Perceived Staffing Adequacy and Customer Experience Strategy on Customer Loyalty with Perceived Vision 2030 Consumer Economy Agenda as a Moderator: A Study on the Retail Sector in Saudi Arabia

1.INTRODUCTION

The retail industry of Saudi Arabia is at the crossroads of radical economic change and consumer market development in the Middle East. In the last ten years, Saudi Arabia has grown to be the biggest retail economy in the Gulf Cooperation Council, with both online and offline consumer spending skyrocketing as the country is urbanising, income levels are increasing, and the population of young techno-savvy people alters the consumption trend (Arab News 2026; Consultancy Middle East, 2025). As reported by (Knight Frank, 2025), Saudi retail expenditure reached SAR 1.41 trillion in 2024, and e-commerce transaction volume is rapidly increasing and is projected to make up almost 50% of the overall retail transactions by 2030 as part of the digital-economy push of the Vision 2030 agenda.

This accelerated market growth is part of a larger vision of Vision 2030 Consumer Economy Agenda, the diversification of the Saudi Arabian economy, where the focus is on developing the non-oil private sector, consumer empowerment, and diversifying to a vibrant service economy, as indicated by (Waheed, 2022; Winarni & Permana, 2022) as well. As suggested by (Selim & Alshareef, 2025), Vision 2030 includes a clear intention to reinforce the Consumer Economy Programme, become more competitive in the market, and offer enhanced services in the most critical sectors, such as retail. Consequently, (Olaopa & Alsuhaibany, 2023; and Yusuf & Lytras, 2023) revealed that the retail sector is shifting towards omni-channel and experience formats, which are a combination of physical and digital interfaces to address the more advanced customer demands. In the context of these radical structural changes, there are critical underexplored concerns of how the adequacy of the staffing and customer experience strategy results in customer loyalty within this dynamic environment, and to what extent customer relationship depends on the perception of Saudi consumers of the Vision 2030 Consumer Economy Agenda.

Despite the existence of studies such as (Agha, 2025; and Magsi et al., 2025) on technological and operational improvements in Saudi retail, the impacts of perceived adequacy of staffing, such as sufficiency of staff numbers, level of skills, and customer experience training, on customer experience and long-term loyalty are under-researched. Although the literature, such as (Mutambik, 2023; and Sun & Pan, 2023) on service quality, agrees that the interaction between workers has a profound impact on the degree of customer satisfaction and loyalty, empirical support on the topic of staffing adequacy in the Middle East retail sector is scarce and disjointed. Furthermore, the available literature (Nasrudin et al., 2025) on the Saudi retail setting concentrates on the general dimensions of service quality without specific emphasis on staffing and analyzing more extensive strategic factors such as the customer experience frameworks. Similarly, the Consumer Economy Agenda of Vision 2030, as a perceived moderating variable in consumer loyalty relations, has not been given significant scholarly coverage, even though it has been central to the policy of retail and consumer expectations.

The study addresses these gaps by assessing the effects of perceived staffing adequacy and customer experience strategy on customer loyalty among Saudi retail consumers, and the moderating effects of Perceived Vision 2030 Consumer Economy Agenda on these relationships. This study contributes to the body of research because it reconfigures the construction of customer loyalty by providing a consumer interpretation of macro-level policy reformation as a conditioning factor. More precisely, it suggests that the perceived Vision 2030 Consumer Economy Agenda cannot influence the retail development on the structural level only but does affect the consumer of the firm-level service practises, which, in turn, changes the relationships between the perceived staffing adequacy, customer experience strategy, and customer loyalty. By so doing, the research brings the Institutional Theory out of its conventional emphasis on organisational adherence to regulatory and normative forces to a consumer-oriented approach whereby institutional reforms serve as interpretive frames according to which customers make judgments and respond behaviourally. Moreover, the conceptualization of the two strategic service signals, staffing adequacy and customer experience strategy, in the present study is contrasted with the traditional service quality research, which regards service attributes as generic SERVQUAL-type dimensions. The combination of these points of view gives the study a more detailed image of the interaction of macro-level economic transformation with the micro-level service experience to form customer loyalty, thus contributing to the theoretical accuracy and place-specific considerations of the Saudi retail environment.

2. LITERATURE REVIEW

2.1. Theoretical Framework

The theoretical basis of this study combines the Social Exchange Theory (SET) with the Institutional Theory to illustrate the process and the situational dynamics that determine customer loyalty. SET articulates the relationship between positive service inputs and results of loyalty because it is based on mutual interactions between customers and firms. The customers consider service encounters and base their choice on perceived benefits and costs as proposed by (Liu et al., 2026; Meira & Hancer, 2021), indicating that they develop relational commitments when realized benefits are positive. Personal perceptions of the sufficiency of staffing and customer experience strategy are strategic service inputs in retail settings, which indicate organisational investment in service quality. These inputs are perceived by the customers as valuable benefits, and they respond with loyalty behaviours, which are observed in the works of (Gawuna & Dasuki, 2022; and Rajâa & Mekkaoui, 2025). Similarly, (Hsiao et al., 2023; and Shahzad et al., 2025) also highlight that frontline service interactions are another important exchange mechanism that may affect customer loyalty.

However, SET cannot provide an answer to the question when these service inputs are perceived in a more favourable way. In response to this limitation, the Institutional Theory is developed, where the evaluations of the stakeholders are influenced by those regulatory and normative environments suggested by (Mohammad et al., 2024) as well. Vision 2030 Consumer Economy Agenda is the conceptual way of how this study is developed in terms of the consumer perceived institutional frame. (Alharethi & Kabil, 2024) argue that national reform agendas are salient institutional forces that condition consumer responses, and (Alqahtani et al., 2024) propose that alignment with socio-economic goals is important to evaluate the services. Therefore, favourable attitudes toward Vision 2030 reinforce the ways the customers perceive the adequacy and experience strategies in staffing, and increase their correlation with loyalty.

2.2. Conceptualization of Key Constructs

In this research, an operationalisation of its key constructs is undertaken in order to capture consumer evaluative judgments in retail settings. Aligned with (Waheed, 2022), Perceived Staffing Adequacy is the perceived ability of the retailer by the consumer to have adequate, available, and competent staff to provide adequate and effective service at the appropriate time. Besides, earlier research by (Selim and Alshareef, 2025) incorporates staffing into the larger service quality aspect; the study isolates it as a specific construct that is a factor of frontline service capacity, as (Meira & Hancer, 2021) also underscore. Customer Experience Strategy is conceptualised as how customer views the retailer as purposefully developing uniform, captivating, and smooth experiences with a variety of touchpoints (Rajâa & Mekkaoui, 2025). In contrast to generic experience measures, this conceptualization focuses on strategic orchestration of interactions, which is also true based on the arguments of (Hsiao et al., 2023) that experience is a managed process, not an outcome. Perceived Vision 2030 Consumer Economy Agenda is the perception of the consumer that the national reform efforts are enhancing the quality of retail, service standards, and customer orientation. Developing the Institutional Theory, this construct represents the way in which macro-level reforms are perceived by the consumer level in the form of evaluative frames forming expectations of the service (Selim & Alshareef, 2025).

2.3. Hypotheses Development

The relationship between staffing adequacy in retail settings and customer loyalty has become an increasingly explored topic in retail and service management studies. Frontline employees have been the centre of focus when it comes to service experiences in retail environments; hence, the display of availability, responsiveness, and competence of employees has a strong influence on how consumers rate service quality and consequent loyalty behaviour (Alqahtani et al., 2024). The study by (Dam & Dam, 2021) explored the connections between staffing adequacy, customer satisfaction, and customer loyalty through survey data on 299 customers of a supermarket in Vietnam, analysed using PLS-SEM. Their results show that the quality of services is a major boost to customer loyalty, and at the same time, they reinforce the brand image and customer satisfaction. Even though the study conceptualises the quality of service as a multidimensional construct, the authors focus on the aspect of employee responsiveness and reliability that is strongly linked with the aspect of staffing adequacy as a determinant of important influence on the development of loyalty. Nevertheless, the application of convenience sampling and the emphasis on a single urban retail setting restrict the extrapolation of the results to other markets, where consumers and industries are relatively undergoing a radical change.

Similar emphasis is made in the operational research on the significance of the capacity of staffing to ensure the effective delivery of retail services. (Diaz et al., 2025) examined the problem of operational constraints of 24-hour retail stores in the Philippines by qualitatively interviewing store owners and employees. The results indicate that staffing deficits, especially during peak times or night shifts, interfere with service provision and compromise customer experiences since they have to wait to be served and have inaccessible service experiences, which eventually negate customer retention. however, the qualitative case-study design is mainly indicative of managerial and operational views as opposed to consumer reviews and hence incapable of empirically estimating the direct impact of staffing adequacy on loyalty outcomes. These results are consistent with the Social Exchange Theory, which assumes that relational consequences, loyalty, are the results of positive interactions with customers in terms of service, as reflected in the arguments of (Alharethi & Kabil, 2024; and Suriansha et al., 2024) as well. However, perceived staffing adequacy as a predictor of consumer-based loyalty is occasionally investigated in previous studies. To address this gap, this study proposes:

H1: There is a statistically significant and positive relationship between Perceived Staffing Adequacy and Customer Loyalty in the retail sector of Saudi Arabia.

The strategy of customer experience has been identified as an important factor in customer loyalty, especially in service-oriented industries where value generation is realised at many points of interaction. (Makudza, 2021) proves that customer loyalty in the banking industry is largely determined by customer experience management, which involves virtual, physical, and service interactions. These observations are consistent with the Social Exchange Theory that states that such positive experiential benefits are returned by customers in loyalty behaviours, as indicated by (Mohammad et al., 2024). Though the research is more operationalized to the dimensions of interaction instead of focusing on the experience as the wider strategic organisational potential. Also, the industry-specific focus and cross-sectional survey design restrict the applicability of the results to different retail settings where the elements of experience are more diverse.

Likewise, evidence emerging in e-retailing literature. (Zaid & Patwayati, 2021) concluded that customer experience has a positive effect on loyalty, both directly and indirectly, via engagement and satisfaction processes in PLS-SEM with 512 participants. Although their results support the relational exchange perspective, the study uses a student sample and deals with digital retail environments, so that the findings can be questionable in terms of their applicability to the real-life retail world, where face-to-face service interactions are still at the centre. Specific information related to the retail sector is presented by (Selim & Alshareef, 2025), who also affirm that customer retention is greatly boosted when the customer experience is improved in the contemporary retail setting.

However, the conceptualization of customer experience by the authors is mostly a moderating product and not a strategic initiative that is planned by organisations to influence loyalty. To expand on this point of view, (Kumar & Mokha, 2021) state that technological programmes like E-CRM can improve customer experiences and loyalty results. However, their review also finds conceptual vagueness in the integration of customer experience and strategic relationship management in the systemic organisation of organisations. Taken together, these researches argue the significance of experience in influencing loyalty, though they lack empirical emphasis on the issue of customer experience as a unified strategic capability in the retail markets. In order to fill this gap, this study hypothesises:

H2: There is a statistically significant and positive association between Customer Experience Strategy and Customer Loyalty in the retail sector of Saudi Arabia.

Emerging markets are characterised by greater consumer expectations and relationships between firms and customers, as increased by national economic agendas and institutional reforms. In terms of the Institutional Theory, the macro-level policies establish regulatory and normative pressures which impact the way consumers judge organisational practises and quality of services (Olaopa & Alsuhaibany, 2023). The Vision 2030 Consumer Economy Agenda within the framework of Saudi Arabia is a significant institutional change that helps to enhance consumer markets, boost the level of services, and promote competition in the sphere of the private sector. Generally, (Yusuf & Lytras, 2023) claim that the Vision 2030 changes have transformed consumer expectations in the Saudi retailing industry, especially on service quality and customer-focused innovation. The research mainly utilises policy analysis and secondary economic information, though, and thus empirical knowledge of the perception of consumers concerning these institutional alterations relative to loyalty patterns is restricted.

In the same way, (Ha, 2021) explored the overall economic transformation in relation to Vision 2030 and found that the institutional changes in favour of service excellence and workforce development prompt the firms to enhance operational and customer engagement strategies. Although the strategy of institutional alignment is emphasised in the study, its macroeconomic approach does not consider the dimension of consumer perception that account the behavioural response like loyalty. Under the organisational level, (Shibeika, 2025) discovered that Vision 2030 efforts have compelled Saudi service organisations to enhance customer experience strategies and employee competence building to keep them competitive. Nevertheless, the qualitative design that takes into consideration the managerial views limit the capacity to study the impacts that such institutional initiatives have on the customer perceptions directly.

Similar arguments are made by (Setiawan et al., 2021), who propose that consumer trust and service expectations can be moulded by national transformation programmes and have an indirect influence on the loyalty results. They, however, do not explicitly assess moderating effects within given service interactions in their cross-national comparative analysis. Similarly, (Manyanga et al., 2022) note that the consumer-based reforms of Vision 2030 stimulate retail organisations to promote workforce capacity and innovation of services, although there is no empirical validation on the basis of consumer-level data. All these studies show that institutional reforms do have an effect on the strategies of organisations and consumer expectations; however, few of them investigate how consumer perceptions towards such reforms moderate the relationship between the service practises and the result of loyalty. To fill this research gap, the following research hypotheses are proposed;

H3a: Perceived Vision 2030 Consumer Economy Agenda positively moderates the relationship between perceived staffing adequacy and customer loyalty.

H3b: Perceived Vision 2030 Consumer Economy Agenda positively moderates the relationship between customer experience strategy and customer loyalty.

3. METHODOLOGY

The current research project followed a primary quantitative research design to empirically investigate the interrelationships between perceived adequate staffing, customer experience strategy, customer loyalty and the moderation effect of the Perceived Vision 2030 Consumer Economy Agenda 2030 Consumer Economy Agenda. A survey questionnaire based on structured and close-ended questions was used to collect data based on measurement items that obtained validity in an examination of the retail setting. The measurement scale was based on a five-point Likert scale on a scale of 1 (strongly disagree) to 5 (strongly agree), which is generally suggested to yield perceptions and behavioural intentions in consumer research, as suggested by (Taherdoost, 2019). The questionnaire was segmented into four parts that stated the constructs of the study: Perceived Vision 2030 Consumer Economy Agenda 2030 Consumer Economy Agenda, Customer Loyalty, Perceived Staffing Adequacy, and Customer Experience Strategy.

The target population was retail customers in Saudi Arabia with recent experience of shopping in retail outlets. The participants were contacted on social media such as Instagram, X (formerly known as Twitter), and Facebook, as this allowed reaching a wider range of digitally active consumers. The method of sampling used in the study is purposive sampling, which, as per (Thomas, 2022), entails the selection of respondents due to certain criteria that apply to the research purpose. It was deemed to be the right approach as only those customers who have experience in retail purchasing and understand the service interactions can make significant assessments of the perceived staffing adequacy and customer experience approaches. Purposive sampling is also often used in similar consumer-focused research to guarantee that the participants are knowledgeable of the required experience suggested by (Obilor, 2023).

As recommended by (Rahman, 2023) the estimation of the required minimum sample size was done by G*Power whereby the sample size was estimated based on the statistical power (0.80), level of significance (0.05) and the expected medium effect size (0.15) when using multiple regression models, according to the recommendation. The analysis showed that the sample size was to be above 200 respondents; thus, a larger sample was aimed at to enhance the statistical strength. The number of consumers who received the questionnaire was about 800, with 540 of them filling out the questionnaire, which is equal to 55% of the response rate. Upon the examination of the missing answers and possible outliers, 52 questionnaires were eliminated, and a final sample of 488 respondents was obtained.

The issue of potential selection bias was reduced through the dispersion of the survey to a variety of social media platforms to represent different population groups. As indicated by (Wei et al., 2023), independent t-tests were used to compare early respondents (n1 = 100) with late respondents (n2 = 100) to examine non-response bias. Also, the multicollinearity was tested based on the variance inflation factor (VIF) method, in which lower values than the criterion of 3.3 show that there is no significant issue of multicollinearity (Gaskin et al., 2025). In addition, the issue of Common Method Bias (CMB) was tested through Harman’s Single Factor Test, which involved Exploratory Factor Analysis (EFA), in which total variance explained was found to be below 50%, that is, 46.31%. It indicated no issue of CMB in the model.

To conduct the data analysis, Partial Least Squares Structural Equation Modelling (PLS-SEM) with SmartPLS software was applied since it is appropriate to use predictive models and complex relationships with moderating effects (Haji-Othman & Yusuff, 2022). The measurement model was analysed by initially testing the internal consistency reliability using Cronbach’s alpha and composite reliability, and convergent validity using Average Variance Extracted (AVE). It was followed by path coefficient analysis to validate the hypothetical relationships and the moderating relationship between the constructs.

4. RESULTS

4.1. Demographic Profile Analysis

The statistics shown in Table 1 portray demographic profile characteristics of the study participants. It is found that out of (N=488) respondents, 56.35% were males, and 35.865 were female, while 7.79% preferred not to answer. Among these participants, 30.47% were below 25 years of age, 24.59% fell in the age category of 25-34 years, 18.03% 35-44 years, and 14.34% were 45-54 years. Also, most of the participants, that is, 27.66% and 25.61%, held Bachelor’s and Master’s degrees. On the other hand, 35.86% makes retail shopping 3-5 times per month, and 25.20% more than 5 times a month. Lastly, in association to preferred retail shopping platform, 46.11% preferred online shopping platforms and 35.45% preferred omnichannel.

Table 1. Demographics profile analysis.

4.2. Measurement Model Assessment

The assessment of the measurement model of the study is carried out for internal consistency and reliability using Cronbach’s Alpha, Composite Reliability, and convergent validity using the Average Variance Extracted (AVE) method, as recommended by (Cheung et al., 2024). The results are specified in Table 2.

Table 2. Measurement model assessment.

The results presented in Table 2 indicate that the measurement items’ factor loading ranged between 0.788 and 0.925, which is higher than the generally accepted 0.70, and thus indicate a strong indicator of reliability. It means that the measurement model accurately measures the latent constructs of the observed items properly, which strengthens the measurement model. The Cronbach alpha and composite reliability are also higher then suggested threshold of 0.7, which portrays satisfactory internal consistency. In addition, the average variance extracted (AVE) values are greater than 0.50, which can be considered a sign of convergent validity.

4.3. Discriminant Validity

The separability among study variables and the issue of conceptual overlapping are examined through discriminant validity using the HTMT ratio within the threshold of 0.85, as suggested by (Haji-Othman & Yusuff, 2022).

As shown in Table 3, it can be observed that all the HTMT values in the case of all the constructs are found to be lower than the threshold value of 0.85. This indicates that study constructs are separated and distinguished from each other with no conceptual overlapping.

Table 3. Discriminant validity.

4.4. Multicollinearity and Common Method Bias using VIF

The issue of multicollinearity and CMB is addressed while examining the values of VIF, which are specified in Table 4.

Table 4. Variance inflation factor.

As depicted in the results, the values are below the standard threshold of 3.3, which rules out the issue of CMB and multicollinearity in the model.

4.5. Path Coefficient

The results presented in Table 5 of the structural model show substantial relationships between the variables in the study. On one hand, the customer experience strategy and customer loyalty have a direct positive statistically significant relationship (β = 0.270, p < 0.001) and indicate that successful customer experience strategies can significantly contribute to increasing consumer loyalty within the retail industry. This observation confirms that managed service interactions and touchpoints of experience motivate customers to have long-term relationships with retailers, supporting H2.

Table 5. Path coefficients analysis.

Likewise, staffing adequacy has a positive but modest relationship with consumer loyalty (β = 0.100, p = 0.026). The magnitude of the effect is relatively lesser, but the outcome shows that the customers who believe that the retail staff is adequate, responsive, and able show higher chances of engaging in the loyalty behaviours, which validates the acceptance of H1. Moreover, the Perceived Vision 2030 Consumer Economy Agenda has a direct and significant effect on customer loyalty (β = 0.395, p < 0.001), which means that it shows a notable direct association but requires careful theoretical interpretation.

In terms of moderation, perceived Vision 2030 is a significant moderator in the predictive relationship of customer experience strategy and customer loyalty (β = 0.105, p = 0.042), and perceived staffing adequacy and customer loyalty (β = 0.057, p = 0.032). These results confirm that H3 is accepted, which means that perceptions of Vision 2030 reinforce such associations. Lastly, the f-square values reflect different sizes of the effect of predictors. Perceived Vision exhibits a middle-level effect (f² = 0.286) on customer loyalty, whereas perceived staffing adequacy exhibits a minimal effect (f² = 0.035). Customer experience strategy has an insignificant impact (f² = 0.005), which implies that there is little practically meaningful effect size, even though it is statistically significant.

4.6. Model Explanatory Power, Predictive Relevance, and Fitness

The model results in Table 6 depict moderate predictive power, as it illustrates 37.7% of the variance in customer loyalty (R² = 0.377; adjusted R² = 0.371) through its predictors. Further, the Q²predict value of 0.342 specifies acceptable predictive relevance. Lastly, comparatively low RMSE (0.814) and MAE (0.605) values advocate better model fitness.

Table 6. Predictive power and relevance.