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Journal of Retailing 79 (2003) 97106

Share of wallet in retailing: the effects of customer satisfaction, loyalty cards and shopper characteristics
Anne W. Mgi,1
Department of Marketing, University of Florida, P.O. Box 117155, Gainesville, FL 32611-7155, USA Accepted 12 February 2003

Abstract In retailing, consumers typically patronize multiple outlets. Thus, an important issue is why consumers vary in how they divide their purchases across outlets and how outlets can get a greater share of consumer expenditures. Two potential avenues for increasing customer share are to raise customer satisfaction, and increase repeat purchase through loyalty cards. This study examines the effects of customer satisfaction and loyalty cards as well as consumer characteristics on customer share spent on the primary grocery store. The ndings suggest that customer satisfaction has a positive, albeit modest, effect on share while consumer economic shopping orientation has a negative direct effect on share. The economic orientation of shoppers, their felt importance of a personal relationship with store personnel, and the level of their aggregate purchase volume moderate the effect of satisfaction on customer share. Finally, the results provide mixed support for the impact of loyalty cards on customer behavior. 2003 by New York University. Published by Elsevier Science. All rights reserved.
Keywords: Customer share; Customer satisfaction; Loyalty programs; Shopping orientations

Introduction For retailers, customer share of wallet is of great signicance and an important questions are how shoppers divide their purchases across competing stores and whether and how retail managers can increase their share of their customers total category expenditures. There is an increasing emphasis on customer satisfaction as a means of affecting store-choice behavior (e.g., Weir, 2001) and although little research exists to substantiate it, it seems intuitive that satisfaction would also affect customer share. However, research on the effects of satisfaction on other behavioral outcomes show mixed results (cf. Dufer & Moulins, 1989; Mittal & Kamakura, 2001; Reichheld, 1993). Recent studies also indicate that the relationship between satisfaction and behavior is moderated by consumer-level variables, that is, not all consumers respond equally to increases in satisfaction (Homburg & Giering, 2001; Mittal & Kamakura, 2001). Taken together this suggests that the effects of customer satisfaction on customer share need to be empirically evaluated.
Tel.: +352-392-0161, ext. 1333. E-mail address: anne.magi@cba.u.edu (A.W. Mgi). 1 The author is currently a visiting scholar at the University of Florida Marketing Department.

Another means of increasing customer share that has become increasingly common in retailing is customer loyaltycard programs, or membership clubs (Sopanen, 1996). However, studies investigating the effects of such programs are few and provide a mixed picture (Liebermann, 1999; Passingham, 1998; Sharp & Sharp, 1997). The effectiveness of such programs has also been questioned on the basis that it is difcult to change established behavioral patterns with common types of reward systems (Dowling & Uncles, 1997). Thus, despite their popularity, questions about their efcacy when it comes to changing customer behavior are warranted. While the dominant view today seems to be that customer share is something a manager can inuence, for example, through increasing satisfaction or introducing a loyalty-card program, a different line of research suggests that consumers are likely to distribute their spending across stores in a way largely unrelated to the marketing actions and performances of these stores. The patronage literature suggests individual difference variables that affect how consumers distribute purchases across storesin particular the share of purchase in the shoppers primary storesuch as a bargain-hunting propensity (Kim, Srinivasan, & Wilcox, 1999; Laaksonen, 1993; McGoldrick & Andre, 1997) or being an apathetic consumer (Williams, Painter, & Nicholas,

0022-4359/03/$ see front matter 2003 by New York University. Published by Elsevier Science. All rights reserved. doi:10.1016/S0022-4359(03)00008-3

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1978). Knowledge about such effects is essential, since they need to be taken into account when designing and evaluating measures taken to increase customer share. This is particularly important if these variables were found to moderate the effect of manageable variables such as customer satisfaction or loyalty programs. The purpose of this study is to investigate to what extent customer satisfaction, loyalty-card programs and relevant consumer characteristics determine the share of shopping trips and the share of purchases a household allocates to its primary grocery store. The study also examines whether consumer characteristics moderate the effects of satisfaction and cards. The hypotheses that will be tested are discussed in more detail in the next section of the paper. Subsequently, the survey study used to examine the hypotheses will be described and the results, mainly based on regression analysis, will be presented. The paper concludes with a discussion and suggestions for further research.

Background Studies have shown that most grocery shoppers have a primary store in which they make a large share of their purchases, whereas the extent to which other stores are used on a routine basis, and consequently the share devoted to the primary store, varies across consumers (East, Harris, Willson, & Lomax, 1995; Mgi, 1999; Urbany, Dickson, & Sawyer, 2000). Clearly, an important goal for retail managers would be to increase their share of their primary customers total grocery expenditures, and possible means for doing so are to increase customer satisfaction and/or launch a loyalty program. However, the share spent in the primary store is also a function of the shoppers overall patronage patternthat is, whether few or many stores are used and whether purchases are concentrated to one store or evenly distributed across storeswhich in turn has been shown to be affected by individual difference variables. Although such variables are not directly under the inuence of the store manager any potential effects need to be taken into consideration when

developing and evaluating programs aimed at increasing customer share, particularly among primary customers. In retailing there are two aspects of customer share: share-of-purchase (SOP) and share-of-visits (SOV), which, although being highly correlated, are not necessarily interchangeable. Purchase amounts vary between shopping trips and a particular store might, for example, only be used for frequent, but small, purchases. Thus, factors that determine where consumers make most of their purchases in volume need not always be the same as the factors that determine what store they visit most frequently. Although SOP would be the dimension of ultimate interest from a managerial perspective, the possibility that some factors affect SOV to a greater extent than SOP warrants an examination of both dimensions. For example, a consumer who is highly satised with his or her primary store might use it for almost all shopping trips resulting in a very high SOV, whereas occasional visits to an out-of-town superstore might drive down the SOP made in the primary store. Fig. 1 presents the framework of this study. Customer satisfaction, loyalty-card programs and shopper characteristics are posited to have independent effects on the two dimensions of primary store customer share. In addition, shopper characteristics are also assumed to moderate the effects of satisfaction and loyalty cards on customer share. These effects will be discussed in the following sections. Customer satisfaction and customer share Numerous studies have been presented that show a positive relationship between satisfaction and measures of repurchase intentions (cf. Anderson, Fornell, & Lehmann, 1994; Boulding, Karla, Staelin, & Zeithaml, 1993; Fornell, 1992; Jones, Mothersbaugh, & Beatty, 2000). In contrast, research reporting a weaker effect of satisfaction on actual repurchase behavior suggests that satised customers do not necessarily exhibit a high level of repurchase behavior (cf. Dufer & Moulins, 1989; Mittal & Kamakura, 2001; Reichheld, 1993). To date, little research exists on the effects of satisfaction on customer share. It seems intuitive that consumers

Fig. 1. Overview of the study framework.

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who are very satised with their primary store would concentrate a larger share of expenditures in that store and be less inclined to visit other stores. However, one could also expect shoppers who regularly use several stores to be fairly satised with all of these stores; hence the satisfaction with a particular store might not be decisive for how the store is used. This corresponds with ndings showing that satised customers need not exhibit a high degree of repurchase behavior. Mgi (1995) found that although self-categorized primary customers of a particular store were signicantly more satised with the store than non-primary customers, about 15% of the customers who had given this store the highest satisfaction rating did not consider it their primary store. Thus, the intuitive notion that satisfaction would be an important determinant of share of spending and visits in the primary store needs to be empirically investigated. H1. Satisfaction has a positive effect on SOP and SOV in the primary store. Recently it has been shown that the effects of satisfaction on behavioral outcomes are moderated by individual difference variables such as age and gender (Homburg & Giering, 2001; Mittal & Kamakura, 2001). Mittal and Kamakura (2001) found that the relationship between satisfaction scores and repurchase behavior for cars was stronger for men than for women, and stronger for younger than for older consumers. Homburg and Giering (2001) found a similar moderating effect of gender, but the opposite moderating effect of age. To the extent that the effect of satisfaction on behavior is moderated by consumer characteristics, this need not be limited to demographic variables. Homburg and Giering (2001) also found that variety seeking had a moderating effect on this relationship. In a retailing context it is plausible that shopping orientations moderate the behavioral response of satisfaction. For example, satisfaction might have a smaller effect on behavior for consumers who exhibit a high degree of economic shopping orientation than for consumers with low economic shopping orientation, if the former continue to comparison shop to a large extent, even when being highly satised with their primary store. Currently available studies on the moderating effects of consumer characteristics on the satisfactionbehavior relationship provide somewhat mixed results and are limited to a very specic context. However, it is intuitive that not all consumers react in the same way to being more or less satised. Identifying moderators would be of great signicance for understanding when, or more specifically in which consumer segments, customer satisfaction has substantial versus more limited effects on subsequent behavior. H2. The effects of satisfaction on SOP and SOV are moderated by consumer characteristics.

Loyalty programs and customer share In retailing, as in many other industries, the use of customer membership clubs, or loyalty programs, has become prevalent (Sopanen, 1996). One purpose of such programs is to increase customer share. However, Dowling and Uncles (1997) question the possibilities of loyalty programs for changing customer behavior. Based on research on how individuals react to rewards, they contend that it is difcult to change established behavioral patterns with the type of reward systems that are prevalent today. Empirical evidence of any effects of loyalty programs on behavior is also limited. A study on the Australian FlyBuy Program indicated substantial excess customer share for only two of the four program participants (Sharp & Sharp, 1997). However, for these two retailers, the deviations were observed for both customers who were members of the program as well as customers who were not. Passingham (1998) found that Sainsbury-card holders spent on average more in the chain and made a larger proportion of their store trips in the chain than non-members, but at the same time 42% of card holders spent less than half of their grocery budget in the chain. Liebermann (1999) investigated membership clubs in three industries, among them retailing. According to self-reports, 20% of members spent signicantly more with the focal rm due to their membership, whereas 36% reported that they spent only slightly more. However, industry specic results were not presented and it is thus not clear whether those results were representative for the retailing sub-sample. An additional issue in retailing is that the effects of loyalty cards might manifest themselves on the chain, rather than individual store level. This is particularly important in retailing sectors in which a retail chain is likely to have several outlets in a specic market area. Thus, the effects on both store and chain-level customer share will be examined in this study. H3a. Customers who belong to the loyalty-card program of their primary store will have a larger SOP and SOV in their primary store. H3b. Customers who belong to the loyalty-card program of a chain will have a larger SOP and SOV in that chain. Analogously with the previous discussion, it is plausible that any effects of loyalty cards would be moderated by consumer characteristics since consumers could be expected to react differently to the loyalty program once enrolled. For example, price shoppers might be less inclined to change their behavior despite having enrolled in a loyalty program. Although no research exists that suggests which consumer characteristics might play such a role, the managerial implications of identifying any such moderators warrants including them in this study.

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H4. Consumer characteristics moderate the effects of loyalty cards on primary store and/or chain-level SOP/SOV. Shopper characteristics and customer share A number of studies on grocery shopping behavior have related customer share in the primary store, typically SOP to a range of consumer characteristics. Although this research conveys a somewhat fragmented picture of consumer-level correlates with customer share, some results stand out as fairly consistent across studies. Three of the factors that have been linked to customer share correspond to shopper types identied by Stone (1954) and found in several subsequent studies (Laaksonen, 1993). Thus, they represent some of the core motivational drivers of grocery shopping behavior. The negative effect of being a price-oriented consumer on customer share in the primary store is intuitive (Kim et al., 1999; Laaksonen, 1993; Mgi, 1999; McGoldrick & Andre, 1997): consumers who perceive benets from comparing prices across stores would be more likely to spread their purchases evenly across stores in their pursuit of good deals than consumers who do not nd across-store price comparisons worthwhile. It also seems reasonable that consumers who appreciate the social dimension of shopping would tend to concentrate their purchases at a specic store, since that would make it easier to build and maintain a relationship with store personnel (Laaksonen, 1993; Mgi, 1999). Likewise, the more apathetic or uninterested in shopping the consumer, the likelier that he or she would concentrate purchases to one store to minimize the energy spent on grocery shopping (Williams et al., 1978). H5a. The consumers economic shopping orientation, that is, his or her interest in comparison shopping on price, has a negative effect on SOP and SOV in the primary store. H5b. The consumers apathetic shopping orientation, that is, the level of lack of interest in grocery shopping, has a positive effect on SOP and SOV in the primary store. H5c. The consumers personalizing shopping orientation, that is, his or her felt importance of a personal relationship with service personnel, has a positive effect on SOP and SOV in the primary store. Age has been negatively related to customer share in several studies (East et al., 1995; East, Hammond, Harris, & Lomax, 2000; Mgi, 1999). One possible explanation is that older consumers have more time at their disposal, thus being able to spend more time on grocery shopping and using several stores (East et al., 2000). Aggregate purchase volume has been positively linked to customer share (Knox & Denison, 2000), which would appear to run contrary to expectations. Rather, it seems plausible that the higher the households total expenditures, the larger the benets of shopping around for better prices. On the other hand, large

purchase volumes is related to household size and it is possible that larger households have less time to shop and thus tend to concentrate purchases to one store. From a managerial perspective it would be important to investigate whether heavy shoppers versus light shoppers differ in their propensity to concentrate their purchases to their primary store, since heavy shoppers are particularly attractive to retailers. H5d. The consumers age is negatively related to SOP and SOV in the primary store. H5e. Total purchase volume is positively related to SOP and SOV in the primary store.

The study Data collection The study was conducted in a Swedish town with approximately 100,000 inhabitants. At the time of the study, four chains and a few independents totaled 35 grocery stores. Two chains dominate the area, but there is great variability concerning store strategy within these two chains. One of the chains is a federation of retailers with substantial intra-chain competition. There are two competing superstores in the market operated by the dominating chains. All four chains represented in the area have had loyalty-card programs in operation for several years. At the time of the study, one of the programs awarded points for purchases that entitled to additional discounts when reaching a certain level, whereas the other programs only gave their members special discounts and members-only mailings. The data were collected by means of a four-week storechoice diary and a follow-up questionnaire. Households recorded what store they shopped in and the purchase amount for all purchases made during the surveyed period. Because a few of the stores had large non-food assortments, households were specically asked to record the amount spent on groceries only. A random sample of 1600 households was obtained from the Swedish Census Bureau. Households that complied with the request to participate in a preceding telephone survey, or were not reached by telephone, received a mailing with the diary and instructions. The person responsible for the main part of grocery shopping completed a questionnaire that was sent out by the end of the four-week period. Six hundred and eighty-one households completed the study (response rate of 43%). The data for 643 households, for which all necessary variables were obtained, were used in this paper. In this sample 74% of the primary shoppers were women. Measurement The two measures of customer shareshare-of-purchase and share-of-visits in the primary storewere estimated

A.W. Mgi / Journal of Retailing 79 (2003) 97106 Table 1 Correlations between main continuous variables SAT SAT EO PO AO Age PV Number of trips SOP SOV

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EO 1.00 .05 .10 .04 .11 .08 .31 .29

PO

AO

Age

PV

Number of trips

SOP

1.00 .09 .24 .18 .14 .14 .04 .19 .11

1.00 .10 .34 .17 .20 .01 .13

1.00 .01 .01 .11 .05 .03

1.00 .28 .24 .09 .00

1.00 .45 .00 .00

1.00 .24 .12

1.00 .67

p < .05. p < .01.

from the diary data for the store the respondent had identied in the questionnaire as their primary store. Other variables obtained from the diary were number of stores used, number of shopping trips, purchase volume, chain-level SOP and SOV. A three-item scale based on the approach used in the Swedish and American Satisfaction indices (cf. Bryant & Cha, 1996; Fornell, 1992) measured overall customer satisfaction with the store. In accordance with Anderson et al. (1994), customer satisfaction was conceptualized as an overall evaluation rather than a transaction-specic post-purchase evaluation. Laaksonens (1993) shopping orientation scales, based on Stones (1954) shopper typologies, were slightly modied and a few new items were developed to form three four-item scales for the apathetic, economic and personalizing shopping-orientation dimensions. A pretest of the scales led to some adjustments of the wordings of a few items. Details of the multi-item measures are reported in Appendix A. In addition to items on the measured constructs, and a number of demographic variables such as age and income, the respondents were asked to indicate which of the available grocery-chain membership-cards they had.

Results During the surveyed four-week period, the households used on average 3.8 grocery stores, and only 4.8% of the households limited their purchases to one grocery store. These data are similar to those found in earlier studies (Desmet & Volle, 1996; Mgi, 1999). The average number of store visits during the period was 14.1 (SD: 6.36). The SOP in the primary store ranged from 21 to 100%, and the average SOP was 62% (SD: 20). The average SOV in the primary store was lower (range: 3100, M: 47, SD: 24). Thus the data show a considerable amount of variation in the dependent variables. As expected, the two share measures were highly correlated (Table 1). Forty-one percent of the households had a superstore as their primary store. There were no signicant differences in SOP for households with different types of primary store, whereas there was a signicant

difference in SOV (MSUPERST = 36, MNON-SUPERST = 56, t = 11.15, p < .01). No signicant differences between men and women were found. Thirty-three percent of households had one of the available membership-cards, 49% of the households had a card for more than one chain, and the remaining 18% had no cards. In other words, it was more common to have two or more cards than to have one card only, and many of the respondents would therefore be likely to have both their primary stores card, as well as a card in a competing chain. Shoppers with no, one or more than one membership differed signicantly on three shopper characteristics: economic orientation (M0C = 5.76, M1C = 5.10, M2+C = 5.83, F2,640 = 7.85, p < .01), aggregate purchase volume (M0C = 2072 (SEK), M1C = 2517, M2+C = 2805, F2,640 = 14.02, p < .01) and age (M0C = 39.0, M1C = 42.6, M2+C = 47.5, F2,640 = 14.76, p < .01). Thus households with at least one membership tend to spend more on groceries, and shoppers with two or more memberships are more economically orientated than shoppers with one card only. As has been shown in previous studies (Bryant & Cha, 1996; Mittal & Kamakura, 2001), there are signicant differences in satisfaction scores between men and women (Mmen = 7.09, Mwomen = 7.54, t = 3.14, p < .01). There were no signicant differences in age between the genders. The correlations between the main continuous variables are presented in Table 1. The effects of the independent variables and the moderating effects on the two dimensions of customer share were analyzed by means of OLS regression with centered data (Aiken & West, 1991).2 It should be noted that the use of centered data changes the interpretation of the lower order regression coefcients to conditional effects when other predictors equal their mean values (Aiken & West, 1991). Since the dependent measures are shares, they were transformed using a log centering transformation (Nakanishi & Cooper, 1982). To take the prevalence of multiple-card holders into account, a dummy variable for card in primary
2 The error terms between models were highly correlated, but since the sets of independent variables were identical across models, OLS and Seemingly Unrelated Regression yielded identical estimates (Srivastava & Giles, 1987).

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store and a dummy variable for card in a competing chain were used. Due to multicollinearity, interaction effects with one dichotomous variable were assessed by changes in R2 . Previous studies (e.g., Mittal & Kamakura, 2001), have shown that the relationship between satisfaction and behavioral outcomes can be non-linear, and in this study several different functional forms of the relationship were investigated. Apart from age, gender and purchase volume, the effects of other demographic variables (income, household size, employment, number of small children) were explored. None of these variables were found to affect SOP or SOV and were thus not included in the nal model. Type of primary store and number of shopping trips were included in the models as covariates. Multicollinearity was found to be modest in the main regressions with no tolerance values below 0.67, and there was no evidence of outliers in the analyses. The results are presented in Table 2. Supporting hypothesis H1, customer satisfaction was positively related to both primary store SOP and SOV. However, this effect was relatively modest (the unique explained variances are, respectively 0.02 and 0.01). Tests of different functional forms of this relationship did not signicantly increase the amount of explained variance. The lack of a strong effect of satisfaction on customer share could be due to unsatised customers limiting shopping to one store as a result of high switching barriers, or customers using several stores despite being highly satised with their primary store. The high overall level of satisfaction and the low number
Table 2 Regression modelsunstandardized coefcients and t values Variable

of households only using one store suggest that the second explanation seems more likely. Supporting H2, two of the shopping-orientation dimensions and aggregate purchase volume moderated the effect of satisfaction on one or both share measures. As suggested earlier, satisfaction had a higher impact on SOP for consumers with a low economic orientation than for shoppers with a high economic orientation (Fig. 2, panel 1). There was also a signicant negative moderating effect of personalizing orientation in both models (Fig. 2, panel 2). This effect might seem counter-intuitive but is in line with the reasoning and empirical results in Jones et al. (2000). They suggest that social benets of the relationships with personnel might mitigate the effect of satisfaction of the core service on repurchase intentions, and also nd support for that in their data. In the current context, shoppers who valued a personal relationship with store personnel seemed less inclined to decrease their share in their primary store with decreasing satisfaction, than consumers with a low level of personalizing orientation. In other words, the personalizing orientation seems to have an insulating effect on the potential negative effects of decreasing satisfaction. There was also a positive moderating effect of purchasing volume on the satisfactionSOP relationship indicating that heavy buyers were more sensitive to changes in satisfaction. Finally, contrary to previous ndings, there were no signicant moderating effects of age or gender (R2 change for both SOP and SOV models not signicant, p > .5).

Dependent variable: primary store SOP t 1.08 3.57 1.69 2.22 6.28 1.03 0.49 1.76 1.41 1.95 3.29 2.72 1.29 0.07 2.40 0.75 5.53

Dependent variable: primary store SOV 0.036 0.016 0.038 0.018 0.019 0.006 0.001 0.001 0.029 0.020 0.005 0.011 0.003 0.000 0.001 0.236 0.010 .29 (.28) t 1.43 2.52 1.79 0.94 4.33 1.27 0.15 1.13 1.39 2.56 1.77 3.84 1.25 0.83 0.35 11.54 6.06

Constant Main effects Satisfaction Card in focal chain (D1 ) Card in competing chain (D2 ) Economic shopping orientation Personalizing shopping orientation Apathetic shopping orientation Age Gender (man = 0, woman = 1) Aggregate purchase volume Interaction effects Satisfaction economic orientation Satisfaction personalizing orientation Satisfaction apathetic orientation Satisfaction age Satisfaction aggregate purchase volume Covariates Primary store a superstore (0 = no, 1 = yes) Number of shopping trips R2 (adj. R2 )

0.016 0.013 0.021 0.025 0.017 0.003 0.001 0.001 0.017 0.010 0.005 0.005 0.002 0.000 0.006 0.009 0.006 .21 (.19)

p < .05. p < .01.

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Fig. 2. Interaction plots for the moderating effects of the economic shopping orientation and the personalizing shopping orientation on the satisfactionSOP relationships (plots are based on trichotomized satisfaction and shopping orientations variables, i.e., lower and higher levels of satisfaction and respective shopping orientation are represented by the lower and upper thirds of these variables).

H3a is not supported. Although the effects of having the focal card were in the expected direction in both models, neither reached signicance. There was, however, a significant negative effect on SOP of having a competing card. This is important, taking into consideration the large overlap in card-ownership. Of the 459 households who have the focal-chain card, 65% also have at least one competing card. Analyses with the SOP and SOV for the two major chains as dependent variables showed that having a card in the chains membership program was associated with a higher concentration of purchases and visits to the stores of that chain supporting H3b (Table 3 reports the results for SOP models. Results for SOV models were similar). Again, however, there was a signicant negative effect of having a competing card. For chain A, this would more or less off-set the effect of having the focal card. There was a slightly larger difference between the effects for chain B, which could be due to the fact that the chain B program was the one rewarding points for purchases. Since the overlap in memberships between these two programs were largeof the households that had at least one of these cards, 57% had boththe chain-level results underscore the importance of considering the numTable 3 Chain-level regression models. Unstandardized coefcients and t values Variable Chain Aa Constant Overall assessment of chain Ac Overall assessment of chain Bc Overall assessment of chain Cc Overall assessment of chain Dc Card in focal chain (D1 ) Card in competing chains (D2 ) R2 (adj. R2 ) Lowest tolerance value
a b

ber of cards held by the shopper when analyzing the effects of loyalty cards. H4 was tested through comparing the base models with an extended model including cross-products for the two card dummy variables and the shopper characteristics. The change in R2 was not signicant in either of the two store-level models or any of the chain-level models (p > .5). Of the hypothesized main effects of shopper characteristics, only the economic-orientation effect was signicant in both models (the unique explained variances were 0.05 and 0.02 for SOP and SOV, respectively). The more inclined the consumer is to engage in price comparisons across stores, and the more s/he nds such comparisons worthwhile, the smaller the primary store SOP as well as SOV. Aggregate purchase volume was positively related to SOV but did not have a signicant impact on SOP. Finally, there were certain differences in the models for SOP and SOV suggesting that the two share measures are not simply interchangeable indicators of the same phenomenon. For example, whether or not the primary store was a superstore had a large effect on SOV but not on SOP. This issue was further explored by comparing four groups of

Chain Bb t 5.05 6.80 4.86 2.56 1.08 4.42 4.22 0.161 0.081 0.078 0.032 0.010 0.216 0.188 .22 (.21) 0.75 t 1.08 4.62 5.88 2.13 0.68 3.56 3.56

0.501 0.077 0.042 0.025 0.011 0.160 0.153 .24 (.23) 0.77

Dependent variable: log centered SOP in chain A, n = 457. Dependent variable: log centered SOP in chain B, n = 383. c Overall assessment of each chain was measures with the item The X chains grocery stores are . . . on a 10-point scale anchored in very badvery good. p < .05. p < .01.

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shoppers with different levels on these two dimensions. The groups were created by dividing the data on each variable according to a median-split. Comparing the groups with high SOP in the primary store and high SOV versus low SOV, there was, as could be expected, a signicant difference in the choice of type of primary store. For the high SOP/low SOV group there was a higher number of households with a superstore as their primary store than for the high SOP/high SOV (PHsov = .30, PLsov = .76, z = 8.37, p < .01). There were no signicant differences in satisfaction between the groups. However, the high SOP/high SOV had on average a high level of personalizing orientation and a low level of economic orientation, whereas the pattern is reversed for the second group (economic orientation: MHsov = 4.69, MLsov = 5.78, t = 4.43, p < .01, personalizing orientation: MHsov = 5.38, MLsov = 4.69, t = 2.69, p < .01).

Discussion The ndings from this study show a great variation in the share-of-visits and share-of-wallets households devote to their primary store. Somewhat contrary to expectation, given the large emphasis on customer satisfaction in todays business world, customer satisfaction explained a fairly modest share of this variation. One explanation for this nding is that not all consumers respond in the same way to feeling satised or dissatised and that these moderating effects decrease the strength of the relationship on the aggregate level. In this study, satisfaction was clearly a more important determinant of customer share for consumers with a low economic orientation than for consumers with a high economic orientation, since highly economic shoppers hardly increased their share in the primary store with increasing satisfaction. The shoppers preference for social interaction with store personnel moderated the effects of satisfaction in that it seemed to insulate the store from the effects of decreasing satisfaction. Moreover, heavy shoppers responded more strongly to changes in satisfaction. Thus, attempts at increasing customer share through boosting customer satisfaction can yield very different results depending on which customers are affected by the improvements. Based on moderating analyses, consumer segments can be identied that are more, or less, likely to respond to increases in satisfaction by shopping more in their primary store, and measures can be targeted at enhancing the satisfaction of customers who are most likely to change their behavior. It is also the case that being highly satised with a particular provider does not preclude high satisfaction with the competitors alternatives, in this case other stores. A consumer who sees benets in regularly using different stores would be more inclined to do so if several alternatives were equally satisfying, than if competing stores were seen as clearly inferior to the primary store. Thus it might be informative to use relative measures of satisfaction when predicting customer share, an argument that corresponds

with the point made by Dick and Basu (1994) concerning relative attitudes. The results of this study provide only mixed support for the positive effects of loyalty cards on customer share. In fact, having a loyalty card did not affect SOP nor SOV on the primary store level and on the chain level there is only a positive effect for card members who only hold the focal chains card. Taking into consideration the large number of multiple-card holders the results indicate that the effects of competing loyalty programs may well cancel each other out. From a rm perspective these results suggest that it is necessary to take into account cardholders card portfolios when evaluating the effectiveness of loyalty programs. Estimates of program overlap on the regional or local market level can, for example, be used for analyzing differences in program efciency across markets. The ndings also point to the need for more research on why consumers enroll in loyalty programs. Another important issue for loyalty-card programs is the causal direction of effects. Since this study is based on cross-sectional data, it does not directly address this question. However, although it is possible that the ndings are a result of consumers having changed their shopping behavior towards the chain after joining a program, at least part of the effect could be attributed to the opposite interpretation, that is, consumers join clubs that reward their established pattern of shopping. This could in fact be one explanation for the large number of multiple-card holders; shoppers who already use several chains on a regular basis might join all available clubs to take advantage of the benets of each club. In this study, the economic shopping orientation was the motivational factor with the largest overall impact on customer share. However, it is possible that other motivational factors, such as the personalizing shopping orientation or the apathetic shopping orientation would be more prominent in other retail industries. For example, for retailers with a large emphasis on personal interaction, the personalizing orientation is more likely to have both a direct effect on customer share and possibly a stronger moderating effect on the satisfactionshare relationship. Moreover, a preference for recreational shopping might well be important in many retail sectors: a consumer with a high recreational shopping orientation might distribute purchases across several stores despite being highly satised with each of them, as a result of a preference for spending time on shopping. In more general terms it should be important for all types of retailers to incorporate variables that are linked to consumers preferred shopping styles when assessing how manageable variables such as satisfaction impact on customer share. The current ndings suggest that there are limitations as to the extent high customer share can be created or fostered through marketing tactics such as customer satisfaction programs or loyalty-card programs. This insight is important when designing and evaluating the outcomes of programs aimed at changing customer behavior through increasing their satisfaction. However, although the individual-level

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effect of satisfaction is modest, increases on the individual level can still have an important effect on store-level customer share. Customer satisfaction is also likely to be important for dimensions of store patronage behavior not included in this study, particularly the choice of primary store and what stores will be included in the customers store portfolio. Therefore, constantly monitoring the satisfaction of ones customers and the causes of their satisfaction remains important. Future research on the link between satisfaction and customer share as well as other aspects of repurchase behavior, taking into account the satisfaction with competing alternatives as well as pertinent consumer-level variables, will further increase the diagnostic value of customer satisfaction surveys. Returning to ideas put forth in early research on store loyalty (Enis & Paul, 1970), the ndings suggest that it could be worthwhile to segment consumers according to their propensity to be behaviorally loyal in terms of their primary store SOP. Should the store manager then only focus marketing efforts on the consumer who is more likely to concentrate most of his or her purchases in a specic store? Not necessarily. If the price-sensitive segment in a given market is sufciently large, it might not be wise to ignore this group by discontinuing price-related mass marketing altogether. Since many of the costs of operating a grocery store are xed, a store manager needs to create enough trafc to efciently utilize the stores capacity. Therefore, it might be wiser to cater to both loyal and promiscuous customers using multidimensional strategies, with specic elements appealing to different segments. Directions for further research The relationships between customer satisfaction and behavioral outcomes are probably much more complex than initially assumed. This study has looked only at a limited part of the puzzle of how customer satisfaction translates into behavioral outcomes. In what way consumer characteristics moderate the relationship between satisfaction and repurchase behavior is likely to be contingent on the product or service category and the buying and usage process for that category. Other consumer characteristics not included in this study, such as a propensity for variety seeking behavior or a recreational shopping orientation, could potentially be important in many retail industries. Further research on how the effects of satisfaction on behavior is moderated by different consumer characteristics would advance customer satisfaction research as well as be of great managerial signicance. An equally important issue is whether consumer characteristics moderate effects of the determinants of satisfaction. In the context of retailing, it is, for example, possible that improvements in store atmosphere might have a large effect on satisfaction for some, but not all, shoppers. A closer understanding of such mechanisms, coupled with good knowledge about the customer base of individual stores,

would have great managerial implications for how increases in customer satisfaction can be efciently obtained. The ndings also raise some issues concerning the use of loyalty-card schemes. Specically, the prevalence of multiple memberships, consumers reasons for acquiring cards, and the causal relationship between card membership and customer share need to be more thoroughly investigated.

Acknowledgements The author wishes to thank James Bettman, Robert East, Tom Meyvis, Tim Silk, Barton Weitz and the reviewers for helpful comments on various versions of this manuscript, and ICA Handlarnas AB, Sweden, for making the data available for research.

Appendix A All items were accompanied by 10-point scales. All shopping orientation items were accompanied by the labels completely disagreecompletely agree. Satisfaction (Cronbachs alpha: 0.84) How satised are you with your primary grocery store? (very dissatisedvery satised) How well does your primary grocery store match your expectations? (not at allcompletely) Imagine a perfect grocery store. How close to this ideal is your primary grocery store? (not at all closevery close) Economic shopping orientation (Cronbachs alpha: 0.76) I choose to shop at the grocery store that has the best deals at the time I compare what I get for my money in different stores You prot from comparing prices across stores I choose what store to go to on the basis of where I nd what I need for the best prices Personalizing shopping orientation (Cronbachs alpha: 0.78) I think personal contact with store personnel is important I think it is important to be recognized by the stores personnel I only shop in stores where I know the staff is friendly I think it is important that there are staff members to talk to in the store in which I shop Apathetic shopping orientation (Cronbachs alpha: 0.83) I want to spend as little effort as possible on grocery shopping I think grocery shopping is a necessary evil I enjoy shopping for groceries (reverse coded) I spend as little time as possible on grocery shopping

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