Influences of consumer loyalty cards on store Loyalty: The case of uchumi and nakumatt Supermarkets in Nairobi

Abstract

The management of customer relationship as a source of competitive advantage has become a vital component in success of firms. The firms have realized the need to develop such long-term relationships to guarantee constant streams of revenues and profitability. Of the strategies that firms have employed in influencing store loyalty has been the use of loyalty cards. The use of loyalty cards as a knowledge tool has become so critical that retailers are offering customers rewards in return for continuous use. The main question has been whether loyalty cards really influence store loyalty. This study empirically researched on the influence of loyalty card on store loyalty. To achieve this objective, a descriptive survey was performed. The research targeted a sample of 200 of which 200 responses were received. This represented a 100% response survey rate. Primary data was collected using a semi-structured questionnaire and data analyzed using percentages and mean scores. Research assistants were trained on the administration of questionnaire and follow up conducted as a control tool. -.. The comparative findings demonstrate that loyalty card do indeed influence store loyalty. The study confirmed that most consumers .v.iewed the loyalty cards as useful and were willing to provide personal information to the firms. The study however noted that loyalty cards cannot work in isolation as the only factor that influence customer's store loyalty development. Results of this study show that customers also focus heavily on the everyday low price, assortment of items, customer service, convenient, location and quality of merchandise as their top factors for developing store loyalty. Therefore, companies have to take the whole package into consideration. Firms need to communicate the value additions that arise from using loyalty cards. It is the recommendation of this study that firms address the issues of rewards obtained from the use of loyalty cards. The current consumer perception is that the value proposition is not enough and firms need to better communicate this value proposition. Further research should be conducted to determine the effect that number of loyalty cards that consumer have in influencing their store loyalty . ..•. v