Capturing customer’s store loyalty through relationship benefits: Moderating effect of retail innovation Nisar Ahmed Channa, Maqsood Hussain Bhutto, Musaira Bhutto and Niaz Ahmed Bhutto Department of Business Administration, Sukkur IBA University, Sukkur, Pakistan, and Beenish Tariq NUST Business School, National University of Science and Technology, Islamabad, Pakistan Abstract Purpose – Research suggests that innovation plays a key role in creating a competitive edge and business survival in highly competitive industries like retail. Despite the importance of innovation in retail establishments, very limited efforts have been made so far to study how innovation influences consumer behavior in retail establishments. This paper aims to identify the impact of relationship benefits (i.e. confidence, social and special treatment benefits) on consumer’s loyalty with the retail store and examine the moderating effect of retailer innovation in these relationships. Design/methodology/approach – To conduct this study, a sample comprised of 400 consumers of four retail sectors (i.e. household, electronics, textile and food) was chosen. The data were analyzed through partial least squares structural equation modeling (PLS-SEM) technique. Findings – The findings of this research suggest a significant positive influence of confidence and special treatment benefits on consumer loyalty and that retail innovation moderates the link between relationship benefits and consumer loyalty. Originality/value – This research contributes to the existing literature in the domain of retail customer loyalty by empirically testing the under-studied phenomenon of retail innovation with the help of contingency theory. Keywords Innovation, Contingency theory, Consumer loyalty, Relationship benefits, Retail industry Paper type Research paper 1. Introduction Academic research in the domain of contingency theory suggests that an organization’s strategic decisions are made on the basis of the level of dynamism in the environment generated through innovation (Ruiz-Molina et al., 2017). In highly competitive industries like retail, commercial establishments are greatly pushed to innovate for creating competitive edge and for business survival (Reinartz et al., 2011; Pantano and Laria, 2012). Despite the importance of innovation in commercial establishments, limited efforts have been made so far to study innovation in retail establishments (Pantano et al., 2017; Pantano, 2014). Furthermore, the contingency theory can contribute to explaining the evolving nature of Capturing customer’s store loyalty Received 2 September 2019 Revised 2 November 2019 17 April 2020 Accepted 17 May 2020 European Business Review © Emerald Publishing Limited 0955-534X DOI 10.1108/EBR-09-2019-0179 The current issue and full text archive of this journal is available on Emerald Insight at: https://www.emerald.com/insight/0955-534X.htm