Promotion, Service Quality, and Store Location as Drivers of Customer Loyalty: The Mediating Role of Customer Satisfaction

Abstract

Previous studies have reported inconsistent findings regarding the effects of promotion, service quality, and location on customer loyalty, suggesting that these relationships may vary across different retail contexts and customer characteristics. This inconsistency highlights the need for further investigation, particularly within Indonesia's highly competitive modern minimarket sector. This study examines the effects of promotion, service quality, and location on customer loyalty among Alfamart consumers in Semarang City, with customer satisfaction acting as an intervening variable. The intensifying competition within the retail industry necessitates effective strategies for sustaining long-term customer relationships. A quantitative explanatory approach was employed, surveying 150 respondents selected via purposive sampling. Data were analyzed using SPSS and path analysis. The findings reveal that service quality and location significantly enhance customer satisfaction, whereas promotion has no significant effect on satisfaction levels. Directly, promotion, service quality, and location all positively influence customer loyalty. However, customer satisfaction neither significantly affects customer loyalty nor serves as an effective intervening variable in the model. Theoretically, this insignificant mediation result challenges the conventional assumption that customer satisfaction automatically converts favorable retail experiences into brand loyalty. These results suggest that customer loyalty among Alfamart consumers in Semarang is primarily driven by operational efficiency and convenience rather than satisfaction alone. Consequently, retail managers should prioritize enhancing service quality and optimizing store location to foster customer retention and long-term loyalty.