The merit of credit: exploring the factors that make retail credit consumers loyal

Abstract

Loyal consumers are often regarded as the ultimate goal of any retail business, with the definition of loyalty incorporating many aspects of consumer behaviour and attitudes, the most prominent of which is return purchase behaviour. Credit consumers tend to display consistent repurchase behaviour, thereby appearing loyal. The aim of the current study was to investigate credit consumers of a retail clothing store and to identify factors that influence their loyalty towards the store. In order to achieve this objective, a comparison was made between a sample of account holders (credit consumers) and a similar sized sample of consumers who paid for their purchases in cash. Respondents were surveyed about their attitudes towards the retailer’s merchandise, service and pricing, their perceived commitment to the retailer, their current purchase behaviour and their anticipated future behaviour regarding long-term loyalty towards the retailer. The study showed that account holders’ loyalty towards the retailer was mostly influenced by the merchandise selection followed closely by the service received. Price had a negligible influence on account holders’ loyalty towards the retailer. The findings of the study serve to guide retailers’ strategies in terms of the provision of credit as a means to encourage loyalty amongst their consumers and resource allocation when considering competitive differentiation