The influence of grey consumers' service quality perception on satisfaction and store loyalty behavior

Purpose – The purpose of this study is to identify grey consumers' perceived service quality at department stores and to examine the relationships between perceived service quality, their satisfaction and loyalty to those stores. Design/methodology/approach – A structured questionnaire was developed to collect the data. Factor analysis was employed to identify dimensions of grey consumers' perceived service quality. Multiple regression analyses were conducted to examine the relationships between grey consumers' perceived service quality at department stores and their satisfaction and loyalty behaviors at those stores. Findings – Three service quality dimensions were identified. The results showed that all three service quality dimensions in the study were significantly and positively related to their satisfaction at their favorite department stores and overall loyalty behavior to those stores. Among three service quality dimensions, personal interaction was the strongest predictor of both grey consumers' satisfaction and overall loyalty behavior. Personal interaction was identified as the most significant factor for promoting positive word of mouth and store image for repeat purchase intention. Practical implications – With this study, department stores' managers would be able to better understand grey consumers and thereby take advantage of the potential purchasing opportunities of this powerful consumer market. This study also may contribute to the department stores' management in allocating their resources to improve service in a more effective way to satisfy grey consumers. Originality/value – Despite the increasing purchasing potential this powerful market has created, grey consumers' shopping behavior is under‐researched and their needs are still unmet in the market place.