How do cultural factors affect loyalty behaviour in retailing? The central role of social proximity

Abstract

Purpose Retail store loyalty is essential to the survival and success of a retailer. The intangible benefits provided by the social exchange in-store influence the way consumers consider their relationships with the retailer. However, its relationships with social proximity and cultural factors are not clear. Therefore, this article investigates the effects of specific cultural dimensions on loyalty behaviour, as well as the mediating role of social proximity on the relationship investigated. Design/methodology/approach This research is based on an empirical investigation undertaken in Thailand with a sample of 636 respondents. Two retail chains were investigated (Big C and Tesco). Structural equation modelling was used to test the research model and a series of research hypotheses. Findings The results reveal that uncertainty avoidance and long-term orientation have positive direct effects on loyalty, while collectivism does not. Furthermore, social proximity significantly mediates the effects of collectivism and long-term orientation on customer loyalty. These findings show that Thailand is a specific emerging market in which retail chains should adapt their loyalty programme accordingly. Practical implications The cultural differences could be used for segmentation strategy for retailers to engage customers in a relationship with the hypermarket. Social proximity is an efficient lever to build loyalty in Thailand. In addition, retailers could utilise certainty and steadiness message as a way to build shopper loyalty. Originality/value This research underlines the social, human dimension that consumers seek, which is opposed to the online purchase. Specifically, this study highlights the mediating role of social proximity between the relationship of cultural variables and loyalty in the retail context. Additionally, this research displays the direct and positive effects of culture on retail loyalty. That is, this paper enhances how culture and shopper-retail staff interaction can be managed to achieve store loyalty.