The relationship between loyalty program and customer loyalty in retail industry: A case study

As competition arises during recent economic crisis, most businesses such as retail business implemented loyalty program to deter their customer from defecting to their competitors. However, the problem appears that supermarket chain loyalty programs are not successfully creating loyalty. All suffer from being too much alike and most loyalty programs feature membership card in the markets. These loyalty mechanisms are not creating ultimate loyalty to one supermarket and as a result, customers belong to more than one supermarket loyalty program in order to get special price and promotions. Thus, this study is intended to investigate the relationship between loyalty program and customer loyalty in retail industry. Data were collected through questionnaires distribution to the total of 360 respondents in Taman Setiawangsa, Kuala Lumpur. The findings indicate that there is a positive and significant relationship between loyalty program and customer loyalty. The findings confirm that Shopping Partners' Program, Member's Day, Rebate Gift Voucher and Special Price significantly influence customer loyalty. However, Gift Redemption, Insurance Coverage, and PEARL Magazine do not significantly influence customer loyalty.