How do innovation and sustainability contribute to generate retail equity? Evidence from Spanish retailing

Abstract

Purpose In the current dynamic and competitive environment in which retail companies operate, store equity is a differentiating factor. In view of the scarce research found regarding the links between the variables traditionally related to brand equity (store awareness, store image, store perceived quality and store loyalty) and innovation, sustainability and the global retail equity, this study aims to examine these links in depth. Design/methodology/approach For a sample of 510 customers of grocery retail establishments and with the help of a structured questionnaire, the relationships between the variables defined in this research were examined using a structural equations model. Findings The authors find evidence in favor of the positive influence of innovation and sustainability on the variables related to brand equity. Likewise, store loyalty to the establishment, influenced by store image and perceived quality, emerges as a key variable in the construction of global brand equity. Research limitations/implications This study shows that innovation and sustainability have a significant impact on the variables traditionally linked with brand equity. Practical implications This research shows that new business models should be created through more innovative and sustainable businesses. In this sense, the managers of retail stores should direct their efforts toward actions aimed at implementing innovation, as well as provide evidence of the sustainability of the store’s activities, with the purpose of improving the perception that consumers have of the store. Originality/value The results of this research support the role of store loyalty as key element of brand equity. Also, to the best of authors’ knowledge, this is the first study that addresses the relationship that innovation and sustainability have with the variables linked to store equity.