) applications are essential to improve the
customer experience and to continuously build a close relationship. Research indicates
that implementation of e-CRM efforts (e.g. chat room, e-mail, worldwide web, etc.)
directly improves e-loyalty (Lee-Kelley et al., 2003). Considering e-CRM features
(e.g. e-bulletin board, FAQs, ability to quick order, complaining, and track order
status, etc.) and technologies (e.g. internet survey, shopping agent, recommender
software, etc.) (Feinberg and Kadam, 2002; Romano and Fjermestad, 2003), e-tailers
should develop strategies to enhance relational bonds (e.g. financial, social, and
structural bonds) between consumers and e-tailers, which lead to customer retention
(Hsieh et al., 2005). Also, e-tailers should investigate the effectiveness of the CRM
features and technologies used in retail web sites related to conversion rates, customer
satisfaction, and ultimately loyalty.
This research makes several contributions to our larger understanding of e-tail
success and customer loyalty. First, we identify attributes that may contribute to
e-tailer image that are unique to online shopping. In addition, we conceptualize e-tail
image as a second-order factor based on the identified e-tail store image attributes (i.e.
quality of e-merchandise, quality of e-service, and e-tail shopping atmosphere). Finally,
we provide a conceptual model that will help e-tailers better articulate how and why
consumers may be e-loyal shoppers. These constructs are extremely important to
e-tailing and they will contribute significantly to the study of consumer behavior in a
computer-mediated environment.
Our study, while focusing on e-tailers specifically, has implications for all e-service
industries. The online environment provides a more consistent platform across service
industries. For instance, a brick and mortar airline ticket office has a very different
physical feel than a specialty retailer, a restaurant, or a custom made furniture
business. However, online, the playing field is narrowed. All service types are similar
in size (the computer screen) and all use similar types of interfaces to develop their web
sites. Therefore, implications from our study should be applicable to a wide variety of Developing
service types. customer loyalty
Limitations and future research
As our study is exploratory in nature, it has several limitations. First, the results of this
study are largely in accord with our conceptual framework; as with any study, further
research is needed to replicate and extend our findings. To justify any generalizations, 17
these findings should be replicated with various types of e-tailers, with different
products and/or services, and with a large sample size. The present study did not
examine different product categories and/or online store classifications, and relied
upon a student sample. Studies with a variety of product classes and/or e-tailer types
(e.g. luxury goods or information services) and with a broad range of target consumers
might reveal findings that corroborate or extend our approach.
Also, this study did not examine personal factors such as product involvement,
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variety-seeking behavior, or impulsiveness. Such individual differences or


consumer-segmentation variables should be incorporated in future studies because
they may help to explain sudden store switching, found even among repeat and/or
loyal consumers. Considering further research design, an experiment with actual
stimuli to respond to the three image aspects (merchandise, service, and atmosphere)
may well influence patronage intent directly and/or indirectly through store image.
Overall, we still need to develop a more detailed understanding of the relationship
between consumer e-loyalty and other marketing-related variables. To do so,
additional measures of e-tailer image attributes, e-tail store image, e-patronage
intentions, and e-loyalty behaviors should be developed.
Despite the importance of the concept, e-tailer loyalty measures and even store
loyalty constructs have not flourished in the marketing literature. For online stores to
succeed in a market environment of fierce competition and rapidly changing
technologies, understanding what attracts customers, retains consumers, and enhances
shopper loyalty is crucial. This study is an initial step in further explorations of the
interplay of the variables that influence shopper perceptions of store image and that
affect customer patronage and loyalty.

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About the authors


Zee-Sun Yun is a PhD candidate at the Department of Advertising, Public Relations, and
Retailing at Michigan State University. Her academic research focuses on exploring the
dynamics of online consumer decision-making. Her research interests are in loyalty and
customization/personalization in customer relationship management, interactive customer
decision support systems, and consumer shopping channel choice toward multi-channel retailers.
MSQ She has been involved in project work, including India Project which is funded research
sponsored by the CSREES, US Department of Agriculture; Researches focus on Indian consumer
17,1 attitudes and behaviors, retail business, distribution channel relationships, and international
business in India. Zee-Sun Yun is the corresponding author and can be contacted at:
yunzeesu@msu.edu
Linda K. Good is Professor and Associate Chair in the Department of Advertising, Public
Relations, and Retailing at Michigan State University. She has published in the International
22 Journal of Retail and Distribution Management, International Review of Retail, Distribution and
Consumer Research, Journal of the Academy of Marketing Science, Journal of Managerial
Psychology, Journal of Retailing. She teaches upper level undergraduate courses in Retail Buying
and Planning, Human Resource Management, and Retail Information Systems. At the graduate
level, she teaches a Professional Seminar and serves as advisor to both master’s and doctoral
students in Retailing.
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