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

Usha Ramanathan, Nachiappan Subramanian, Wantao Yu, Rohini Vijaygopal

    Research output: Journal PublicationArticlepeer-review

    22 Citations (Scopus)
    68 Downloads (Pure)

    Abstract

    Retail networks are striving to achieve competitive advantage by increasing value through loyalty and efficiency with a focus on service operations. As sales promotions have become an integral part of the retail supply chain planning, customer behavioural aspects based on loyalty and service operations have been challenged greatly. Subsequently, management capabilities, such as planning and timely replenishment, have become complicated tasks for many retail store managers. This study develops a model integrating retail network value and efficiencies with customer behaviour and performance. We validate the model using survey data from prominent U.K. retail store customers. Our data analysis shows that both loyalty and service operation attributes have positive significant impact on customer behaviour, while the service operation mediates the relationship between loyalty and customer behaviour. This result gives a new outlook to build managerial capability based on customer loyalty and service operations. Our results specifically show that the service operation attributes will indirectly influence the customers’ buying behaviour even in the presence of loyalty attribute such as promotion schemes. This result sends a strong signal to retail supply chain managers to offer customised promotions considering local community rather than having uniform sales promotion nationwide.
    Original languageEnglish
    Pages (from-to)478-488
    JournalProduction Planning & Control
    Volume28
    Issue number6-8
    Early online date16 May 2017
    DOIs
    Publication statusPublished Online - 16 May 2017

    Keywords

    • Retail network performance
    • customer behaviour
    • customer loyalty
    • management capabilities
    • service operations

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