Coalition loyalty-programme adoption and urban commercial-network effectiveness evaluation

Abstract

Purpose – To counter the proliferation of out-of-town shopping centres, a spontaneous or planned coalition loyalty programme (CLP), one involving most retailers in an urban network, may positively affect a town centre's capacity to entice customers and may enhance its competitiveness. The purpose of this paper is to assess the effectiveness of CLP implementation in town-centre management (TCM) as a tool for enhancing urban commercial-system attractiveness. Design/methodology/approach – The theoretical framework used in this study is supported by the evaluation methodologies of an empirical case study: the Savigliano Card project. CLP performance analysis uses a dynamic network-competitiveness index, an approach based on Laspeyres-type decomposition. The effects on each retailer's profitability are then tested by matching network and regression analyses. Findings – The results suggest that CLPs implementation in a TCM scheme can produce benefits and positive externalities for customers, retailers and urban areas. CLPs can influence a town centre's revitalisation process, improve the attractiveness of the urban commercial network and increase the profitability of private retailers by enhancing cross-selling dynamics. Practical implications – The paper provides a CLP performance-evaluation methodology and presents the benefits concerning CLP implementation in TCM strategies. Originality/value – This type of CLP is weakly exploited in marketing theory and practice; therefore, the paper provides theoretical and empirical explanations for the measurement of CLP effectiveness in TCM. In addition, it has significant implications for both practitioners and academics.