Modelling Customer Loyalty Using Partial Least Square: An Empirical Evidence from Online Food Industry
Dwi Suhartanto, Gundur Leo, Lina Setiawati, Siti Samsiyah Purwaningsih
Department of Business Administration
Politeknik Negeri Bandung
Indonesia
Abstract
Introduction The online food delivery service industry has emerged as huge and prospective industry. In this competitive business environment, having and developing loyal customer are essential; yet, research to examine customer loyalty modelling in this industry is limited. Aim of the study This study is designed to assess the applicability of Partial Least Square Modelling to assess the customer loyalty toward online food delivery service. Method This study uses a survey of 439 online food service customers collected from greater Bandung region. The model, including four quality system predictors (efficiency, fulfilment, availability, and privacy), was examined using SmartPLS software. Result The results show that the model of loyalty toward online food has an acceptable Goodness of Fit Index. Further, the R2 of the customer loyalty in the model is 0.67. These results indicate that the method applied is suitable for modelling customer loyalty. Conclusion This study offer an empirical evidence on the applicability of Partial Least Square to model the customer loyalty toward online food delivery service. This result extends the existing methodological and managerial practices to develop loyalty in the online food industry.
Keywords: Partial least square, Online food industry, Customer loyalty
Topic: Industrial Engineering