The mediating role in the customer satisfaction-loyalty relationship on the retail industry

The relationship between customer satisfaction and loyalty has been subject to several studies in recent years. Using both theoretical and, mostly, empirical methodologies, the literature has captured a direct bond linking satisfaction to customers’ loyalty, whose mediating role presents enough merits to be examined as well. Accordingly, this paper has the purpose to assess the mediating factors of the satisfaction and customer’s loyalty in the retail traditional industry, with a particular emphasis on the following mediating relationships: quality service, brand image and perceived value. This paper adds to the growing literature focused on the retail industry, being aware that such condition is uttermost important for the traditional retail in Portugal, as research and literature is still lacking, particularly focusing on studies at the regional level. This paper therefore contributes to mitigate such gap, by gathering evidence from traditional retail stores of the Centre of the Portugal, offering a discussion that makes major contributions that are supportive of practitioners and retail management in their quest for customer satisfaction and loyalty, and subsequent reward in terms of the sustainability and profitability of traditional retail businesses. As main findings of this paper, one can highlight the suggestion that service quality directly influences the corporate image, perceived value and customer satisfaction and, concurrently, those influence back the behavioural purchase intentions. The positive relationship between quality of service and corporate image suggests that customers who received a high quality of service while consuming services would create a favourable image of the traditional retail store; similarly as the positive relationship between the service quality and the perceived value, which demonstrates that the high quality of service received by customers contributes to increase their perception about the value received by their purchases.