The Relation Between Perceived Staffing Adequacy, Customer Experience Strategy and Customer Loyalty: The Moderating Role of Perceived PVCEA

1. INTRODUCTION

Saudi Arabia’s retail industry 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 account for 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 the larger PVCEA, which aims to diversify the Saudi Arabian economy by focusing on developing the non-oil private sector, consumer empowerment, and diversifying into a vibrant service economy, as indicated by Kayani and Alzaid (2025). As suggested by Saied et al., (2024), Vision 2030 includes a clear intention to reinforce the Consumer Economy Programme, become more competitive in the market, and offer enhanced services in critical sectors such as retail. In the context of these radical structural changes, there are critical underexplored concerns regarding how the adequacy of staffing and the Consumer Experience Strategy (CES) result in customer loyalty within this dynamic environment, and to what extent customer relationships depend on the perception of Saudi consumers of PVCEA.

Although the literature, such as Mutambik (2023) and Sun and 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 for the topic of staffing adequacy in the Middle Eastern retail sector is scarce and disjointed. 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, as Saied et al., (2024) highlighted.

In addition, although the relationship between service quality and customer loyalty has been extensively studied, there are several conceptual and theoretical gaps. Studies such as Zaid and Patwayati (2021) generally focused on staffing as a component of overall service quality measures, such as SERVQUAL, rather than conceptualising perceived staffing levels as a separate consumer perception that reflects the sufficiency, availability, and competence of the front line. Existing studies, such as Mutambik (2023) and Sun and Pan (2023), have tended to consider staffing as one component of broader service quality measures without conceptualising it as an independent consumer perception that reflects the sufficiency, availability, and competence of the front line. Similarly, research such as Makudza (2021) and Pappas et al., (2023) on customer experience has analysed it as a consumption outcome and not a deliberate organisational ability called Customer Experience Strategy (CES) that involves how the organisation’s interactions and experiences are designed with the customer throughout multiple customer touchpoints. Hence, the unique value of strategic experience management in customer loyalty is unclear. In addition, while some studies have started to consider Vision 2030 as an emerging theme in policy and economic development literature (Saied et al., 2024), prior investigations have not used consumers perceptions of macro-level institutional reforms as a contextual mechanism impacting the evaluation of firm-level service practices in the customer loyalty model. Thus, the main gap in the literature addressed in this research is conceptual, focusing on explaining the effect of strategic service signals and consumer-perceived institutional environments on customer loyalty in the Saudi retail sector.

In this study, we assume that staffing adequacy is a distinct construct which is not fully captured in broader service quality frameworks. In the field of traditional service quality models, the focus is mainly on consumers’ overall assessment of service performance in terms of reliability, responsiveness, assurance, empathy, and tangibles. In comparison, perceived staffing adequacy is a measure of consumers’ ratings of the number of available, competent, and sufficient employees in the front-line service area of a retailer. Therefore, staffing adequacy is not a judgement on the quality of service but a separate signal of the capability and operational resources of the organisation. Moreover, retailers could evaluate their service quality similarly, even though the degree to which they felt they had an adequate workforce was significantly different. Therefore, the independent analysis of staffing adequacy allows for a more detailed understanding of consumer perceptions of the level of investment by the retailer in the frontline service capacity and how these perceptions impact customer loyalty beyond the focus of traditional service quality dimensions.

This 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 effect of PVCEA on these relationships. This study contributes to the body of research by reconfiguring the construction of customer loyalty by providing a consumer interpretation of macro-level policy reform as a conditioning factor. By doing so, this study brings 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 conceptualisation of the two strategic service signals, staffing adequacy and Customer Experience Strategy, in the present study contrasts with traditional service quality research, which regards service attributes as generic SERVQUAL-type dimensions.

The remaining sections of the article are analysed as follows: This section outlines the theoretical background, conceptualisation of the constructs, and hypotheses formulation for the proposed research model. Next, the methodology section presents the research design, research methodology, measurement instruments, sample, and analysis method. The empirical results are reported in the next section and discussed in terms of the other literature and theories that are relevant. Finally, this paper presents a summary of the main results, theoretical and practical implications, limitations of the study, and directions for future research.

2. LITERATURE REVIEW

2.1. Theoretical Framework

The theoretical basis of this study combines Social Exchange Theory (SET) with Institutional Theory to illustrate the process and situational dynamics that determine customer loyalty. SET articulates the relationship between positive service inputs and loyalty results because it is based on mutual interactions between customers and companies. Customers consider service encounters and base their choices on perceived benefits and costs, as proposed by Liu et al., (2026), indicating that they develop relational commitments when they realise that the benefits are positive. Personal perceptions of staffing sufficiency and Customer Experience Strategy are strategic service inputs in retail settings that indicate organisational investment in service quality. These inputs are perceived by customers as valuable benefits, and they respond with loyalty behaviours, as observed by Liu et al., (2026) and PhamThi and Ho (2024). Similarly, Hsiao et al., (2023) highlighted that frontline service interactions are an important exchange mechanism that may affect customer loyalty.

However, SET cannot answer the question of when these service inputs are perceived more favourably. In response to this limitation, Institutional Theory was developed, where the evaluations of stakeholders are influenced by the regulatory and normative environments suggested by Buallay et al., (2022). The PVCEA is the conceptual framework of this study in terms of the consumer-perceived institutional frame. Hsiao et al., (2023) argue that national reform agendas are salient institutional forces that condition consumer that condition consumer and Alqahtani et al., (2024) propose that alignment with socioeconomic goals is important for evaluating services. Therefore, favourable attitudes toward Vision 2030 reinforce the ways customers perceive the adequacy and experience strategies in staffing and increase their correlation with loyalty.

Institutional theory implies that not only does organisational behaviour change due to institutional environments, but perceptions of organisational actions are also highlighted in PhamThi and Ho (2024). In this study, as signified by Galleli and Amaral (2026) regarding institutional policies and frameworks, the PVCEA is viewed as a sub-institutional context at the consumer level that influences perceptions of retail service. From this perspective, Saied et al., (2024) also articulate that consumers who are positive regarding their perceptions of Vision 2030 have shown higher levels of optimism towards the reforms of the country, trust in institutions, and confidence in the modernisation of the retail sector. They assume that staffing levels prove that retailers are working to deliver good service, as required by the goals of national development. Likewise, strategies for improving customer experience could be interpreted as trustworthy indications of the company’s dedication to the consumer-centred change desired in Vision 2030. This psychological mechanism, in terms of institutional trust and positive evaluative framing, legitimises service initiatives and enhances their perceived value. Based on this, Institutional Theory suggests that the moderating effect can be attributed to people’s different perceptions of the overall institutional context in which they are engaged.

The moderating role of PVCEA is theoretically justified by the assumption that institutional environments affect not only organisational behaviour but also the cognitive frames that enable stakeholders to understand the behaviour of the organisation. The PVCEA among consumers could lead to greater confidence in the path of retail modernisation, trust in institutional reforms, and expectations of better levels of service for customers (Saied et al., 2024). This also makes them more likely to consider adequate staffing and strategically designed customer experiences as indicators of a retailer’s commitment to broader national reform objectives and not just a series of operational activities.

While the central theoretical perspective in this research is that PVCEA should condition the relationships between retailers’ service practices and customer loyalty, Institutional Theory also offers a justification for a direct link between PVCEA and loyalty. Due to the expected positive portrayal of Vision 2030, consumers’ confidence in the entire retail environment is likely to increase, meaning that this change will support improvements in service standards, market competitiveness, and consumer protection (Saied et al., 2024). Consumers’ trust in individual service events can also positively impact their general trust in retailers’ institutions in the altered market environment. In this context, customer loyalty is a function of the assessment of staffing levels and customer experience practices, but also an indicator of general trust and confidence in the sector’s future and its trustworthiness. Therefore, the moderating role of PVCEA is considered an institutional spillover effect, whereas the direct effect is a consumer’s evaluative framing of retailer service efforts. Complementing Institutional Theory, these roles are extended to help explain the development and contextual reinforcement of customer loyalty.

However, customers with fewer positive perceptions of Vision 2030 are more inclined to assess similar service practices in terms of their primary functional qualities, as found by Suriansha et al., (2024). Therefore, institutional theory predicts the moderating role not only that it does not predict the absence of service investment but also that the perception of the institution together with its perception of the services will influence the interpretation of the service investment, not whether it exists or not, as suggested by Dam and Dam (2021). This study gives Institutional Theory a new aspect beyond organisational compliance and establishes consumer-perceived institutional environments as evaluative frames that affect the effectiveness of firm-level service initiatives.

2.2. Conceptualisation of Key Constructs

In this study, the constructs were conceptualised as separate consumer perceptions that occur at various points in the service evaluation process. Perceived Staffing Adequacy is the consumer’s evaluation of the retailer’s staffing level, availability, and competency as a means of providing timely and effective service, as suggested by Fisher et al., (2021). According to Zaid and Patwayati (2021), staffing is hidden in the context of service quality and a broader strategic capacity. Staffing is part of a larger service quality measure, but it is overlooked in this broader context because it serves as a signal of resource capacity. In this perspective, Makudza (2021) argues that staffing adequacy is a measure of the adequacy of staff that captures consumers’ evaluation of the availability of staff and staff performance in service encounters, compared to general service quality which reflects the overall evaluation of the quality of the staff performing the services. Consequently, it can be considered a structural service input rather than a service output, in line with the arguments presented by Haque et al., (2024).

Perceived Staffing Adequacy can be conceptually separated from the overall concept of service quality. Traditional service quality measurement systems, such as SERVQUAL, measure customer perceptions of overall service quality based on five dimensions: reliability, responsiveness, assurance, empathy, and tangibility (Mutambik, 2023; Sun & Pan, 2023). In contrast, consumers’ perception of staffing adequacy is limited to their assessment of the availability, number, and competency of the store’s frontline employees to provide adequate and effective service in a timely manner (Suriansha et al., 2024). This construct does not assess the quality of the service received but rather reflects the customer’s perception of an organisational capability that can be used in the provision of service. As a result, it can be said that staffing is a strategic operational capability that relates to customers’ confidence in the retailer to provide services that satisfy customers’ expectations at all times. By separating the construct of service quality from customer loyalty, an important contribution of this study lies in its ability to isolate the distinct contribution of the front line in terms of their perceptions of the resources they have on the job to the customer’s loyalty towards the organisation.

Customer Experience Strategy is the consumer consciousness of how a retailer deliberately designs and coordinates a consistent, engaging, and seamless experience across points of contact the customer touchpoints throughout the experience, as specified by Bruckberger et al., (2023). Unlike service quality, this construct looks at the conscious management of interactions, not just the service performance, nonetheless, before, during, and after the purchase. According to Hsiao et al., (2023), Customer Experience is a strategic process that results from several interactions and channels.

Customer Experience Strategy (CES) is closely related to customer experience but should not be used as an interchangeable term. Customer experience is the consumer’s full cognitive and emotional appraisal formed upon the completion of a retailer’s service encounter, which is considered a result of the service encounter (Hsiao et al., 2023). However, the Customer Experience Strategy (CES) is true for retailers’ deliberate organisational ability to design, coordinate, and proactively manage customer interactions before they are evaluated in a multi-contacting manner (Pappas et al., 2023). It is not about consumer responses but about strategic decisions related to the journeys themselves, the uniformity of the service offered, and the involvement of physical and digital channels. Thus, Customer Experience Strategy (CES) is a managerial capability that leads to customer experience rather than the experience itself. By separating Customer Experience Strategy from customer experience, this study allowed for a focus on the impact of planned service initiatives on customer loyalty through more strategic organisational action than evaluation after the customer consumption of the product, thereby moving beyond the outcome-oriented approaches of consumer-centric customer experience research.

Finally, PVCEA reflects consumers’ perceptions that the national reform movement has raised the quality of retail, customer orientation, and service standards (Suriansha et al., 2024). This variable is an institutional frame, as opposed to the previous constructs developed at the firm level, that is, a macro-level definition that consumers use to define their retail experience. Staffing adequacy is considered a measure of service capacity, Customer Experience Strategy is a measure of service design, and Vision 2030 perceptions are considered a measure of institutional context and are independent within the proposed model.

2.3. Hypotheses Development

2.3.1. Perceived Staffing Adequacy and Customer Loyalty

The relationship between staffing adequacy in retail settings and customer loyalty has become increasingly important in retail and service management studies. Frontline employees have been the focus of service experiences in retail environments; hence, the display of availability, responsiveness, and competence of employees strongly influences how consumers rate service quality and consequent loyalty behaviour (Alqahtani et al., 2024). Dam and Dam (2021) explored the connections between staffing adequacy, customer satisfaction, and customer loyalty using survey data from 299 customers of a supermarket in Vietnam, which was analysed using PLS-SEM. Their results show that the quality of services is a major boost to customer loyalty and simultaneously reinforces brand image and customer satisfaction. Although the study conceptualises service quality as a multidimensional construct, the authors focus on employee responsiveness and reliability, which are strongly linked to staffing adequacy as a determinant of loyalty development. 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 undergoing radical changes.

Similar emphasis is placed in the operational research on the significance of staffing capacity 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 in the Philippines. The results indicate that staffing deficits, especially during peak times or night shifts, interfere with service provision and compromise customer experiences because they have to wait to be served and have inaccessible service experiences, which eventually negates their 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 loyalty is a relational consequence of positive interactions with customers in terms of service, as reflected in the arguments of Suriansha et al., (2024). However, perceived staffing adequacy as a predictor of consumer-based loyalty has been investigated in previous studies. To address this gap, this study proposes the following hypothesis:

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

2.3.2. Customer Experience Strategy and Customer Loyalty

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 interaction. These observations are consistent with the Social Exchange Theory, which states that such positive experiential benefits are returned by customers in loyalty behaviours, as indicated by Dam and Dam (2021). However, the research is more operationalised to the dimensions of interaction instead of focusing on the experience as the wider strategic organisational potential. In addition, 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 is emerging in the e-retailing literature. Zaid and Patwayati (2021) concluded that customer experience has a positive effect on loyalty, both directly and indirectly, via engagement and satisfaction processes, using 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; therefore, 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 Pappas et al., (2023), who also affirm that customer retention is greatly boosted when customer experience is improved in the contemporary retail setting.

However, the authors’ conceptualisation of customer experience is mostly a moderating product and not a strategic initiative planned by organisations to influence loyalty. To expand on this point of view, Kumar and Mokha (2021) state that technological programmes such as E-CRM can improve customer experiences and loyalty results. However, their review also found conceptual vagueness in the integration of customer experience and strategic relationship management in organisations. Taken together, these studies 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 retail markets. To fill this gap, this study hypothesises the following:

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

2.3.3. Moderating Role of Perceived Consumer Economic Agenda

Emerging markets are characterised by greater consumer expectations and relationships between firms and customers, as increased by national economic agendas and institutional reforms. According to Institutional Theory, macro-level policies establish regulatory and normative pressures which impact the way consumers judge organisational practices and service quality (Olaopa & Alsuhaibany, 2023). The PVCEA within the framework of Saudi Arabia is a significant institutional change that helps enhance consumer markets, boost the level of services, and promote competition in the private sector. Kumar and Mokha (2021) claimed that Vision 2030 changes have transformed consumer expectations in the Saudi retail industry, especially regarding service quality and customer-focused innovation. This research mainly utilises policy analysis and secondary economic information; thus, empirical knowledge of consumers’ perceptions of these institutional alterations relative to loyalty patterns is restricted.

Similarly, Ha (2021) explored the overall economic transformation in relation to Vision 2030 and found that institutional changes in favour of service excellence and workforce development prompt firms to enhance their 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 accounts for behavioural responses such as loyalty. At 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 considers managerial views limits the capacity to study the direct impact of such institutional initiatives on customers’ perceptions.

Similar arguments are made by Kumar and Venkatesan (2021), who propose that consumer trust and service expectations can be moulded by national transformation programs and have an indirect influence on loyalty results. However, they did not explicitly assess the moderating effects within the given service interactions in their cross-national comparative analysis.

Studies such as Ha (2021), Manyanga et al., (2022), and Shibeika (2025) have consistently shown that Vision 2030 has brought about innovation in services, work skills, and customer-centric transformation in retail services. However, most of these studies focus on organisational reactions to reform agendas and not on consumer surveys of their assessment. Similarly, Kumar and Venkatesan (2021) claim that national transformation programs impact service expectations and trust, but the impact of these perceptions on service outcomes depends on firm-level service practices. Based on the above, it can be concluded that while the literature reviewed shows that institutional reforms impact organisations and markets, their impact on the influence of perceived staffing levels and the Customer Experience Strategy (CES) on customer loyalty is limited.

Similarly, Manyanga et al., (2022) note that the consumer-based reforms of Vision 2030 stimulate retail organisations to promote workforce capacity and innovation in services, although there is no empirical validation based on consumer data. These studies show that institutional reforms affect the strategies of organisations and consumer expectations; however, few of them investigate how consumer perceptions of such reforms moderate the relationship between service practices and loyalty results. To fill this research gap, the following hypotheses are proposed. The conceptual framework of this study is shown in Fig. (1).