The Effect of Hypermarkets’ Social Media Usage on Indonesian Customers’ Loyalty

Abstract

Most studies argue that the implementation of relationship like customer relationship management (CRM) may represent the difference between the success and failure of retailing organization. The purposes of this research is: (1) to test the new construct of CRM based on elements of social media related to the customer relationship, (2) to investigate the relationship between CRM and purchase intention, (3) to investigate the relationship between purchase intention and customer loyalty, (4) to examine the effect of purchase intention as a mediating role between CRM and customer loyalty, (5) to examine psychological distance as the moderating role between CRM and purchase intention. The conceptual focus of CRM model is to see the effectiveness of using social media to create purchase intention and their impact on customer loyalty. This research used SEM analysis with Smart PLS 2.0 version to test the validity and reliability of the data. The data sample is collected from Twitter and Facebook users. The results indicated that the CRM has a positive influence on purchase intention. On the other hand, purchase intention has a positive effect on customer loyalty and at the same time, it played a mediating role between CRM and customer loyalty. Psychological distance was moderated by CRM and purchase intention. The four hypotheses are supported. The limitation of this research is that it is only confined to Twitter and Facebook users that usually go to hypermarkets in five biggest malls in Jakarta.