What induces online loyalty? Online versus offline brand images☆

a r t i c l e i n f o This study investigates the effect of the interplay between a multi-channel retailer's offline and online brand images on consumers' online perceived risk and online loyalty within the framework of a theory of cognitive dissonance. A sample of 671 female college students participated in an experiment using a 2 (prior offline brand image) × 2 (online performance) between-subjects design. Results reveal that offline brand image exerts significant effects on online brand image – which, in turn, significantly explains online perceived risk – and online customer loyalty. However, online perceived risk has no significant effect on online customer loyalty after controlling for the effects of online and offline brand images. These results provide implications for the direct and indirect halo effects of offline brand image and the direct effect of online performance that may influence consumers' perceptions, expectations, and loyalty regarding multi-channel retailers. Retailing has become increasingly competitive since the advent of the Internet. Multi-channel retailing that incorporates the Internet into its channel portfolios has become a standard business strategy for once-traditional in-store retailers such as department stores and specialty stores (Geyskens, Gielens, and Dekimpe, 2002). In-store retailers' expansion to the e-channel has brought tremendous shifts in the retailing paradigm and the market structure (Nicholson, Clarke, and Blakemore, 2002). The multi-channel strategy may help retailers foster customer loyalty by increasing customer contact points, offering channel selections for the customer's convenience, and providing diverse types of services (Cassab and MacLachlan, 2006). The synergy between online and offline operations generated by the seamless integration between the two channels enriches customers' experiences with the retailer, strengthens the brand image of the retailer, and cultivates customer loyalty in both channels (Bailer, 2006; Gefen, 2000; Harvin, 2000). On the other hand, the multi-channel strategy also implies that the retailer's unsatisfactory performance in one channel may impact the customer's image and expectations of the retailer in the other channels. For example, a brick-and-click retailer that possesses a negative brand image from inconsistent performance in its offline channel may have difficulties persuading consumers to believe that its online store will provide accurate information and reliable services. Online retailers invest considerable resources to improve their web site content, structure, and product presentation methods to enhance customers' experiences with their online stores. Therefore, examining the effectiveness of their investment in improving consumers' perceived online brand image and online shopping behaviors …