Effect of retail service quality on switching intentions among hypermarket customers

Abstract

Retail service quality is a vital driver in determining customer satisfaction, which in turn promotes customer loyalty and reduces switching intentions. Based on disconfirmation theory, the difference between expectations and delivered service quality, determines the level of a customer satisfaction. Service quality is a solution to build customer satisfaction which could lead to customer loyalty hence reducing switching intentions. The concept of switching intentions has received significant attention in the field of marketing, however, little is known about the application of this concept in the context of retail business. Consumer research has neither verified the relationships among constructs like retail service quality, customer satisfaction, customer loyalty and switching intentions, in a single framework, nor explored the possible influence of store ethnicity and price discounts on customer satisfaction and customer loyalty to switching intention. The current study has investigated the interrelationship among service quality, customer satisfaction, customer loyalty with switching intentions, and the moderating role of price discounts and store ethnicity, in a single framework. Random sampling was used by administering standardized questionnaires personally to 450 hypermarket customers located in the Eastern Province of Saudi Arabia. The quantitative data was analyzed by the structural equation modeling technique using AMOS 20 software. The study extended the existing body of knowledge by introducing new moderators of price discounts and ethnic store on the relationships between satisfaction and switching intentions, and loyalty and switching intentions. The results confirmed that retail service quality has significant positive influence on customer satisfaction, and the positive effect of customer satisfaction on customer loyalty. Besides that, the study verified in marketing literature that store ethnicity and price discounts acted as moderating mechanism for explaining the switching intentions of satisfied and loyal customers. The results of the study may serve as a guideline for top managers of the hypermarkets to design appropriate policies and strategies in terms of retail service quality, price discounts and needs of ethnic groups in a particular region. This will help to enhance customer satisfaction and customer loyalty hence reducing switching intentions of customers.