Role of store image influencing store loyalty: A study of the retail industry in Bangladesh

Abstract

Over the last few decades the retail industry is experiencing dynamic changes globally through the emergence of supermarkets as the dominant retail form. This is due to the fact that consumers` behavior and preferences has changed and shifted towards convenience, high quality products, provision for customer care, greater emphasis on value for money, flexible payment methods, and sophisticated channels of distribution. Like other developing countries of the world, the retail sector in Bangladesh has been witnessing a gradual uprising for the last and half decade as the traditional markets made ways for new retail formats with the emergence of large scale retail stores especially in the urban areas of the country. This has led to the creation of an environment in which the retail industry faces severe competition. The retail environment of Bangladesh is in the phase of experimentation where customers, as well as store owners, are experiencing larger and diverse retail formats. In this scenario, the retail stores have to work on what attracts consumers and what will make them not shift their store preference. Today’s customers’ preference has shifted for newer service dimensions, product excellence, pleasing store atmosphere etc. which are creating unique shopping experiences. They develop specific expectations for the selection of stores. Hence, it becomes important to understand the overall customer perceptions regarding store image that will have an impact in customer satisfaction and store loyalty. This dissertation has been conducted to identify the influence of store image on store loyalty in the context of the Bangladesh retail market. The study presents and discusses the empirical findings from a survey of 534 supermarket shoppers and examined the shoppers’ perspectives to understand their loyalty status by using Partial Least Square (PLS) method based on Structural Equation Modeling (SEM). The findings of this thesis largely support the hypothesized relationships proposed in the theoretical model. The results revealed that store image has both direct and indirect relationships with store loyalty. To validate the general findings of the dissertation a case study has been conducted on the leading supermarket Agora. This thesis contributes to theoretical and practical knowledge by emphasizing the marketing approach on consumer perception of store image and to formulate effective retail marketing strategies to create and enhance a favorable image perception which will have a positive effect on the customers’ store revisiting intentions. At the end of the thesis a few recommendations along with some agenda for future research are put forward for consideration.