The influence of Islamic values on retail brand equity and store loyalty: a Saudi Arabian perspective

This study investigates the factors influencing store loyalty in the Saudi Arabian retail industry. It argues that retail store loyalty is influenced not only by “classic” factors like location, retail brand equity, and retail customer service experience, but also by culturally specific factors – in this case the Islamic values of customer and of retailers, particularly in countries such as Saudi Arabia, where these cultural factors exert a very different and strong influence compared with in Western countries where much of the literature on retail brand loyalty originates.
This study is needed because the gap in both literature and understanding relating to the impact of such cultural values, particularly Islamic values held by highly observant Muslims, leads not only to a misunderstanding by academics of the factors contributing to retail loyalty, but also to practical problems for Western marketers in terms of doing business via retailers in Saudi Arabia. This thesis fills the gap.
The study was carried out using mixed methods, with the pilot and then the main quantitative surveys preceded by a qualitative depth-interview study, the purpose of which was to identify the variables to be used in the quantitative surveys.
In the qualitative study, 20 people were interviewed to seek their opinion on the role of Islamic values in the retail strategy. The sample size was determined based upon the literature. As the survey progressed, no new variables were needed. There was strong conformity between the respondents. This led to a pilot quantitative study of 120 respondents. Afterwards, a sample of 1104 respondents from Saudi Arabia was generated to collect quantitative data. A predeveloped measurement scale was used to measure the constructs used in the study. Structural equation modelling (SEM) was used to analyse the data and hypotheses testing.
The finding suggested that the loyalty of observant Saudi consumers was strongly influenced by the adherence to Islamic values by stores. The data further revealed that stores which follow Islamic values as a part of their retail strategy improve their brand equity and customer service experience. The concept of Islamic Retail Brand Equity was introduced to explain this phenomenon.
The conclusion was that to create and maintain retail brand equity and store loyalty, retail stores in Saudi Arabia should focus on their Islamic Retail Brand Equity by following Islamic values in the stores. This study extends the concept of customer service by using the concept of Islamic Values in the theory developed. The implications for academic theory relate to the need to take into account culturally specific variables, on both consumer and retail sides. For marketers, the implications relate to the need to take into account Islamic values in their dealings with both consumers and retailers.