Antecedents of primary store disloyalty in a stagnant market

Peter McGoldrick, DP Hampson

Research output: Contribution to conferencePaperpeer-review

Abstract

Relationship marketing and loyalty programs have been major strategic tools for retailers but recession and stagnation impacted severely on loyalty. Customer loyalty has generated direct economic benefits for retailers, loyal customers being more likely to purchase high margin supplementary products (Gummesson 1997). Customer retention lowers costs, Dhar and Galzer (2003) suggesting that loyals require up to 90% less marketing expenditure. Gremler and Brown (1999) refer to “the loyalty ripple effect” to suggest that loyalty can enhance customer behaviors providing indirect benefits. Loyals generate further interest and patronage in the firm through positive WOM, a most cost-effective form of marketing communication (Zeithaml et al. 2006). Given its importance, numerous research studies examine the antecedents of consumer loyalty and a dichotomy has emerged between loyals and non-loyals. The former require relationship maintenance strategies, the latter relationship building. However, a disproportionately small amount of research has looked specifically at shoppers who remain patrons of their primary stores but become less loyal – i.e., primary store disloyalty. To develop strategies to restore previous loyalty, marketers need to understand the causes of shifts toward disloyalty.This need is particularly apparent in a stagnant economic climate. Consumers are faced with factors potentially increasing their willingness and ability to be disloyal. Hampson and McGoldrick (2012) find that recent economic crises have undermined many retailers’ loyalty bases, as consumers have became more price-conscious and concerned with value. Greater Internet access also allows consumers to become more knowledgeable. Many retailers’ recession responses contributed further to these trends, creating enduring levels of increased disloyalty. Based upon a literature review, qualitative investigations and quantitative primary research, this paper addresses the following research objectives: 1) to define and conceptualize primary store disloyalty; 2) to examine shifts in primary store disloyalty since the 2008/09 recession; 3) to identify some antecedents to primary store disloyalty; 4) to discuss the managerial implications and theoretical contributions.The qualitative investigations with managers and consumers, combined with two surveys of 1,211 and 611 shoppers at different phases of recession and stagnation, reveal significant influences upon primary store disloyalty of (post)recession effects, service failures and intrinsic motivations. It is argued that researchers need to give closer scrutiny to recession effects and to shopper disloyalty, not treat this merely as an antonym of loyalty. The paper suggests implications for researchers, retailers and other marketers.
Original languageEnglish
Publication statusPublished - Aug 2012
EventAmerican Marketing Association, Summer Educators’ Conference - Chicago
Duration: 16 Aug 201219 Aug 2012

Conference

ConferenceAmerican Marketing Association, Summer Educators’ Conference
CityChicago
Period16/08/1219/08/12

Keywords

  • Primary Store Disloyalty; Store Loyalty; Recession; Disloyalty Motives; Critical Incidents.

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