Consumers' cognitive, affective, and behavioral responses toward a firm's recovery strategies when committing a transgression

The customer-retailer relationship symbolizes the attachment and connection that consumers’ share with retailers. When consumers’ create these relationships they expect for the retailer to maintain the relationship without a breach, such as a transgression. Transgressions occur when retailer violates the relationship that it has with its customers. When transgressions occur in the customer-retailer relationship they can have several negative consequences for the retailer, such as financial loss and the retailer losing customers. Due to the negative consequences of transgressions, previous researchers have examined the impact of recovery options offered after transgressions occur. However, few studies have examined the recovery option and degree of transgression in relation to consumers’ responses measured in terms of customer trust, customer forgiveness, and retailer equity (retailer image, retailer loyalty, and retailer credibility). Considering the benefits to be gained from this research, the overall purpose of this study is to examine the impact of the customer-retailer relationship and how it is impacted when firms engage in transgressions. Specifically, the current study also looks to examine how the degree of consumers’ attachment toward the firm influences his or her ability to forgive a firm’s transgression (low vs. high) whether a recovery option is offered or not. The study also examines the interconnectedness of trust, forgiveness, and retailer equity (image, loyalty, and credibility). Data were collected from a convenience sample of undergraduate and graduate students, with majority of participant ages ranging from18-23. The final sample consisted of 204 participants. Majority of the participants were female 87.8%, and approximately 55.6% were Caucasian. Several statistical techniques were used to examine the hypotheses (e.g., one-way analysis of variance, multivariate analysis of variance, univariate analysis, and simple linear regression). Results revealed that consumers’ are more likely to have high levels of trust, to forgive the retailer, and to have high levels of retailer credibility when recovery options are offered after transgressions as compared to no recovery. Results further show that consumers’ degree of attachment is likely to moderate the relationship between firm recovery and trust. Further, it was found that there is a relationship between trust, customer forgiveness, and retailer equity (image, loyalty, and forgiveness). This study’s findings add to the literature of customer-retailer relationships (measured in terms of trust, customer forgiveness, and retailer equity: image, loyalty, and credibility) and how they are impacted when transgressions occur. The study also advances the literature by exploring consumers’ attachment and the relationship between trust, customer forgiveness, and retailer equity. Implications are provided. Limitations and future directions are discussed as well