The Unraveling Loyalty Model of Traditional Retail to Suppliers for Business Sustainability in the Digital Transformation Era: Insight from MSMEs in Indonesia

Abstract

The development of fast-moving consumer goods (FMCGs) retail has demonstrated an evolution of buyer–seller interactions. In the era of digital transformation, FMCGs and micro, small, and medium enterprises (MSMEs) can easily use website applications to shop for various products from suppliers, make payments, and access a wider variety of products with more efficient delivery. However, empirical studies on loyalty drivers on B2B relationships for business sustainability in the retail industry have not received much attention. This research aimed to examine the factors that influence loyalty and analyze the mediating role of MSME loyalty by discussing a new conceptual framework designed based on the buyer–seller relationship theory and relational marketing. Data were collected from 500 owners or managers of FMCG retail stalls in various provinces in Indonesia and analyzed using structural equation modeling (SEM). The results showed that merchandising, website quality, commitment, and satisfaction have a positive effect on loyalty, as opposed to service quality and trust. There are also different roles in the mediating variables of trust, commitment, and satisfaction on retail store loyalty. These findings were useful for policymakers, managers, and practitioners to clarify the influence of service quality, merchandising website quality, and the role of relationship quality on loyalty in the era of digital transformation.