International Journal of Retail & Distribution Management

Do channel integration efforts pay-off in terms of online and offline customer loyalty?
Marta Frasquet, Maria-José Miquel,
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Marta Frasquet, Maria-José Miquel, "Do channel integration efforts pay-off in terms of online and offline customer loyalty?",
International Journal of Retail & Distribution Management, https://doi.org/10.1108/IJRDM-10-2016-0175
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 Do channel integration efforts pay-off in terms of online and offline customer loyalty?

Purpose: The aim of this paper is to investigate the effects of multichannel integration on
customer loyalty. Our specific objectives are to provide an appropriate reliable
measure of the construct, and to analyse the impact of multichannel integration on
offline and online loyalty, both directly and by mediation of customer satisfaction.

Design/methodology/approach: Our paper focuses on the retail apparel sector of Spain and
the United Kingdom. We applied a scale development process and tested our model
with data of 761 multichannel apparel shoppers. The proposed theoretical model was
estimated through EQS 6.1 and a mediation test was calculated.

Findings: Our findings show, firstly, that the construct of channel integration has two
dimensions: reciprocity, which refers to the possibility of crossing the channels while
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shopping, and coordination, which refers to the alignment of offline and online offers;
second, that multichannel integration affects positively both offline and online loyalty
both directly and through satisfaction, which partially mediates the relationship.

Research limitations/implications: Culture might play a moderating role in the relationships

found that is not analysed.

Practical implications: Our findings have implications for the managers of multichannel retail
companies as they help to understand the benefits of channel integration in creating a
loyal customer base both online and offline.

Originality/value: This paper contributes to the literature on multichannel retailing in two main
ways; first, by developing a scale to measure MCI, and second, by demonstrating that
MCI has strong effects on customer satisfaction and loyalty.

Keywords: channel integration, multichannel retailing, online loyalty, offline loyalty

Article Classification: Research paper

 1. Introduction

In order to remain competitive and relevant for their customers, traditional brick-and-
mortar retailers have added online channels, becoming multichannel retail companies or brick-
and-clicks (Gallino and Moreno, 2014; Verhoef et al., 2015). Although pure online players have
been found to perform better than brick-and-clicks (Herhausen et al., 2015), multichannel
retailers have a competitive advantage over pure players based on the potential synergies
between their offline and online channels. However, as Badrinarayanan et al. (2012) and
Herhausen et al. (2015) report, brick-and-clicks are struggling to achieve those advantages, and
this may be due to a lack of channel integration. In fact, IBM (2015), based on a survey and an
Omnichannel Capability Index produced from it, concludes that there is room for improvement
in the multichannel strategies of European retailers
The lack of multichannel integration (MCI hereafter) can be related to the evolution of the
industry. In the early stages of e-commerce, brick-and-mortar retailers just added the online
channel as a separate division, run in parallel to rather than integrated with the physical
business model. In fact, it was debated whether channels should be operated separately or not
(Goersch, 2002), as the costs of data integration are very high (Neslin et al., 2006). Today, it
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seems clear that multichannel retailers should strive for coordination and integration of
channels (Gallino and Moreno, 2014; Herhausen et al., 2015) and this has become the focus of
retail managers. Recently, a move from multichannel to omnichannel retailing has been
reported (Brynjolfsson et al., 2013; Verhoef et al., 2015), and this signifies the full integration
of channels to blur the boundaries between offline and online channels. Retailers are investing
considerable resources into integrating online and offline channels, but the payoffs are not yet
clear. It is sufficiently agreed, though, that the shopping experience is enhanced when
channels are integrated (Verhoef et al., 2015). Thus, understanding how channel integration
affects key customer responses such as customer satisfaction and loyalty is of utmost
relevance. Despite the fact that MCI has been acknowledged as a strategic priority for retailers,
its effects on customer reactions towards retailers and across different channels remain
unclear and more research is needed in this field (Badrinarayanan et al., 2014; Herhausen et
al., 2015). Addressing this research gap, the aim of this paper is to better understand the
concept of MCI from the customer perspective, and its implications for customer responses.
More specifically, we want to, firstly, provide a reliable measure of the construct of perceived
MCI, and secondly, analyse the impact of MCI on satisfaction with the retailer and on loyalty
towards its offline and online channels.
Developing a valid and reliable scale with which to measure the MCI construct (following
Churchill, 1979) is a methodological contribution towards clarifying the domain and
measurement of the construct. Understanding the implications of channel integration for
customer satisfaction and loyalty will provide interesting managerial and theoretical
contributions. Wallace et al. (2004) found that a multichannel strategy enhanced the portfolio
of service outputs provided to the customer, thus improving customer satisfaction and
ultimately the customer’s retailer loyalty. Although providing a relevant base for our research,
Wallace et al. (2004) did not measure MCI but had multichannel retailing as the research
context. There are some papers (as discussed in Section 2) that explicitly measure MCI and its
effects but, with the exception of Herhausen et al. (2015), who analysed behavioural
responses towards the online and offline channels separately, the papers assess overall
responses towards the retailer. It is of relevance to attempt to understand whether the
benefits of MCI are more evident when it comes to attitudes and behaviours towards the
online or the offline channel. If MCI had similar benefits for both channels, this would support
the idea that the benefits of a multichannel strategy were multichannel (Gallino and Moreno,
2014), but if they were unequal, for example if offline loyalty were not affected, this would
mean that MCI was not producing positive effects across all the retailer channels.
 Our paper focuses on the apparel sector. Despite initial doubts about the selling of clothes
online, this sector is leading the growth in online sales as a result of channel integration and
brand-building efforts (Euromonitor International, 2014). All in all, integration efforts should
be more relevant for experiential products, such as apparel (Herhausen et al., 2015).
Moreover, it is particularly interesting to study loyalty in the apparel context as in this sector
loyalty is challenged because of the multiple alternatives and high purchase frequency
(Michaelidou and Dibb, 2009).

2. Literature Review
2.1. Multichannel integration
MCI is defined as the management of diverse channels so as to offer shoppers a seamless
experience across all of a firm’s channels (Goersch, 2002; Chatterjee, 2010). Similarly, Bendoly
et al. (2005) state that MCI aims to provide mutual support and interchangeability of channels
for customers. MCI involves investments at two levels: at the marketing level to coordinate
brand image and merchandise, and at the operations and information management level to
integrate logistics processes and customer databases (Pentina and Hasty, 2009). Coordinating
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and integrating the distribution channels can provide synergies that increase the effectiveness
of each channel and contribute to enhancing the performance of the retailer. With Gallino and
Moreno (2014: 1450) stating “the impact of a multichannel strategy is also multichannel”, this
implies a rethinking of channel evaluation and a realignment of channel-specific incentives, as
the sales in one channel may come from investments made in another. In fact, the profitability
of MCI may not be seen immediately, and Herhausen et al. (2015) warn of its risks and
potential downsides. Nevertheless, as Bendoly et al. (2005) suggest, the most interesting
benefits of MCI come in the form of psychological effects on consumers.
The review of the limited literature that empirically analyses MCI and its effects on firms’
performance is summarised in Table 1. There is quite a lot of diversity among the papers in
terms of the domain of the concept of MCI, its measurement, and its dimensionality. The only
common feature in the operationalization of the construct is that it includes the possibility for
shoppers to cross channels during the shopping process, e.g. to buy online and collect at a
store, or return offline products bought online. Some studies, such as Chiu et al. (2011) or
Gallino and Moreno (2014), limit the construct domain to this dimension, but most consider
additional dimensions of MCI. For instance, the pioneering contribution of Bendoly et al.
(2005) found that MCI has two dimensions: physical integration, which refers to the above-
mentioned possibility of shopping across channels, and informational integration, which refers
to the online and offline channels providing information to one another. This second meaning
is captured by the majority of the subsequent studies, but with different names, such as
reciprocity (Lee and Kim, 2010), store locator, or information management (Pentina and Hasty,
2009). Additionally, other studies include the consistency dimension (e.g. Pentina and Hasty,
2009; Lee and Kim, 2010). Given the diversity of approaches taken to the concept of MCI in the
few papers measuring the construct, we considered it advisable to develop a new, valid and
reliable scale with which to measure the MCI construct, taking an integrative approach
regarding the aspects analysed in the previous studies.

Insert Table 1

In the literature on MCI, we find authors who analyse the effects on different behavioural
responses, such as perceived service quality and perceived risk (Bendoly et al., 2005;
Herhausen et al., 2015), and image and trust (Schramm-Klein et al., 2011), and most often
different measures of shopping intentions and attitudes, such as customer retention (Bendoly
 et al., 2005; Chiu et al., 2011), loyalty (Lee and Kim, 2010; Schramm-Klein et al., 2011), online
and offline search and purchase intentions, and willingness to pay (Herhausen et al., 2015). On
the basis of those papers, we built our research model with the aim of investigating the effect
of MCI on satisfaction and loyalty, as we discuss in the following sections.

2.2. Impact of channel integration on satisfaction

Retailers’ efforts to integrate offline and online channels are expected to increase customer
satisfaction with an enhanced provision of service outputs. We want to extend the findings of
Wallace et al. (2004) that a multichannel retail strategy increases customer satisfaction, by
analysing whether the integration of channels is the cause of customer satisfaction.
Satisfaction is defined as a summary affective response to the shopping experience (Oliver,
1980). When a retailer succeeds in integrating its channels by providing increased levels of
service, e.g. the opportunity to collect at the store items purchased online, it is expected that
customer satisfaction will increase. We find empirical support for this effect in the high-
technology business-to-business (B2B) service sector (Madaleno et al., 2007), and in the retail
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banking sector (Seck and Philipe, 2011), but not in the physical goods retail sector. Unlike
services, purchasing goods implies deliveries and returns, which are strongly affected by the
degree of channel integration. With some retailers having made more progress in channel
integration than others, we could assume that, when a consumer deals with a retailer that
offers more possibilities for shopping seamlessly across channels, he/she will be more
satisfied. Omnichannel management has the objective of optimizing the performance over
channels and the customer experience across channels (Verhoef et al., 2015), allowing the
shopper to interact simultaneously with offline and online channels at any stage of the
purchase process. Thus, we expect that the perception of MCI will impact overall shopper
satisfaction with the retailer.
H1: Multichannel integration is positively related to overall customer satisfaction with the
retailer.

2.3. Impact of channel integration on offline and online loyalty

When a retailer succeeds in integrating its online and offline channels and the shopping
experience is thus enhanced, customers are likely to develop positive attitudes towards the
retailer and are likely not to be willing to shop elsewhere. Focusing on the studies from Table 1
that analyse customer-level responses to MCI, we note that Bendoly et al. (2005) found
customers less likely to switch to a competitor when channels were integrated, and that Lee
and Kim (2010) proved there to be a positive direct effect of channel integration on overall
loyalty. Schramm-Klein et al. (2011) included loyalty as an indirect consequence of MCI and
found perceived channel integration to have a positive impact on customer loyalty through
positive effects on image and trust.
Herhausen et al. (2015) assessed the effect of online-offline channel integration on
customer evaluations of the channels (i.e. perceived quality and risk), and the effect of these
evaluations on overall, online and offline shopping intentions. They expected that online-
offline channel integration would affect the online channel positively and the alternative, i.e.
offline, channel negatively; this would have implied that the offline channel was cannibalized
by the increased performance of the online channel. However, their results showed that
integration did not affect the offline channel negatively. This could be explained by customers
extending their positive evaluations of the online channel to the offline channel by virtue of
the halo effect, implying that there are cross-channel synergies (Farag et al., 2007; Kwon and
Lennon, 2009) and that the offline channel benefits from the online-offline channel
 integration. As the measure of MCI is bidirectional, that is, it refers to both online-offline and
offline-online channel integration, we believe that MCI will affect both online and offline
loyalty positively, as the efforts to make the two channels interchangeable will build positive
attitudes and intentions towards the retailer’s channels. MCI means, for example, that, when
shopping at a store, a customer can order at a kiosk an item that is out-of-stock at the local
store, and this will contribute positively towards offline loyalty. MCI also means that, when
purchasing online, the customer can choose to have the product delivered to their home or to
a store, and this will contribute to online loyalty. There are features of MCI that cannot be
categorized as online-offline integration or offline-online integration, but are reciprocal or
refer to the consistency between channels. Additionally, there is the halo effect that means
that every aspect of MCI could contribute towards both online and offline loyalty. Thus,
H2: Multichannel integration is positively related to customer loyalty towards the offline
channel of the retailer.
H3: Multichannel integration is positively related to customer loyalty towards the online
channel of the retailer.
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2.4. Effect of satisfaction on offline and online loyalty

By developing a fully integrated multichannel strategy, the retailer aims to better satisfy
customer needs, and because satisfaction is the seed of loyalty, enhancing satisfaction is key to
retaining customers (Mittal and Kamakura, 2001). Loyalty is a key relational outcome in
business-to-consumer relationships. Dick and Basu (1994: 99) define loyalty as “the strength of
the relationship between an individual’s relative attitude and repeat patronage”, reflecting the
attitudinal and behavioural components of the construct. When consumers are loyal to a
retailer, they revisit the retailer, repurchase products and recommend the product/retailer to
relatives or friends (Zeithaml et al., 1996).
The positive relationship between satisfaction and loyalty has often been confirmed in the
retailing literature, in the online context (Anderson and Srinivasan, 2003), and specifically in
the multichannel setting by Wallace et al. (2004), and Lee and Kim (2010). When a
multichannel shopper is satisfied with shopping at a particular retailer, he/she will be more
likely to develop loyalty behaviours towards the offline channel of the retailer because the
offline shopping experience is improved by the integration of channels. We expect a similar
connection regarding the online channel. Switching costs are very low online and there is
fierce competition; this could lead to consumers shopping elsewhere despite being satisfied
with a retailer’s online channel (Wallace et al., 2004). However, we believe that, when a
retailer is able to satisfy a customer’s needs with a shopping experience online that allows
interaction with the offline network, the shopper will tend to become loyal to the online
channel. Thus,
H4: Overall customer satisfaction with the retailer is positively related to loyalty to its
offline channel.
H5: Overall customer satisfaction with the retailer is positively related to loyalty to its
online channel.

2.5. Effect of offline loyalty on online loyalty

In multichannel retailing, the most common pattern is still for the new channel being added
to be the online one. Fornari et al. (2016) find that, when a retailer adds a new channel, in the
long run, migration turns into synergy and different channels interact and reinforce each
other. Research on the interaction effects between channels claims the existence of a halo
 effect, whereby offline behaviours build online behaviours; for example, offline shopping
frequency may affect online purchasing (Farag et al., 2007), offline patronage and online
shopping intentions (Jones and Kim, 2010), or offline attitude may affect online attitude
(Badrinarayanan et al., 2012). Thus, we expect that customers transfer existing attitudes and
beliefs built from the offline channel to the online channel, and hypothesize,
H6: Loyalty towards the offline channel of the multichannel retailer is positively related to
loyalty towards its online channel.
Figure 1 displays our conceptual model with the hypothesized relationships between MCI,
customer satisfaction and loyalty in a multichannel context. Our model reflects the three
constitutive elements – attribute perceptions, satisfaction, and loyalty – of the shopping
process often reported in the literature (Finn et al., 2009; Ha, 2006).

Insert Figure 1
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3. Methodology
3.1. Scale items’ development
As our literature review revealed no consensus on the measurement of MCI, we developed
a scale following the scale development principles of Churchill (1979) and Rossiter (2002).
Based on the literature review, we produced an initial list of 78 items that had previously been
used by different authors or that we worded based on the dimensions of the concept
suggested in some conceptual papers. Our approach to the measurement of the concept and
the subsequent scale development process assumes the measure of MCI is reflective, based on
Coltman’s et al. (2008) framework. Thus we generated a large set of items that shared the
domain of the construct. After eliminating duplicities, the number of items came down to 32.
Then we held eight in-depth interviews with multichannel shoppers. As a result of those
interviews, a list of themes included in the concept of shopping across channels was produced
and compared to the initial list of items from the literature to determine whether the domain
of the concept for today’s shoppers was fully captured by the list of items. Two items were
added to our list, making 34 items. Next, the scale was purified by a panel of experts,
according to the procedure suggested by Zaichkowsky (1985). Eight marketing scholars
participated in this process; first, they were presented with a definition of MCI that we
developed for the purposes of the research: the use by the retailer of offline and online
channels in such a way that the customer feels he/she is interacting with the same company
and is able to cross from one channel to the other during the shopping process; then, they had
to assess, from 1 (not at all) to 3 (completely), the extent to which each item was
representative of the construct. For an item to be retained in the scale it had to receive a 3
from at least two thirds of the panel members, and no scores of 1. The final scale had 18 items.
3.2. Data collection
In order to validate the new MCI scale and to test our proposed model, a questionnaire was
developed, which included items linked to the constructs to be measured, using five-point
scales.
For measuring MCI, it was deemed appropriate to use an adequacy-importance model
(Schramm-Klein et al., 2011) due to the domain of the construct. In the current multichannel
setting, multichannel customers have higher expectations due to their extensive past
experience of converged channels (Shankar et al., 2003; Wing and Mahajan, 2002) and
retailers are developing multichannel strategies to respond to those expectations (Wallace et
 al., 2004). It is thus relevant to consider not only how customers perceive different aspects
related to MCI, but also how relevant those aspects are for them, as this will suggest how the
retailer is doing according to the customer’s requirements. Accordingly, the respondents first
assessed the importance of each channel integration item; then, they had to choose their
most-visited retailer from an exhaustive list of multichannel retailers operating in their
country. All the retailers considered were originally offline retailers that had become
multichannel retailers by adding the transactional online channel, and all of them were single-
brand retailers. With the chosen retailer in mind, the respondent evaluated it on each item;
this allowed us to create a weighted variable that was the result of multiplying one variable by
the other and dividing by five. Satisfaction and loyalty measures were also referred to the
respondent’s most-visited retailer. Overall satisfaction was measured with a three-item Likert
scale: (1) Considering all your visits (both offline and online) to Retailer X, how satisfied are
you? (2) Considering only your visits to Retailer X’s online store, how satisfied are you? (3)
Considering only your visits to Retailer X’s physical stores, how satisfied are you?. Offline
loyalty and online loyalty were measured through two scales adapted from that of Yang and
Peterson (2004), which was deemed appropriate as it had been applied to the multichannel
retail context and included electronic word-of-mouth: How likely would you be to…(1) say
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positive things about Retailer X’s online/offline shop to other people, (2) recommend Retailer
X’s online/offline shop to those who seek your advice, (3) encourage your friends and relatives
to use Retailer X’s online/offline shop, (4) visit Retailer X’s online/offline shop more often, and
(5) post positive messages about Retailer X’s online/offline shop on some Internet message
board? We also included demographic variables, such as gender and age.
Data were collected by means of a survey targeted to the population of multichannel shoppers
in the apparel product category. The questionnaire was sent to 2027 members of two Internet
panels, one in the UK and the other in Spain, and 1598 responded. After filtering out those
respondents who did not satisfy the conditions that define our population and those who had
not shopped at any of the listed retailers, applying the gender and age quotas, and eliminating
incomplete questionnaires, our final sample comprised 761 individuals, 380 in Spain (49.9%)
and 381 in the UK (50.1%). Gender and age quotas were set to replicate the socio-
demographic profile of online shoppers presented in “PwC Global Online Shopping Habits”
(PwC, 2014).

3.3. Sample profile and retailers’ representativeness

The socio-demographic profile of multichannel shoppers in the apparel category suggested
women had to be overrepresented in the sample. Thus, our final sample comprised 66.6%
women against 33.4% men. All ages were included in the sample. However, younger
consumers are slightly overrepresented as they shop online more often than the other age
groups (in our sample: 18-24 years, 18.7%; 25-34 years, 30.7%; 35-44 years, 25.4%; 45-54
years, 16.7%; older than 54, 8.5%).
As mentioned before, our data are retailer-specific as the respondent had to answer the
questionnaire with a particular retailer in mind. The three retailers that accounted for most of
the answers in Spain were chains of the Inditex group (Zara, 27.9%; Springfield, 12.9%;
Pull&Bear, 11.8%), whereas in the UK two British retailers (Next, 23.1%; M&S, 21%) were the
most popular choices, followed by H&M (14.4%).

4. Data Analysis and Results

4.1. MCI dimensions
 To identify the dimensionality of the MCI scale, a principal component analysis with Oblimin
rotation and factor extraction according to the Mineigen criterion being equal to 1 was
employed (Kaiser-Meyer-Olkin test - KMO: .951; Barlett: 5398.48; d.f.: 153; sig.: .000; Matrix
corr. determ.: 9.79 e-7). Weighted items (importance of each channel integration item by
evaluation of each item) were used as inputs into the analysis. The two factors identified
account for a cumulative 63.41% of the variance, and they were labelled as Reciprocity and
Coordination (see Table 2). The two dimensions explain quite similar amounts of variance.

Insert Table 2

In Table 2 we can check that the two dimensions explain quite similar amounts of variance.
4.2. Psychometric properties of the scales
In order to assess the validity and reliability of the scales used in the study, and more
precisely to test the factor structure of the MCI construct more rigorously, a confirmatory
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factor analysis was conducted, using EQS 6.1. MCI was introduced into the analysis as a
second-order reflective construct.
Regarding the MCI measure, Table 3 shows some of the commonly accepted indicators of
convergent validity and reliability, providing adequate values: the Cronbach's alpha
coefficients exceed the threshold of .7 (Nunnally and Bernstein, 1994), the Lagrange multiplier
test was reviewed, and it was also verified that all standardized factor loads for the observed
variables were significant and that the mean of the loads exceeded .7 (Hair et al., 2005).
Additionally, the values of the composite reliability for the Reciprocity and Coordination
dimensions were calculated, being .93 and .92 respectively, values which exceeded the critical
threshold of .7; those for the average variance extracted (AVE) were .58 for Reciprocity and .59
for Coordination, higher than .5 (Fornell and Larcker, 1981). The Cronbach’s alpha value for the
entire MCI scale was .96.
Table 3 also shows adequate values regarding indicators of convergent validity (factorial
loads > .6 and significant) and reliability (Cronbach’s alpha > .7; AVE > .5) for the rest of the
measures. It has to be mentioned that no item of any scale was dropped, because they all
reached the commonly accepted values of the different criteria.

Insert Table 3

To analyse the discriminant validity, two procedures were applied: (a) a test that the
confidence interval for the estimation of the correlation between each pair of factors did not
include the unit (Anderson and Gerbing, 1988) and (b) a test that the AVE, for each factor, was
greater than the square of the correlation between each pair of factors (Fornell and Larcker,
1981). As Table 4 reports, there was an issue between the satisfaction and loyalty scales (both
offline and online), and between the online and offline loyalty scales. Therefore, a third
criterion was used: the chi-square difference test. Accordingly, the chi-square of the
measurement model was again estimated, but each time, for each pair of factors showing
discriminant validity problems, the covariance was fixed to 1 (chi-square covariance model for
SAT-OFF equal to 1= 1715.88 with 425 d.f.; for SAT-ONL = 1629.57 with 425 d.f.; for OFF-ONL =
1866.38 with 425 d.f.); those values were compared with the chi-square measurement model
(1595.06 with 424 d.f.), and we checked that, for the three situations, the chi-square
difference was over the critical value (10.82; p<.001 for 1 d.f.) (chi-square difference = 120.80,
 34.51, 271.32 respectively with d.f. difference for the three situations equal to 1). Considering
all the indicators as a whole, we can confirm that the measurement instruments had
discriminant validity.

Insert Table 4

4.3. Hypothesis testing and mediation analysis

The proposed theoretical model (Figure 1) was estimated using a robust methodology in
EQS 6.1. MCI was introduced as a second-order reflective construct. The results are shown in
Table 5, and support five of the six hypotheses: there is a significant and positive relationship
between MCI and overall satisfaction (H1) and between MCI and loyalty (offline – H2 and
online – H3). The results suggest that the influence of MCI on satisfaction is quite strong, and
that on loyalty weaker, with a similar influence in both contexts, offline and online. Moreover,
overall satisfaction exerts a significant, strong and positive influence on offline and online
loyalty (H4 and H5 respectively). Finally, the results do not support offline loyalty having an
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influence on online loyalty (H6).

Insert Table 5

The data in Table 5 show how relevant is the perception of the retailer’s MCI on overall
customer satisfaction, and how that satisfaction strongly influences loyalty. On the other hand,
although MCI exerts a significant influence on loyalty, both offline and online, that influence is
not very strong. Taking into consideration Zeng et al.’s (2009) suggestion about the need to
consider both direct and indirect impacts of satisfaction determinants on behavioural
intentions, we analysed the mediation effect of overall satisfaction on the relationship
between MCI and loyalty, for both offline and online channels. The results are shown in Table
6. We tested the direct effect of MCI on (offline and online) loyalty, reporting the standardized
β of the direct relationship and the R2 of the dependent variable; then, the direct effect model
was compared to its respective simple mediation model, providing the size effect (f2) of the R2
variation (Cohen, 1988). The data confirm a partial mediation effect in both situations, offline
and online loyalty: the effect of MCI on (offline and online) loyalty is partially mediated by
overall satisfaction; this means that, although MCI has an indirect influence on loyalty through
overall satisfaction, there is also a significant direct influence of MCI on offline and online
loyalty. The effect is moderate in the case of the mediation effect of overall satisfaction on
offline loyalty (as the f2 value is higher than .15 but lower than .35), but, for the mediation
effect of overall satisfaction on online loyalty, the effect size is strong (as the f2 value is higher
than .35). All in all, the role of MCI on online and offline customer loyalty is very relevant, as it
not only exerts a direct influence on it , but also an indirect influence through overall customer
satisfaction, which is even more relevant in the online context.

Insert Table 6

5. Conclusions
This paper contributes to the literature on multichannel retailing in two main ways: first, by
developing a scale to measure MCI, and second, by demonstrating that MCI has strong effects
 on customer satisfaction and loyalty. Very few studies have focused on customer-perceived
MCI, and the scales employed were not based on a thorough evaluation of the domain of the
construct, nor did they fully capture the meaning of MCI in the present multichannel context.
It is also relevant to highlight that the present study uses an adequacy-importance model
(Schramm-Klein et al., 2011), considering not only to what extent the customer perceives the
retailer’s MCI but also how relevant it is for him/her. Furthermore, the separate effects of MCI
on offline and online loyalty have seldom been investigated, except by Herhausen et al. (2015),
who explain the indirect influence of online-offline channel integration on behavioural
intentions both offline and online.
Our results show that MCI is a construct with two dimensions: reciprocity, which refers to
the possibility of crossing from the online to the offline channel and vice versa, and
coordination, which refers to the alignment of online and offline offers. The discovery of these
two dimensions helps to consolidate the concept of MCI as bidimensional. Thus, our concept
of MCI is not restricted to the physical integration of channels as in the papers of Chiu et al.
(2011) and Gallino and Moreno (2014), but it incorporates channel coordination, which
captures the ideas of information integration/coordination or consistency, as in the papers of
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Bendoly et al. (2005), Pentina and Hasty (2009), and Lee and Kim (2010). Although both
dimensions are relevant, integration has slightly more weight on perceived MCI. Our results
also reveal that, when channels show a higher degree of integration according to customer
expectations, customer satisfaction increases. These relationships extend the findings of
Wallace et al. (2004), who found that a multichannel strategy was linked to satisfaction, by
suggesting that it is specifically channel integration and not just the addition of the online
channel that drives customer satisfaction.
Regarding loyalty, our data support the idea that this behavioural construct is strongly
impacted by customer satisfaction, as evidenced by considerable earlier research, but it is also
positively influenced by MCI. This direct effect of MCI on loyalty confirms the findings of
Bendoly et al. (2005) and Herhausen et al. (2015). A new, relevant contribution of our research
is the finding that MCI has similar impacts on online loyalty and offline loyalty. This suggests
that the addition of the online channel to the existing store network does not cannibalize the
offline channel; on the contrary, when efforts are made to integrate both channels, this helps
build loyalty towards the offline channel as well as the online. Another relevant finding is that
overall satisfaction mediates the relationships between MCI, and offline and online loyalty.
Although at first sight the data may suggest that overall satisfaction influences customer
offline and online loyalty much more than MCI, our mediation analysis reveals that MCI affects
loyalty through overall satisfaction as well (thus, an indirect effect is evident). The percentage
of the explained variance in customer loyalty when considering the mediation effect overall
satisfaction has between MCI and offline and online loyalty, is significantly greater than that
explained when only the direct effect is considered. This reinforcement of customer loyalty
through an indirect effect of MCI is stronger for the online channel; this consequence is
relevant if we consider that, as the literature suggests, getting loyal customers is more difficult
in the online context than in the offline one (Neslin et al., 2006). Accordingly, retailer strategies
developed to improve perceived MCI will have a greater benefit for the online channel, which
is usually the weakest channel in terms of number of customers for those brick-and-mortar
retailers that have added the online channel so as to become brick-and-clicks.
The findings discussed above suggest the importance for managers of multichannel companies
of fully integrating their channels so as to provide shoppers with a seamless experience across
channels, and channel interchangeability (Chatterjee, 2010; Verhoef et al., 2015). In so doing,
the retailer not only should coordinate the assortment of products, promotions, and
transmission of the same brand image, but also should specially provide increased
opportunities to cross channels during the shopping process (i.e. by allowing the customer to
 return to a local store an item bought online). This will benefit customer satisfaction and
loyalty to the retailer, both online and offline. Although it could seem that overall satisfaction
is the main key variable for enhancing customer loyalty in whatever the context, due to its
strong influence on loyalty compared to that of MCI, that is not completely true. Retailers just
developing strategies to enhance overall satisfaction in order to increase customer loyalty
(both online and online) will be underestimating the power of MCI on customer loyalty. This
means that developing strategies to meet customer expectations regarding MCI, together with
strategies aimed at increasing overall customer satisfaction, will generate synergies in
increasing customer loyalty, mainly in the online context, as the mediation effect has proved to
be strong (versus moderate) when considering online loyalty (versus offline loyalty).
Accordingly, improving online and offline factors determining customer satisfaction (such as
personal customer service or establishment of atmosphere in the offline context, site design or
financial security in the online one, or product offerings and product information in either
channel), together with the integration and coordination of both channels, will enhance
altogether customer loyalty more broadly.
It is worth to remember that these results come from the consideration of MCI from the
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customer perspective, which means that the retailer not only has to consider how customers
perceive its efforts regarding MCI; it is also necessary to identify which aspects of the MCI
domain are more relevant to customers, in order for retailers’ efforts to be more targeted, and
to reinforce and promote those perceived-relevant issues, as that will have stronger
consequences in terms of customer satisfaction and loyalty.
Our paper has certain limitations coming from the research design: different shopping
motivations of the respondents might introduce some bias, and in this regard motivations
could be introduced into the model so that their effects on MCI perceptions, customer
satisfaction and loyalty might be analysed. Moreover, culture might play a moderating role in
the relationships found, and that is not analysed here; a multi-group analysis could be applied
to identify this influence. Future research could also pay attention to the online retailers that
are moving offline by opening brick-and-mortar stores or collection points, and analyse
whether the effects we have observed also hold in this context. Additionally, it could be
interesting to test whether those results are consistent across retailers of different sizes, or
shoppers of different ages and spending behaviours.

Acknowledgments:
This research has been financed by the Spanish Ministry of Economy and Competitiveness
(Project ref.: ECO2014-55881).

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 Figure 1. Conceptual model

Offline loyalty
H2
H4

Multichannel H1 Overall
H6
integration satisfaction
H5
H3

Online loyalty
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 Table 1. Empirical studies analyzing the effects of MCI
Author Method MCI measure Results
Survey of multichannel customers MCI has two factors: informational
Bendoly et of three retailers in apparel, Author-designed integration and physical integration.
al. (2005) electronics and music (n=1598). 8-item scale. MCI reduces the likelihood of firm
Logistic regression. switching upon availability failure.
Count of 46
interchannel
Pentina and Site content analysis of 50 MCI improves online sales.
coordination
Hasty (2009) multichannel retail companies.
parameters in 6
categories.
MCI has five factors: information
Author-designed
Survey of multichannel shoppers consistency, freedom in channel
22-item scale
of any retailer (n=706). selection, email marketing, channel
Lee and Kim based on the
Factor analyses (exploratory and reciprocity, and customer service.
(2010) dimensions of
confirmatory) and structural Positive relationship of three
Robey et al.
equation modelling. dimensions of MCI with customer
(2003).
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loyalty.
MCI has a positive effect on loyalty,
Survey of multichannel shoppers
Schramm- 7-item formative mediated by trust and the image of
of retailers from a variety of
Klein et al. scale (adequacy- the retailer.
sectors (n=981).
(2011) importance). MCI can enable customer migration to
Structural equation modelling.
more efficient retail channels.
Survey of customers with
experience of free-riding (n=716) 3 items referring MCI has no significant effect on
Chiu et al.
when shopping for electronics, to physical channel lock-in, thus does not prevent
(2011)
hardware or software. integration. free-riding.
Structural equation modelling.
1 item: presence
Quasi-experiment.
Gallino and or not of “buy MCI reduces online sales and
Databases of online and offline
Moreno online and pick increases traffic and sales at offline
channels of a home equipment
(2014) up in store” stores.
retailer (1 year of data).
functionality.
MCI directly increases perceived
Experimental design (3 studies) 5 items referring service quality of online channel and
Herhausen manipulating online-offline to physical and indirectly affects behavioural
et al. (2015) integration for apparel and informational responses for both channels.
accessories retailers. integration. Effect of MCI is stronger for less
experienced Internet shoppers.
 Table 2. Exploratory factor analysis of the MCI scale
Factor 1 Factor 2
Reciprocity Coordination
It is easy to collect at a (Retailer) store goods purchased over the Internet .65
It is convenient to return goods I have bought online to any of (Retailer’s) .68
physical stores
(Retailer) enables me to place a courtesy hold on products in a local store .75
(Retailer’s) physical store allows me to do an order online .71
At (Retailer’s) website it is easy to get information on order and delivery status .71
(also for products ordered offline)
At (Retailer’s) website it is easy to get real-time information on product .76
availability in a local store
It is easy to search for store locations and opening hours at (Retailer’s) website .68
(Retailer) offers online accessories, product support, or additional product types .69
(Retailer’s) online customer service is almost the same as I can get from the .65
store
I observe a clear and visible association of brand names (including logos and .57
slogans) across channels
(Retailer) sells online the same products as in the physical stores .69
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(Retailer) offers the same prices online as in the physical stores .71
(Retailer) offers the same promotions online as in the physical stores .82
On (Retailer’s) website I can get information about prices in a local store .77
On (Retailer’s) website I can get information about promotions in a local store .72
On (Retailer’s) website I can use my loyalty card or redeem coupons obtained .63
offline
On (Retailer’s) website I can obtain online coupons to be used offline .64
(Retailer) provides consistent store images between the online store and the .57
physical store
% variance 33.28% 30.13%
 Table 3. Reliability and convergent validity of the measures
Convergent validity Reliability
Factor Item Mean
Stand. loads (t) Cronbach α CR AVE
loading
Stand. rec1 .60 (9.05*)
loads (t) rec2 .65 (9.80*)
rec3 .73 (9.32*)
rec4 .78 (7.73*)
RECIPROCITY rec5 .80 (9.98*)
.76 .93
.99 (REC) rec6 .83 (10.26*)
(9.88*) rec7 .78 (10.16*)
MULTICHANNEL rec8 .81 (10.11*)
INTEGRATION
rec9 .84 (10.00*)
(MCI) .95 .90
rec10 .73 (10.53*)
(reflective,
nd
2 order) coo1 .77 (9.08*)
coo2 .74 (8.96*)
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coo3 .74 (9.90*)

.91 COORDINATION coo4 .81 (9.58*)
.78 .91
(7.61*) (COO) coo5 .81 (9.64*)
coo6 .77 (9.55*)
coo7 .76 (9.99*)
coo8 .75 (9.00*)
sat1 .84 (14.44*)
OVERALL SATISFACTION (SAT) sat2 .84 (17.56*) .84 .86 .87 .70
sat3 .83 (14.91*)
off1 .91 (19.96*)
off2 .98 (19.21*)
OFFLINE LOYALTY
off3 .88 (19.11*) .86 .89 .93 .74
(OFF)
off4 .79 (17.33*)
off5 .72 (16.97*)
onl1 .89 (17.55*)
onl2 .86 (16.44*)
ONLINE LOYALTY
onl3 .87 (19.76*) .82 .89 .91 .68
(ONL)
onl4 .78 (18.13*)
onl5 .71 (19.96*)
S-B χ2 (424 d.f.) = 1017.18 (p<.00); BBNFI=.87; BBNNFI=.91; CFI=.92; IFI=.92; MFI = .47 RMSEA=.059
*= p < .01
Note: CR=composite reliability; AVE=average variance extracted
 Table 4. Discriminant validity

MCI SAT OFF ONL

MCI .90 .49 .46 .52
SAT [.78; .64] .70 .74 .87
OFF [.74; .61] [.90; .82] .74 .71
ONL [.78; .66] [.96; .91] [.88; .80] .68
Under the diagonal: confidence interval for the correlation between each pair of factors
Diagonal: average variance extracted
Above the diagonal: square of the correlation between each pair of factors
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 Table 5. Hypothesis testing
Hypotheses Structural relationship β t value Contrast
H1 Multichannel Integration
Overall Satisfaction .70 12.75** Accepted
H2 Multichannel Integration
Offline Loyalty .14 2.75** Accepted
H3 Multichannel Integration
Online Loyalty .11 2.46* Accepted
H4 Overall Satisfaction
Offline Loyalty .76 12.63** Accepted
H5 Overall Satisfaction
Online Loyalty .75 6.18** Accepted
H6 Offline Loyalty
Online Loyalty .13 1.10ns Rejected
S-B χ2 (426 d.f.) = 1595.09 (p<.000); BBNFI=.865; BBNNFI=.907; CFI=.915; IFI=.915; MFI= .462; RMSEA=.060
ns
* = p < .05; **= p < .01; non significant
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 Table 6. Mediation test
Direct Model Mediation Model
2 2 2
β R Β βind R f Mediation
MCI
Offline Loyalty .68** .47 .14** .35** .70 .33 Partial
MCI
Overall Satisfaction .70**
Overall Satisfaction
Offline Loyalty .77**
MCI
Online Loyalty .71** .51 .11* .54** .88 .42 Partial
MCI
Overall Satisfaction .70**
Overall Satisfaction
Online Loyalty .86**
* = p < .05; ** = p < .01
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