Every day, large amounts of personal information are collected by private companies from consumers through multiple sources. Loyalty programs are one of the most popular tools, used to gather such information. Information that is used to offer more personalised options and to target more effectively their promotions. However, many consumers are still attracted to such programs because of the rewards and other benefits offered. Privacy concerns over loyalty programs seem to take their toll. According to a Colloquy (2015) report the numbers of active members is dropping and one of the main reasons cited in the report is privacy concerns. Declining numbers and increased privacy concerns raise the question of how concerned consumers appreciate the benefits offered by loyalty programs and how their satisfaction and loyalty are affected. Apparently, loyalty programs cannot always guarantee loyalty (Nielsen, 2013) as a large portion of consumers demand better protection of their privacy (Madden, 2014) and decline to subscribe to such programs over privacy concerns (Maritz, 2013). The objectives of this study are firstly to examine the underlying reasons behind consumers’ privacy perceptions and secondly to investigate how such perceptions alter consumers’ appraisal of the benefits offered by the loyalty program as well as satisfaction with the program and consumer loyalty. Based on a review of the relevant literature a set of testable hypotheses was developed.

In the last decade loyalty programs have gained popularity across various industries. They are one of the most popular marketing tools that companies use to increase retention, enhance loyalty and gather ‘big data’. The number of companies adopting loyalty programs is rapidly increasing with fashion department stores grown their loyalty program subscriptions by 70% between 2010 and 2012 (Colloquy, 2013). One of the main reasons for this growth can be attributed to the benefits fashion retailers offer to their customers. A new body of current research had directed its attention to a comprehensive set of benefits offered by loyalty programs as well as their potential to increase customer retention and profitability (Evanschitzky et al., 2012). Until recently, it was debatable if loyalty programs can be effective and appropriate in luxury retailing (Lowenstein, 2009), despite research evidence showing a positive effect of loyalty programs’ benefits on customer retention (e.g. Mimouni-Chaabane & Volle, 2010). Traditionally, luxury companies and retailers build loyalty through top-end and differentiated customer experiences. If loyalty schemes were to succeed in the luxury sector they had to deliver the kind of recognition and rewards that make luxury shoppers feel remarkable. Given the growing interest in loyalty programs and scarcity of research related to their effectiveness in the luxury fashion department stores, this study comes to examine the effectiveness of such programs. In particular, this research examines how the utilitarian, hedonic and symbolic perceived benefits from loyalty programs can influence the satisfaction and trust with the program and consequently store loyalty. These relationships are compared between high- and low-end fashion department stores and the differences in their effectiveness are reported. To test these relationships data were collected form a sample of 984 consumers from an online panel in US, using a structured questionnaire. A range of different department stores that offer loyalty programs were pre-selected through a rater procedure to represent the high- and low- fashion department stores. Using structural equation modelling and multi-group analysis, findings support that the effectiveness of loyalty programs is important to both high-and low-end fashion retailing settings but the strength of this effectiveness varies across the two settings. Specifically, hedonic and symbolic benefits derived from loyalty programs found to be more important in the high-end rather than the low-end fashion retailers. In contrast, utilitarian benefits found to be much more effective in influencing customers’ satisfaction with the program in the low-end fashion retailing. The results of this research address an important research gap and help to better understand customers' perceptions of loyalty program benefits obtained from high- and low-end fashion department stores. Finally, the findings provide clear guidelines for managers in both high- and low-end fashion retailing on how to design effectively their loyalty program rewards, by strategically allocating their resources to the benefits that are more important in their setting.

One of the main priorities for many service companies is the development and maintenance of long term relationship with valuable customers. A common research route is the hourglass approach where general hypotheses are developed, then they are tested on a single type of service and finally the findings are taken as generalised across the whole spectrum of services. It is well recognised that customer relationships are multi-sided and contingent to the nature of the services, but still the empirical research on the moderating role of service types is limited. Additionally, the actual bonds that tie the service provider to the customer, have received limited attention by the scholars. Thus, this paper attempts to address the issue of relevance and relative importance of the different types of relational bonds between hedonic and utilitarian services. The Theory of Planned Behaviour (TPB) together with longitudinal qualitative research was used to develop a set of hypotheses that was empirically tested in a large sample of consumers. The basic premise of TPB is that attitudes together with subjective norms and perceived control can predict intentions, and actual behaviours. However, TPB has been criticised that it does not incorporate a full set of attitudinal drivers towards intentions. Responding to this criticism, this study developed (through qualitative research and literature review) an extensive set of relational bonds found to be important in different service contexts. These bonds are: switching costs, economic, social, confidence, convenience, emotional and habit bonds. Together with subjective norms and perceived difficulty, relational bonds were examined in relation to repurchase intentions across hedonic and utilitarian services, based on a survey (sample size: 548), through multi-group analysis and structural equation modelling. Based on the results, the drivers of repurchase intentions can be classified into three categories: 1) universal drivers of repurchase intentions that transcend service categories (emotional, subjective norms and perceived difficulty) 2) service specific bonds (confidence, convenience, and habitual bonds) and 3) inconsequential relational bonds (switching cost, economic bonds and social bonds). Explanations of these differences lie in the nature and the value customers derive for the two different types of services. Initial findings suggest that many of the generally accepted theoretical relations in this field are service context specific. This is the first attempt to get a relational bonding footprint of different types of services in an effort to develop granular theories that take into account the nature and context of service typologies. From a managerial perspective findings qualify general theories of customer relationship management and make them more usable for the specific contexts of services.