The causal relationship between store equity and loyalty: Testing two alternative models in retailing

Abstract

Although the concept of brand equity has received a great interest in the marketing literature, little is known about its role in retailing. Additionally, there is no consensus on the causal relationship between store equity and customer loyalty. This work is intended to contribute to research about store equity by exploring the content of this construct and its relationship with customer loyalty toward establishment. Two alternative causal models are examined: one that considers loyalty as a dimension of store equity and another that contemplates loyalty as its consequence. The empirical research was carried out among 820 consumers in four retail categories. Two key dimensions of store equity emerge from the results, i.e., image and service quality. Although the validity of both models is corroborated, the results show that the model that considers loyalty as a dimension of store equity performs better.