DRIVERS OF CUSTOMERS’ LOYALTY IN UNORGANIZED RETAIL: INSIGHTS FROM INDIA

Abstract

Loyalty in retail is a well-studied phenomenon but it has been studied from the perspective of organized retail where resource-and-data heavy strategies are used to cultivate customer loyalty. It is not established why customers are loyal to unorganized retail where the retailer is neither schooled in marketing, aware and exposed to modern technology, nor have they got the resources to formulate and execute resource-heavy loyalty building strategies. This study attempts to find an answer to this question. A two-step empirical approach has been deployed, wherein a qualitative thematic analysis has been undertaken to identify broad groupings of drivers of loyalty for unorganized retailers and then a customer survey has been conducted to confirm and classify factors identified in step one, as determinant of customers’ attitudinal and behavioral loyalty. In total, seven overarching drivers of customer loyalty have emerged from the analysis. Convenience and assortment were found to be the most powerful drivers of behavioral loyalty, whereas retailer’s indigeneity, socialization, extraordinary help, and unbiased recommendations were found to be the drivers of attitudinal loyalty. General behavior of the retailer contributed to the formation of both types of loyalty. The article also discusses the implications of the findings for practitioners and scope for future research.