The Relationship Between Service Quality, Corporate Image, and Customer Loyalty of Generation Y: An Application of S-O-R Paradigm in the Context of Superstores in Bangladesh

Abstract

Facing immense competition, retailers across the globe are experiencing reduction in their customer loyalty. This decreasing trend is even more observable in the superstore retailing in Bangladesh; especially whose target market is young cohort (Generation Y [Gen Y]). As a result, it is vital for the superstore owners to ascertain the factors affecting the customer loyalty of Gen Y. The main purpose of this study is to investigate the influence of service quality and corporate image on customer loyalty of Gen Y in the retail superstores of Bangladesh. A total of 325 Gen Y shoppers were surveyed from four leading superstores in Bangladesh using a structured questionnaire. Smart-PLS 3.0 software was used to validate the collected data and test the statistical significance of the path relationships by following structural equation modeling. The results indicate that Gen Y customers’ loyalty toward the superstores is positively and significantly influenced by both service quality and corporate image. The outputs also reveal that service quality indirectly affects Gen Y customer loyalty toward superstores with an intervening role of corporate image. Research implications from theoretical and practical standpoints as well as the recommendations for forthcoming study are also provided.