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The Relationship among Retail Store Environment, Customer Satisfaction and
Customer Loyalty in Convenience Store
(Case Study of Indomaret & Alfamart Customer in Malang City, Indonesia)
By :
Jozarky Fajrianto
Supervisor :
Ida Yulianti , SE., MM., MBA
ABSTRACT
The development of globalization era encourages the emergence of several new
retail business followed by the rapid growth of technology, competition and changes
of the business environment. Indonesian consumers prefer to shop at modern market,
which is clean, comfortable, quiet, and has a good layout rather than shopping at
traditional market. The retail store environment is one of the important things that must
continue to be improved and made as attractive as possible in order to provide a sense
of satisfaction to customers, which will be able to create a sense of customer loyalty to
the visited retail market.
This research aims to determine the relationship among retail store
environment, customer satisfaction, and customer loyalty on Indomaret and Alfamart
customer in Malang City. The data analysis in this research using SEM (Structural
Equation Model) Method with 100 consumers who shopped at Indomaret and Alfamart
as respondents. The sampling technique used is purposive sampling. The data
processing in this study is using LISREL (Linear Structural Relationship) 8.8 software
which is the statistical software package for SEM.
In this research it is indicated that the retail store environment has indirect
significant influence on customer loyalty through customer satisfaction on Indomaret
and Alfamart customer in Malang City. By maintaining and improving retail store
environment which comfortable, neat and orderly displayed, then the consumers who
shop at Indomaret and Alfamart will be satisfied. When the customers feel satisfied
while shopping then the sense of loyalty towards Indomaret and Alfamart will appear
automatically so Indomaret and Alfamart customers will be hard to move to other
similar shopping places. Therefore, Indomaret and Alfamart become main retail market
of consumer.
Key Word: Indomaret, Alfamart, retail store environment, customer satisfaction,
customer loyalty
A.BACKGROUND OF THE RESEARCH
The development of business environment encourages some businesses to give
more pay attention and respond to that condition. The era of economic globalization
is accompanied by the rapid growth of technology, competition, and changes of the
business environment. In addition, that condition provides some new business
opportunities for companies to expand their market to international scale and this also
happens to Indonesian companies, like J.CO Donuts and Coffee Company and
Indofood Company. One of business types that is influenced by business environment
is retail business such as; supermarket, hypermarket, minimarket, and other retail shops
that keep popping up.
The development of the retail business in Indonesia grows significantly in Asia,
particularly among developing countries. Based on a report entitled "Global Retail
Development Index (GRDI) 2011" issued by a management consulting firm AT
Kearney, world, Indonesia was recorded as the best third retail market in Asia. This
report assessed the condition of the retail industry in 30 developing countries in the
world and ranked them based on a number of factors including business risk,
population, and wealth associated with the condition of the retail industry. Indonesia
retail industry in 2012 was estimated to grow into 134 billion US dollars (1206 trillion
rupiah) and it increased to 223 billion US dollars (2007 trillion rupiah) in 2015. The
economic activities of Indonesia are very strongly valued since the Indonesia
population has already reached 235.5 million. Moreover, Indonesian residents per
capita income also continues to raise along with the growth of the retail industry's
infrastructure which keeps running. (www.koran-jakarta.com, 2012).
Recently, most of the Indonesian consumers prefer to shop at modern market,
which is clean, comfortable, quiet, and has a good layout rather than shopping at
traditional market. A growing number of communities who decide to switch their
shopping behavior from shopping in traditional to modern outlets then create an
opportunity for retailers to open new outlets or change the format of their traditional
outlets into modern ones.
The retail store environment is one of the keys in retail markets business to
attract consumers to shop. Kotler and Keller (2009) said that a store identity can be
communicated to consumers by decorating stores or more broadly it can be
communicated via retail store environment. Although the retail store environment is
not directly communicated, if the store has a good atmosphere and elegant look, then
the store can give a good impression on customer first impression. If a positive
impression lasts a long time, then the store will become the first choice for the
customers to purchase some goods and to get services. So retail store environment can
also be one of the ways used by retail market business to give satisfaction to the
consumers so it can generate a sense of loyalty to the retail market. The current retail
store environment becomes a very important factor for consumers in choosing where
to shop. A cozy retail store environment also becomes a certain consideration for
consumers before deciding to shop in the retail market.
This fits well with the opinion from Sutisna (2001) stating that the retail store
environment will also determine the image of the store itself. When a store is equipped
with a comfortable room setting, air conditioning, and artistic use of the cool wall paint
colors, all of which can show the existence of a classy shop atmosphere. Thus, the
environment of the store and the exact location can be used as a means of
communication that gives a positive impression and enlarges the opportunity to bring
up the flavor of the satisfaction of service on the consumer and creates a presence of
loyalty customers. All in all, it can bring some profits to the shop.
The retailers must have an attempt to determine the most effective strategy to
win customer satisfaction. Customer satisfaction is the overall attitude shown by the
customers indicated by their opinion regarding the goods and services they have
acquired and used (Mowen, 2001). The next progress of customer satisfaction is
customer loyalty that happens when the purchase activity that customers do bring some
positive behaviors such as positive word of mouth, recommendation, and repeat
buying.
Customer satisfaction is crucial for retailers because customers will spread their
satisfaction to other prospective customers, so that it will raise the reputation of retailer.
Tse and Wilton (1988) said that customer satisfaction is customer response toward the
evaluation of the perceived discrepancy after use. Engel et al. (2005) defines customer
satisfaction as a full evaluation of the purchase where the selected alternative is at least
equal or exceed the customer expectations, while dissatisfaction arises when the results
did not meet the expectations of customers.
Customer loyalty is one of the keys to be successful in a business. To maintain
the consumer loyalty on retail market, retailers should give good environment or
atmosphere of convenient store. In addition, by having a loyal consumers, the company
will gain an advantage in the form of free promotion from its customers. It happens
because loyal customers will not be hesitate to recommend retailers products and or
services of the company to the relatives, friends, colleagues, acquaintances and their
other relation.
Meanwhile, Kotler and Keller (2009) argued that satisfied and loyal customers
are good in creating the opportunity to gain new customers. Maintain all existing
customers in general will be more profitable compared to the turnover of customers
because the cost to attract new customers can cost five times more than retaining the
existing ones.
Indomaret and Alfamart are the largest retail companies in Indonesia which
have the highest number of outlets. Indomaret is a retail company which was first
established by a businessman in Indonesia. In 2003, it has 796 outlets in Jabodetabek,
Bogor, Bandung, Semarang and Surabaya. Meanwhile, Alfamart was newly
established in 2004 with 923 outlets. Indomaret and Alfamart are growing rapidly in
business environment. In 2012, Indomaret already has 6009 outlets and then in 2014 it
already has approximately 8500 outlets. Meanwhile, Alfamart in 2013 has 7500 outlets
and 500 of which are still under construction. Nowadays, Indomaret and Alfamart
outlets can be found in almost every villages and cities surrounding Indonesia.
This research is conducted in Malang City because the researcher is still take
study in Malang and Malang City is already considered by the retailer as good market
in retail business. Indomaret and Alfamart are also found in almost every area in
Malang City. According to the Disperindag (2016) data there are 83 outlets of
Indomaret and 49 outlets of Alfamart in Malang. From the data above, it can be
concluded Indomaret and Alfamart have stores spreading all over Malang city Region.
Both retail companies are constantly doing new innovations to attract customers to
keep loyal on those retail companies. Consequently, the consumers get the benefit from
tough competition between the two companies because the existence of that
competition will automatically trigger those two companies to provide their best
services. One of them is by creating cozy environment of the shop with the purpose to
give satisfaction to the customers. In the long run, it is expected to be able to create
customers’ loyalty toward the retail company.
Based on the description above, the researcher is interested in doing a
research on the implementation of retail store environment which is thought to be
able to make customers feel satisfied with the retail store environment of both
Indomaret and Alfamart stores. Furthermore, it is also expected to be able to create
customers loyalty toward Indomaret and Alfamart. Therefore, the researcher entitles
his study “The Relationship among Retail Store Environment, Customer
Satisfaction, and Customer Loyalty in Convenience Store (A Case Study of
Indomaret & AlfaMart Customer in Malang City, Indonesia)”
B. LITERATURE REVIEW
Retail Store Environment
One of the factors that should be owned by stores to attract the attention
consumers is the retail store environment. Retail store environment affects the buyer’s
emotional state that causes or influences to purchase. Emotional state will create two
dominant feelings that raise a sense of excitement and desire. According to Kotler and
Keller (2009), retail store environment is a planned environment in accordance with the
target market and which can attract customers to buy. Meanwhile, according to Berman
and Evan (2007), retail store environment is the physical characteristics of a store that
can show image (impression) of the stores and attract consumers. Another definition
of the retail store environment according to Levy and Weitz (2001) is that: Retail store
environment is environment through visual communication design, lighting, colors,
music and fragrances to stimulate customer perception and emotional response and
ultimately influence customer behavior in buying goods.
Meanwhile, the understanding of retail store environment by Gilbert (2003:
129) is that the retail store environment is a combination of physical messages that
have been planned. Retail store environment can be described as changing the buying
environmental planning that produce special emotional effects that can cause
consumers to do purchase action.
Retail store environment has some elements which can affect the environment
of the store that want to be created. According to Seok (2009), there are three important
elements to consider in building retail store environment. It consists of convenience,
physical atmosphere, customer Service.
Convenience matters when consumers shop at department stores and mass
merchant store but not at specialty stores.
Physical atmosphere is found to have significant influence on Hispanic
consumers’
Customer service has positive and significant relationship with Hispanic
consumers’ decision to shop at department stores, specialty stores, and mass
merchant store.
Customer Satisfaction
Customer satisfaction can be defined as customer response to the discrepancy
between the level of interest perceived and actual performance after use (Rangkuti,
2008:30). According Tciptono (2002:146), satisfaction or dissatisfaction is the
customer response to the evaluation or disconfirmation of the perceived mismatch
between the expectations of the previous or other performance norm and perceived
performance of products after use. Meanwhile, according to Kotller (2003), customer
satisfaction is someone’s happy or upset feeling after comparing his expectation and
the performance or result of the product he gets. There are some similarities concerning
the definition of customer satisfaction that is customer satisfaction aims at evaluating
or comparing the customers’ expectations on product (goods and services) compared
to the experience of these products. The expectation can exceed his expectations or less
than what he has expected.
Customer Loyalty
Customer Loyalty according Kotler (2005:18) is defined as the repeat purchase
made by a customer for a commitment to a brand or company. Loyalty according to
Griffin in Huriyati (2005:129) refers more to the form of the behavior of these units to
make a purchase decision on an ongoing basis to the goods or services of a company
that is chosen. While according to Oliver (in Huriyati, 2005:129), customer loyalty is
customer commitment in depth for many years to re-subscribe or re-purchase of
products or services consistently selected in the future, although the influence of the
situation and marketing efforts have the potential to cause changes in behavior.
Research Model
H1 H3
H2
= H4
Figure 2.1 The Research Model of Relationship among Retail Store
Environment, Customer Satisfaction, and Customer Loyalty
From the chart above, it can be concluded that are several factors that affect the
emergence of customer loyalty. Factors affecting the emergence of consumer loyalty
are the retail store environment and consumer satisfaction.
The retail store environment is to be one factor that can shape the customer
satisfaction in customer when shopping (Naderian, 2012). Satisfaction being the
determining factor of growing interest in the purchase. It is not only about the cleanliness
of the store but also about the clear shopping environment and attractable decoration.
Customer who have shopped in grocery store will feel the value displayed by the owner.
So that retail store environment is a visual communication conducted by the retailers
to give satisfaction to customer when shopping.
Retail Store
environtment
Customer
Loyalty
Customer
Satisfaction
H1: There is a significant influence of retail store environment on customer
satisfaction of Indomaret and Alfamart consumer
According to Wijayanto et.al (2013) is better retail store environment will
increase the customer loyalty. So that if the perception of customer to retail store
environment is better, then the customer loyalty will increase too.
H2: There is a significant influence between retail store environment on
customer loyalty of Indomaret and Alfamart consumer
If customer satisfaction is manifest then the customer loyalty to a brand or
company can also be realize (Tu and Chang, 2005). Also from research conducted by
Jung and Yoon (2011) customer satisfaction has positive relation with customer
loyalty. Can be concluded that the customer who already satisfied will become loyal.
H3: There is a significant influence between customer satisfaction on customer
loyalty of Indomaret and Alfamart consumer
The retail store environment includes different views of interior, exterior,
layout, traffic shop interior, comfort, atmosphere, service, music, sales clerk, uniforms,
display items and so on, which raises the attractiveness to the consumer and arouses
the desire to buy. From the description above, it can be concluded that the environment
of the store is perceived by consumers as an influence of the overall physical shape
created by the owner to make stores more appealing and convenient to arise the desire
of consumers to buy. With cozy environment of the stores, it is expected that it can
give satisfaction to the customer after the customer get satisfaction then a sense of
loyalty will appear.
H4: There is indirect effect model of retail store environment, customer
satisfaction, and customer loyalty
C. RESEARCH METHODOLOGY
Research Design
The research that is conducted by the researcher is explanatory research.
Explanatory research has the purpose of testing a theory or hypothesis to strengthen or
even to reject the existing theory or hypothesis. This research aims at understanding
how the independent variable affects the dependent variable (Sekaran and Bougie,
2010)
Information from the respondent was collected empirically, in order to know
the opinion of the respondents to the object under the research. The type of
investigation in this research is causality, which tests the effect of one variable to
another variable. Seeing from the time horizon, this research is a cross sectional
because the information from the sample of respondents was collected empirically
in order to know the opinion of the respondents to the object under the research,
(Sekaran, 2003).
This research was conducted through survey research which is a method of
collecting primary data obtained directly from the original source, in the form of
interviews and questionnaires drawn from a sample of the population.
Data Analysis Method
In this research, the quantitative analysis was used by testing the hypotheses
using statistical tests.
To analyze the characteristics of the retail store environment on customers’
satisfaction and its implications for customer loyalty performed with using Structural
Equation Model (SEM). The data of retail store environment on customer satisfaction
and its implications for customer loyalty were obtained from consumers who shop at
Indomaret and Alfamart in Malang. The data was merged, then the questionnaire
answer score was obtained. It was then processed into Structural Equation Model
(SEM).
Besides analyzing it descriptively to answer the objectives of the research, a
quantitative analysis was also done to answer the research objectives by using
Structural equation Model Test (SEM). SEM is used to analyze the relationship
between the indicator variables, latent variables and measurement error (Joreskog
and Sorbom, 1996). SEM is used to analyze the relationship between one latent
variable with another latent variable that is known as structural equation which
together involves measurement error. Beside that, a structural equation model can be
used to analyze two-way relationships (reciprocal). The data processing in this research
uses LISREL (Linear Structural Relationship) 8.8 software which is the statistical
software package for SEM. Testing the research model to measure the factors identified
was conducted by confirmatory factor analysis approach.
The steps needed to be conducted in structural equation modeling (SEM)
according Hair, Anderson, and Black (1998) are as follow:
1. First step: building a theory-based model
SEM is based on a causal relationship, wherein the change in a variable is
assumed to SEM is based on a causal relationship, in which the change in a
variable is assumed to affect change in another variable. At this stage, the
theoretical model was developed in accordance to the model which will be
observed has already been reflected in the framework.
2. Step two: building flowchart causality
SEM describes the relationships between variables in a flow chart that can be
especially helpful in describing a series of causal relationship between the
constructs of theoretical models that have been built in the first phase. The
flow diagram illustrates the relationship between the constructs with straight
arrows described a direct causal relationship of a construct to other
constructs. Exogenous constructs, known as the independent variables are not
predicted with another variables in the model. The exogenous construct is a
construct that is designated by the line with one arrowhead.
3. The third step: describing the flow diagram into mathematical equations. Based
on the concept model of research on step two above, it can be formulated in
mathematical form. The equation constructed of flow diagram that is
converted, consists of:
a. Structural models express causality to test the hypothesis.
b. Measurement models express a causal relationship between indicators
with the research variables (latent).
4. Step four: selecting the type of matrix input.
In testing, the matrix input used is correlation matrix.
5. Step five: estimating equation models identification.
Problems in the identification principally is the problem of the inability of the
models developed to produce good estimates. At this step, it can be done by
looking at:
a. The standard error that is bigger than one or more coefficients.
b. High correlation (it is bigger than or equal to 0.9) among the estimated
coefficient.
6. Step six: interpretating of the model or the test results.
At this stage the results are interpreted and researched theoretically and
deeply. Logical explanations were described on the findings.
According to the paradigm of the research described in the research
framework, the design analysis uses structural equation model (SEM) which shows the
influence of the retail store environment on customer satisfaction and its implications
on customer loyalty.
Confirmatory Factor Analysis (CFA)
Confirmatory factor analysis is a tool that is used to confirm or reject
presumption theory. According to Jorescog and Sorborn (1993), confirmatory factor
analysis is used to test the unidimensional construct. CFA is also known as validity and
reliability construct on SEM. In this research, the researcher used CFA approach with
the result of t-test 1.96
Goodness of Fit
Chi Square tests the objective of this analysis to develop and test whether a
model fits the data. Chi-square is sensitively against a sample that is too small
or too big. Therefore, the test should be complemented with other test
instrument. Chi-square is expected to be small.
P-value is expected to be 0.05
CMIN/DF is the value of chi Square divided by Degrees of freedom. CMIN/DF
is expected to be ≤ 2.00
GFI is an index that describes the level of the overall fitness model and they
were calculated from the squared residuals from the model that was predicted
and compared with the actual data. GFI value 0.90 suggests models tested to
have a good agreement.
AGFI is an index showing the development of Goodness of Fit Index (GFI) as
adjusted for the ratio of degree of freedom (Ghozali and Fuad). AGFI
recommended value is 0.90.
NFI index is the measure of comparison between the proposed model and null
models. NFI recommended value is 0.90.
NNFI index is used to measure the model suitability with basis comparative to
the baseline or zero models. NNFI recommended value is 0.90.
CFI is an incremental suitability index. This index is highly recommended to
be used because this index is relatively insensitive to the size of the sample and
less affected the complexity of the models.
RMSEA (Root Mean Square Error of Approximation). RMSEA is
measurement that tries to improve the statistical tendency of chi square reject
model with large number of sample. RMSEA is expected to be ≤ 0.08.
D. RESEARCH RESULT AND DISCUSSION
SEM Analysis Result
The theoretical model on the conceptual framework of the study is said to be fit
if it is supported by empirical data. Testing result of the goodness of fit on the overall
model according to the results of the SEM is shown in Appendix 5. In order to
determine the hypothetical model, it should be supported by empirical data given in
figure and table below.
Figure 4.4 Path Diagram Result of SEM Analysis
Table 4.10
Testing Result of Goodness of Fit Overall Model
Criteria Cut-of value Result Model Indicator
Chi Square Small Expected 224.05 Not too good model
p-value 0.05 0.0031
CMIN/DF ≤ 2.00 1.697 Good model
GFI 0.90 0.80 Marginal
AGFI 0.90 0.74 Not too good model
NFI 0.90 0.91 Good model
NNFI 0.90 0.95 Good model
CFI 0.95 0.96 Good model
RMSEA ≤ 0.08 0.08 Good model
Source: Appendix 4
The test results of the Goodness of Fit based on Figure 4.4 and Table 4.7 show
that 4 out of 8 Goodness of fit are shown to have good models. They are CMIN/DF,
CFI, NFI, and NNFI. While the other 2 Goodness of Fit that are GFI, and RMSEA
show models in the marginal model category. While the other 2 Goodness of fit are not
too good model or slightly outside the recommended index. However, Solimun (2006)
stated that if there are one or two criteria of goodness of fit that are indicated as good
models, the good of fit model is stated as good model. According Arbucle and Wothke,
if RMSEA and CMIN/DF have already met the cut off value of goodness of fit model,
they can be stated as good models too. Therefore, the SEM models in this study are
suitable and fit to use. Therefore, it can be interpreted for further discussion.
Structural Model
This structural model tested three hypotheses relationship among variables
with direct influence. Here is the complete presentation of the testing results on the
relationship among variables.
Table 4.11
Structural Model SEM Result: Direct Influence
Relationship between variables Coefficient
Standardize
Retail Store Environment (X1)Customer Satisfaction
(X2)
0.77
Retail Store Environment (X1)Customer
Loyalty(X3)
0.10
Customer Satisfaction (X2)Customer Loyalty (X3) 0.78
Source: Appendix 4
Graphically presented as follows:
X1
X2
X3
0.10
0.77
0.78
Figure 4.5 Structural Model (SEM) Result
Based on the Table 4.11 and figure 4.5, the results of structural model test can
be presented as follow:
1. Retail Store Environment (X1) has positive and significant effect on the
Customer Satisfaction (X2) with standardized coefficient of 0.77. This means
there is significant influence of the Retail Store Environment (X1) on Customer
Satisfaction (X2). Positive coefficient indicates that the higher value of Retail
Store Environment (X1) will produce higher value of the Customer Satisfaction
(X2)
2. Retail Store Environment (X1) has no significant effect toward the Customer
Loyalty (X3) with standardized coefficient of 0.10. This means there is no
significant influence of the Retail Store Environment (X1) on Customer
Loyalty (X3). It means that the intensity of the Retail Store Environment (X1)
will not affect the level of Customer Loyalty (X3).
3. Customer Satisfaction (X2) has positive and significant effect on Customer
Loyalty (X3) with standardized coefficient of 0.78. This means there is
significant influence of the Customer Satisfaction (X2) on Customer Loyalty
(X3). Positive coefficient indicates that the higher value of Customer
Satisfaction (X2) will produce higher value of the Customer Loyalty (X3).
Besides direct influence, SEM is also known to have indirect influence. The
testing of indirect influence is done by multiplying two direct influence. The indirect
influence was significant if both direct influence formed are significant. Here is the
result of the indirect influence.
Table 4.12
Structural Model (SEM) Result: Indirect Influence
Indirect Influence Direct Influence Coefficient
Indirect
Influence
Coefficient
X1 → X2 → X3 X1 →X2 = 0.77 X2 → X3 = 0.78 0.60
The table 4.12 shows the indirect influence of Retail Store Environment (X1)
on Customer Loyalty (X3) through the Customer Satisfaction (X2). The indirect effect
coefficient obtained was 0.60. The direct influence of Retail Store Environment (X1)
to Customer Satisfaction is Significant and the direct influence of Customer
Satisfaction (X2) to Customer Loyalty (X3) is significant too. It can be concluded that
there is indirect significant influence of Retail Store Environment (X1) on Customer
Loyalty (X3) through the Customer Satisfaction (X2). The coefficient is positive which
means that the higher Retail Store Environment (X1), the higher is the Customer
Loyalty (X3) through the Customer Satisfaction (X2). In other words, Customer
Satisfaction (X2) variable has been able to mediate the Retail Store Environment (X1)
to Customer Loyalty (X3). In other words, Customer Satisfaction (X2) variable has
been able to mediate the effect of Retail Store Environment (X1) to Customer Loyalty
(X3).
Discussions
In this research, use retail store environment, customer satisfaction, and
customer loyalty. This research is aim to know the relationship among retail store
environment, customer satisfaction, and customer loyalty who shopped at Indomaret
and Alfamart in Malang. After conducting research and data analysis, it was found that
there is significant influence between the retail store environment and customer
satisfaction, there is significant influence between the customer satisfaction and
customer loyalty, there is no significant influence between the retail store environment
and customer loyalty, and there is an indirect effect model of retail store environment,
customer satisfaction and customer loyalty. Some strategies that should be considered
by Indomaret and Alfamart in Malang are:
1. Retail Store Environment toward Customer Satisfaction
Based on the research result on this study, “The Relationship among Retail
Store Environment, Customer Satisfaction and Customer Loyalty in Convenience Store
(Case Study of Indomaret and Alfamart Customer in Malang City, Indonesia)” the
retail store environment has direct significant influence toward customer satisfaction
this result can supported the theory that already said by Naderian (2012) the retail store
environment is to be one factor that can shape the customer satisfaction in shopping.
The better retail store environment will remain positive sense of satisfaction who come
to shopping in Indomaret and Alfamart. Then Indomaret and Alfamart should
considered to maintain the retail store environment that already good which already
agreed by the customer like “Convenient shopping hours”, “Easy to find the item that
they looking for”, “convenience of store location”, “nice window display”,
“attractiveness of store layout”, “nice product display”, “salespersons assistance”,
“store reputation” and the retail store environment that just give as fairly agreed by
customer is the “music played at the store” and “the flexible return policies”. So that
the retail store environment of Indomaret and Alfamart should improve because:
The customer still feel that the music played in Indomaret or Alfamart still not
too made them feel comfortable while shopping. To cover this weakness,
Indomaret and Alfamart should pay attention or should to know about the music
that like by customer or the music that still on top 100 song that being listened
by majority people.
The customer still feel that the exchange process of defective or expired in
Indomaret and Alfamart is relatively still unflexible. To cover this weakness,
Indomaret and Alfamart should more pay attention to customer that feel the
product that they bought already defect or expired in order to give satisfaction
to customer who are shopping.
2. The Retail Store Environment toward Customer Loyalty
Based on the research result on this study, “The Relationship among Retail
Store Environment, Customer Satisfaction and Customer Loyalty in Convenience Store
(Case Study of Indomaret and Alfamart Customer in Malang City, Indonesia)” the
retail store environment there has no direct significant influence toward customer
loyalty this result can’t supported the theory that already said by Wijayanto et.al (2013)
a better retail store environment will increase the customer loyalty. It means that the
intensity of the Retail Store Environment will not affect the level of Customer Loyalty.
From this result the researcher can concluded that:
The customer feel that the “Convenient shopping hours”, “Easy to find the item
that they looking for”, “convenience of store location”, “nice window display”,
“attractiveness of store layout”, “nice product display”, “salespersons
assistance”, “store reputation” of Indomaret and Alfamart is already good
which is already agreed by the customer but it can not make them directly
generate a sense of loyalty to Indomaret and Alfamart.
3. The Customer Satisfaction toward Customer Loyalty
Based on the research result on this study, “The Relationship among Retail
Store Environment, Customer Satisfaction and Customer Loyalty in Convenience Store
(Case Study of Indomaret & Alfamart Customer in Malang City, Indonesia)” the
customer satisfaction has direct significant influence toward customer loyalty this
result can supported the theory that already said by Tu and Chang (2005) If customer
satisfaction is manifest then the customer loyalty to a brand or company can also be
realize and according to Jung and Yoon (2011) customer satisfaction has positive
relation with customer loyalty. So Indomaret and Alfamart should considered to
maintain the customer satisfaction that already good which is agreed by the customer
like “I am pleased to visit the store”, “I really enjoyed myself at the store”, “overall, I
am satisfied with the experience at the store” and the customer satisfaction indicator
that just give as fairly agreed by customer is “this store exceeded my expectattion”. So
that Indomaret and Alfamart should give improvement to customer satisfaction
because:
The customers still feel that shopping at Indomaret or Alfamart has not too
exceeded their expectation. To cover this, for Indomaret and Alfamart need
some improvement in some aspect in order to make the customer feel satisfied
while shopping, start from providing good service, create retail store
environment as cozy as possible so that the customers will come back again to
Indomaret and Alfamart to shop.
4 The Indirect Effect Model of Retail Store Environment, Customer Satisfaction, and
Customer Loyalty.
Based on the research result on this study, “The Relationship among Retail
Store Environment, Customer Satisfaction and Customer Loyalty in Convenience Store
(Case Study of Indomaret and Alfamart Customer in Malang City, Indonesia)” there is
indirect significant influence of Retail Store Environment toward Customer Loyalty
through the Customer Satisfaction. In other words, Customer Satisfaction has been
able to mediate the Retail Store Environment to Customer Loyalty. So Indomaret and
Alfamart should keep maintain and give improvement on the relationship between
retail store environment toward customer satisfaction and customer satisfaction toward
customer loyalty. Then it will make the indirect effect of retail store environment
toward customer loyalty trough customer satisfaction still maintained. From this result
the researcher can concluded that:
Customer feel that the “Convenient shopping hours”, “Easy to find the item that
they looking for”, “convenience of store location”, “nice window display”,
“attractiveness of store layout”, “nice product display”, “salespersons
assistance”, “store reputation” of Indomaret and Alfamart is already good
which is agreed by the customer that can make them satisfied while shopping
in Indomaret and Alfamart, then the customer feel “I am pleased to visit the
store”, “I really enjoyed myself at the store”, “overall, I am satisfied with the
experience at the store” of Indomaret and Alfamart is already good which is
agreed by the customer, that can drive a sense of loyalty to Indomaret and
Alfamart
E. CONCLUSIONS AND RECOMMENDATIONS
Conclusion
This research discusses the implications of the retail store environment to
customer satisfaction as well as the implications for customer loyalty in Indomaret
and Alfamart in Malang.
Based on the results of research and discussion that has been done, it can be
concluded as follow:
1. There is a positive and significant influence of retail store environment on
customer satisfaction. This means that the better retail store environment that
Indomaret and Alfamart Malang provide, the greater is the customers
satisfaction.
2. There is no direct influence of retail store environment on customer loyalty.
This means there is no significant influence between Retail Store Environment
on Customer Loyalty. It means that the intensity of the Retail Store
Environment will not affect the level of Customer Loyalty.
3. There is a big influence of customer satisfaction on customer loyalty. This
means the higher customer satisfaction while shopping at Indomart and
Alfamart in Malang then, the greater is the customer loyalty. Then the customer
loyalty makes customers constantly do shopping in Indomaret and Alfamart and
customer satisfaction also encourages customers to recommend other people
to shop at Indomaret and Alfamart.
4. There is indirect significant influence between Retail Store Environment and
Customer Loyalty through Customer Satisfaction. In this case, good retail
store environment is able to attract customers to shop at Indomaret and Alfamart
in Malang. Then respondents or customers who come to shop in Indomaret and
Alfamart in Malang will feel satisfied when shopping at Indomaret and
Alfamart in Malang. In other words, customers feel comfortable with retail
store environment provided shown by neat and clean layout of goods so
customers will easily find the items they need and the completeness of the
goods to be purchased. To conclude, good retail store environment can make
the customers feel satisfied and they will have a sense of customer loyalty
toward the stores.
Recommendation
Based on the conclusions above, there are some pproposed suggestions that are
expected to be beneficial for the company to expand the market. They are described as
follow:
1. Indomaret and Alfamart should pay more attention to retail store environment
that becomes important aspect of the retail business. It is because retail store
environment can influence consumer satisfaction while shopping. In addition,
Indomaret and Alfamart must keep the bright store lighting, the existing of wall
color, cleanliness, fragrant scent and music in order to make consumers feel
relaxed and comfortable when shopping so it can better attract the attention of
consumers which will also affect customer satisfaction and also increase
customer loyalty.
2. In improving the customer satisfaction, Indomaret and Alfamart should add the
type of daily need products, for example by renewing the product types and
increasing the variety of product. By increasing the number of product type , it
will create customers loyal behavior
3. For further researchers, the results of this study can be used as an additional
reference, although this research is still far from perfect. Therefore it is
suggested to use the other independent variables, so it will obtain more
complete and accurate information. For example: Service Quality, Marketing
Mix (Price, Place, Product, and Promotion), and After Sales Service.
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