Factors influencing brand loyalty in the retail sphere

Abstract

A key success factor in gaining market share in today’s rapid ever-changing environment, relies on sustaining long-term relationships with all stakeholders. Changing apathetic customers into loyal customers and establishing long term relationships with customers is critical for organizational success. The purpose of this study is to gain insight into what drives consumers loyalty to a loyalty program and to a brand in the retail sphere in South Africa. A quantitative research method was employed to gain insight into these pertinent constructs to gather further understanding from the South African customer’s perspective. The questionnaires were administered online via Qualtrics, using a convenience sampling method. The study draws research insights from a sample of 203 educated, older, and high-income earning South African respondents. Structural equation modeling was used as an analysis technique. The researcher also developed key findings, such as that consumers are most loyal to Dischem and Woolworths. In terms of theory development, this study provides a cohesive framework and model on the subject of brand loyalty. In terms of practical implications, the results of this study produce some key implications for managers in the retail industry in South Africa. This study shows that there a distinct and positive link between loyalty to a loyalty programme and loyalty to the retail brand. Other notable findings include the positive drivers of loyalty towards a loyalty programme, which include loyalty programme value and programme social benefits. Furthermore, customisation was found to play a critical role in loyalty towards a loyalty programme as well as loyalty towards a retail brand. The most notable finding is that loyalty schemes do influence brand loyalty directly within the retail sphere in South Africa