Do channel integration efforts pay-off in terms of online and offline customer loyalty?

Abstract

Purpose
The purpose of this paper is to investigate the effects of multichannel integration (MCI) on customer loyalty. The specific objectives are to provide an appropriate reliable measure of the construct, and to analyse the impact of MCI on offline and online loyalty, both directly and by mediation of customer satisfaction.

Design/methodology/approach
The paper focusses on the retail apparel sector of Spain and the UK. The authors applied a scale development process and tested the model with data of 761 multichannel apparel shoppers. The proposed theoretical model was estimated through EQS 6.1 and a mediation test was calculated.

Findings
The findings show, first, that the construct of channel integration has two dimensions: reciprocity, which refers to the possibility of crossing the channels while shopping, and coordination, which refers to the alignment of offline and online offers. Second, that MCI affects positively both offline and online loyalty both directly and through satisfaction, which partially mediates the relationship.

Research limitations/implications
Culture might play a moderating role in the relationships found that are not analysed.

Practical implications
The findings have implications for the managers of multichannel retail companies as they help to understand the benefits of channel integration in creating a loyal customer base both online and offline.

Originality/value
This paper contributes to the literature on multichannel retailing in two main ways: first, by developing a scale to measure MCI, and second, by demonstrating that MCI has strong effects on customer satisfaction and loyalty.

Full text


Dochannelintegrationeffortspayoffintermsofonlineandoffline
customerloyalty?
MartaFrasquetFacultyofEconomics,UniversitatdeValencia,Valencia,Spain
Maria‐JoséMiquelDepartmentofMarketingandMarketResearch,UniversitatdeValencia,
Valencia,Spain
Purpose:Theaimofthispaperistoinvestigatetheeffectsofmultichannelintegrationon
customerloyalty.Ourspecificobjectivesaretoprovideanappropriatereliable
measureoftheconstruct,andtoanalysetheimpactofmultichannelintegrationon
offlineandonlineloyalty,bothdirectlyandbymediationofcustomersatisfaction.
Design/methodology/approach:OurpaperfocusesontheretailapparelsectorofSpainand
theUnitedKingdom.Weappliedascaledevelopmentprocessandtestedourmodel
withdataof761multichannelapparelshoppers.Theproposedtheoreticalmodelwas
estimatedthroughEQS6.1andamediationtestwascalculated.
Findings:Ourfindingsshow,firstly,thattheconstructofchannelintegrationhastwo
dimensions:reciprocity,whichreferstothepossibilityofcrossingthechannelswhile
shopping,andcoordination,whichreferstothealignmentofofflineandonlineoffers;
second,thatmultichannelintegrationaffectspositivelybothofflineandonlineloyalty
bothdirectlyandthroughsatisfaction,whichpartiallymediatestherelationship.
Researchlimitations/implications:Culturemightplayamoderatingroleintherelationships
foundthatisnotanalysed.
Practicalimplications:Ourfindingshaveimplicationsforthemanagersofmultichannelretail
companiesastheyhelptounderstandthebenefitsofchannelintegrationincreatinga
loyalcustomerbasebothonlineandoffline.
Originality/value:Thispapercontributestotheliteratureonmultichannelretailingintwomain
ways;first,bydevelopingascaletomeasureMCI,andsecond,bydemonstratingthat
MCIhasstrongeffectsoncustomersatisfactionandloyalty.
Keywords:channelintegration,multichannelretailing,onlineloyalty,offlineloyalty
ArticleClassification:Researchpaper

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

1. Introduction
Inordertoremaincompetitiveandrelevantfortheircustomers,traditionalbrick‐and‐
mortarretailershaveaddedonlinechannels,becomingmultichannelretailcompaniesorbrick‐
and‐clicks(GallinoandMoreno,2014;Verhoefetal.,2015).Althoughpureonlineplayershave
beenfoundtoperformbetterthanbrick‐and‐clicks(Herhausenetal.,2015),multichannel
retailershaveacompetitiveadvantageoverpureplayersbasedonthepotentialsynergies
betweentheirofflineandonlinechannels.However,asBadrinarayananetal.(2012)and
Herhausenetal.(2015)report,brick‐and‐clicksarestrugglingtoachievethoseadvantages,and
thismaybeduetoalackofchannelintegration.Infact,IBM(2015),basedonasurveyandan
OmnichannelCapabilityIndexproducedfromit,concludesthatthereisroomforimprovement
inthemultichannelstrategiesofEuropeanretailers
Thelackofmultichannelintegration(MCIhereafter)canberelatedtotheevolutionofthe
industry.Intheearlystagesofe‐commerce,brick‐and‐mortarretailersjustaddedtheonline
channelasaseparatedivision,runinparalleltoratherthanintegratedwiththephysical
businessmodel.Infact,itwasdebatedwhetherchannelsshouldbeoperatedseparatelyornot
(Goersch,2002),asthecostsofdataintegrationareveryhigh(Neslinetal.,2006).Today,it
seemsclearthatmultichannelretailersshouldstriveforcoordinationandintegrationof
channels(GallinoandMoreno,2014;Herhausenetal.,2015)andthishasbecomethefocusof
retailmanagers.Recently,amovefrommultichanneltoomnichannelretailinghasbeen
reported(Brynjolfssonetal.,2013;Verhoefetal.,2015),andthissignifiesthefullintegration
ofchannelstoblurtheboundariesbetweenofflineandonlinechannels.Retailersareinvesting
considerableresourcesintointegratingonlineandofflinechannels,butthepayoffsarenotyet
clear.Itissufficientlyagreed,though,thattheshoppingexperienceisenhancedwhen
channelsareintegrated(Verhoefetal.,2015).Thus,understandinghowchannelintegration
affectskeycustomerresponsessuchascustomersatisfactionandloyaltyisofutmost
relevance.DespitethefactthatMCIhasbeenacknowledgedasastrategicpriorityforretailers,
itseffectsoncustomerreactionstowardsretailersandacrossdifferentchannelsremain
unclearandmoreresearchisneededinthisfield(Badrinarayananetal.,2014;Herhausenet
al.,2015).Addressingthisresearchgap,theaimofthispaperistobetterunderstandthe
conceptofMCIfromthecustomerperspective,anditsimplicationsforcustomerresponses.
Morespecifically,wewantto,firstly,provideareliablemeasureoftheconstructofperceived
MCI,andsecondly,analysetheimpactofMCIonsatisfactionwiththeretailerandonloyalty
towardsitsofflineandonlinechannels.
DevelopingavalidandreliablescalewithwhichtomeasuretheMCIconstruct(following
Churchill,1979)isamethodologicalcontributiontowardsclarifyingthedomainand
measurementoftheconstruct.Understandingtheimplicationsofchannelintegrationfor
customersatisfactionandloyaltywillprovideinterestingmanagerialandtheoretical
contributions.Wallaceetal.(2004)foundthatamultichannelstrategyenhancedtheportfolio
ofserviceoutputsprovidedtothecustomer,thusimprovingcustomersatisfactionand
ultimatelythecustomer’sretailerloyalty.Althoughprovidingarelevantbaseforourresearch,
Wallaceetal.(2004)didnotmeasureMCIbuthadmultichannelretailingastheresearch
context.Therearesomepapers(asdiscussedinSection2)thatexplicitlymeasureMCIandits
effectsbut,withtheexceptionofHerhausenetal.(2015),whoanalysedbehavioural
responsestowardstheonlineandofflinechannelsseparately,thepapersassessoverall
responsestowardstheretailer.Itisofrelevancetoattempttounderstandwhetherthe
benefitsofMCIaremoreevidentwhenitcomestoattitudesandbehaviourstowardsthe
onlineortheofflinechannel.IfMCIhadsimilarbenefitsforbothchannels,thiswouldsupport
theideathatthebenefitsofamultichannelstrategyweremultichannel(GallinoandMoreno,
2014),butiftheywereunequal,forexampleifofflineloyaltywerenotaffected,thiswould
meanthatMCIwasnotproducingpositiveeffectsacrossalltheretailerchannels.

Ourpaperfocusesontheapparelsector.Despiteinitialdoubtsaboutthesellingofclothes
online,thissectorisleadingthegrowthinonlinesalesasaresultofchannelintegrationand
brand‐buildingefforts(EuromonitorInternational,2014).Allinall,integrationeffortsshould
bemorerelevantforexperientialproducts,suchasapparel(Herhausenetal.,2015).
Moreover,itisparticularlyinterestingtostudyloyaltyintheapparelcontextasinthissector
loyaltyischallengedbecauseofthemultiplealternativesandhighpurchasefrequency
(MichaelidouandDibb,2009).
2. LiteratureReview
2.1.Multichannelintegration
MCIisdefinedasthemanagementofdiversechannelssoastooffershoppersaseamless
experienceacrossallofafirm’schannels(Goersch,2002;Chatterjee,2010).Similarly,Bendoly
etal.(2005)statethatMCIaimstoprovidemutualsupportandinterchangeabilityofchannels
forcustomers.MCIinvolvesinvestmentsattwolevels:atthemarketingleveltocoordinate
brandimageandmerchandise,andattheoperationsandinformationmanagementlevelto
integratelogisticsprocessesandcustomerdatabases(PentinaandHasty,2009).Coordinating
andintegratingthedistributionchannelscanprovidesynergiesthatincreasetheeffectiveness
ofeachchannelandcontributetoenhancingtheperformanceoftheretailer.WithGallinoand
Moreno(2014:1450)stating“theimpactofamultichannelstrategyisalsomultichannel”,this
impliesarethinkingofchannelevaluationandarealignmentofchannel‐specificincentives,as
thesalesinonechannelmaycomefrominvestmentsmadeinanother.Infact,theprofitability
ofMCImaynotbeseenimmediately,andHerhausenetal.(2015)warnofitsrisksand
potentialdownsides.Nevertheless,asBendolyetal.(2005)suggest,themostinteresting
benefitsofMCIcomeintheformofpsychologicaleffectsonconsumers.
ThereviewofthelimitedliteraturethatempiricallyanalysesMCIanditseffectsonfirms’
performanceissummarisedinTable1.Thereisquitealotofdiversityamongthepapersin
termsofthedomainoftheconceptofMCI,itsmeasurement,anditsdimensionality.Theonly
commonfeatureintheoperationalizationoftheconstructisthatitincludesthepossibilityfor
shopperstocrosschannelsduringtheshoppingprocess,e.g.tobuyonlineandcollectata
store,orreturnofflineproductsboughtonline.Somestudies,suchasChiuetal.(2011)or
GallinoandMoreno(2014),limittheconstructdomaintothisdimension,butmostconsider
additionaldimensionsofMCI.Forinstance,thepioneeringcontributionofBendolyetal.
(2005)foundthatMCIhastwodimensions:physicalintegration,whichreferstotheabove‐
mentionedpossibilityofshoppingacrosschannels,andinformationalintegration,whichrefers
totheonlineandofflinechannelsprovidinginformationtooneanother.Thissecondmeaning
iscapturedbythemajorityofthesubsequentstudies,butwithdifferentnames,suchas
reciprocity(LeeandKim,2010),storelocator,orinformationmanagement(PentinaandHasty,
2009).Additionally,otherstudiesincludetheconsistencydimension(e.g.PentinaandHasty,
2009;LeeandKim,2010).GiventhediversityofapproachestakentotheconceptofMCIinthe
fewpapersmeasuringtheconstruct,weconsidereditadvisabletodevelopanew,validand
reliablescalewithwhichtomeasuretheMCIconstruct,takinganintegrativeapproach
regardingtheaspectsanalysedinthepreviousstudies.
Table1.EmpiricalstudiesanalyzingtheeffectsofMCI
Author Method MCImeasure Results
Bendolyet
al.(2005)
Surveyofmultichannelcustomers
ofthreeretailersinapparel,
electronicsandmusic(n=1598).
Logisticregression.
Author‐designed
8‐itemscale.
MCIhastwofactors:informational
integrationandphysicalintegration.
MCIreducesthelikelihoodoffirm
switchinguponavailabilityfailure.
Pentinaand
Hasty
(2009)
Sitecontentanalysisof50
multichannelretailcompanies.
Countof46
interchannel
coordination
MCIimprovesonlinesales.


parametersin6
categories.
LeeandKim
(2010)
Surveyofmultichannelshoppers
ofanyretailer(n=706).
Factoranalyses(exploratoryand
confirmatory)andstructural
equationmodelling.
Author‐designed
22‐itemscale
basedonthe
dimensionsof
Robeyetal.
(2003).
MCIhasfivefactors:information
consistency,freedominchannel
selection,emailmarketing,channel
reciprocity,andcustomerservice.
Positiverelationshipofthree
dimensionsofMCIwithcustomer
loyalty.
Schramm‐
Kleinetal.
(2011)
Surveyofmultichannelshoppers
ofretailersfromavarietyof
sectors(n=981).
Structuralequationmodelling.
7‐itemformative
scale(adequacy‐
importance).
MCIhasapositiveeffectonloyalty,
mediatedbytrustandtheimageof
theretailer.
MCIcanenablecustomermigration
tomoreefficientretailchannels.
Chiuetal.
(2011)
Surveyofcustomerswith
experienceoffree‐riding(n=716)
whenshoppingforelectronics,
hardwareorsoftware.
Structuralequationmodelling.
3itemsreferring
tophysical
integration.
MCIhasnosignificanteffecton
channellock‐in,thusdoesnot
preventfree‐riding.
Gallinoand
Moreno
(2014)
Quasi‐experiment.
Databasesofonlineandoffline
channelsofahomeequipment
retailer(1yearofdata).
1item:presence
ornotof“buy
onlineandpick
upinstore”
functionality.
MCIreducesonlinesalesand
increasestrafficandsalesatoffline
stores.
Herhausen
etal.(2015)
Experimentaldesign(3studies)
manipulatingonline‐offline
integrationforappareland
accessoriesretailers.
5itemsreferring
tophysicaland
informational
integration.
MCIdirectlyincreasesperceived
servicequalityofonlinechanneland
indirectlyaffectsbehavioural
responsesforbothchannels.
EffectofMCIisstrongerforless
experiencedInternetshoppers.

IntheliteratureonMCI,wefindauthorswhoanalysetheeffectsondifferentbehavioural
responses,suchasperceivedservicequalityandperceivedrisk(Bendolyetal.,2005;
Herhausenetal.,2015),andimageandtrust(Schramm‐Kleinetal.,2011),andmostoften
differentmeasuresofshoppingintentionsandattitudes,suchascustomerretention(Bendoly
etal.,2005;Chiuetal.,2011),loyalty(LeeandKim,2010;Schramm‐Kleinetal.,2011),online
andofflinesearchandpurchaseintentions,andwillingnesstopay(Herhausenetal.,2015).On
thebasisofthosepapers,webuiltourresearchmodelwiththeaimofinvestigatingtheeffect
ofMCIonsatisfactionandloyalty,aswediscussinthefollowingsections.

2.2.Impactofchannelintegrationonsatisfaction
Retailers’effortstointegrateofflineandonlinechannelsareexpectedtoincreasecustomer
satisfactionwithanenhancedprovisionofserviceoutputs.Wewanttoextendthefindingsof
Wallaceetal.(2004)thatamultichannelretailstrategyincreasescustomersatisfaction,by
analysingwhethertheintegrationofchannelsisthecauseofcustomersatisfaction.
Satisfactionisdefinedasasummaryaffectiveresponsetotheshoppingexperience(Oliver,
1980).Whenaretailersucceedsinintegratingitschannelsbyprovidingincreasedlevelsof
service,e.g.theopportunitytocollectatthestoreitemspurchasedonline,itisexpectedthat
customersatisfactionwillincrease.Wefindempiricalsupportforthiseffectinthehigh‐
technologybusiness‐to‐business(B2B)servicesector(Madalenoetal.,2007),andintheretail
bankingsector(SeckandPhilipe,2011),butnotinthephysicalgoodsretailsector.Unlike
services,purchasinggoodsimpliesdeliveriesandreturns,whicharestronglyaffectedbythe
degreeofchannelintegration.Withsomeretailershavingmademoreprogressinchannel
integrationthanothers,wecouldassumethat,whenaconsumerdealswitharetailerthat

offersmorepossibilitiesforshoppingseamlesslyacrosschannels,he/shewillbemore
satisfied.Omnichannelmanagementhastheobjectiveofoptimizingtheperformanceover
channelsandthecustomerexperienceacrosschannels(Verhoefetal.,2015),allowingthe
shoppertointeractsimultaneouslywithofflineandonlinechannelsatanystageofthe
purchaseprocess.Thus,weexpectthattheperceptionofMCIwillimpactoverallshopper
satisfactionwiththeretailer.
H1:Multichannelintegrationispositivelyrelatedtooverallcustomersatisfactionwiththe
retailer.

2.3.Impactofchannelintegrationonofflineandonlineloyalty
Whenaretailersucceedsinintegratingitsonlineandofflinechannelsandtheshopping
experienceisthusenhanced,customersarelikelytodeveloppositiveattitudestowardsthe
retailerandarelikelynottobewillingtoshopelsewhere.FocusingonthestudiesfromTable1
thatanalysecustomer‐levelresponsestoMCI,wenotethatBendolyetal.(2005)found
customerslesslikelytoswitchtoacompetitorwhenchannelswereintegrated,andthatLee
andKim(2010)provedtheretobeapositivedirecteffectofchannelintegrationonoverall
loyalty.Schramm‐Kleinetal.(2011)includedloyaltyasanindirectconsequenceofMCIand
foundperceivedchannelintegrationtohaveapositiveimpactoncustomerloyaltythrough
positiveeffectsonimageandtrust.
Herhausenetal.(2015)assessedtheeffectofonline‐offlinechannelintegrationon
customerevaluationsofthechannels(i.e.perceivedqualityandrisk),andtheeffectofthese
evaluationsonoverall,onlineandofflineshoppingintentions.Theyexpectedthatonline‐
offlinechannelintegrationwouldaffecttheonlinechannelpositivelyandthealternative,i.e.
offline,channelnegatively;thiswouldhaveimpliedthattheofflinechannelwascannibalized
bytheincreasedperformanceoftheonlinechannel.However,theirresultsshowedthat
integrationdidnotaffecttheofflinechannelnegatively.Thiscouldbeexplainedbycustomers
extendingtheirpositiveevaluationsoftheonlinechanneltotheofflinechannelbyvirtueof
thehaloeffect,implyingthattherearecross‐channelsynergies(Faragetal.,2007;Kwonand
Lennon,2009)andthattheofflinechannelbenefitsfromtheonline‐offlinechannel
integration.AsthemeasureofMCIisbidirectional,thatis,itreferstobothonline‐offlineand
offline‐onlinechannelintegration,webelievethatMCIwillaffectbothonlineandoffline
loyaltypositively,astheeffortstomakethetwochannelsinterchangeablewillbuildpositive
attitudesandintentionstowardstheretailer’schannels.MCImeans,forexample,that,when
shoppingatastore,acustomercanorderatakioskanitemthatisout‐of‐stockatthelocal
store,andthiswillcontributepositivelytowardsofflineloyalty.MCIalsomeansthat,when
purchasingonline,thecustomercanchoosetohavetheproductdeliveredtotheirhomeorto
astore,andthiswillcontributetoonlineloyalty.TherearefeaturesofMCIthatcannotbe
categorizedasonline‐offlineintegrationoroffline‐onlineintegration,butarereciprocalor
refertotheconsistencybetweenchannels.Additionally,thereisthehaloeffectthatmeans
thateveryaspectofMCIcouldcontributetowardsbothonlineandofflineloyalty.Thus,
H2:Multichannelintegrationispositivelyrelatedtocustomerloyaltytowardstheoffline
channeloftheretailer.
H3:Multichannelintegrationispositivelyrelatedtocustomerloyaltytowardstheonline
channeloftheretailer.

2.4.Effectofsatisfactiononofflineandonlineloyalty

Bydevelopingafullyintegratedmultichannelstrategy,theretaileraimstobettersatisfy
customerneeds,andbecausesatisfactionistheseedofloyalty,enhancingsatisfactioniskeyto
retainingcustomers(MittalandKamakura,2001).Loyaltyisakeyrelationaloutcomein
business‐to‐consumerrelationships.DickandBasu(1994:99)defineloyaltyas“thestrengthof
therelationshipbetweenanindividual’srelativeattitudeandrepeatpatronage”,reflectingthe
attitudinalandbehaviouralcomponentsoftheconstruct.Whenconsumersareloyaltoa
retailer,theyrevisittheretailer,repurchaseproductsandrecommendtheproduct/retailerto
relativesorfriends(Zeithamletal.,1996).
Thepositiverelationshipbetweensatisfactionandloyaltyhasoftenbeenconfirmedinthe
retailingliterature,intheonlinecontext(AndersonandSrinivasan,2003),andspecificallyin
themultichannelsettingbyWallaceetal.(2004),andLeeandKim(2010).Whena
multichannelshopperissatisfiedwithshoppingataparticularretailer,he/shewillbemore
likelytodeveloployaltybehaviourstowardstheofflinechanneloftheretailerbecausethe
offlineshoppingexperienceisimprovedbytheintegrationofchannels.Weexpectasimilar
connectionregardingtheonlinechannel.Switchingcostsareverylowonlineandthereis
fiercecompetition;thiscouldleadtoconsumersshoppingelsewheredespitebeingsatisfied
witharetailer’sonlinechannel(Wallaceetal.,2004).However,webelievethat,whena
retailerisabletosatisfyacustomer’sneedswithashoppingexperienceonlinethatallows
interactionwiththeofflinenetwork,theshopperwilltendtobecomeloyaltotheonline
channel.Thus,
H4:Overallcustomersatisfactionwiththeretailerispositivelyrelatedtoloyaltytoits
offlinechannel.
H5:Overallcustomersatisfactionwiththeretailerispositivelyrelatedtoloyaltytoits
onlinechannel.

2.5.Effectofofflineloyaltyononlineloyalty
Inmultichannelretailing,themostcommonpatternisstillforthenewchannelbeingadded
tobetheonlineone.Fornarietal.(2016)findthat,whenaretaileraddsanewchannel,inthe
longrun,migrationturnsintosynergyanddifferentchannelsinteractandreinforceeach
other.Researchontheinteractioneffectsbetweenchannelsclaimstheexistenceofahalo
effect,wherebyofflinebehavioursbuildonlinebehaviours;forexample,offlineshopping
frequencymayaffectonlinepurchasing(Faragetal.,2007),offlinepatronageandonline
shoppingintentions(JonesandKim,2010),orofflineattitudemayaffectonlineattitude
(Badrinarayananetal.,2012). Thus,weexpectthatcustomerstransferexistingattitudesand
beliefsbuiltfromtheofflinechanneltotheonlinechannel,andhypothesize,
H6:Loyaltytowardstheofflinechannelofthemultichannelretailerispositivelyrelatedto
loyaltytowardsitsonlinechannel.
Figure1displaysourconceptualmodelwiththehypothesizedrelationshipsbetweenMCI,
customersatisfactionandloyaltyinamultichannelcontext.Ourmodelreflectsthethree
constitutiveelements–attributeperceptions,satisfaction,andloyalty–oftheshopping
processoftenreportedintheliterature(Finnetal.,2009;Ha,2006).
Figure1.Conceptualmodel



3. Methodology
3.1.Scaleitems’development
AsourliteraturereviewrevealednoconsensusonthemeasurementofMCI,wedeveloped
ascalefollowingthescaledevelopmentprinciplesofChurchill(1979)andRossiter(2002).
Basedontheliteraturereview,weproducedaninitiallistof78itemsthathadpreviouslybeen
usedbydifferentauthorsorthatwewordedbasedonthedimensionsoftheconcept
suggestedinsomeconceptualpapers.Ourapproachtothemeasurementoftheconceptand
thesubsequentscaledevelopmentprocessassumesthemeasureofMCIisreflective,basedon
Coltman’setal.(2008)framework.Thuswegeneratedalargesetofitemsthatsharedthe
domainoftheconstruct.Aftereliminatingduplicities,thenumberofitemscamedownto32.
Thenweheldeightin‐depthinterviewswithmultichannelshoppers.Asaresultofthose
interviews,alistofthemesincludedintheconceptofshoppingacrosschannelswasproduced
andcomparedtotheinitiallistofitemsfromtheliteraturetodeterminewhetherthedomain
oftheconceptfortoday’sshopperswasfullycapturedbythelistofitems.Twoitemswere
addedtoourlist,making34items.Next,thescalewaspurifiedbyapanelofexperts,
accordingtotheproceduresuggestedbyZaichkowsky(1985).Eightmarketingscholars
participatedinthisprocess;first,theywerepresentedwithadefinitionofMCIthatwe
developedforthepurposesoftheresearch:theusebytheretailerofofflineandonline
channelsinsuchawaythatthecustomerfeelshe/sheisinteractingwiththesamecompany
andisabletocrossfromonechanneltotheotherduringtheshoppingprocess;then,theyhad
toassess,from1(notatall)to3(completely),theextenttowhicheachitemwas
representativeoftheconstruct.Foranitemtoberetainedinthescaleithadtoreceivea3
fromatleasttwothirdsofthepanelmembers,andnoscoresof1.Thefinalscalehad18items.
3.2.Datacollection
InordertovalidatethenewMCIscaleandtotestourproposedmodel,aquestionnairewas
developed,whichincludeditemslinkedtotheconstructstobemeasured,usingfive‐point
scales.
FormeasuringMCI,itwasdeemedappropriatetouseanadequacy‐importancemodel
(Schramm‐Kleinetal.,2011)duetothedomainoftheconstruct.Inthecurrentmultichannel
setting,multichannelcustomershavehigherexpectationsduetotheirextensivepast
experienceofconvergedchannels(Shankaretal.,2003;WingandMahajan,2002)and
retailersaredevelopingmultichannelstrategiestorespondtothoseexpectations(Wallaceet
al.,2004).Itisthusrelevanttoconsidernotonlyhowcustomersperceivedifferentaspects
relatedtoMCI,butalsohowrelevantthoseaspectsareforthem,asthiswillsuggesthowthe
retailerisdoingaccordingtothecustomer’srequirements.Accordingly,therespondentsfirst
Multichannel
integration
Offlineloyalty
Onlineloyalty
Overall
satisfaction
H1
H3
H2
H6
H4
H5

assessedtheimportanceofeachchannelintegrationitem;then,theyhadtochoosetheir
most‐visitedretailerfromanexhaustivelistofmultichannelretailersoperatingintheir
country.Alltheretailersconsideredwereoriginallyofflineretailersthathadbecome
multichannelretailersbyaddingthetransactionalonlinechannel,andallofthemweresingle‐
brandretailers.Withthechosenretailerinmind,therespondentevaluateditoneachitem;
thisallowedustocreateaweightedvariablethatwastheresultofmultiplyingonevariableby
theotheranddividingbyfive.Satisfactionandloyaltymeasureswerealsoreferredtothe
respondent’smost‐visitedretailer.Overallsatisfactionwasmeasuredwithathree‐itemLikert
scale:(1)Consideringallyourvisits(bothofflineandonline)toRetailerX,howsatisfiedare
you?(2)ConsideringonlyyourvisitstoRetailerX’sonlinestore,howsatisfiedareyou?(3)
ConsideringonlyyourvisitstoRetailerX’sphysicalstores,howsatisfiedareyou?.Offline
loyaltyandonlineloyaltyweremeasuredthroughtwoscalesadaptedfromthatofYangand
Peterson(2004),whichwasdeemedappropriateasithadbeenappliedtothemultichannel
retailcontextandincludedelectronicword‐of‐mouth:Howlikelywouldyoubeto…(1)say
positivethingsaboutRetailerX’sonline/offlineshoptootherpeople,(2)recommendRetailer
X’sonline/offlineshoptothosewhoseekyouradvice,(3)encourageyourfriendsandrelatives
touseRetailerX’sonline/offlineshop,(4)visitRetailerX’sonline/offlineshopmoreoften,and
(5)postpositivemessagesaboutRetailerX’sonline/offlineshoponsomeInternetmessage
board?Wealsoincludeddemographicvariables,suchasgenderandage.
Datawerecollectedbymeansofasurveytargetedtothepopulationofmultichannelshoppers
intheapparelproductcategory.Thequestionnairewassentto2027membersoftwoInternet
panels,oneintheUKandtheotherinSpain,and1598responded.Afterfilteringoutthose
respondentswhodidnotsatisfytheconditionsthatdefineourpopulationandthosewhohad
notshoppedatanyofthelistedretailers,applyingthegenderandagequotas,andeliminating
incompletequestionnaires,ourfinalsamplecomprised761individuals,380inSpain(49.9%)
and381intheUK(50.1%).Genderandagequotasweresettoreplicatethesocio‐
demographicprofileofonlineshopperspresentedin“PwCGlobalOnlineShoppingHabits”
(PwC,2014).
3.3.Sampleprofileandretailers’representativeness
Thesocio‐demographicprofileofmultichannelshoppersintheapparelcategorysuggested
womenhadtobeoverrepresentedinthesample.Thus,ourfinalsamplecomprised66.6%
womenagainst33.4%men.Allageswereincludedinthesample.However,younger
consumersareslightlyoverrepresentedastheyshoponlinemoreoftenthantheotherage
groups(inoursample:18‐24years,18.7%;25‐34years,30.7%;35‐44years,25.4%;45‐54
years,16.7%;olderthan54,8.5%).
Asmentionedbefore,ourdataareretailer‐specificastherespondenthadtoanswerthe
questionnairewithaparticularretailerinmind.Thethreeretailersthataccountedformostof
theanswersinSpainwerechainsoftheInditexgroup(Zara,27.9%;Springfield,12.9%;
Pull&Bear,11.8%),whereasintheUKtwoBritishretailers(Next,23.1%;M&S,21%)werethe
mostpopularchoices,followedbyH&M(14.4%).

4. DataAnalysisandResults
4.1.MCIdimensions
ToidentifythedimensionalityoftheMCIscale,aprincipalcomponentanalysiswithOblimin
rotationandfactorextractionaccordingtotheMineigencriterionbeingequalto1was
employed(Kaiser‐Meyer‐Olkintest‐KMO:.951;Barlett:5398.48;d.f.:153;sig.:.000;Matrix
corr.determ.:9.79e‐7).Weighteditems(importanceofeachchannelintegrationitemby

evaluationofeachitem)wereusedasinputsintotheanalysis.Thetwofactorsidentified
accountforacumulative63.41%ofthevariance,andtheywerelabelledasReciprocityand
Coordination(seeTable2).Thetwodimensionsexplainquitesimilaramountsofvariance.

Table2.ExploratoryfactoranalysisoftheMCIscale
Factor1
Reciprocity
Factor2
Coordination
Itiseasytocollectata(Retailer)storegoodspurchasedovertheInternet .65 
ItisconvenienttoreturngoodsIhaveboughtonlinetoanyof(Retailer’s)
physicalstores
.68 
(Retailer)enablesmetoplaceacourtesyholdonproductsinalocalstore .75 
(Retailer’s)physicalstoreallowsmetodoanorderonline .71 
At(Retailer’s)websiteitiseasytogetinformationonorderanddeliverystatus
(alsoforproductsorderedoffline)
.71 
At(Retailer’s)websiteitiseasytogetreal‐timeinformationonproduct
availabilityinalocalstore
.76 
Itiseasytosearchforstorelocationsandopeninghoursat(Retailer’s)website .68 
(Retailer)offersonlineaccessories,productsupport,oradditionalproducttypes .69 
(Retailer’s)onlinecustomerserviceisalmostthesameasIcangetfromthe
store
.65 
Iobserveaclearandvisibleassociationofbrandnames(includinglogosand
slogans)acrosschannels
.57 
(Retailer)sellsonlinethesameproductsasinthephysicalstores  .69
(Retailer)offersthesamepricesonlineasinthephysicalstores  .71
(Retailer)offersthesamepromotionsonlineasinthephysicalstores  .82
On(Retailer’s)websiteIcangetinformationaboutpricesinalocalstore  .77
On(Retailer’s)websiteIcangetinformationaboutpromotionsinalocalstore  .72
On(Retailer’s)websiteIcanusemyloyaltycardorredeemcouponsobtained
offline
 .63
On(Retailer’s)websiteIcanobtainonlinecouponstobeusedoffline  .64
(Retailer)providesconsistentstoreimagesbetweentheonlinestoreandthe
physicalstore
 .57
%variance 33.28% 30.13%

InTable2wecancheckthatthetwodimensionsexplainquitesimilaramountsofvariance.
4.2.Psychometricpropertiesofthescales
Inordertoassessthevalidityandreliabilityofthescalesusedinthestudy,andmore
preciselytotestthefactorstructureoftheMCIconstructmorerigorously,aconfirmatory
factoranalysiswasconducted,usingEQS6.1.MCIwasintroducedintotheanalysisasa
second‐orderreflectiveconstruct.
RegardingtheMCImeasure,Table3showssomeofthecommonlyacceptedindicatorsof
convergentvalidityandreliability,providingadequatevalues:theCronbach'salpha
coefficientsexceedthethresholdof.7(NunnallyandBernstein,1994),theLagrangemultiplier
testwasreviewed,anditwasalsoverifiedthatallstandardizedfactorloadsfortheobserved
variablesweresignificantandthatthemeanoftheloadsexceeded.7(Hairetal.,2005).
Additionally,thevaluesofthecompositereliabilityfortheReciprocityandCoordination
dimensionswerecalculated,being.93and.92respectively,valueswhichexceededthecritical
thresholdof.7;thosefortheaveragevarianceextracted(AVE)were.58forReciprocityand.59
forCoordination,higherthan.5(FornellandLarcker,1981).TheCronbach’salphavalueforthe
entireMCIscalewas.96.
Table3alsoshowsadequatevaluesregardingindicatorsofconvergentvalidity(factorial
loads>.6andsignificant)andreliability(Cronbach’salpha>.7;AVE>.5)fortherestofthe

measures.Ithastobementionedthatnoitemofanyscalewasdropped,becausetheyall
reachedthecommonlyacceptedvaluesofthedifferentcriteria.
Table3.Reliabilityandconvergentvalidityofthemeasures
FactorItem
ConvergentvalidityReliability
Stand.loads(t)Mean
loadingCronbachαCRAVE
MULTICHANNEL
INTEGRATION
(MCI)
(reflective,
2ndorder)
Stand.
loads(t)
RECIPROCITY
(REC)
rec1 .60(9.05*)
.76 .93
.95 .90
rec2 .65(9.80*)
.99
(9.88*)
rec3 .73(9.32*)
rec4 .78(7.73*)
rec5 .80(9.98*)
rec6 .83(10.26*)
rec7 .78(10.16*)
rec8 .81(10.11*)
rec9 .84(10.00*)
rec10 .73(10.53*)
.91
(7.61*)
COORDINATION
(COO)
coo1 .77(9.08*)
.78 .91
coo2 .74(8.96*)
coo3 .74(9.90*)
coo4 .81(9.58*)
coo5 .81(9.64*)
coo6 .77(9.55*)
coo7 .76(9.99*)
coo8 .75(9.00*)
OVERALLSATISFACTION(SAT)
sat1 .84(14.44*)
.84 .86 .87 .70sat2 .84(17.56*)
sat3 .83(14.91*)
OFFLINELOYALTY
(OFF)
off1 .91(19.96*)
.86 .89 .93 .74
off2 .98(19.21*)
off3 .88(19.11*)
off4 .79(17.33*)
off5 .72(16.97*)
ONLINELOYALTY
(ONL)
onl1 .89(17.55*)
.82 .89 .91 .68
onl2 .86(16.44*)
onl3 .87(19.76*)
onl4 .78(18.13*)
onl5 .71(19.96*)
S‐Bχ2(424d.f.)=1017.18(p<.00);BBNFI=.87;BBNNFI=.91;CFI=.92;IFI=.92;MFI=.47RMSEA=.059
*=p<.01
Note:CR=compositereliability;AVE=averagevarianceextracted

Toanalysethediscriminantvalidity,twoprocedureswereapplied:(a)atestthatthe
confidenceintervalfortheestimationofthecorrelationbetweeneachpairoffactorsdidnot
includetheunit(AndersonandGerbing,1988)and(b)atestthattheAVE,foreachfactor,was
greaterthanthesquareofthecorrelationbetweeneachpairoffactors(FornellandLarcker,
1981).AsTable4reports,therewasanissuebetweenthesatisfactionandloyaltyscales(both
offlineandonline),andbetweentheonlineandofflineloyaltyscales.Therefore,athird
criterionwasused:thechi‐squaredifferencetest.Accordingly,thechi‐squareofthe
measurementmodelwasagainestimated,buteachtime,foreachpairoffactorsshowing
discriminantvalidityproblems,thecovariancewasfixedto1(chi‐squarecovariancemodelfor
SAT‐OFFequalto1=1715.88with425d.f.;forSAT‐ONL=1629.57with425d.f.;forOFF‐ONL=
1866.38with425d.f.);thosevalueswerecomparedwiththechi‐squaremeasurementmodel
(1595.06with424d.f.),andwecheckedthat,forthethreesituations,thechi‐square
differencewasoverthecriticalvalue(10.82;p<.001for1d.f.)(chi‐squaredifference=120.80,

34.51,271.32respectivelywithd.f.differenceforthethreesituationsequalto1).Considering
alltheindicatorsasawhole,wecanconfirmthatthemeasurementinstrumentshad
discriminantvalidity.
Table4.Discriminantvalidity
MCI SAT OFF ONL
MCI .90 .49 .46 .52
SAT [.78;.64] .70 .74 .87
OFF [.74;.61] [.90;.82].74.71
ONL [.78;.66] [.96;.91] [.88;.80].68
Underthediagonal:confidenceintervalforthecorrelationbetweeneachpairoffactors
Diagonal:averagevarianceextracted
Abovethediagonal:squareofthecorrelationbetweeneachpairoffactors


4.3. Hypothesistestingandmediationanalysis
Theproposedtheoreticalmodel(Figure1)wasestimatedusingarobustmethodologyin
EQS6.1.MCIwasintroducedasasecond‐orderreflectiveconstruct.Theresultsareshownin
Table5,andsupportfiveofthesixhypotheses:thereisasignificantandpositiverelationship
betweenMCIandoverallsatisfaction(H1)andbetweenMCIandloyalty(offline–H2and
online–H3).TheresultssuggestthattheinfluenceofMCIonsatisfactionisquitestrong,and
thatonloyaltyweaker,withasimilarinfluenceinbothcontexts,offlineandonline.Moreover,
overallsatisfactionexertsasignificant,strongandpositiveinfluenceonofflineandonline
loyalty(H4andH5respectively).Finally,theresultsdonotsupportofflineloyaltyhavingan
influenceononlineloyalty(H6).
Table5.Hypothesistesting
Hypotheses Structuralrelationship β tvalue Contrast
H1 MultichannelIntegrationOverallSatisfaction .70 12.75** Accepted
H2 MultichannelIntegrationOfflineLoyalty .14 2.75** Accepted
H3 MultichannelIntegrationOnlineLoyalty .11 2.46* Accepted
H4 OverallSatisfactionOfflineLoyalty .76 12.63** Accepted
H5 OverallSatisfactionOnlineLoyalty .75 6.18** Accepted
H6 OfflineLoyaltyOnlineLoyalty .13 1.10ns Rejected
S‐Bχ2(426d.f.)=1595.09(p<.000);BBNFI=.865;BBNNFI=.907;CFI=.915;IFI=.915;MFI=.462;RMSEA=.060
*=p<.05;**=p<.01;nsnonsignificant


ThedatainTable5showhowrelevantistheperceptionoftheretailer’sMCIonoverall
customersatisfaction,andhowthatsatisfactionstronglyinfluencesloyalty.Ontheotherhand,
althoughMCIexertsasignificantinfluenceonloyalty,bothofflineandonline,thatinfluenceis
notverystrong.TakingintoconsiderationZengetal.’s(2009)suggestionabouttheneedto
considerbothdirectandindirectimpactsofsatisfactiondeterminantsonbehavioural
intentions,weanalysedthemediationeffectofoverallsatisfactionontherelationship
betweenMCIandloyalty,forbothofflineandonlinechannels.TheresultsareshowninTable
6.WetestedthedirecteffectofMCIon(offlineandonline)loyalty,reportingthestandardized
βofthedirectrelationshipandtheR2ofthedependentvariable;then,thedirecteffectmodel
wascomparedtoitsrespectivesimplemediationmodel,providingthesizeeffect(f2)oftheR2
variation(Cohen,1988).Thedataconfirmapartialmediationeffectinbothsituations,offline
andonlineloyalty:theeffectofMCIon(offlineandonline)loyaltyispartiallymediatedby

overallsatisfaction;thismeansthat,althoughMCIhasanindirectinfluenceonloyaltythrough
overallsatisfaction,thereisalsoasignificantdirectinfluenceofMCIonofflineandonline
loyalty.Theeffectismoderateinthecaseofthemediationeffectofoverallsatisfactionon
offlineloyalty(asthef2valueishigherthan.15butlowerthan.35),but,forthemediation
effectofoverallsatisfactionononlineloyalty,theeffectsizeisstrong(asthef2valueishigher
than.35).Allinall,theroleofMCIononlineandofflinecustomerloyaltyisveryrelevant,asit
notonlyexertsadirectinfluenceonit,butalsoanindirectinfluencethroughoverallcustomer
satisfaction,whichisevenmorerelevantintheonlinecontext.

Table6.Mediationtest
DirectModel MediationModel
βR
2Β βind R2f2 Mediation
MCIOfflineLoyalty .68** .47 .14** .35** .70 .33 Partial
MCIOverallSatisfaction   .70**    
OverallSatisfactionOfflineLoyalty   .77**    
MCIOnlineLoyalty .71** .51 .11* .54** .88 .42 Partial
MCIOverallSatisfaction   .70**    
OverallSatisfactionOnlineLoyalty   .86**    
*=p<.05;**=p<.01
5. Conclusions
Thispapercontributestotheliteratureonmultichannelretailingintwomainways:first,by
developingascaletomeasureMCI,andsecond,bydemonstratingthatMCIhasstrongeffects
oncustomersatisfactionandloyalty.Veryfewstudieshavefocusedoncustomer‐perceived
MCI,andthescalesemployedwerenotbasedonathoroughevaluationofthedomainofthe
construct,nordidtheyfullycapturethemeaningofMCIinthepresentmultichannelcontext.
Itisalsorelevanttohighlightthatthepresentstudyusesanadequacy‐importancemodel
(Schramm‐Kleinetal.,2011),consideringnotonlytowhatextentthecustomerperceivesthe
retailer’sMCIbutalsohowrelevantitisforhim/her.Furthermore,theseparateeffectsofMCI
onofflineandonlineloyaltyhaveseldombeeninvestigated,exceptbyHerhausenetal.(2015),
whoexplaintheindirectinfluenceofonline‐offlinechannelintegrationonbehavioural
intentionsbothofflineandonline.
OurresultsshowthatMCIisaconstructwithtwodimensions:reciprocity,whichrefersto
thepossibilityofcrossingfromtheonlinetotheofflinechannelandviceversa,and
coordination,whichreferstothealignmentofonlineandofflineoffers.Thediscoveryofthese
twodimensionshelpstoconsolidatetheconceptofMCIasbidimensional.Thus,ourconcept
ofMCIisnotrestrictedtothephysicalintegrationofchannelsasinthepapersofChiuetal.
(2011)andGallinoandMoreno(2014),butitincorporateschannelcoordination,which
capturestheideasofinformationintegration/coordinationorconsistency,asinthepapersof
Bendolyetal.(2005),PentinaandHasty(2009),andLeeandKim(2010).Althoughboth
dimensionsarerelevant,integrationhasslightlymoreweightonperceivedMCI.Ourresults
alsorevealthat,whenchannelsshowahigherdegreeofintegrationaccordingtocustomer
expectations,customersatisfactionincreases.Theserelationshipsextendthefindingsof
Wallaceetal.(2004),whofoundthatamultichannelstrategywaslinkedtosatisfaction,by
suggestingthatitisspecificallychannelintegrationandnotjusttheadditionoftheonline
channelthatdrivescustomersatisfaction.
Regardingloyalty,ourdatasupporttheideathatthisbehaviouralconstructisstrongly
impactedbycustomersatisfaction,asevidencedbyconsiderableearlierresearch,butitisalso
positivelyinfluencedbyMCI.ThisdirecteffectofMCIonloyaltyconfirmsthefindingsof
Bendolyetal.(2005)andHerhausenetal.(2015).Anew,relevantcontributionofourresearch

isthefindingthatMCIhassimilarimpactsononlineloyaltyandofflineloyalty.Thissuggests
thattheadditionoftheonlinechanneltotheexistingstorenetworkdoesnotcannibalizethe
offlinechannel;onthecontrary,wheneffortsaremadetointegratebothchannels,thishelps
buildloyaltytowardstheofflinechannelaswellastheonline.Anotherrelevantfindingisthat
overallsatisfactionmediatestherelationshipsbetweenMCI,andofflineandonlineloyalty.
Althoughatfirstsightthedatamaysuggestthatoverallsatisfactioninfluencescustomer
offlineandonlineloyaltymuchmorethanMCI,ourmediationanalysisrevealsthatMCIaffects
loyaltythroughoverallsatisfactionaswell(thus,anindirecteffectisevident).Thepercentage
oftheexplainedvarianceincustomerloyaltywhenconsideringthemediationeffectoverall
satisfactionhasbetweenMCIandofflineandonlineloyalty,issignificantlygreaterthanthat
explainedwhenonlythedirecteffectisconsidered.Thisreinforcementofcustomerloyalty
throughanindirecteffectofMCIisstrongerfortheonlinechannel;thisconsequenceis
relevantifweconsiderthat,astheliteraturesuggests,gettingloyalcustomersismoredifficult
intheonlinecontextthanintheofflineone(Neslinetal.,2006).Accordingly,retailerstrategies
developedtoimproveperceivedMCIwillhaveagreaterbenefitfortheonlinechannel,which
isusuallytheweakestchannelintermsofnumberofcustomersforthosebrick‐and‐mortar
retailersthathaveaddedtheonlinechannelsoastobecomebrick‐and‐clicks.
Thefindingsdiscussedabovesuggesttheimportanceformanagersofmultichannelcompanies
offullyintegratingtheirchannelssoastoprovideshopperswithaseamlessexperienceacross
channels,andchannelinterchangeability(Chatterjee,2010;Verhoefetal.,2015).Insodoing,
theretailernotonlyshouldcoordinatetheassortmentofproducts,promotions,and
transmissionofthesamebrandimage,butalsoshouldspeciallyprovideincreased
opportunitiestocrosschannelsduringtheshoppingprocess(i.e.byallowingthecustomerto
returntoalocalstoreanitemboughtonline).Thiswillbenefitcustomersatisfactionand
loyaltytotheretailer,bothonlineandoffline.Althoughitcouldseemthatoverallsatisfaction
isthemainkeyvariableforenhancingcustomerloyaltyinwhateverthecontext,duetoits
stronginfluenceonloyaltycomparedtothatofMCI,thatisnotcompletelytrue.Retailersjust
developingstrategiestoenhanceoverallsatisfactioninordertoincreasecustomerloyalty
(bothonlineandonline)willbeunderestimatingthepowerofMCIoncustomerloyalty.This
meansthatdevelopingstrategiestomeetcustomerexpectationsregardingMCI,togetherwith
strategiesaimedatincreasingoverallcustomersatisfaction,willgeneratesynergiesin
increasingcustomerloyalty,mainlyintheonlinecontext,asthemediationeffecthasprovedto
bestrong(versusmoderate)whenconsideringonlineloyalty(versusofflineloyalty).
Accordingly,improvingonlineandofflinefactorsdeterminingcustomersatisfaction(suchas
personalcustomerserviceorestablishmentofatmosphereintheofflinecontext,sitedesignor
financialsecurityintheonlineone,orproductofferingsandproductinformationineither
channel),togetherwiththeintegrationandcoordinationofbothchannels,willenhance
altogethercustomerloyaltymorebroadly.
ItisworthtorememberthattheseresultscomefromtheconsiderationofMCIfromthe
customerperspective,whichmeansthattheretailernotonlyhastoconsiderhowcustomers
perceiveitseffortsregardingMCI;itisalsonecessarytoidentifywhichaspectsoftheMCI
domainaremorerelevanttocustomers,inorderforretailers’effortstobemoretargeted,and
toreinforceandpromotethoseperceived‐relevantissues,asthatwillhavestronger
consequencesintermsofcustomersatisfactionandloyalty.
Ourpaperhascertainlimitationscomingfromtheresearchdesign:differentshopping
motivationsoftherespondentsmightintroducesomebias,andinthisregardmotivations
couldbeintroducedintothemodelsothattheireffectsonMCIperceptions,customer
satisfactionandloyaltymightbeanalysed.Moreover,culturemightplayamoderatingrolein
therelationshipsfound,andthatisnotanalysedhere;amulti‐groupanalysiscouldbeapplied
toidentifythisinfluence.Futureresearchcouldalsopayattentiontotheonlineretailersthat

aremovingofflinebyopeningbrick‐and‐mortarstoresorcollectionpoints,andanalyse
whethertheeffectswehaveobservedalsoholdinthiscontext.Additionally,itcouldbe
interestingtotestwhetherthoseresultsareconsistentacrossretailersofdifferentsizes,or
shoppersofdifferentagesandspendingbehaviours.

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