Role of loyalty schemes in shopping tourism

Study by a lecturer and by a former scholar from IFTM looks into the relevance of loyalty programmes in building links with shopping tourists 

Research Corner | A partnership between Macau Business and the Macao Institute for Tourism Studies (IFTM) 

A recent research paper focused on loyalty programmes in shopping tourism suggests retailers should not simply offer loyalty memberships to shopping tourists, but also emphasise member privileges in retail promotions. The work – by a lecturer and by a former scholar from the Macao Institute for Tourism Studies (IFTM) – stated this would help maximise the desired impact on consumer behaviour of loyalty programmes, including strengthening the relationship between customer and shop brand. 

Authors IFTM lecturer Dr Veronica Lam Iok Keng and Dr Anthony Wong Ip Kin, from Sun Yat-sen University in mainland China, pointed out that shopping tourists often seek purchases that represent value for their money. “Distinctive member benefits such as price discounts and special packaging can be more attractive to Chinese tourist shoppers due to their large purchase volume abroad as the result of their gift-giving culture,” they wrote. 

Their paper, “The role of relationship quality and loyalty program in tourism shopping: a multilevel investigation”, was published earlier this year in the Journal of Travel and Tourism Marketing. The research also concluded that a good loyalty programme could mitigate any negative effect of customer satisfaction on trust in particular retail services. 

“In a store with a good loyalty programme (i.e., with excellent benefits), [the] customers’ level of trust remains high and unchanged regardless of their satisfaction level,” Dr Lam and Dr Wong said. “In a store with a poor loyalty programme (i.e., with few benefits), [customer] level of trust is relatively low, but the trust level improves when customers are satisfied with the store.” 

The researchers argued that membership programmes could increase tourist shopper confidence in a store, as such schemes often signified for clients a sense of care and of long-term relationship. “Hence, retail brands may seek [out] cooperative behaviours” from tourists, “such as giving feedback and sharing ideas,” it was suggested. 

The study results were based on a survey answered by 311 tourists from mainland China visiting Macau for shopping. Represented in the sample data were 13 retail store brands. 

Building long-lasting links 

Loyalty programmes are regarded as an important marketing tool in retailing. Past research has shown that such schemes are often adopted by retailers to reward customers, build trust, improve satisfaction, increase brand commitment, and ultimately induce customers to spend more and shop more often. 

Dr Lam and Dr Wong stated in their paper that loyalty programmes were important in building relationships between store brands and shopping tourists. Such schemes helped to enhance a consumer’s personal support for, and cooperation with, store brands. Through the offer of free merchandise, coupons and other rewards, shop brands could receive in return customer support for, and devotion to, the brand, the researchers noted. 

Their findings implied that loyalty programmes needed to demonstrate “a company’s efforts and willingness” to establish a long-term link with shopping tourists, rather than representing only a promotional tool to boost sales. “A loyalty programme can be reconsidered as a channel to enhance the opportunity for communication between retailers and tourist shoppers, thus enhancing their cooperation, word-of-mouth recommendations and share of purchase,” the authors suggested. 

Dr Lam and Dr Wong stated that, in order to increase shopping tourists’ loyalty, “customer relationship building – through increasing their trust, emotional commitment and cooperation – can help differentiate retail brands within the competitive shopping environment”. 

They added: “If tourist shoppers who are satisfied with the retailers will likely be committed and cooperative, it will be beneficial for retailers to strengthen customer interaction and encourage tourist shoppers to give opinions and share ideas on how to better improve the retailers’ performance.” 

– The researchers 

Dr Veronica Lam Iok Keng is a lecturer at the Macao Institute for Tourism Studies (IFTM), where she teaches subjects related to marketing and event management. She holds a PhD from the University of Waikato, in New Zealand. Prior to becoming a scholar, she worked in the hospitality industry, namely in sales and marketing, and convention services. Her research interests include tourism marketing, destination image, and the Chinese tourist market. 

Dr Anthony Wong Ip Kin, also known as Dr. IpKin Anthony Wong, is a former scholar of IFTM. He currently is a professor at the School of Tourism Management at Sun Yat-sen University, in mainland China. He has a doctorate in communication and information sciences from the University of Hawaii at Manoa, in the United States. Dr Wong has published more than 100 articles in scholarly journals and international conference proceedings, including in top-tier academic publications. 

– The paper 

Veronica Lam Iok Keng and Anthony Wong IpKin: “The role of relationship quality and loyalty program in tourism shopping: a multilevel investigation”, Journal of Travel and Tourism Marketing, Volume 37, Issue 1, pages 92-111, 2020.