Feti Fatimah

The rapid retail development has led to increasingly fierce competition, and micro retail businesses need innovation to survive and thrive. Retail innovation is reflected in the quality of consumers’ behavior in making purchase decisions. Therefore, this study aimed to analyze the role of retail behavior quality as an intervening variable on merchandise offer and store image on consumers’ loyalty in micro retail businesses. In this study, the confirmatory and explanatory methods were used, and it was conducted in Jember Regency, East Java, Indonesia with a sample size of 306 consumers of micro retail businesses. Moreover, the data were obtained through a questionnaire, and Partial Least Squares-Structural Equation Modeling analysis was used to determine the direct and indirect effects. The results showed that merchandise offer had a positive and significant effect on consumers loyalty both directly and indirectly through retail behavior quality with total effect of 50.4%. Store image had no significant direct effect on consumers loyalty. However, it had a positive and significant direct effect on consumers through retail behavior quality with total effect of 22%. In this context, retail behavior quality played an important role in increasing consumers’ loyalty to micro retail businesses. These results contributed to improved retail quality behavior oriented towards transparency in quality of goods, employee attitudes, in-store environment, product arrangement, and established good relationships with consumers to maintain loyalty.

Acknowledgment
The authors are grateful to the Muhammadiyah University of Jember for funding thisresearch.