Perceived retailer innovativeness and brand equity: mediation of consumer engagement

The relationship between customers and retailers is more complicated nowadays due to the sophisticated trends of the current service retail landscape and consumers' high expectations. This study investigates how perceived retailer innovativeness (PRI) influences consumer engagement (CE) and brand loyalty. Based on the wheel of retailing theory and signaling theory, we empirically analyzed these relationships based on 723 customers who patronize service retailers. The empirical findings suggest that product innovativeness has the strongest impact on CE, followed by service innovativeness and experience innovativeness. However, only product and experience innovativeness influence brand equity. Further results imply that CE not only contributes directly to the brand building, but also significantly mediates the relationship between product innovativeness-brand equity, service innovativeness-brand equity, and experience innovativeness-brand equity. The research adds new insights to the retail innovativeness literature and provides managers with new ways to customize SME retail services.