Identifying The Factors That Influence Retail Customer Loyalty And Capitalising Them

Abstract

Much has been said about loyalty and the advantages that a loyal customer base offers to an organisation and more specifically to retail customers. With more than 2 billion loyalty programme memberships including hotel, supermarket, airline and financial services in the United States alone it is clear that loyalty programmes are an essential part of the marketing plan and strategy of retail organisations – a road to survival, growth and profits. This study focussed on one particular clothing retailer in Gauteng that on its own represents 20.3% of the market making it the largest clothing retailer in South Africa. Gauteng was selected due to its stature as the largest clothing retailer in South Africa and also the nature of its customer base which consists of three distinct groups of customers: (1) cash only non-loyalty programme members, (2) cash only loyalty programme members, and (3) credit customers who purchase on terms.

This study investigated the factors that influence customer loyalty amongst members of a retail loyalty programme in the apparel retail industry and found that the two most important drivers of customer loyalty were merchandise availability and customer service related variables. Price did not feature as an important driver of loyalty opening opportunities for retailers to focus on loyalty marketing strategies that do not revolve solely around price but rather focus on long-term relationship building. The responses received from this research were illuminating and will be of value to retailers who have an existing loyalty programme or are contemplating the starting of a programme.