Impact of Social Media in Coffee Retail Business

Full text

Journal of Business and Economic Development
2020; 5(1): 44-55
http://www.sciencepublishinggroup.com/j/jbed
doi: 10.11648/j.jbed.20200501.16
ISSN: 2637-3866 (Print); ISSN: 2637-3874 (Online)
Impact of Social Media in Coffee Retail Business
Ersoy Ayse Begum
1, *
, Keceli Yavuz
2
, Kwiatek Piotr
3
1
Department of Marketing, Shannon School of Business, Cape Breton University, Sydney Nova Scotia, Canada
2
College of Business, Alfred University, New York, USA
3
Department of Marketing, College of Business, American University of the Middle East, Kuwait City, Kuwait
Email address:
*
Corresponding author
To cite this article:
Ersoy Ayse Begum, Keceli Yavuz, Kwiatek Piotr. Impact of Social Media in Coffee Retail Business. Journal of Business and Economic
Development. Vol. 5, No. 1, 2020, pp. 44-55. doi: 10.11648/j.jbed.20200501.16
Received: June 18, 2019; Accepted: February 7, 2020; Published: March 17, 2020
Abstract:
Retail coffee business has been growing fast in the Middle East countries particularly during the last decade. High
penetration rates of mobile communication devices such as smart phones and high usage of Social Media make the coffee
retails in the region with Fee WIFI access, very attractive off-line and on-line social venues. The growth of internet in Arab
countries is continuous and offers many e-commerce opportunities for retail businesses to penetrate, grow and achieve loyalty.
This article aims to test how coffee retail businesses can optimize social media usage in order to increase their customer base,
reach higher level of customer satisfaction and hence increase rate of customer loyalty in the long run. The literature review
focuses on social media engagement and use of businesses, small businesses and retailers in the world and in the middle-east,
coffee shop industry and coffee shop service expectations of customers. The primary data collection is targeted to test the
constructs identified in the secondary data for coffee retail business as well as social media engagement of subjects who
frequent coffee shops. Proposed conceptual model suggests that social media engagement of coffee shops customers through
retailers’ social media and internet presence will lead to higher satisfaction about the shop and consequently transform them
into loyal customers. Therefore, finally the model suggests that coffee shops should continuously seek to optimize their social
media enabled marketing activities in order to achieve their business objectives.
Keywords:
Social Media, Social Media Engagement, Small Businesses, Coffee Shop Business,
Customer services and Loyalty
1. Social Media Engagement and Use for
Businesses
In the digital world or our days, firms are using Social
Media to effectively reach their customers, capture new ones
and implement more targeted loyalty programs. According to
a McKinsey report, firms are not only using social media
more and more to engage with customers but are making this
digital form of brand engagement a high strategic priority [1].
Moreover, recent studies suggest that consumers are
increasing their participation in social media, and firms
utilise these platforms as sales channels in addition to
marketing communication tools [2].
[3] carried out a study involving content analysis of different
articles pertaining to social media marketing and optimization
by businesses. The study not only focused on how the
consumers use social media, but also on the perspective of
firms on the usage and the optimization of the platform for
business. The results indicated that microblogs and social
networks are widely used means by businesses and the sites
directly managed by businesses produce better results [3].
[3] Further argued that Social media communication by
firms could lead to increase in consumption of the products.
However, the strategies to be used on social media channels
need to be optimized in accordance with the demographics of
the users. According to the authors another important factor
is that the messages conveyed in social media activities so
should consequent in the improvement of customers attitude
towards the brand. Vivid and more interactive posts on the
platforms are very instrumental to this end and can be
measured by increased number of shares and likes. To this

Journal of Business and Economic Development 2020; 5(1): 44-55 45
end Facebook and Twitter according to the findings under the
research are the best means for improving consumer attitudes
about the brand.
This brings the discussions to the concept of s-commerce
which is defined as a subset of eCommerce that brings
eCommerce functionality directly into an established social
network to drive sales. Social commerce is a form of
commerce that is mediated by social media and is converging
both online and offline environments. Social commerce
involves using social media that support social interactions
and user contributions to assist activities in the buying and
selling of products and services online and offline [4].
Marketing through social media platforms, can be fast and
powerful way to do the product campaign. Social media
marketing programs usually centre on efforts to create
content that attracts responsiveness and encourages readers to
share it with their social networks. [5] Demonstrated in an
article that the main drivers of s-commerce (social media
commerce) engagement are message, social media account
credibility, peer communication and online social interaction
propensity. Influencers and target audiences satisfaction with
brands’ Facebook and social media activity result in
increased intentions to engage in s-commerce activities.
Relationship marketing can certainly not be ignore in all these
discussions. As per the Relationship Marketing (RM) theory put
forward by [6-7] identified conceptual models that specify a
number of antecedents that influence consumer intentions to
purchase products and services directly through s-commerce.
Facebook, for example, as the worlds leading Social
Networking Site with over 1.6 billion active users across the
globe is said to have a significant potential for firms aiming
s-commerce activities [8]. Facebook has been actively
encouraging consumers to shop via Facebook brand pages
through the recent introduction of a range of new ad features
leading firms to increasingly attempt to embrace Facebook as
a marketing channel to drive consumer engagement, brand
awareness and shopping opportunities [9].
Considering the exponential growth of S-commerce and
the importance of Social Media engagement of firms and
customers, this study examines the dynamics with respect to
the Coffee Retail Business with a focus in the Middle East.
Social Media Engagement for Small businesses and
retailers
Word of mouth is what the small business owners had to
rely on to attract new customers and build a reputation. Since
recommendations from existing customer is an important
source of customer base extender for small businesses, and
the customers today communicate more and more via social
media networks, social media is an important source of
digital word of mouth for small businesses and retailers.
Although more and more small businesses are using social
media, there is not enough understanding of how to adapt and
use Social Media for growing business and building loyalty.
Insites Consultings 2011 research on firms across US and
Europe has revealed that nearly 90 of firms undertake Social
Media activities and half of them integrated SM activities in
their short term and long term business strategies. The focus
of this paper being retailers specific, literature review of
retailers integrating SM and S-commerce into their strategic
planning is given below.
Reference [10] demonstrated that retailers use social media
to engage and interact with their customers hence increasing
the dialogue between the retailer and consumers or between
consumers. Retailers then can use social media to improve
communication and develop interpersonal relationships with
consumers. This active and continuous level of engagement
will not only promote brand performance but also improve
the retailer’s performance.
Social media Internet technologies have brought new
opportunities as new channels of distribution and
communication for small businesses [11]. Socialmedia can be
utilized to break through the clutter, and connect with
customers on one to one basis [12]. Leibovitz in 2012 further
suggested that social media influences consumers purchasind
decisions significantly. Firms whose social media presence is
of significant visibility achieved enchanced brand recognition
and scored higher in search engine ranking [13].
However, one of the critical success-factor is the content
development for social media accounts as the more interesting
is the content the more engagement and interaction is created
with existing and potential customers. Prior studies have
shown that peer communication via social media can exert a
huge influence on attitudes and purchasing behaviors [14].
The ability of social media to create interactive dialogues
with customers is a powerful customer engagement tool [15].
In addition the cost of making a difference in the mind of
consumers with personal engagement through social media is
significantly lower than traditional media and even generic
internet advertising making it the most cost-effective form of
information dissemination and customer interaction [14].
Social media is not only an effective communication channel
but also a good intermediary to collect information from the
customers [16].
As good and as rewarding social media is for small
businesses and retailers, it also has some challenges for the
business owners. Begin technologically savy is a pre-
requisite and the time it takes to create social media accounts
and keep them current, relevant and interesting. Social media
also presents challenges for small businesses. Many small
business men and women are not technologically savvy and
know little about social media.
2. Small Businesses in the Middle East
In the last fifteen years Middle East and particularly the
Gulf Region have become as a major retail trading and
banking centre for the global market. It is crucial to
understand the retail business with particular focus on family
owned small businesses.
Islam being in the centre of life in the Gulf Region,
needless to mention that Islamic culture shapes the
geography and therefore the organizations and managers
working there are significantly influenced by the sections
related to commercial transactions in the Quran.

46 Ersoy Ayse Begum et al.: Impact of Social Media in Coffee Retail Business
Authoritarian management is predominant in large
organizations, while consultative methods prevail in other
arenas. Article identified by [17] indicates that smaller,
family-controlled firms were less bureaucratic, authoritarian,
and impersonal than larger firms that were not family
controlled. Some Islamic sects prefer consultative methods of
management, which is more consistent with tribalistic
traditions [18].
Family owned most small businesses are managed by the
elder family members and stress a leading role for the fathers
[19]. Satisfying customers remains the top priority for
Middle East small retailers which requires thorough
understanding of customers’ needs and what satisfies them.
Family-owned businesses are advantageous on this due to the
fact that they can learn about their customers’ needs and be
more flexible in meeting those needs. References [17, 20, 21]
all argue that family businesses have more easy access to
understanding customers’ needs and wants.
Governments in the Gulf region recognizes the importance
of small businesses to the growth of their economies and
decreasing dependence on the oil industry. 60% of GDP in the
UAE is contributed by the small businesses in the UAE for
example and this number is expected to reach 70% by 20121.
Considering increasing importance of small businesses in the
region, an aggressive and competitive growth plan is now
being formulated. However, giving the uncertainty of today’ s
economic climate, makes this very challenging.
3. Social Media Engagement and Use for
Small Businesses in the Middle East
Looking at the adoption of social media among small and
medium-sized enterprises (SMEs) in the Middle East region;
Coffee Shop business in the Middle East, Small businesses
are less likely to use emerging technologies due to their
limited capabilities, and resources [22-24]. SM usage has
been quite extensive in the Arab region contrary to the
perception of the West World [25]. LinkedIn analysis into the
SM adoption of 260 SMEs in the Gulf Cooperation Council
(GCC) found that 92 percent of companies are already on
social media platforms, with a further five percent preparing
to establish a presence [26].
Needless to mention rapid growth of the SM trend among
businesses in the GCC, Social Media has become a crucial part
of the marketing strategies. This rapidly accelerating trend
among businesses in the GCC has strategically placed SM as
an important element in today’s comprehensive marketing
strategies. [27] argues that because of organisational, cultural
and environmental differences, comparison of small businesses
adoption of social media in developed and developing
countries should not be generalised.
Like in the developed markets, Social Media marketing is
a derivative of word of mouth marketing, viral marketing and
social presence theory in the Middle East as well [28].
[31] In April 2017 wrote a research article which
demonstrated that attitudes of owners/entrepreneurs of SMEs
towards SM usage were grounded in their perceptions of the
benefits of SM. As long as SM was recognized as an essential
platform for branding, advertising, and promoting their
products and services, it was considered to be used. Most
small businesses use SM to design their advertising materials
using rich, dynamic, and interactive media at minimal cost.
SM is an ideal venue to employ viral marketing techniques to
build brand awareness for the companies.
Some other findings of the work carried out by [29]
Ahmad et all (2017) revealed that SMEs can attract new
customers on SM by creating pages that are tailored to the
requirements of potential customers by allowing existing
customers to share their views on their experiences, thereby
enhancing the SMEs goals and targets.
The same study showed that small businesses and retailers
can use SM to attract customers to meet other customers as
poeple are increasingly utilizing SM for ratings, reviews, and
recommendations given by others. This makes the social
media a good platform to leverage on community networks
and information sharing. SM helps companies to discover
who likes or dislikes their products and services and and
allows businesses to turn unhappy customers into satisfied
and returning customers.
This has led to a new phenomenon known as social
contagion. Social contagion can be defined as an event that
“occurs when adoption is a function of exposure to other
people’s knowledge, attitudes, or behaviors” [30]. Social
contagion arises when people in a social structure rely on one
another to manage uncertainty regarding future purchase
decisions [31].
Theoretically speaking, social beings, people, use SM to fulfil
their need to connect with others and exchange information
more quicklty than any other communication medium. This fact
when used appropriately can surely lead to increased sales and
enlarge customer base for small retailers [24].
In addition, SM can help businesses drive revenue from
existing customers by getting them to spend more on each
purchase [32]. For example, giving out coupons at each
purchase is commonly used by small retailers in the Middle
East. [35] Indicated that the dominant social media platform
in the Middle East region is Facebook, with nine out of ten
national Internet users using it (90 percent), followed by
WhatsApp at 82 percent, and Instagram (56 percent). Twitter
comes fourth with the UAE having 51 percent active users in
the country, and, finally, YouTube with 50 percent.
4. Coffee Shop Business in the Middle
East
According to Business Insider, coffee is the second most
sought-after commodity in the entire world, with an industry that
is worth over $100 billion across the globe. 500 billion cups of
coffee are consumed on Earth every year. South America ranked
as the largest coffee producer, with Brazil producing about 43.2
million bags of coffee. Consumers of coffee are generally aged
19-34 years old and key contributor to the growth of coffee

Journal of Business and Economic Development 2020; 5(1): 44-55 47
consumption is said to be the Millenials. With the rise in
urbanization and the demand for quick, quality product has been
fueling the expansion of café insustry across the globe [33]. The
coffee and snack shops industry is a $30 billion market that grew
at average annual rates of 2.7 percent between 2009 and 2013,
as reported by [34].
According to [8] Starbucks is by far the largest coffee house
chain in the world in terms of revenue, generating more than
10 times the revenue of its closest competitor, Costa Coffee, in
2015. According Euromonitor Coffee shops are the fastest
growing restaurant category. In 2016, specialist coffee shops
were the fastest growing major restaurant category in terms of
global sales, increasing 9.1% from 2014-2015. The growth
was steady across the globe in both developed and developing
markets. The largest growth opportunities will be in Asia
While all regions will see strong growth in the category, Asia
Pacific will be home to the largest sales increase in specialist
coffee shops, totaling over US$3.7 billion dollars in new value
growth from 2016-2020. Worldwide Competition is growing
quickly, leading to rapid diversification. In fact The Coca-Cola
Company recently purchased Costa Café.
Competitive dynamics in the coffee shop market are
changing at the local level as well. In emerging markets, this
has meant an increasingly large number of brands competing
for share, many of which are going to creative new heights to
differentiate themselves. In addition to international
competition, with increased coffee consumption, café retail
business in the Middle East also experienced a rapid growth
both through international chains and local brands.
Middle East’s coffee industry, is expected to climb to $4.4
billion by 2021, according to Euromonitor International. The
new movement has seen a shift in consumer appreciation of
coffee as an artisan, specialist and quality experience, rather
than a commodity. As a beverage with multi-cultural appeal,
coffee consumption in the region is growing twice as fast as
the global average, putting pressure on the food service
industry to stay relevant to customers [35].
Coffee has always been a part of Middle Eastern culture
and, in recent years, chains have caught on, opening a flurry
of coffee shops in thriving regions like the UAE and Saudi
Arabia. Whether local or international only those who will
identify satisfy quality seeking customers will survive. The
most promising trend to this end seems to be the specialty
coffee according to Euro Monitor.
5. Coffee Shop Customers Service
Expectations in the Middle East
Coffee shop owners/managers can build more effective
marketing strategies if they understand factors influencing
customers brand involvement and eventually build brand
loyalty among them [36].
Reference [37] argued that customers develop loyalty
when they show an interest and spend time and energy in
choosing a specific coffee shop to frequent. Different from
product brand involvement, service brand involvement can
be difficult to understand, because of the unique
characteristics of the service industry, which are intangible
and heterogeneous [38].
A study on coffee shop industry in South Korea by Cha et
al in 2015 showed that consumption at a coffee shop can be
continuous or occasional; therefore, developing brand loyalty
is critical to sustain a long-term customer relationship.
Promoting customers’ interests and emphasis toward the
coffee brands become essential factors for coffee shop
brands. It is clear that customer involvement is important
because it influences customers’ consumption experiences
and service process Production and consumption in the
service industry are often inseperable and hence customers
are encouraged to be involved with service delivery and
prefer relevant concepts [39, 40]. Reference [41] in his article
has argued that key factors to lead customer service
satisfaction for Coffee Shops are Product and Service
Innovation, Technology integration. In addition
knowledgeable barista, ambiance, no waiting at the cashier
and really good coffee are most expected by the consumers
[42]. Offering your customers Wi-Fi internet access in your
coffee shop is a great extra service. It gives your customers
an extra reason to visit your coffee shop and can be arranged
without spending a lot of money [43]. Use of loyalty cards
and high traffic location are also important factors for the
customer to choose your cafe. Loyalty cards are the most
cost-effective customer acquisition tactic [44].
Millennials are spending more money on coffee than other
generations but prefer higher quality coffee experiences because
they choose to spend their money on better life experiences.
6. Research Methodology
6.1. Hypotheses and Research Model
Based on the literature, we developed the following
hypotheses to examine the factors that affect the customers
perceived loyalty to their coffee house brand with respect to
their social media engagement.
H1: Customers’ exposure to the coffee house’s on-line ads
has a positive impact on the customers’ social media
expectations from the coffee house.
H2: Customers’ purpose of using social media has a
positive impact on the customers’ social media expectations
from the coffee house.
H3: Customers’ social media expectations from the coffee
house has a positive impact on the customers’ behavior of
joining/following coffee house’s social media account.
H4: Customers’ behavior of joining/following coffee
house’s social media account has a positive impact on the
customers’ perceived loyalty to the coffee house brand.
H5: Customers’ service expectations from the coffee house
has a positive impact on the customers’ perceived loyalty to
the coffee house brand.
6.2. Research Model
Figure 1 shows the research model used in this study to

48 Ersoy Ayse Begum et al.: Impact of Social Media in Coffee Retail Business
examine
Figure 1. Research Model.
6.3. Data Collection
The data was collected through conducting surveys in
person at randomly selected coffee shops through
convenience sampling during Feb-April 2018. Please refer to
Appendix A for the questionnaire.
6.4. Factor and Reliability Analyses
In order to check the construct validity of the factors used
in the research model, we conducted confirmatory factor
analysis (CFA) using psych package in R environment. This
package provides a general-purpose toolbox for experimental
psychology, which contains functions like factor analysis,
principal component analysis, cluster analysis and reliability
analysis [45]. By using the functions in psych package, we
calculated the number of factors (with fa. parallel function),
we conducted confirmatory factor analysis to calculate the
factor loadings (with fa function), and finally we determined
the reliability of each factor (with alpha function). Table 1
summarizes the factor loadings and Cronbach’s alpha values
for each factor.
Table 1. Confirmatory Factor Analysis Statistics.
Factor Item Factor
Loadings
Customers’ Social Media
Expectations from the Coffee
House
SMEXPECT; CR=0.74; AVE=0.65
Coffee houses should have Social SMExp1 0.65
Media activities for their
customers
Coffee houses should create SMExp2 0.82
attractive content for capturing
and keeping customers
Coffee houses should encourage SMExp3 0.62
their customer to use of Social
media account through special
offers
Customers’ Purpose of Using
Social Media
SMPURPOSE; CR=0.67; AVE=0.43
to keep in touch with family and SMPur1 0.48
friends
to make new friends SMPur2 0.46
to get opinions SMPur3 0.48
to share videos/pictures/music SMPur4 0.61
to share my experiences SMPur5 0.65
Customers’ Service Expectations
from the Coffee House
CHEXPECT; CR=0.74; AVE=0.50
… has a reading/work area that CHExp1 0.70
is specifically designated to be
quiet and allow customers to work
… has a meeting area designated CHExp2 0.69
to hold events
… has access to PC and work CHExp3 0.74
stations
… has free access to WIFI CHExp4 0.45
Note: Model fit: χ
2
(87)=127.688, p=.00; CFI=0.922, TLI=0.906, RMSEA=0.050. AVE=average variance extracted; CR=Cronbach’s α; CFI=comparative.

Journal of Business and Economic Development 2020; 5(1): 44-55 49
To ascertain the extent to which variances in the constructs
could be explained by the model, R2 values of the dependent
constructs were calculated and found to be significant.
Loadings for each construct, composite scores, and average
variance extracted (AVE) per construct are shown in Table 1.
The convergent validity of the model is established, since all
items are significant at.05 levels and indicate loadings of.4 or
higher [46]. All constructs indicate acceptable levels of
reliability with composite reliability measures which range
from.66 to.74 [47].
The convergent validity of construct is verified through
AVE values above the 0.5 threshold (Fornell and Larcker,
1981). As shown in Table 1, the cutoff AVE value is not
achieved for none of the three constructs, with AVE values
ranging from.43 to.65. We accept the values based on the
notion that if AVE is less than 0.5 but composite reliability is
higher than 0.6, the convergent validity of the construct is
still adequate [48].
Table 2. Descriptive statistics.
Mean SD CHExpect JoinSM Loyalty OnlineAd SMExpect SMPurpose
CHExpect
-
0.73 0.71
JoinSM 1.46 0.51 -0.12 1.00
Loyalty 1.55 0.50 0.05 0.28 1.00
OnlineAd 1.24 0.44 -0.09 0.17 0.22 1.00
SMExpect
-
0.61 0.19 0.21 0.21 0.18 0.86
SMPurpose
-
0.31 0.33 0.07 0.09 0.06 0.50 0.66
Note: SD=Standard deviation; the diagonal values represent the square root of the AVE.
Discriminant validity of constructs was assessed through
the Fornell-Larcker criterion (Fornell and Larcker, 1981).
Discriminant validity cannot be established. Descriptive
statistics (the mean, and standard deviation), and correlations
are presented in Table 2 (the diagonal values represent the
square root of the AVE).
Structural Equation Modelling (SEM)
To test the hypotheses, we developed a Structural Equation
Model (SEM) using lavaan package (Rosseel, 2012). The R
code to create the model is as follows:
modelsem<-'
CHEXPECT=~ CHExp1 + CHExp2 + CHExp3 +
CHExp4 SMEXPECT=~ SMExp1 + SMExp2 + SMExp3
SMPURPOSE=~ SMPur1 + SMPur2 + SMPur3 +
SMPur4 + SMPur5
SMEXPECT~ h1*OnlineAD + h2*SMPURPOSE
JoinSM ~ h3*SMEXPECT
Loyalty ~ h4*JoinSM + h5*CHEXPECT
IND1:=h1*h3*h4
IND2:=h2*h3*h4
IND3:=h3*h4
'semmodelfit<-sem (modelsem, data=mainData)
summary (semmodelfit, rsquare=TRUE,
standardized=TRUE, fit. measures=TRUE)
First three lines in this model are to calculate the latent
variables, second three lines are for developing model by
indicating the direct relationships between the factors, and
finally the last three lines are to indicate the indirect
relationships between the factors. Once the model is defined
to an object called modelsem, sem () function uses this object
as input and fits the model to another object called
semmodelfit. Finally, the summary () function uses the
semmodelfit object as input and prints the regression and
model fit values. In this model, modelsem and semmodelfit
are arbitrary variable names. Table 3 and 4 summarize the
SEM regression and model fit values.
Table 3. Structural Equation Modelling Results.
Latent Variables: Estimate Std. Err z-value P (>|z|) Std. lv Std. all
CHEXPECT CHExp1
1.000
-
-
-
0.728 0.682
CHExp2
1.044
0.143
7.327
0.000
0.761 0.732
CHExp3
1.027
0.143
7.184
0.000
0.748 0.697
CHExp4
0.567
0.108
5.260
0.000
0.413 0.466
SMEXPECT SMExp1
1.000
-
-
-
0.614 0.695
SMExp2
0.992
0.129
7.689
0.000
0.609 0.774
SMExp3
0.975
0.142
6.865
0.000
0.599 0.622
SMPURPOSE SMPur1
1.000
-
-
-
0.311 0.464
SMPur2
1.600
0.391
4.096
0.000
0.497 0.438
SMPur3
1.593
0.372
4.288
0.000
0.495 0.473
SMPur4
1.572
0.322
4.880
0.000
0.488 0.608
SMPur5
2.236
0.438
5.107
0.000
0.695 0.690
Regressions: Estimate Std. Err z-value P (>|z|) Std. lv Std. all
SMEXPECT  OnlineAD (h1)
0.287
0.104
2.767
0.006 0.468
0.205
SMEXPECT  SMPURPOSE (h2)
1.319
0.295
4.475
0.000 0.668
0.668
JoinSM  SMEXPECT (h3)
0.186
0.070
2.672
0.008 0.114
0.224
Loyalty  JoinSM (h4)
0.279
0.069
4.028
0.000 0.279
0.284
Loyalty  CHEXPECT (h5)
0.064
0.055
1.156
0.248 0.047
0.093

50 Ersoy Ayse Begum et al.: Impact of Social Media in Coffee Retail Business
Defined Parameters: Estimate
Std. Err
z-value P (>|z|) Std. lv Std. all
IND1 h1h3h4
0.015
0.008
1.782
0.075 0.015 0.013
IND2 h2h3h4
0.068
0.033
2.067
0.039 0.021 0.043
IND3 h3h4
0.052
0.023
2.227
0.026 0.032 0.064
Table 4. Model Fit statistics.
Model Fit Statistics
Values
Number of observations 184
Estimator
Maximum Likelihood
Model Fit Test Statistic
127.688
Degrees of freedom
87
P-value (Chi-square)
0.003
Model test baseline model:
Minimum Function Test Statistic
628.561
Degrees of freedom
105
P-value
0
User model versus baseline model:
Comparative Fit Index (CFI)
0.922
Tucker-Lewis Index (TLI)
0.906
Loglikelihood and Information
Loglikelihood user model (H0)
-3007.818
Criteria:
Loglikelihood unrestricted model
-2943.974
(H1)
Number of free parameters
32
Akaike (AIC)
6079.636
Bayesian (BIC)
6182.514
Sample-size adjusted Bayesian
6081.162
(BIC)
Root Mean Square Error of
RMSEA
0.05
Approximation:
90 Percent Confidence Interval
0.030, 0.068
P-value RMSEA <=0.05
0.467
Standardized Root Mean Square
0.067
Residual (SRMR):
Our dataset shows an acceptable level of fit to the
developed model. Although Chi-square statistic is significant
(P=0.003), Standardized Root Mean Square Residual
(SRMR) Index is 0.067, which is between acceptable (0.05)
and good (0.08) fit limits (Cangur & Ercan, 2015). Root
Mean Square Error of Approximation (RMSEA) Index is
0.05, which indicates good fit. Tucker-Lewis Index (TLI) and
Comparative Fit Index (CFI) are 0.906 and 0.922
respectively. Although commonly accepted limits for TLI and
CFI are 0.95, it is assumed that the bigger TLI and CFI
values indicate better fit.
Table 5. Lavaan Path Model Results.
Structural Paths β z-value Hypothesis
OnlineAD SMEXPECT .29 2.77 H1, supported
SMPURPOSE  SMEXPECT 1.32 4.48 H2, supported
SMEXPECT JoinSM .19 2.67 H3, supported
JoinSM  Loyalty .28 4.03 H4, supported
CHEXPECT  Loyalty .06 1.16 H5, rejected
As provided in Table 5, four out five hypotheses are
supported by the analysis of the data. First, on-line
advertising has a moderate and significant impact on
customers’ social media expectations from a coffee house
(β=.29, p < 0.01). The customers’ purpose of using social
media has a strong and significant impact on customers’
social media expectations (β=1.32, p < 0.01). Next,
customers’ social media expectations from the coffee house
have moderate and significant impact on customers’ joining
and following social media behaviors (β=.19, p < 0.01). In
turn, these social media behaviors have significant impact on
perceived customer’s loyalty (β=.28, p < 0.01). Contrary to
our expectations, customers’ service expectations do not have
a significant impact on perceived loyalty (β=.06, p > 0.05).
7. Conclusion and Implications for
Further Research
Research results validate the proposed model and shows
how on-line advertising and consumer’s intent of using social
media for socialisation leads to certain expectations from
their frequented coffee retailers with respect to their social
media presence. The more engaging and interactive the
content the more loyalty can be expected.
How a brand makes someone feel is the driver for loyalty or
unloyalty. Experiences customers are exposed through
products/services are key success factors for further interacting.
With respect to social media, content marketing is an effective
strategy. Through targeted and intriguing content, it is possible

Journal of Business and Economic Development 2020; 5(1): 44-55 51
to build a positive and rewarding relationship that leads to
loyalty. To consistently infuse brand loyalty triggers in your
content is to develop and share content that is useful and
conveys shared value. Shared value is about focusing more on
people and their beliefs and less on your product. The focus on
the product is why many contents from brands are ignored
.
Retaining and cultivating customer are critically important
for coffee outlets due to increasing competition both on local
and international levels. Building sustainable relations with
customer coffee retail operators can be achieved through
creating a high value perception. Perceive superior value will
positively influence the customer loyalty. Deep
understanding of the consumer can be reflected on
customized content through SM which will help the retailer
to develop competitive strategies in achieving loyalty.
The findings of this study clearly indicate that having
social media account keeping them alive with interactive and
engaging customer profile could help building stronger
longer relationships with their customers. However perceived
loyalty to the Coffee Retailer could not attributed to the
customer services of the Coffee House which is questionable
in terms of customer relationship principles. Granted, further
research is recommended on a more conclusive model
identifying other factors influencing customer service
expectations and anticipated loyalty and demonstrating the
correlation in between.
Appendix
Appendix A: Survey Questionnaire
Dear respondent,
You are invited to participate in a person-to- person survey conducted by the Marketing students of the American University of the
Middle East on the topic of: ‘Social Media Optimization for coffee retail in Kuwait’ for the Marketing Research class.
Your participation in this survey is voluntary. You may refuse to take part in the research or exit the survey at any time. You
are free to decline to answer any particular question you do not wish to answer for any reason.
Your survey answers are anonymous and no one will be able to identify you or your answers, and no one will know whether
or not you participated in the study. The results of the survey will be used for academic purposes only.
Many thanks in advance for your valuable contribution.
Best regards,
Dr. Ayse Ersoy
Asst. Professor of Marketing
American University of the Middle East
Statement of Acknowledgment:
The following is hereby acknowledged;
The anonymity of the person interviewed is guaranteed This survey is only for academic research purposes.
Screening Questions A B
1 Do you go to Coffee Houses Yes No
2 Do you use Social Media Yes No
If they answer No to Questions 1 or 2, please thank the respondent and stop the survey.
1. What is your gender?
a. Male
b. Female
2. What is your age?
a. 18-25
b. 26-40
c. 41-60
d. 61+
3. What is your nationality?
a. Kuwaiti
b. Non-Kuwaiti
4. What is your education?
a. Primary Education
b. High School Graduate
c. Undergraduate Degree

52 Ersoy Ayse Begum et al.: Impact of Social Media in Coffee Retail Business
d. Masters Degree
e. Doctorate Degree
5. Which social media accounts do you use? (you can select more than one)
a. Facebook
b. Instagram
c. Snapchat
d. Twitter
e. LinkedIn
f. Other
6. How many social networking sites communities/groups are you a member of?
a. 3-5
b. 5-10
c. 10-15
d. 15+
7. How do you access your social network account? (You can choose more than one)
a. PC
b. Laptop
c. Smartphone
d. Tablet
8. How long have you been using social networking sites?
a. 1-3 years
b. 3-5 years
c. 5-10 years
d. 10 years+
9. On average, how much time do you spend daily on a social networking sites?
a. less than 1 hour
b. 1-5 hours
c. 5-10 hours
d. 10 hours+
10. Are you loyal to one specific coffee house brand?
a. yes
b. no
11. Do you prefer local coffee houses over International coffee house chains
a. yes
b. no
12. Do you prefer International coffee house chains over local coffee houses
a. yes
b. no
13. Have you joined the social media account of your favorite Coffee House Brand
a. yes
b. no
14. Have you ever seen any advertising about your favorite coffee house brand in social media

Journal of Business and Economic Development 2020; 5(1): 44-55 53
a. yes
b. no
15. Have you ever followed a blogger that talks about Coffee Houses
a. yes
b. no
16. Have you ever participated to a Coffee house on line promotion
a. yes
b. no
17. When you go to a coffee shop what do you usually purchase?
a. hot drinks
b. cold drinks
c. pasteries
d. sandwiches
e. other
18. When going into a coffee shop what is most important to you?
a. quality of products
b. price
c. location
d. atmosphere/decoration
e. customer profile
f. other
STRONGLy AGREE
NEUTRAL
DISAGREE STRONGLY
AGREE DISAGREE
21 I use social media to find information
22 I use social media to play games
23 I use social media to make professional
contacts
24 I use social media to keep in touch with
family and friends
25 I use social media to make new friends
26 I use social media to get opinions
27 I use social media to share
videos/pictures/music
28 I use social media to share my experiences
29 Coffee houses should have Social
Media activities for their customers?
30
Coffee houses should create attractive
content for capturing and keeping
customers
31
Customers going to the same coffee house
should be able to communicate with each
other on line
32
Coffee houses should encourage their
customer to use of Social media account
through special offers
33 Coffee shops should have their own
application
34
Coffee shops should register with delivery
service provider applications like (Coffee,
Talabat etc.)

54 Ersoy Ayse Begum et al.: Impact of Social Media in Coffee Retail Business
35
I would be be inclined to purchase more
coffee if If my preferred coffee shop is
having a promotional event (sales, etc.)
36
I would be interested in a coffee shop that
has a reading/work area that is specifically
designated to be quiet and allow customers
to work
37
I would be interested in a coffee shop that
has a meeting area designated to hold
events
38 I would be interested in a coffee shop with
access to PC and work stations
39 I would be interested in a coffee shop with
free access to WIFI
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