Journal of Retailing 80 (2004) 249–263

Customer retailer loyalty in the context of multiple channel strategies

David W. Wallacea,∗ , Joan L. Gieseb,1 , Jean L. Johnsonb,2
a Department of Marketing, College of Business, Illinois State University, Normal, IL 61790-5590, USA
b Department of Marketing, College of Business and Economics, Washington State University, Pullman, WA 99164-4730, USA

Abstract

With an increasingly competitive retail environment and decreasing customer switching costs, customer retailer loyalty is a critical goal
for merchants of all types. We investigate customer retailer loyalty in the context of multiple channel retailing strategies. Results show that
multiple channel retail strategies enhance the portfolio of service outputs provided to the customer, thus enhancing customer satisfaction and
ultimately customer retailer loyalty. These results suggest that multiple channel retailing can be a useful strategy for building customer retailer
loyalty.
© 2004 New York University. Published by Elsevier. All rights reserved.

Keywords: Customer loyalty; Multiple channel retailing; Internet marketing

Introduction ternet retailing, because increased competition and minimal

Customer loyalty generates numerous benefits and hence
is a critical aim of many marketing strategies (Jacoby &
Chestnut 1978). Most importantly, customer loyalty creates
a stable pool of customers for a firm’s product or service
(Oliver 1997). A small shift in customer retention rates can
make a large difference for earnings, and this influence ac-
celerates over time. Loyal customers buy more, are willing
to pay higher prices, and generate positive word of mouth,
thus suggesting a strong link between loyalty and profitability
(Reichheld 1993; Wright & Sparks 1999; Zeithaml, Berry, &
Parasuraman 1996).
Customer loyalty encapsulates both loyalty to the retailer
and loyalty to the brand. Brand loyalty, in particular, has been
extensively studied (Day 1969; Jacoby & Chestnut 1978;
Oliver, 1997); however, little research has been conducted
on the critical role of retailer loyalty. Customer retailer loy-
alty is of extreme interest to merchants, because high cus-
tomer acquisition costs are difficult to recoup without repeat
purchasing. This is ironic, particularly with the advent of In-
∗ Corresponding author. Tel.: +1 309 438 5066; fax: +1 309 438 5510.
E-mail addresses: dwallac@ilstu.edu (D.W. Wallace), giesej@wsu.edu
(J.L. Giese), johnsonjl@wsu.edu (J.L. Johnson).
1 Tel.: +1 509 335 6354; fax: +1 509 335 3865.
2 Tel.: +1 509 335 1877; fax: +1 509 335 3865.
customer switching costs make customers increasingly dif-
ficult to retain (Srinivasan, Anderson, & Ponnalovu 2002).
Thus, efforts to enhance customer loyalty may be a critical
defensive strategy for retailers: the existing customer base is
both retained for the retailer and denied to its competitors
(Fornell 1992; Jacoby & Chestnut 1978).
Our key research question concerns the implications of a
multiple channel interface for building customer retailer loy-
alty. Do merchants who invest in multiple channels receive
a payoff in terms of customer loyalty? Do these multiple
channels influence the drivers of customer satisfaction and
ultimately loyalty? This question is surprisingly unanswered
to date; empirical research has not adequately considered
market-level responses to multiple channel retailing strate-
gies (Homburg, Hoyer, & Fassnacht 2002; Reinartz, Krafft,
& Hoyer, 2004). This is a compelling issue and of utmost im-
portance to researchers (Peterson & Balasubramanian 2002),
as well as practitioners (Reda 2002b).
Multiple channel retailers simultaneously employ an ar-
ray of channels consisting of retail stores, mail order catalogs,
and web sites often targeting the same customer. Merchants
may undertake multiple channel strategies for a variety of
reasons: to gain legitimacy with key stakeholders (DiMaggio
& Powell 1983); to respond to competitor actions within the
industry (e.g., Grewal, Comer, & Mehta 2001); to save on
transaction costs (Dutta, Heide, Bergen, & John 1995); and

0022-4359/$ – see front matter © 2004 New York University. Published by Elsevier. All rights reserved.
doi:10.1016/j.jretai.2004.10.002
250 D.W. Wallace et al. / Journal of Retailing 80 (2004) 249–263
to increase market coverage (Friedman & Furey 2003). While
these are no doubt important strategic reasons, it is also crit-
ical for both managers and researchers to gain insight into
market-level responses to multiple channel retailing strate-
gies and their implications for customer retailer loyalty and
retailer profits. The major contribution of this research is to
conceptualize and empirically demonstrate the critical role of
multiple channel retailing in attaining strategic imperatives
from their multiple channel customer markets—customer sat-
isfaction that leads to customer retailer loyalty.
The remainder of this paper proceeds as follows. First,
we develop a conceptual framework and hypotheses. Next,
we describe the research design incorporating a multi-mode
survey undertaken in cooperation with an industry partner (a
major regional retailer of specialty sporting goods). Empirical
results from the main study data and a follow-up study are
presented. The paper closes with a discussion of implications
and future research suggestions.
Conceptual development
With the advent of multiple channel retailing, the interface
between merchants and their customers has become much
more complex. Merchants typically augment their core prod-
uct offerings with service outputs (e.g., product selection,
attribute information, and extended hours of operation) pro-
vided before, during, and after purchase (Bucklin 1966; Stern
& El-Ansary 1992). A portfolio of complementary channels
makes available a greater and deeper mix of service outputs
to the final customer (Frazier & Shervani 1992). With more
Fig. 1. Multiple channel loyalty framework.
service outputs available across several channels, final cus-
tomers have an opportunity to engage with a retailer over
multiple contact points; this can occur during a single pur-
chase or over multiple purchases. Because customers can
have more of their service output needs met through multiple
channels (and, even if not accessed, customers perceive that
their needs can be met easily with multiple channels), we ar-
gue that multiple channel strategies develop customer retailer
loyalty through enhanced satisfaction. With an increasingly
competitive retail climate, retailers are extremely motivated
to increase satisfaction and subsequently build customer loy-
alty. Multiple channel strategies may help retailers achieve
this important goal.
Fig. 1 displays the framework that drives our conceptual
development. In general, we argue that increased multiple
channel shopping by the customer increases the available
package of service outputs and the potential number of
contact points between the retailer and the customer. As the
figure indicates, we theorize that this has major strategic
consequences in customer satisfaction and customer retailer
loyalty.
Customer retailer loyalty
Day (1969) argued that for true loyalty to be in effect the
customer must both have a favorable attitude towards a prod-
uct and purchase it repeatedly. The attitude component dis-
tinguishes between true loyalty and “spurious” loyalty due to
high switching costs or a dearth of other choices. Because the
evaluative nature of attitude towards something, in this case
the retailer, may develop over time and have lasting duration
 D.W. Wallace et al. / Journal of Retailing 80 (2004) 249–263
(Eagly & Chaiken 1998), this aspect of loyalty includes a
more enduring tendency that generalizes across multiple pur-
chase instances. Dick and Basu (1994) characterized loyalty
as a “relative attitude,” an appraisal of a behavioral choice
relative to its alternatives. Merging these two perspectives,
we conceptualize customer retailer loyalty as the customer’s
attitudinal and behavioral preference for the retailer when
compared with available competitive alternatives.
In the case of multiple retailing channels, a merchant man-
ages the store, catalog, and web site; many brands are offered,
but only one retailer is identified across the channels. Thus,
the real benefit of a multiple channel strategy is that this strat-
egy encourages customers to be loyal to a specific retailer re-
gardless of which channel(s) customers access and regardless
of which brand they purchase. With more channel opportuni-
ties for the retailer to provide positive customer experiences
via greater service outputs and contact with customers, we
would expect the outcome to be increased customer retailer
loyalty; that is, a preference for a particular retailer relative
to competitors.
Multiple channel strategies
Multiple channel strategies may take a variety of forms.
Friedman and Furey (2003) differentiate between channel
mix and channel integration. In the former, each channel
functions independently of the others as a stand-alone unit,
providing a package of services that appeals to a particu-
lar group of customers; customers may visit different chan-
nels on different shopping occasions, depending on their cur-
rent needs (Hansell 2002). Channel integration, on the other
hand, involves a synergistic combination of channel functions
(Görsch 2000). A clothing item can be tried on at a retail store
and later purchased from the affiliated catalog, or items can
be ordered online for express store pickup.
It is plausible that multiple channel strategies in a compet-
itive environment may have the effect of reducing customer
loyalty. As channels multiply, the retailer’s market coverage
increases. This increased customer access leads to decreases
in the customers’ information search costs and increased
price transparency. The resulting increased competition may
lead to lower prices, higher price elasticities, frequent price
changes, and narrow price dispersion—classic symptoms of
market competition (Brynjolfsson & Smith 2000; Tang &
Xing 2001). All of these factors decrease customer switch-
ing costs while at the same time increase customer motivation
to switch, leading to an erosion in customer loyalty.
We argue, however, that the cross-channel synergies made
possible by a multiple channel retailing strategy will serve
to enhance customer retailer loyalty. Channel types differ in
their abilities to perform various service outputs (Bucklin,
Ramaswamy, & Majumdar 1996). For example, retail stores
provide excellent opportunities for prepurchase trial, instant
gratification, and personalized attention, while Internet sites
provide expanded accessibility, product information, and
novelty (Grewal, Iyer, & Levy 2004). Catalogs offer superior
251
color and image reproduction while putting product informa-
tion at a shopper’s fingertips without necessitating computer
and Internet access. Because of these differential strengths,
customers may use different channels for different purposes
or at different times; for example, a gift book could be pur-
chased online where it can be wrapped and drop shipped
directly to its intended recipient, while a customer may pur-
chase clothing at a retail store where it can be tried on.
In addition to these single-channel uses for different pur-
poses, technology creates opportunities for cross-channel
synergies, for example, in-store Web kiosks and the com-
bination of online ordering with express pick up (Peterson &
Balasubramanian 2002). Because multiple complementary
channels provide more, and more diverse, service outputs
than single-channel strategies, when a merchant adds com-
plexity to its customer interface by increasing customer con-
tact points, it thereby expands both the quantity and possible
combinations of service outputs available to its customers.
For example, a customer may want to try on multiple styles
of shoes, but may not be able to arrive at a decision until
later in the evening; rather than heading back to the mall, the
customer can order the exact product desired online. Con-
versely, a customer may feel confident ordering a product
online sight-unseen, knowing that the product is returnable
to a local retail store. Thus, we would expect that these mul-
tiple customer contact points would have important positive
implications for customer shopping behavior, and these will
lead to increased customer loyalty. This expectation repre-
sents the foundation for our research question and study de-
sign. Is the loyalty formation process influenced by multiple
channel shopping behavior?
Multiple channel shopping
Market-level response is the strategic imperative for any
marketing strategy. This research is concerned in particular
with market response to multiple channel retailing. Recent
market research suggests that customer shopping patterns
have evolved to take advantage of the new multiple chan-
nel environment. Results indicate that 35 percent of the con-
sumers surveyed shopped using some combination of cata-
logs, bricks-and-mortar stores, and the Internet; 66 percent
said that they had visited one channel before purchasing
from another (Saunders 2002). Jupiter Research has labeled
this class of customers the “multi-channel shoppers” (Reda
2002a). These customers “are combining various channels
and approaches, searching online to buy offline, searching
offline to buy online—and everything in between” (Wind &
Mahajan 2002, p. 65). We define customer multi-channel em-
ployment as the number of different channels a customer vis-
its in making a purchase.
It is important to note that like multiple channel retailing
strategies, customer multi-channel employment manifests it-
self in a variety of ways. The most important distinction in
this context is between shopping that crosses a merchant’s
different channels (e.g., when a customer researches prod-
252 D.W. Wallace et al. / Journal of Retailing 80 (2004) 249–263
ucts at a Best Buy retail store and purchases at BestBuy.com)
and shopping that crosses not only channels but merchants
as well (e.g., researching with the Crutchfield catalog and
purchasing from Comp USA’s retail store). Retailers whose
customers engage in the former are most directly positioned
to take advantage of the possibilities for differentiation pro-
vided by a multiple channel strategy and hence reap the ben-
efits of enhanced customer loyalty. These customer shopping
habits provide the most managerially actionable strategic op-
tions, in that cross-channel synergies as described above can
be designed into a merchant’s multiple channel system.
Multiple channel service outputs
We define the multi-channel portfolio of service outputs
as the package of service outputs that customers perceive to
be available from the merchant’s combined mail order, re-
tail, and Internet channels. Channels differ in the package of
service outputs that they provide. As customers visit more
channels, they thereby enhance the total package of service
outputs on which they can draw. Thus, we predict that through
multiple channel shopping, customers will encounter a higher
level of available service outputs. The influence of multiple
channel shopping on the perception of available service out-
puts forms the basic premise on which this customer retailer
loyalty model is developed. Therefore:
H1 . Customer multi-channel employment positively influ-
ences the perceived level of the multi-channel portfolio of
service outputs.
Satisfaction and customer retailer loyalty
In the traditional expectancy disconfirmation satisfaction
model (Oliver 1980), satisfaction results from the comparison
of an initial standard and perceived variance from that stan-
dard. In this paradigm, customer expectations form the stan-
dard of comparison. Positive disconfirmation occurs when
the customer evaluates the discrepancy between what ac-
tually occurred and these expectations thereby concluding
that their expectations were met or exceeded. This positive
disconfirmation leads to increased satisfaction (e.g., Oliver
1980; Spreng, MacKenzie, & Olshavsky 1996). Satisfaction
is generally considered to be a customer’s summary affec-
tive response to the experience (Giese & Cote 2000; Oliver
1980).
Because satisfaction is the “seed” out of which loyalty
develops (Oliver 1999, p. 42), enhancing satisfaction is an
important means for achieving loyalty. The objectives of loy-
alty strategies are to increase customer loyalty, increase the
purchase amount of loyal customers, decrease customer loy-
alty to competitors, and decrease customer switching (Jacoby
& Chestnut 1978). Therefore, offering a multi-channel port-
folio of service outputs as a means to satisfy customer needs,
leads to increased customer satisfaction and hence increased
customer loyalty (Shankar, Smith, & Rangaswamy 2003).
In a multiple channel setting, customers enter into retail
exchanges with expectations regarding the appropriate lev-
els of service outputs they should encounter. Customers have
learned to expect an increasingly high level of service out-
puts most likely because of their past experience across many
channels. The convergence of catalog, retail store and the Web
leads customers to expect more options and more service out-
puts (Wind & Mahajan 2002). These expectations form the
standard of comparison for their current experience with the
merchant. Customers with complex needs expect a complex
portfolio of service outputs. For example, a customer who
enters a store expecting considerable advice in choosing a
product after examining product assortment and prices on
the Internet site, and gets that advice and accuracy, will be
more satisfied than one who needs such advice but is not able
to get it.
With the advent of multi-channel shopping, customers
have expectations regarding the service outputs available to
them from all of a retailer’s channels. Consistent with the
expectancy disconfirmation paradigm, when customers find
higher levels of service outputs available, their expectations
are more likely to be positively disconfirmed, and this leads
to increased satisfaction. Also consistent with the expectancy
disconfirmation paradigm, when customers find lower levels
or lower quality of service outputs available, their expecta-
tions will be negatively disconfirmed resulting in decreased
satisfaction. There are two satisfaction issues here: raised
customer expectations and the multiple channel merchant’s
capability to meet those expectations in service output perfor-
mance. Research has shown that multiple channel customers
have higher expectations because of the nature of the multiple
channel system (Shankar et al. 2003). As an advance to this
logic, our contention is that multiple channel merchants are
positioned to satisfy those expectations because they offer
channel options designed to be in proportion to the service
outputs expected. Not only do retailers employ multiple chan-
nel strategies to respond to competitors (Grewal et al., 2001);
most importantly, they develop multiple channel strategies
to respond to customer expectations. Thus, multiple channel
customers are more likely to have their service output needs
met, and hence:
H2 . An increase in the multi-channel portfolio of service
outputs leads to increased positive disconfirmation of the cus-
tomer’s expectations.
H3 . Disconfirmation positively influences satisfaction.
Satisfying the end customer is strategically crucial to all
channel members. It is seen as a means to competitive ad-
vantage (Day & Nedungadi 1994). Among its most strate-
gic consequences, satisfaction leads to increased customer
retention, decreased price elasticities, lower customer acqui-
sition costs, and lower transaction costs (Anderson, Fornell,
& Lehmann 1994; Lemon, White, & Winer 2002). Here we
focus on a key variable associated with customer retention:
customer retailer loyalty.
 D.W. Wallace et al. / Journal of Retailing 80 (2004) 249–263
Theory suggests that satisfaction feeds back into the sys-
tem to influence ensuing intentions and behaviors (Howard
& Sheth 1969; Oliver 1980). A customer’s satisfaction with
the shopping experience should reflect well on the merchant.
When a retailer pursues a multiple channel strategy, the depth
and diversity of service outputs it provides to customers is en-
hanced. This, as we have argued, leads to increased customer
satisfaction; and an increase in satisfaction has been shown
to result in increased customer loyalty (Fornell 1992; Oliver
1999). Although there are low switching costs to consummat-
ing purchases and intense pressure to lure competitors’ cus-
tomers, we contend that when complex service output needs
are satisfied with an individual merchant’s multiple channel
portfolio of service outputs, then:
H4 . Customer satisfaction will positively influence cus-
tomer retailer loyalty.
Some question has been expressed in the practitioner lit-
erature as to whether multiple channel customers are likely
to be more or less loyal than single-channel customers (Reda
2002a). Some merchants feel that multiple channel customers
are simply casting about for the best prices and hence will
have no real loyalty to any particular merchant. Others ar-
gue that multiple channel retailing provides an opportunity
to attract customers who may have been exposed to a product
in one channel, but who are participating in another channel
when they are ready to buy. A study by BizRate.com and J.C.
Williams group found that dual channel customers spent an
average of $600 more in a focal store than store-only shoppers
(Pastore 2001). Similarly, another recent survey showed that
multiple channel shoppers tend to spend more than single-
channel shoppers and that channels can effectively drive traf-
fic to each other (Saunders 2002). Cross-channel synergies
are clearly influencing customer purchase decisions. Recall,
again, the example of a customer who tries on a pair of shoes
in a store, but only decides later in the evening to purchase
them via the Internet. It is likely that the focal retailer’s web
site will be top-of-mind for the customer or at least included
in the customer’s consideration set of alternative web sites
(Reda 2002a).
Channels differ in the levels and forms of service outputs
that they provide (Bucklin, Ramaswamy, & Majumdar 1996;
Grewal, Iyer, & Levy 2004). Because of this, multiple channel
customers are able to assemble a more diverse and complete
portfolio of service outputs than single-channel customers.
As hypothesized in H1 , we expected that the customer’s use of
multiple channels would influence the level of service outputs
that the customer finds available. Furthermore, we expect that
multiple channel shopping, relative to single-channel shop-
ping, will have strong implications for customer/retailer rela-
tionships. In particular, we anticipate that the development of
customer retailer loyalty will differ between single and mul-
tiple channel customers. Our model, which predicts that ser-
vice outputs influence positive disconfirmation, satisfaction,
and ultimately retailer loyalty, should be more descriptive of
253
multiple channel customers than single-channel customers in
that multiple channel customers perceive more service out-
puts to be available to them and have more potential contact
points with the retailer; they are, therefore, more likely to have
their expectations positively disconfirmed, and hence more
likely to be satisfied. Finally, we expect that the influence
of satisfaction on loyalty will be likewise higher for multi-
ple channel customers. In sum, we argue that the conceptual
model presented in Fig. 1 is more effective for multiple rather
than single-channel customers.
H5 . Our model (service outputs influence disconfirmation,
which drives customer satisfaction, and thereby builds cus-
tomer retailer loyalty) will better explain loyalty for multiple
rather than single-channel customers.
Method
The first phase of research involved ten semi-structured
qualitative interviews with consumers. The interviews en-
sured that our research questions were relevant and aided in
developing service output domains. Participants consistently
reported engaging in multiple channel shopping behaviors
and being influenced by the kinds of service outputs they
encountered. We found consistent customer response to four
key service outputs: convenience, selection, waiting time, and
product information. Thus, they form the basis for our mea-
sures.
The quantitative research targeted the customers of a sin-
gle industry multiple channel partner, a large regional retailer
of specialty outdoor sporting goods with bricks and mortar,
mail order, and Internet businesses. By focusing on a sin-
gle industry, the effects of variance not due to the measured
constructs are reduced. The industry is structured along tra-
ditional lines, in which the product moves from manufactur-
ers/suppliers to distributors or retailers and then on to end
customers; thus, results from this research should general-
ize well to other specialty and shopping goods industries.
By focusing on a single multiple channel retailer, this re-
search design limits uncontrollable environmental variables.
At the same time, it allows us to capture both single and mul-
tiple channel customers, since not all customers of a multiple
channel retailer will take advantage of all channels. As well,
single-channel retailers by definition can’t have their own
multiple channel customers.
Although this $5 billion industry has seen strong growth
in recent years (Outdoor Industry Association 2002), its core
distribution has traditionally been through small, independent
bricks and mortar retail locations. The industry as a whole is
currently struggling with a variety of multi-channel related is-
sues, which threaten to inflict major structural changes. Man-
ufacturers are experimenting with direct selling, and retailers
are experimenting with opening additional channels. This in-
dustry is therefore an appropriate setting for research into
multiple channel retailing strategies.
254 D.W. Wallace et al. / Journal of Retailing 80 (2004) 249–263
Sample and data collection
The survey, with an incentive, was administered to the
industry partner’s customers via store intercept, mail and
email. The mixed mode approach ensures that the perspec-
tives of a broad selection of the merchant’s customers are
represented and mitigates coverage errors or other biases re-
sulting from data collection mode. For example, a mail survey
alone might generate a disproportionate number of responses
from catalog-only shoppers. The survey explores customer
experiences with the retailer as well as its competitors during
a recent purchase.
The mail survey was sent to 600 randomly selected re-
cent (within the last three months) purchasers, with 151 com-
pleted surveys returned, for a 25 percent response rate. For
the Internet customer survey, we culled the partner’s email
list for 4,000 recent purchasers; they were sent an email from
the president endorsing the research and a link to the sur-
vey site. Of these, 326 filled out the online questionnaire,
for a response rate of 8.2 percent. Finally, 103 retail cus-
tomers filled out the questionnaire on-site in the retail store.
The retailer’s customer database indicated that our respon-
dents had substantial average life-to-date purchases, both in
dollar volume and in number of transactions, suggesting that
these customers have repeated experience with the retailer
and have developed related attitudes over time. There is no
significant difference in purchase volume between respon-
dents and nonrespondents (p = .33) and no differences be-
tween early and late respondents on any of the variables in
this study (Armstrong & Overton 1977); we conclude that
non-response bias should not be a problem.
Measure development
Measure development followed standard research proce-
dures (Churchill 1979). Reflective measures were adapted
from existing scales, while the formative measures were new.
The questionnaire document was peer reviewed and pretested
on a student sample (n = 132), and items were reworded
or dropped based on the pretest. After Confirmatory Factor
Analysis (CFA), composites were formed by summing scale
items. Please see Appendix A for all measures.
Customer multi-channel employment
In order to assess the extent to which each respondent
is a multi-channel shopper (that is, the more channels you
visit, the more of a multi-channel shopper you are), we asked
customers about the service outputs accessed from all mail
order, retail, and Internet channels combined. If service out-
puts were accessed from three channels, the customer is a
three-channel shopper, while if only one channel is accessed,
the customer is a single-channel shopper, and so forth; thus,
our measure of multi-channel employment is derived from
the categories of service outputs reportedly accessed.
Multi-channel portfolio of service outputs
We requested that each customer, in all three data col-
lection modes, estimate the likelihood that each of the mer-
chant’s mail order, Internet, and retail channels can deliver the
four primary service outputs (information, product selection,
delivery time, convenience). Similar to Fishbein’s (1963) ex-
pectancy value model, customers rated the ability of each
of the industry partner’s channels to deliver each output; the
outputs are then weighted in terms of their importance to the
customer. The logic behind weighting service outputs by their
importance is that available service outputs alone are not suf-
ficient to sway customer responses. Service outputs that are
available, but are of no interest to the shopper, are likely to
be of little influence. The customer must both perceive the
service output to be available and have some reason to think
that the service output matters to him/her, in order to find
it valuable. For example, a customer may perceive that the
retail store can provide the quickest product delivery time;
yet if the customer is purchasing a pair of overstock skis in
July, delivery time is of very little importance. Four weighted
values result (one each for convenience, waiting and delivery
time, assortment, and information); these are then summed
to create a single multi-attribute service output score. A high
score indicated that all four-service outputs were important
and were perceived to be readily available from all of the
retailer’s channels. We used seven-point scales to measure
availability (1 = Very Unlikely, 7 = Very Likely) and impor-
tance (1 = Not at all Important, 7 = Very Important).
Disconfirmation and satisfaction
Disconfirmation was operationalized using three items
based on Oliver (1980), with end points reflecting the
problems (1 = Much More Serious, 7 = Much Less Serious),
benefits, and overall purchase experience (1 = Much Worse
Than Expected, 7 = Much Better Than Expected). Customer
satisfaction was measured using a two-item, seven-point
scale (1 = Very Dissatisfied/Terrible and 7 = Very Sat-
isfied/Delighted) (Oliver 1980; Westbrook 1980). The
disconfirmation measure operationalizes the evaluation of
the actual experience relative to a priori expectations, as op-
posed to the satisfaction measure which reflects the summary
response resulting from the disconfirmation of expectations.
Typically, a positive relationship should exist between
disconfirmation and satisfaction; however, results to the
contrary have been found (e.g., Spreng & Olshavsky 1993).
Customer retailer loyalty
This construct was measured to capture both behavioral
and attitudinal elements (Dick & Basu 1994; Srinivasan
et al. 2002). To tap the behavioral domain, we measured the
number of the focal merchant’s competitors patronized by
the customer using a checklist of such competitors provided
by the industry partner. In general, greater switching behav-
ior indicates lower loyalty to any one retailer. To measure
the attitudinal element, customers were asked to compare the
industry partner to its competition (1 = Much Worse Than Av-
 D.W. Wallace et al. / Journal of Retailing 80 (2004) 249–263
erage, and 7 = Much Better Than Average). Since these are
experienced customers, this measure captures a comparison
with available alternatives that has developed over time.
Control variables
We control for a number of variables that, while not the
focus of this research, are likely to influence our variables:
product type, depth of shopping experience, age, income, and
purchase involvement. Customers are likely to engage in less
information search and devote considerably less effort for
convenience goods than for shopping and specialty goods
(Darby & Karni 1973). Product type is controlled for by the
research design, which only addresses shopping and specialty
goods. Expectations based on shopping experience may sig-
nificantly influence perceptions of and satisfaction with the
current shopping experience (Churchill & Surprenant 1982;
Spreng et al. 1996). It is also likely that customers with more
shopping experience are more accustomed to the service out-
puts made available to them by the merchants that they en-
counter. For example, they are better at navigating web sites,
reading size charts in catalogs, asking appropriate questions
of retail sales people, and so forth. We employ a four-item
measure that taps a customer’s experience at researching and
purchasing similar products. We also control for age and in-
come levels. These are related to socioeconomic status and
are likely to influence purchase volume, as well as the type
and quantity of service outputs accessed. Online shoppers,
in particular, are thought to be from higher socioeconomic
groups (Wolfinbarger & Gilly 2003). Age and income may
also make for more demanding customers, thus lessening the
impact of service output availability on satisfaction and loy-
alty.
Purchase involvement, the personal relevance a purchase
has for a customer, is also included as a control variable. Cus-
tomers who are highly involved with the purchase will engage
in greater effort processing information (Celsi & Olson 1988)
and attend more closely to the services made available to
them. We expect that highly involved customers will be more
likely to notice and assess a high availability of service out-
puts, and thus treat it as a control variable that may confound
Table 1
Measure validation
Construct Range of factor loadings
Satisfaction .65–.95
Disconfirmation .57–.88
Multi-channel portfolio of service outputs .76–.92
Goodness-of-fit statistics NFI CFI
.98 .99
Involvement .82–.96
Experience .74–.89
Goodness-of-fit statistics NFI CFI
.94 .94
a Average variance extracted calculated as per Fornell and Larcker (1981).
b Reliability calculated per Fornell and Larcker (1981).
255
the influence of available service outputs on satisfaction. Our
measure is based on a nine-item version of Zaichkowsky’s
(1985) widely used scale, adapted as appropriate for purchase
involvement (Lichtenstein, Bloch, & Black 1988).
Results
The validity of the five reflective measures was assessed
using confirmatory factor analysis. In the first CFA model,
which included disconfirmation, multi-channel service out-
puts, and customer satisfaction, all loadings were signifi-
cant and ranged from .57 to .95, well above Nunnally and
Bernstein’s (1994) suggested cutoff of .4. The model was
2
significant (χ(24) = 53.59; p < .001) which is not surpris-
ing given this test’s known sensitivity to large sample sizes
(Bollen 1989). However, alternative fit indices also suggest
that the model fits the data reasonably well: the GFI, NFI and
CFI statistics are at or above .98, and RMSEA = .05 (Bagozzi
& Yi 1988). In addition, results show evidence of reason-
able consistency (Fornell & Larcker 1981). Average variance
extracted (AVE) ranged from .66 to .75, while reliabilities
ranged from .79 to .92. Finally, discriminant validity can be
inferred in that 95 percent confidence intervals around the
construct Φs do not contain 1 (Anderson & Gerbing 1988).
Thus, it can be concluded that, though related, disconfirma-
tion and satisfaction are distinct and separate constructs. The
second CFA model included the control variables (involve-
ment and experience) (χ(26)2 = 229; p = .000). The NFI, CFI,
and GFI statistics all exceed .92; RMSEA is .11. AVE was
.82 for involvement and .66 for experience; reliabilities were
.96 and .89, respectively. Finally, 95 percent confidence in-
tervals around the construct Φs once again do not contain 1
(Anderson & Gerbing 1988). Table 1 summarizes CFA results
and Table 2 shows descriptive statistics.
An examination of Fig. 1 suggests that the entire sys-
tem should be estimated simultaneously; we thus test our
hypotheses using LISREL. The initial structural model in-
cluding all controls had a χ2 of 161.84; GFI was .94, CFI
was .64, and NFI was .63, while RMSEA was .13. Having
AVEa Reliability (ρn )b
.66 .79
.59 .81
.75 .92
GFI RMSEA χ2 (df, p) = 98 (38, .000)
.98 .046
.82 .96
.66 .89
GFI RMSEA χ2 (df, p) = 229 (26, .000)
.92 .11
256 D.W. Wallace et al. / Journal of Retailing 80 (2004) 249–263

Table 2
Correlation coefficients and descriptive statistics
Construct Number of Service Disconfirmation Customer Loyalty Age Income Experience Involvement
channels outputs satisfaction
Service outputs .207**
Disconfirmation −.002 .246**
Customer satisfaction −.016 .212** .456**
Loyalty −.062 .026 .253** .204**
Age .027 −.068 .072 .047 .035
Income −.013 −.038 −.038 .028 −.06 .456**
Experience .046 .136** .129** .144** −.125** .051 .116**
Involvement −.034 .067 .114* .079 .095* −.054 −.092* −.056
Mean 1.75 330.76 16.55 12.49 14.09 37.40 79694 23.40 44.54
SD .70 112.32 3.07 1.81 2.68 11.17 43734 3.96 11.16
∗ Significant at the .05 level (two-tailed).
∗∗ Significant at the .01 level (two-tailed).

Table 3 H3 predicted that disconfirmation would influence customer

LISREL results combined data satisfaction. Consistent with past findings, this prediction is
Dependent Independent Standardized t-Value supported (β = .44; p < .01). H4 predicted that customer sat-
variable variable parameter isfaction would influence customer retailer loyalty; this pre-
estimate
diction is also supported (β = .23; p < .01).
Service outputs Controls Turning to the control variables, age and income did not in-
Experience .13 3.15**
Involvement .07 1.80*
fluence the multi-channel portfolio of service outputs, but ex-
perience (γ = .13; p < .01) and involvement (γ = .07; p < .05)
Predictors
did. Older customers (γ = .10; p < .05), more experienced
Number of channels .19 4.72**
customers (γ = .09; p < .05), and more involved customers
Disconfirmation Controls (γ = .10; p < .05) were more likely to have their expectations
Age .10 2.38* positively disconfirmed, while income did not have a sig-
Experience .09 2.24* nificant effect. Interestingly, the only control variable to in-
Involvement .10 2.40*
fluence overall satisfaction was experience (γ = .09; p < .05).
Predictors Equally interesting is the negative influence of shopping ex-
Service outputs .22 5.56** perience on loyalty (γ = −.15; p < .01).1 Apparently, the more
Satisfaction Controls
shopping customers engage in, the less loyal they are to any
Experience .09 2.44* given merchant. These results suggest that multiple channel
strategies, as depicted in Fig. 1, do contribute towards build-
Predictors
Disconfirmation .44 11.85** ing customer retailer loyalty.
To test H5 , we split the sample into two groups, single and
Loyalty Controls multiple channel customers, based on their multiple chan-
Experience −.15 −3.81** nel usage scores; that is, we converted this measure into a
Predictors dichotomous variable and used it to split the sample. There
Satisfaction .23 5.52** were 160 single-channel customers, and 264 multiple chan-
χ(17)
2 = 41.96; p < .001; RMSEA = .05, GFI = .98; CFI = .92; NFI = .87. nel customers. Because a Chow test was necessary to test
∗ Significant at the .05 level.
the poolability of these models across the two groups, we
∗∗ Significant at the .01 level.
ran separate 3SLS models for each group; this analytical
method simultaneously estimates a system of linear equa-
ascertained that some control variables had no effect on our tions and permits the error terms of each equation to covary
endogenous constructs, a more parsimonious model was esti- (Ramanathan 1998). Each 3SLS model included three equa-
mated (see, e.g., Nijssen, Sing, Sirdeshmukh, & Holzmueller tions. In the first equation, the dependent variable was dis-
2003). In the new model, χ2 was 41.96 and RMSEA was
.05, while GFI, CFI and NFI were .98, .92, and .87, respec- 1 Examination of our model suggests that it would be appropriate to test

tively. Table 3 presents results of this second model. H1 pre-
dicted that customer multi-channel employment positively
influences the multi-channel portfolio of service outputs. H1
is supported (γ = .19; p < .01). H2 predicted that the multi-
channel portfolio of service outputs would positively influ-
ence disconfirmation. H2 is also supported (β = .22; p < .01).
for whether satisfaction completely mediates the effect of disconfirmation
on loyalty. We used three OLS regression models for this purpose (Baron &
Kenny 1986). Results suggest that there is partial mediation. In addition to its
indirect effect, disconfirmation has a direct effect as well (b = .21; p < .001).
While the satisfaction paradigm does not specifically predict such an effect,
apparently loyalty is directly influenced when retailers successfully meet
customer expectations.
 D.W. Wallace et al. / Journal of Retailing 80 (2004) 249–263 257

Table 4
3SLS regression results: single versus multiple channel customers
Independent variable Dependent variable Single-channel customers Multiple channel customers

Standardized parameter estimate t-Value Standardized parameter estimate t-Value

Disconfirmation Controls
Age .10 1.09 .14 2.19*
Income −.17 −1.98* −.02 −.80
Experience .06 .71 .22 3.65**
Involvement .12 1.56 .10 1.71
Predictors
Service outputs .22 2.88* .20 3.46**

Satisfaction Controls
Age −.11 −1.21 −.07 −1.00
Income .09 .95 .15 2.25*
Experience .05 .66 .00 .02
Involvement .02 .20 −.02 −.25
Predictors
Disconfirmation .51 2.18* .84 4.62**

Loyalty Controls
Age .34 .32 −.07 −.91
Income −.05 −.45 −.03 −.31
Experience −.26 −2.50* −.23 −2.58*
Involvement −.03 −.35 .05 −.70
Predictors
Satisfaction .81 1.55 .83 3.22**
∗ Significant at the .05 level.
∗∗ Significant at the .01 level.

confirmation, in the next it was satisfaction, and in the final
equation, it was loyalty. The Chow test was significant for
the disconfirmation equation (p = .002), and marginal for the
loyalty equation (p = .15), suggesting that some differences
do exist in how these models function for multiple channel
and single-channel customers. H5 stated that H2 –H4 would
be more strongly supported for multiple channel customers.
There appears to be support for this assertion; R2 for the
single-channel group is 8 percent, while R2 for the multi-
ple channel group is 19 percent. Overall, the constructs do a
better job of explaining the behavior of multiple rather than
single-channel customers. This difference may be manifested
in two ways: disconfirmation has a stronger influence on satis-
faction for multiple channel customers (b = .84; p < .01) than
for single-channel customers (b = .52; p < .05); in addition,
satisfaction is a significant predictor of loyalty for multiple
channel customers (b = .83; p < .01), while it is not for single-
channel customers (b = .81; p < .20). These results suggest
that multiple channel retailing can be an effective means for
building customer retailer loyalty. Table 4 presents these re-
sults.
Our finding that satisfaction is a better predictor of loy-
alty for multiple channel customers than single-channel cus-
tomers is consistent with recent empirical research. Shankar
et al. (2003) found that the relationship between loyalty and
satisfaction is higher online than offline. They argue that this
may be because the online medium makes it easier for satis-
fied customers to choose the service provider again. We can
extend this argument to the single versus multiple channel
context. A multiple channel customer perceives an increased
ability to satisfy their complex needs via enhanced service
outputs and more points of contact with a specific merchant.
Multiple channel service outputs and multiple points of con-
tact make it easier for a multiple channel customer’s satisfac-
tion to manifest itself in the form of loyalty.
This explanation assumes that an increased level of avail-
able service outputs is more likely to confirm customer expec-
tations and, mediated by satisfaction, increase retailer loyalty.
There is an intriguing relationship between customer expec-
tations level and the resulting level of satisfaction. The most
plausible explanation for our results is that raised multiple
channel customer expectations actually lead to increased per-
ceived performance (Yi 1990), which leads in turn to positive
disconfirmation. On the other hand, high expectations would
appear to be more difficult to meet, thereby raising the likeli-
hood and magnitude of negative disconfirmation (Anderson
1973; Olshavsky & Miller 1972). Multiple channel shoppers
might reasonably be expected to have higher expectations,
thereby requiring that multiple channel performance needs
to be correspondingly better in order to avoid negative dis-
confirmation. It might thus be argued that multiple channel
shoppers could be expected to be less, not more, satisfied.
Both arguments are evident in Spreng et al.’s (1996) find-
ings of a negative direct effect of expectations on positive
disconfirmation, as well as a positive indirect effect through
perceived performance; interestingly, the positive indirect ef-
258 D.W. Wallace et al. / Journal of Retailing 80 (2004) 249–263
fect was slightly stronger than the negative direct effect. We
conducted a follow-up study to examine these alternative per-
spectives.
Follow-up study
The follow-up study was designed to extend our results by
examining negative market response and competitive effects.
The basic contention in our main research study is that the
use of multiple channels provides an opportunity to expose
the customer to a larger and more diverse package of service
outputs, and this has critical strategic implications in the form
of enhanced customer satisfaction leading to customer loy-
alty with the retailer. A key challenge for a multiple channel
retailer is the integration of its various channels in order to
provide the customer a seamless shopping experience such
that competitive switching pressures are lessened. Our ma-
jor assumption throughout has been that the multiple channel
retailing strategy has been implemented successfully. What
happens when this is not the case? Cross-channel failures
can occur in a number of ways. For example, a clothing item
purchased online may not be returnable to a local store, or a
product displayed in the store cannot be found in the catalog.
In such cases, customer expectations are negatively, rather
than positively disconfirmed, and the multiple channel strat-
egy turns into a liability rather than a loyalty-enhancing as-
set. If cross-channel synergies can produce loyal customers,
it may be that cross-channel failures can produce customers
that are not loyal.
Our key challenge in conducting this research was to iden-
tify customers of our industry partner who may have been the
victims of cross-channel failures. We developed a mailing list
of 1,000 “lost” customers; that is, randomly selected past cus-
tomers of our industry partner who had not purchased from
them in the last 36 months but who were still active pur-
chasers with other firms in the same industry. Why had these
active purchasers apparently dropped this retailer from their
consideration sets? Have these apparently “lost” customers
stopped patronizing the retailer due to cross-channel failures
or something else?
A survey was mailed to the home addresses of these 1,000
past customers. The packet included the survey, a stamped
return envelope, and a cover letter with a response incen-
tive. We received 140 responses; after accounting for 65 non-
deliverable addresses, this represented a 15 percent response
rate. Survey responses were matched to customer sales his-
tory in the industry partner’s database. There was not a signif-
icant difference in the number or dollar amount of life-to-date
purchases between the mailing list and our 140 respondents,
nor was there a significant difference between early and late
respondents on either of these metrics, suggesting that the
respondents were representative of the mailing list.
The survey included the same measures for disconfirma-
tion and overall satisfaction used in the main study data col-
lection, along with measures of cross-channel service per-
formance problems (e.g., I saw something in the catalog but
couldn’t find it on the web site) and inflated multiple chan-
nel expectations (e.g., I expected more product information).
Since customers may cease to patronize a store for reasons
not directly related to multiple channel retailing, questions
related to general failings in regard to service, pricing, and
merchandise were included (e.g., the hours were inconve-
nient). In addition, questions were asked concerning compe-
tition (e.g., other stores have a better selection).
Results suggest that while there was no significant dif-
ference between “lost customers” and respondents from
the main study data collection in level of disconfirmation
(t(663) = .01); lost customers did express a lower level of
overall satisfaction (t(694) = −3.8; p = .000). Given this find-
ing, we estimated a regression model in which the lost cus-
tomer’s overall satisfaction was a direct function of discon-
firmation, cross-channel failures, multiple channel expecta-
tions, and competition. The regression model is significant
(F(106) = 22.4; p < .001), with these independent variables ex-
plaining 47 percent of the variance in overall satisfaction.
As expected, disconfirmation is the strongest predictor of
satisfaction (b = .49; p < .001). Inflated expectations about
multiple channel service outputs lead to reduced satisfaction
(b = −.27; p < .01), as does strength of competition (b = −.18;
p = .04). Problems caused by multiple channel issues are not a
significant predictor of overall satisfaction (b = .10; p = .15).
Interestingly, the most common reason cited by customers
for their lack of recent patronage was that they had simply
lost the habit of shopping there; others were price and lack
of recent need.
Discussion
The key research question focused on the market-level re-
sponse to multiple channel retailing, particularly in the forms
of customer satisfaction and retailer loyalty; that is, do re-
tailers who invest in multiple channels receive a payoff in
terms of customer loyalty? Our results emphatically suggest
that multiple channel retailers do receive a customer loyalty
payoff. Although market-level response is the ultimate criti-
cal measure of retailer effectiveness and profitability, the im-
pact of multiple channel strategies on market-level responses
has received much less attention by researchers (Homburg,
Hoyer, & Fassnacht 2002) than other multiple channel issues,
such as competitive response. Therefore, based on seminal
service outputs and satisfaction/loyalty theories, the results
of our research prompt researchers and managers to focus
on these critical market-level responses to multiple channel
strategies.
According to our results, the retailer loyalty payoff occurs
because: customers perceive an enhanced portfolio of ser-
vice outputs provided by the multiple channels; customers’
complex needs are more likely to be satisfied with a synergis-
tic combination of service outputs; and satisfaction based on
multiple channel strategies results in customers having loy-
alty to the provider of the multiple channels, the retailer. Im-
 D.W. Wallace et al. / Journal of Retailing 80 (2004) 249–263
portantly, our results provide a preliminary indication that the
empirical model linking multiple channel strategies to cus-
tomer retailer loyalty was more effective for multiple channel
customers than for those customers employing only a single
channel.
The results of our follow-up investigation imply that, not
surprisingly, these lost customers are less satisfied overall
than those surveyed in the main data collection. Interestingly,
dissatisfaction does not appear to result from cross-channel
failures related to the complexity inherent in multiple channel
strategies; but rather to a failure to deliver the overall level
of service outputs customers expect of a multiple channel re-
tailer (inflated expectations issue), failure of a single channel
to deliver a specific service output, or competitive reasons
to switch to another retailer. Price is a generally important
competitive issue in satisfying customers.
These follow-up results, paired with our main study re-
sults, support the conclusion that multiple channel retailing
is an important means of enhancing customer satisfaction
and retailer loyalty, provided that retailers make available
and deliver general levels of service outputs commensurate
with multiple channel customers’ high expectations. On the
other hand, the strategy of multiple channel retailing does not
appear to diminish customer satisfaction; that is, when multi-
ple channel customers are dissatisfied and ultimately switch
to another retailer, the causes focus on single-channel fail-
ures (as opposed to multiple channel interaction failures) and
competitive advantages, particularly price advantages. These
results suggest that multiple channel strategies result in more
satisfied and loyal multiple channel customers; these results
do not suggest that the unique complexities of multiple chan-
nel interactions result in more dissatisfied multiple channel
customers.
Future research
Future research is needed to address the unique role of
specific service outputs in different channels and how these
unique roles impact satisfaction and retailer loyalty. It is ac-
cepted that different channels provide different mixes of ser-
vice outputs and that customers may access different channels
depending on their current needs (Friedman & Furey, 2003;
Hansell 2002); most importantly, future research needs to
address the efficacy of these different mixes, both alone and
in combination. For example, how does customer response
to live online help compare with response to 1–800 support
or in-person selling? What do customers get out of in-store
sources of information such as point-of-purchase materials
and employees that they might not get from a web site or cat-
alog? When retailers transition from single to multiple chan-
nel strategies, they thereby gain the ability to provide these
different mixes of services to their customers. We are not nec-
essarily advocating that all retailers should pursue multiple
channel strategies. It is an interesting and important ques-
tion to examine under what product market conditions, and
259
for what types of retailers, this transition to multiple chan-
nel strategies is particularly efficacious. In addition, future
research should examine the market response to specific ser-
vice outputs provided by combined channels, such as online
ordering with retail pickup or in-store web kiosks. Combining
channels to provide service outputs is emerging as a merchan-
dising trend. The question remains whether such a multiple
channel strategy creates strategically important market-level
responses.
Friedman and Furey (2003) introduce an interesting dis-
tinction between channel mix and channel integration strate-
gies. Empirical research needs to be done on this important
distinction and on other multiple channel strategies that may
be available to managers. In particular, what is the efficacy of
each strategy, and what are their managerial challenges and
implications?
Multiple channel retailing introduces a host of competitive
issues. For example, competition among a retailer’s differ-
ent channels would appear to be detrimental to the synergis-
tic combination of services required of successful multiple
channel retailing. What managerial strategies are effective
at curbing such competition? The purpose of this research
has been to examine market response to an existing multiple
channel retailing strategy. More research needs to be done on
the reasons why such strategies are implemented in the first
place. Competitive reasons surely loom large here, as indeed
they do for any marketing initiative. What are the implica-
tions for competitive response when retailers announce or
implement multiple channel strategies? Finally, competition
among multiple channel retailers and the risk of free-riding
on services may make it difficult to profitably support prod-
ucts with the kinds of services advocated here. What forms
of compensation and control mechanisms are needed on the
part of suppliers and wholesalers to align the interests and ob-
jectives of different retailers with their upstream suppliers?
Although we used cross-sectional data from a customer
group with considerable experience shopping from the re-
tailer, we did not track these customers across several pur-
chase episodes; instead loyalty is based on historical sales
amounts and number of past purchase episodes rather than
true longitudinal data. A longitudinal study, however, would
provide valuable insight into other factors that enhance sat-
isfaction and retailer loyalty, as well as insight into what fac-
tors diminish satisfaction resulting in “lost” customers and
what factors cause customers to switch retailers even though
satisfaction may be unchanged. Future research should also
explore multiple channel strategic implications of customers
who purchase from one channel on one occasion and another
channel on another occasion and customers who use different
channels for different purposes.
Our research is designed to assess the impact of multiple
channel shopping on customer satisfaction and, ultimately,
customer retailer loyalty, for the customers of a single re-
tailer. With this design, there is variance in the number of
channels used by the customer but no variance in the num-
ber of channels offered by the retailer. Also, with this de-
260 D.W. Wallace et al. / Journal of Retailing 80 (2004) 249–263
sign, there is less variance in customer response because
of the main study’s focus on only current customers. We
contend that there is little reason to expect that the multi-
ple channel customers of this retailer would be different in
any systematic way from the multiple channel customers of
other retailers, and that this general framework—customers
who visit multiple channels are thereby exposed to more ser-
vice outputs and this has beneficial effects on satisfaction
and loyalty—should apply in other settings. The follow-up
study was designed to investigate market-level responses of
“lost” customers. Nonetheless, future research should com-
pare the responses of customers to single versus multiple
channel retailers. In addition, future research should further
expand on differences between single versus multiple chan-
nel customers. Indeed, fertile future research should track
the development of loyalty, utilizing current customers and
noncustomers, over multiple purchase instances and multi-
ple channels, as well as, across multiple retailers that employ
different multiple channel strategies.
Conclusion
It has been observed that with the advent of Internet re-
tailing, the new “frictionless market” may lead to increased
price competition (Brynjolfsson & Smith 2000). Retailers
that wish to compete successfully must find some way of
providing differential value. This research, based on actual
industry data, suggests one important means to this end. By
expanding the portfolio of service outputs available to the
customer, multiple channel strategies may be employed to
enhance the retailer’s overall value proposition (Porter 2001),
leading to enhanced customer satisfaction and managerially
relevant outcomes.
This research has investigated two strategically critical yet
under-researched areas: multiple channel retailing strategies
and customer retailer loyalty. Multiple channel distribution
strategies have become increasingly important in industry
(Reda 2002b) and in academic research (Frazier 1999), and
customer retailer loyalty has become similarly consequen-
tial. The major contribution of this research is to apply clas-
sic channels and satisfaction theory to these domains, and
to show that retailers who pursue multiple channel strate-
gies enhance the service outputs the customers find available,
thereby satisfying their customers; this satisfaction enhances
the strategically important outcome of customer retailer loy-
alty. In addition, we specifically model this process for two
different groups, single and multiple channel customers, and
show that it can be particularly effective for the latter. Thus,
we conclude that multiple channel strategies, in and of them-
selves, are useful in satisfying multiple channel customers’
high expectations and retaining customers.
Acknowledgements
The authors thank our industry partner for their generous
involvement in this project. The authors also thank the De-
partment of Marketing at Washington State University for
financial support.
 D.W. Wallace et al. / Journal of Retailing 80 (2004) 249–263 261

Appendix A. Construct operationalizations

262 D.W. Wallace et al. / Journal of Retailing 80 (2004) 249–263
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