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SICSSAM- 153 Factors Influencing Store Loyalty and Shopping Mall Loyalty: Distance As a Moderator Variable Keni Faculty of Economic, University of Tarumanagara, Indonesia keni@fe.untar.ac.id Camelia Dea Verena Faculty of Economic, University of Tarumanagara, Indonesia Abstract The key purpose of this study is to investigate the relationship between store loyalty and shopping mall loyalty. The study was conducted to see whether store relationship commitment, perceived value of store and store environment have a significant effect on store loyalty. This research also examined the effect of distance as a moderating variable. The population of this research was all the customers that shopped at Central Park Mall, Jakarta. The sampling frame was limited to all customers who went shopping at Carrefour Central Park, Jakarta. A non-probability convenience sampling was used for this research. The method of data collection was conducted by distributing questionnaires to 200 respondents, categorized by short and long distances. This study showed that the shopping mall loyalty was influenced by store loyalty, and store loyalty itself was influenced by store relationship commitment. The study also revelaed that the perceived value of store has a significant positive effect on store loyalty. Furthermore, the study showed that distance has no moderating effect at all. Keywords: perceived value of store, shopping mall loyalty, store environment, store relationship commitment, store loyalty. 1. Introduction Nowadays, many people think that the shopping mall is one of the most easily accessible popular destinations, especially in big cities in Indonesia. The shopping malls became an iconic symbol of a city that responded to the various needs of the society and can be seen as a one-stop entertainment center. It provides for almost all of the people’s needs, such as food courts, cinemas, supermarkets, department stores, bookstores, etc. These malls are located close to one another and they offer similar products. The mall management must clearly understand the factors that can influence the success of a mall, so that it can maintain its existence compared to other malls. The shopping mall management should be ready to compete fiercely to attract and retain visitors by attracting consumers, creating an enjoyable shopping experience, building good relationships and encouraging customer loyalty [1, 2, 3]. Although consumers prefer to shop in attractive-looking shopping centers, distance has an effect on how attractive the mall is [4, 5]. Customer loyalty is largely associated with long-term success and profit of a company [6]. Loyal consumers often buy a product, return to buy another product, and then tell others to come buy the same products, which helps the company to generate revenue and reduce expenses [7]. According to Rabbannee et al. [5], store loyalty is a very important factor that influences the success of a mall. In order to improve the loyalty to the mall, managers must focus on increasing the store relationship commitment and perceived value of stores. Baker, et al. [8] and Ryu & Han [9] stated that the store environment can affect store patronage intentions. Decorative colors can serve as a competitive advantage for a mall. A unique combination of colors can maximize positive consumer perceptions of a product [10]. Wakefield & Baker [1] stated that the tenant variations, physical environment, and shopping involvement spark the excitement toward shopping malls and the desire to stay at the mall. According to Chebat et al. [11] commitment to a mall is one of the keys to achieving loyalty to a shopping mall. That way, the mall management must find the appropriate way to improve the consumer's commitment to a mall. The method is to strengthen mall awareness and self-congruity [11]. This study discusses two types of loyalty, which are shopping mall loyalty and store loyalty. The store loyalty itself is influenced by store relationship commitment, perceived value of stores and store environment. It also discusses the impact of distance as a moderating variable on shopping behavior. The purposes of this research are: i) to determine the effect of store relationship commitment, perceived value of store, and store environment on store loyalty; ii) to determine the effect of store loyalty on shopping mall loyalty; iii) to determine the effect of store relationship commitment, perceived value of store, and store environment on store loyalty in the condition of short and long distances; iv) to determine the effect of store loyalty on shopping mall loyalty in the condition of short and long distances; v) to determine the effect of distance as a moderating variable between store relationship commitment, perceived value of store, and store environment and store loyalty; and between store loyalty and shopping mall loyalty. It is hoped that this study will i) provide a reference for the shopping mall management to determine the appropriate strategies to achieve the mall’s success; ii) identify and analyze the influence of relationship commitment stores, perceived value of stores, and store environment on store loyalty with distance as a moderating variable; iii) identify and analyze the effect of store loyalty on the shopping mall loyalty, with distance as a moderating variable; iv) provide an overview for the shopping mall managers on how to improve the shopping mall loyalty. This paper is organised into four sections. The first section presents the theoretical development and the hypotheses of the study, while the second section discusses the research methodology, including data collection and measurement information. In the third section, empirical results are presented. The final section concludes with a discussion of the findings and a review of the limitation of the study. 2. Literature Review Store loyalty Descriptions of store loyalty can be seen as: “the biased (i.e, non-random), behavioral response (i.e., purchase), expressed over time, by some decision-making unit, with respect to one or more alternative brands out of a set of such brands, and is a function of psychological (decision-making, evaluative) processes” [12]. According to Sirgy & Samli [13], store loyalty refers to “the disposition of consumers to shop repeatedly in a given store.” A consumer’s store loyalty can be seen from the number of items they purchased from the company [14]. Therefore, store loyalty can be described as consumer’s behavioral response to a store in the form of repetitive purchase. Shopping mall loyalty Shopping mall loyalty can be defined as “repeated patronage of a specific retail property” [5]. It is seen as the “shopper’s attitudinal predisposition consisting of intentions to continually patron the mall in terms of repeat shopping at the mall and willingness to recommend the mall” [11]. Wakefield & Baker [1] described mall re-patronage intention as a form of behavioral responses that are influenced by emotions (excitement) of consumers towards a mall. Thus, it can be concluded that the shopping mall loyalty is a consumers’ behavioral response to do repatronage towards a mall, in the form of repeated trips to the mall and a willingness to recommend the mall. Store relationship commitment Morgan & Hunt [15] defined relationship commitment as "an exchange partner believing that an ongoing relationship with another is so important as to warrant maximum efforts at maintaining it." The definition is consistent with the definition proposed by Moorman, Zaltman & Deshpande [16], which is an "enduring desire to maintain a valued relationship." In general, relationship commitment is “the degree of the membership’s psychological attachment to the association” [17]. In this study, relationship commitment is defined as a deep psychological bond between the consumer and a store that should lead to a desire to maintain the relationship with maximum efforts. Perceived value of store Boksberger & Melsen [18] defined perceived value as: “a combined assessment of consumers’ perception of benefits and sacrifices, including quality and price, for a variety of perceived value dimensions with original behavioural intentions and customer satisfaction playing a role in overall evaluation.” Meanwhile Zeithaml [19] stated “Perceived value is the consumer’s overall assessment of the utility of a product, based on perceptions of what is received and what is given”. This study refers to the definition of perceived value as consumers' assessment on a product, based on what they receive (quality) and give (price). Store environment Store environment is also known as atmospherics. Atmospherics is “the effort to design buying environments to produce specific emotional effects in the buyer that enhance his purchase probability” [20]. Store environment can be seen as a tangible environment is the management of store ambient factor, store design factor and store social factor that are intended to induce a specific emotion in consumers, to increase the likelihood that they will make purchases. Distance The farther the consumer from a store in terms of time, distance and effort required to reach the store, the greater the cost spent by the shoppers [5]. Furthermore, it is stated that the distance includes the travel time needed, the transportation being used and the psychological perception of consumers in achieving the desired product [23]. Based on those things, the study concluded that distance is a combination of time, distance and effort required to reach a location. This study examines the effects of store loyalty on shopping mall loyalty and whether distance moderates the effect between these variables. It also investigates distance as the moderating variable in relationship between store loyalty and its three antecedents - store relationship commitment, perceived value of the store and store environment. Figure 1 shows the theoretical framework. Figure 1. Theoretical Framework A study conducted by Rabbannee, et al. [5] and Chebat et al. [11] found that commitment to the relationship with the store significantly affect store loyalty. Consumers who are committed to a store are seen as loyal consumers and will be less likely to move to another brand compared to consumers who do not have a commitment to a store [24]. Furthermore, this commitment will lead consumers to spread positive feedback, recommend others to the company and communicate their problems to the company, so that the company can improve its service [25]. Zeithaml [19] stated that the perceived product values are the main factors that could lead consumers to have purchase intention and behavior. Yang & Peterson [26] found that the perceived value is the trigger for the achievement of customer loyalty. Perceived value affects the existence of store loyalty [5], as indicated by the higher consumer perceived value, the higher the customer loyalty to a store. "One of the most significant features of the total product is the place where it is bought or consumed" [20]. Atmosphere is one of the factors that greatly affects the level of customer loyalty. Store atmosphere has proved to have a positive influence on patronage intention [27]. Wakefield & Baker [1] found that the physical environment is one of the most important factors that will ultimately determine the patronage intention. A customer’s first impression and the level of excitement tends to come from the store’s physical environment. Consumers would prefer to shop in a store and recommend the store to friends when they feel comfortable and well-served in the store [28]. Based on the above statement, we can hypothesize that: H1a : Store relationship commitment has a positive effect on store loyalty. H1b : Perceived value of store has a positive effect on store loyalty. H1c : Store environment has a positive effect on store loyalty. H1d : Under short distance, store relationship commitment has a positive effect on store loyalty. H1e : Under short distance, perceived value of store has a positive effect on store loyalty. H1f : Under short distance, store environment has a positive effect on store loyalty. H1g : Under long distance, store relationship commitment has a positive effect on store loyalty. H1h : Under long distance, perceived value of store has a positive effect on store loyalty. H1i : Under long distance, store environment has a positive effect on store loyalty. Shopper loyalty can be seen as a key factor in achieving competitive advantage for the mall management [29]. Consumers can do the mall re-patronage because it is influenced by the presence of tenants in a mall [1]. Rabbannee et al. [5] stated that the shopping mall tenants are important in determining the success of a mall because store loyalty has a positive influence on shopping mall loyalty. The achievement of store loyalty will thus influence the establishing of shopping mall loyalty. Based on the above statement, we can hypothesize that: H2 : Store loyalty has a positive effect on shopping mall loyalty. H2a : Under short distance, store loyalty has a positive effect on shopping mall loyalty. H2b : Under long distance, store loyalty has a positive effect on shopping mall loyalty. Dennis et al. [4] argued that consumer interest in going to a mall to shop is lessened due to distance. The closer the consumer is to a store, the greater the tendency of the consumer to shop at the store [30]. A study conducted by Rabbannee, et al. [5] found that distance can be a moderating variable between perceived value and store loyalty. Perceived valuehas a positive influence on store loyalty within a short distance, while with long-distance perceived value has no effect on store loyalty. Based on the above statement, we can hypothesize that: H3a : Distance can be a moderating variable between store relationship commitment and store loyalty. H3b : Distance can be a moderating variable between perceived value of store and store loyalty. H3c : Distance can be a moderating variable between store environment and store loyalty. Rabbannee et al. [5] discovered that in the case of short distance conditions, consumers visited the mall because of the store’s re-patronage intention and it was not because of the shopping mall loyalty. Furthermore, it was found that in the short distance, store loyalty has no effect on shopping mall loyalty. However, when customers considered the travel distance as a long distance, then store loyalty had a positive influence on shopping mall loyalty. Based on the above statement, we can hypothesize that: 3. Research Methodology A cross-sectional approach is utilized to gather data.This study applied a survey method by using a structured questionnaire in order to collect data concerning each of the studied variables. In order to measure these variables, some instruments were adapted from the previous research literature. In this study, store relationship commitment, perceived value of store, store loyalty, and shopping mal loyalty were measured by using six items, five items, four items and four items repetitively, which were adapted from Rabbannee et al. [5]. Meanwhile, the measurement for store environment was measured by using five items, which were adapted from Baker et al. [22]. The instrument used (except the profile of respondents) was a 5-point Likert scale, where 1 indicates "strongly disagree" and 5 indicates "strongly agree". The method of data analysis used to answer the research question was a regression analysis, conducted via SPSS. Assumption for regression analysis such as a normality test, a multicollinearity test and a heteroscedasticity test were conducted before the regression analysis was performed. The analysis of moderating variables in this study used the analysis of sub-groups. The significance level used in this study was 5%. 4. Results and Discussions Table I summarizes the results of testing the hypotheses: The results of testing hypothesis 1a stated that the relationship commitment has a positive effect on store loyalty. The results of this study are consistent with Rabbannee, et al.[5]. Consumers who have a committed relationship with a shop will feel they have an emotional bond with the store, so they will be more loyal to the store. Given their commitment to a store, consumers will speak highly of the store and recommend the store to their family and friends. Furthermore, consumers will also care about the continuity of the store. For example, by providing comments and suggestions directly to Carrefour, they allow the store to improve the quality of its service. Next, hypothesis 1b found that perceived value of a store had no significant effect on store loyalty. This would be caused by the influence of a similar product that can be easily found in the other competing stores, so although consumers felt the value gained when shopping at Carrefour was high, it still did not impact the level of consumer loyalty. When rival stores offered certain promos, consumers would switch to the other stores. This indicates that the value perceived by the consumer had no effect on their loyalty to Carrefour. The results of the research are not consistent with the research conducted by Rabbannee, et al. [5], who discovered that perceived value did have a positive effect on store loyalty.The results of the analysis found in hypothesis 1c shows that the store environment had no significant effect on store loyalty. These results are not consistent with the study that examined the effect of store atmosphere on patronage intention, in which the structure was proven as an important factor affecting patronage intention [27, 28]. This may potentially occur because while shopping, some people may have paid less attention to the store environment as they were too focused on the products and could have caused the lack of effect on store loyalty. In addition, daily necessities are the main focus of most consumers who come to the Carrefour store, which makes store environment not as big a consideration. Under the conditions of short distance, relationship commitment had a positive influence on store loyalty, as stated in hypothesis 1d. The existence of the relationship between consumer with Carrefour caused consumers to make repeated purchases at Carrefour and they were less likely to switch to other stores. Consumers who felt that Carrefour had an important role in their daily life tended to be loyal. The results of this study are in line with the research conducted by Rabbannee, et al. [5]. The test results of hypothesis 1e were also consistent with Rabbannee, et al. [5], who found that the perceived value had a positive effect on store loyalty. Consumers who traveled a distance of less than 4 kms, saw the perceived value as a reason to shop at the store. Consumers who were satisfied with the value gained from the store tended to be loyal. Consumers felt that what they bought from Carrefour matched their expectations. Thus, the higher the perceived value of the consumer is, the more the influence on their store loyalty. In hypothesis 1f, the study found that the store environment did not have a positive influence on store loyalty. In the case of short distance, consumers came to buy the daily necessities, not because the store environment is more comfortable than other stores. The store environment was not considered to significantly affect consumer loyalty. Furthermore, the study showed that relationship commitment has a positive influence on store loyalty, in the condition of long distance. This result is similar to the study conducted by Rabbannee, et al. [5]. Researchers found that under the conditions of long distance, consumers who have a committed relationship to a store will positively impact store loyalty. Consumers who have an emotional bond with Carrefour, did not see the distance that they traveled as a reason for not shopping there, so even though the distance from their residence to Carrefour Central Park was more than 4 kms, they would still shop at the same store because they were loyal. The findings contained in hypothesis 1h are consistent with Rabbannee, et al. [5], who found that under conditions of long distance, the perceived value of stores does not significantly influence store loyalty. The farther the distance from the store would lead consumers to choose alternative stores. When the other stores offered any beneficial promotions, consumers would not hesitate to switch to other stores. Hypothesis 1i found that store environment has no influence on store loyalty. Under conditions of long distance, consumer interest towards experiencing a comfortable shopping atmosphere did not have an impact on consumer loyalty because the atmosphere of grocery stores such as Carrefour was not a primary reason for consumers to shop at the store. For hypothesis 2 about store loyalty and mall loyalty, results showed that store loyalty could positively affect mall loyalty. Rabbannee, et al. [5] also found that store loyalty has a positive influence on shopping mall loyalty. The existence of a particular store located in a mall would be enough to attract visitors to visit that particular shopping center, leading to an increase in shopping mall loyalty. Consumers who had been loyal to the Carrefour store located in the Central Park Mall continued to make repeated visits to Carrefour, thus they visited the Central Park Mall as well. Frequently, visitors will continue to make repeat visits to Central Park Mall and the shopping mall loyalty will be increased. Store loyalty has a positive influence on loyalty to a mall in the condition of short distance, as stated in hypothesis 2a. Under conditions of within a short distance, the existence of consumers who were loyal to Carrefour resulted in a loyalty to Central Park Mall as well. Those consumers who were loyal to Carrefour, they grew dependent on the mall, and relied on the mall for the purchasing of their daily items. The study conducted by Rabbannee, et al. [5] also showed that in the short distance conditions, the presence of store loyalty would result in shopping mall loyalty. In hypothesis 2b, it appears that in the long distance condition, store loyalty has a positive influence on loyalty to the mall. The results found are inconsistent with the research done by Rabbannee, et al. [5]. Consumers re-visit a particular mall because they feel that the mall fulfills their needs. Despite the long distance, store loyalty positively influences the shopping mall loyalty. Distance cannot be a moderating variable between relationship commitment and store loyalty, as found in hypothesis 3a. If the consumer has a relationship to the store, the distance is not a significant obstacle for consumers. They will still shop at Carrefour. The results of the study are in line with the research conducted by Rabbannee, et al. [5]. Inconsistencies with previous research studies also occur in hypothesis 3b, which found that the distance cannot be a moderating variable between perceived value of stores and store loyalty, according to study conducted by Rabbannee, et al. [5]. The study stated that the distance may be moderating the relationship between perceived value of store to store loyalty. As Carrefour is a grocery store, its rival stores have the same products. When the rival stores offer promotions, then consumers are likely to switch in order to meet their basic needs. Hypothesis 3c found that store environment and store loyalty cannot be moderated by the distance variable. Consumers who shop at Carrefour, who are categorized as either short or long distance, both pay little attention to store environment. Store environment is not the reason they are loyal to Carrefour. The results of hypothesis 4 is not consistent with the result found by Rabbannee, et al. [5], which stated that the distance could be a moderating variable between store loyalty and mall loyalty. In this study, the distance was not a moderating variable between store loyalty and mall loyalty. Regardless of distance, as consumers are already dependent on the stores at Central Park Mall, they grow to become dependent on the mall. 5. Conclusions Store loyalty has a positive influence on shopping mall loyalty. It is hoped that the management of the Mall ought to cooperate and support the existing tenants to increase store loyalty which will lead to mall loyalty. In order to do that, the management of the mall can offer interesting promotions and manage a member card system. Since the store relationship commitment has a positive effect on store loyalty, the store should maintain and improve the committed relationship with the customers. The store’s main concern should be identifying the needs and thoughts of the consumers. The management should work to increase the consumer’s perceived value, especially for the consumers classified as traveling a “short distance”. The store should advertise its attractive prices and free services to increase the perceived value and store loyalty. The limitation of this study is that the sample was taken only in Jakarta. Hence, the future studycould be improved by expanding the sample size to other big cities in Indonesia. 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