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ABSTRACT: Retail can be seen from two sides, namely traditional retail such as grocery stores and community businesses, most
of which do not use professional management and modern retail which can be seen as stores with professional management.
Emerging competition makes companies have to carefully set strategies and manage companies so that companies are able to
remain competitive and survive. Maintaining customer loyalty is one of the company's strategies to survive with the existing
competitive conditions. This research uses a qualitative descriptive method, which describes the data collected and analyzed. The
subject of this research is the role of consumer loyalty on customer retention in retail companies using literature review of
secondary data. Based on the results of the study, it can be explained that the role of consumer loyalty on customer retention in
retail companies that are developing in the form of department stores in Indonesia, namely with this loyalty, a retail company can
compete with other retail businesses. Loyalty definitely has an impact on customer retention, and consumers choose retail
businesses for their daily needs. Similar forms of competition between modern retail companies include segmented market
competition, service system competition, price competition, product quality competition and so on.
INTRODUCTION
In modern times and the influence of globalization is very strong like today, the development of retail businesses in Indonesia is
triggered by the rapid competition in the end consumer market and social factors. Changes in lifestyle and shopping patterns and
habits of the Indonesian people also affect the development of retail businesses, especially in urban areas where the tendency of
consumers to choose to shop in modern markets reaches 41%. Retail businesses are divided into four categories, namely based
on sales volume, type of products sold, form of business ownership and based on the operating methods used. The classification
of retail businesses based on sales volume can be divided into large, medium and small-scale retail. Large-scale retail formats such
as department stores, chain stores, warehouse stores and hypermarkets can be grouped more specifically based on the types of
products sold that are food-oriented. (Sulistyowati & Indrian, 2020).
The world of retail is a world that is always actively growing and developing. Etymologically, retail means breaking down
goods and services in accordance with consumer needs (Utami, 2010: 5). Retail can be seen from two sides, namely traditional
retail such as grocery stores and community businesses that mostly do not use professional management and modern retail which
can be seen as stores with professional management. The concept of growth and development can be interpreted by the
increasing number of retailers opening outlets / stores. These conditions on the other hand can be seen as the potential market
that needs to be tapped and the need for companies to increase the volume of their companies to achieve economic conditions.
Seeing this fact, competition in the retail world can be said to be tight and targeting various segments and changing consumer
behavior in terms of shopping in modern markets.
The tight competition that arises makes companies have to carefully set strategies and manage the company so that the
company is able to remain competitive and survive. Maintaining customer loyalty is one of the company's strategies to survive
with the existing competitive conditions. Loyal consumers can be understood as company assets to develop and compete with
similar companies. Facts reveal that currently it is increasingly difficult for companies to gain a competitive advantage due to rapid
product imitation, short product life and the amount of information available to consumers and consumers' negative response to
advertising. besides the fact that the minimum barriers to switching make consumers easily move from one store to another.
These findings do make companies have to be more careful and smart in managing the market because of the higher similarity of
products and services and easy access to information so that the company's strategy must be built in such a way and one way is
RESEARCH METHODS
This research uses a qualitative descriptive method, which describes the data collected and analyzed. The subject of this research
is on the role of consumer loyalty on customer retention in retail companies using literature review of secondary data. This
secondary data is obtained from literature, previous research journals, magazines and company document data needed in this
study.
The data collection technique used in this research is through documents which are formal records, books, articles and
other information materials that have relevance to the problem or archive. Data analysis used in this research uses a qualitative
approach, namely by collecting or describing data from the field which is useful for providing an overview of the research and as
a discussion of the research results. The data used is the result of collection from field research which is compared with the
theoretical basis obtained from library materials to be able to solve existing problems and then compiled into a research result in
order to produce a new conclusion.
B. Implementation of Consumer Loyalty towards Customer Retention in Developing Retail Companies in the Form of
Department Stores in Indonesia.
Retail is an important link in the distribution process of goods and is the last link in a distribution process. Through retail,
a product can meet directly with its users. The retail industry here is defined as an industry that sells products and services that
have been added value to meet the needs of individuals, families, groups, or end users. The products sold are mostly the fulfillment
of household needs including nine basic necessities. The retail industry in Indonesia makes a large contribution to the Gross
Domestic Product (GDP) and also absorbs a large number of workers. As a developing country, the growth rate of Indonesia's retail
industry is influenced by the strength of people's purchasing power, population growth, and also the need for fulfillment of
consumer products.
The presence of the modern retail industry basically utilizes the shopping patterns of people, especially the upper middle
class, who do not want to jostle in traditional markets that are usually muddy or not neatly organized. Although the presence of
modern retail is highlighted to kill traditional markets because it has advantages in many factors, its own development can be said
to be unstoppable. If observed further, the retail business competition is increasingly unhealthy. The government tends to sell
licenses to big players, even hypermarkets, even though the market is already saturated. As a result, in some cities, large retail
outlets have begun to close, while in housing estates and villages, grocery merchants are threatened by mini-market franchises.
(Soliha, 2008).
In an unhealthy business climate, the law of the jungle applies. Whoever is strong is the winner. Maybe Indonesia is not
that bad yet, but if it is not addressed immediately, the potential for the law of the jungle to apply is just a step away. Local
governments as regional authorities should know the potential of their regions. What is the purchasing power of the people and
how many retailers are operating. So far, there is a tendency for local governments to never object to giving licenses to investors
who want to open retail outlets. According to the Indonesian Retailers Association (APRINDO), the retail business in Indonesia
began to develop in the 1980s along with the development of the Indonesian economy. This came about as a result of the growth
of the middle class, which led to the demand for supermarkets and department stores (convenience stores) in urban areas.
This trend is expected to continue in the future. Another thing that drives the development of the retail business in
Indonesia is the change in lifestyle of the upper middle class, especially in urban areas who tend to prefer shopping in modern
shopping centers. Changes in shopping patterns that occur in urban communities are not only to fulfill shopping needs but also to
travel and seek entertainment. The development of businesses in the retail industry is also followed by increasingly fierce
competition between a number of local and foreign retailers that have sprung up in Indonesia. The retail industry in Indonesia is
currently growing with the construction of more and more new outlets in various places. The eagerness of retailers to invest in
the construction of new outlets is not difficult to understand. With economic growth averaging above 3% since 2000 and inflation
under control, they have reason to believe that Indonesia's economy will strengthen again in the future. (Soliha, 2008).
There are several retail companies in Indonesia in the department store category, namely PT Matahari Department Store
Tbk (Matahari Department Store) which was established on October 24, 1958, PT Mitra Adi Perkasa which owns Sogo Department
Store, which opened in 1990 in Jakarta, PT Ramayana Lestari Sentosa Tbk (Ramayana Department Store) which was established
1978, and PT Metropolitan Retailmart (Metro Department Store) which was established 1991. Among the four retail companies
in the department store category, two of them have online sites, namely Matahari Department Store and Sogo Department Store.
Initially, the Lippo Group has opened an e-commerce called MatahariMall on September 9, 2015, which has hundreds of
thousands of product choices with the best prices from all needs, ranging from women's fashion, men's fashion, health & beauty,
cellphones and tablets, laptops, gadgets, electronics, lifestyle, hobbies, household needs, and others. However, on November 9,
2016 PT Matahari Department Store Tbk (MDS) also opened an ecommerce called MatahariStore, although initially MDS had a
special page on MatahariMall, this was done by MDS because the MatahariStore site only wanted to focus on fashion. However,
when customers open the MatahariStore website, they are automatically connected to MatahariMall because the transaction
flow at MatahariStore will be handled directly by MatahariMall.com, starting from content, payment, to delivery of goods.
MatahariMall.com provides the best service facilities to support customers in shopping online safely and reliably with various ease
of transactions, such as bank transfer, credit card with 0% installment, COD and O2O system (Online-to-Offline and
OfflinetoOnline).
Meanwhile, Sogo Department Store owned by PT Mitra Adi Perkasa currently also has an e-commerce called MAPEMALL.
As a leading brand, Sogo not only provides Sogo clothing and Sogo accessories for the fashion of its consumers, but also a variety
of home appliances that will ease daily activities. In fact, there are attractive offers in the form of Sogo vouchers that allow
CLOSING
Based on theory, relevant articles, books or literature studies and discussions, it can be concluded that direct competition in the
retail business occurs between modern and traditional retailers, between fellow modern retailers, between fellow traditional
retailers, and plus competition between suppliers. Retail business competition that occurs between fellow modern retail
companies occurs both in the same category and indirect competition because it is in a different category.
Competition is in a reasonable condition when it occurs between fellow modern retailers, between fellow traditional retailers,
and between suppliers. However, imbalances occur in competition between modern and traditional retailers, because under
certain conditions the victims are on the side of traditional retailers. Competition between suppliers is triggered by equal
opportunities from many suppliers to supply their products to modern retail companies. The tightness of this competition is
exacerbated by the great interest of the producers themselves to have their products sold through modern retail, namely to
establish the existence of their products and brands in consumers from the target segment of a modern retail.
The role of consumer loyalty in customer retention in developing retail companies in the form of department stores in
Indonesia, namely with this loyalty, a retail company can compete with other retail businesses. Loyalty definitely has an impact
on customer retention, and consumers choose retail businesses for their daily needs. Similar forms of competition between
modern retail companies include segmented market competition, service system competition, price competition, product quality
competition and so on. Competition between department stores is also quite intense, such as Sogo Department Store, Metro,
Matahari, Ramayana, etc. which continue to grow aggressively. From the above research, it can be seen that similar forms of
competition among modern retail companies are market segmentation, service system, price competition, and product quality
competition.
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