Store Loyalty Determinants of Modern Retailing in Indonesia: A Structural Equation Modelling (SEM) Approach

Creating and maintaining customer store loyalty is an essential chore in the marketing concept and marketing activities. It is uneasy and complicated but necessary for retailers to undertaking seriously. Thus, this study aims to explore the determinant factors influencing consumer store loyalty based on Indonesian experience in modern retailing market. The conceptual framework was based on the
revised Stimulus- Organism-Response (S-0-R) model from Mehrabian and Russell (1974) and Belk (1975). The data was analyzed empirically using the structural model. The selected stimuli that pertain to the environmental factors (consisting of store image, store personnel, store satisfaction and culture) were examined to investigate the store loyalty determinant factors empirically. Derived from the S-0-R model, the organism factor was treated as the mediating variables. In this study, the influence levels of affect (consumers' liking) and trust were examined.
This study was conducted toward modern retailing market (hypermarkets/supermarkets) in Indonesia. The results of this study showed that the (revised) S-0-R model fit with the data and extended knowledge of consumers' store loyalty key factors. Both affect and trust were found to mediate the relationship between store image, store satisfaction and culture and store loyalty construct. Affect was proved to be prior mediator followed by trust in the case of Indonesian experience toward hypermarket/supermarket loyalty. The empirical findings suggested that store image, store satisfaction and culture had significant and positive effect on store loyalty through affect and trust. In particular, consumers' store satisfaction had significant and positive impact on affect and trust; also it had the strongest influence on the store loyalty through affect and trust. The predicted positive relationship between culture and affect, trust and store loyalty was also supported. Femininity and long-term orientation as culture elements had positive impact on store loyalty through affect and trust. Unexpectedly, the collectivism revealed a negative association with store loyalty, means that the collectivism term focused more on in-group from the extended family, not on the out-group. Moreover, the findings supported the positive significant relationship between store image and
store loyalty via affect and trust. Empirically, place and promotion (as store image dimensions) determined consumers' store loyalty. Surprisingly, store personnel negatively but significantly influenced the consumers' store loyalty via affect and trust, Store personnel only influenced negatively the consumer's affective state, but did not have impact on consumers' trust. Empirical data demonstrated that demographic and socio-economics characteristics
gave an important impact on store loyalty. Every ethnic group had different levels of loyalty toward modern retailing market (hypermarkets/supermarkets). Gender, city of born, office locations, visit frequency to the store (more than four times a month) and ownership of some electronic products (such as credit card, DVD/VCD players,
hand-phone, life insurance, and laptop/PC) had significant and positive influence on store loyalty. Total family income/expenditure monthly, occupation and ownership
of home-theater, conversely, illustrated a negative significant effect on store loyalty. Understanding the environmental factors can assist the understanding of the
determinant factors of consumers' store loyalty at least in the hypermarket/supermarkets context. It also provides some ways to identify those customers who are more willing to develop and maintain relationship, and those who are primarily interested in short-term relationship (based on transaction only). For the Indonesian case, understanding the ethnicity can assist any players in the modern retailing
market in segmenting and targeting their consumers' undoubtedly.