Abstract

Purpose: Fast food franchise companies are trying a variety of innovative services to increase their competitiveness in response to changes in population composition in the fast food market and rapid changes in consumption trends due to technological development. From this point of view, franchise companies that have focused on offline store operations are providing O2O (offline to online) service as a core service for customer convenience. This new attempt is a strategy to increase loyalty by applying an interaction method based on understanding the characteristics of new generation consumers. However, existing studies are focused on the relationship between O2O service and acceptance, so very little is known about how O2O service affects customer loyalty. Therefore, this study examines the impacts of customer involvement and relative advantages of fast food O2O service on customer brand engagement (cognitive and affective engagement) and store loyalty for MZ(Millennials - Z) generations. Research design, data, and methodology: In order to achieve the purposes of this research, several hypotheses were developed. The data were collected from 247 questionnaires in their 16-30s and were analyzed using SPSS 22.0 and SmartPLS 3.0 program. Measurement model analysis was carried out to assess convergent and discriminant validity. Also, common method bias was tested using the values of VIF (variance inflation factor). The hypotheses was tested using structural equation modeling. Result: First, involvement has a positive effect on cognitive and affective engagement. Second, relative advantages have has a positive effect on cognitive and affective engagement. Third, cognitive influences affective engagement. Finally, both cognitive and affective engagement affect store loyalty, but affective engagement has a stronger effect on store loyalty than cognitive engagement. Conclusions: In the process of consumer-brand interaction, it was confirmed that store loyalty was influenced by cognitive and affective engagement sequentially. However, the results show that affective engagement has a relatively stronger on store loyalty than cognitive engagement. Therefore, it is necessary to establish an O2O service strategy to maintain long-term loyal customers by inducing cognitive participation with high-involved consumer, as well as affective interaction, in order to obtain new customers and increase customer loyalty.