Customer retention and the mediating role of perceived value in retail industry

Abstract

PurposeThe purpose of this paper is twofold: to examine the effect of corporate social responsibility, social media marketing, sales promotion, and store environment on the perceived value and customer retention in the retail industry; and to provide a significant contribution to the existing literature by examining the mediating effect of the perceived value between the stated factors and customer retention.Design/methodology/approachA quantitative research approach was utilized, collecting data from customers of department stores in the east coast of Malaysia. In total, 278 valid questionnaires were used in the analysis of data using the structural equation modeling.FindingsThe findings indicate that perceived value has a significant positive effect on customer retention. The outcomes also showed that social media marketing has an insignificant effect on the perceived value, whereas its effect on customer retention is positive and statistically significant. Additionally, the results confirmed that corporate social responsibility and store environment have significant positive effects on the perceived value and customer retention. Moreover, the findings showed that sales promotion has a significant positive effect on the perceived value, but its effect on customer retention is insignificant. Finally, the results revealed that the perceived value mediates the relationships between all of the independent variables and customer retention.Originality/valueThe results of this study improve our understanding of how these factors affect customer retention in the retail industry.