Verticalization: the Impact of Channel Strategy on Product Brand Loyalty and the Role of Involvement in the Fashion Industry

Abstract

Our study contributes to the knowledge on how manufacturers’ distribution channel strategy impact brand loyalty. Using PLS regression, we demonstrate that in the fashion industry, characteristics of the retail channel contribute higher to product brand loyalty in vertically integrated channels while the impact of product brand characteristics on brand loyalty is higher in conventional channels. We also show that consumers’ involvement has a stronger effect for verticals. Our results imply that strong product brands are less reliant on verticalization to be successful, whereas weaker brands can benefit from support from the retail environment and this can be achieved more effectively in vertically integrated channels.

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