Connecting the dots between brand equity and brand loyalty for retailers: The mediating roles of brand attitudes and word-of-mouth communication

Abstract

Managing and developing brand equity is of crucial interest to retailers. To provide a better understanding of retailer brand equity, we introduce a specific nomological network that brings together operational retailer brand equity dimensions and marketing performance outcomes. More specifically, we hypothesize that consumer attitudes toward the retailer and word-of-mouth communication individually and sequentially mediate the relationship between retailer brand equity and consumer loyalty toward the retailer. Partial least squares path modeling (PLS) was used to test the proposed model with 335 US consumers from the home improvement retail sector. A systematic validation procedure with explanatory (i.e., in-sample) and predictive (i.e., out-of-sample) power assessments and robustness tests such as the confirmatory tetrad analysis and model comparison confirms these specific relationships. The results show that the refined model allows retail managers to link brand equity dimensions to marketing performance more accurately and to predict customer loyalty more reliably.