Exploring the role of brand loyalty in offsetting brand transgressions—a case study of ZARA

¹ Graduate School of Business, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Malaysia
² Inner Mongolia Tongliao Sales branch of China National Petroleum Corporation Limited, Tongliao, China

^* yunyun999776@163.com

Abstract

This study explores the role of brand loyalty in offsetting brand transgressions. It leveraged the “Xinjiang Cotton” controversy as a broader context while focusing on how the ZARA brand is performing in the Chinese market. The Better Cotton Initiative called for a boycott of cotton products from Xinjiang, China, which affected the Chinese consumer market. ZARA, as a representative of foreign fast-fashion clothing brands, was noticeably affected. A quantitative questionnaire survey was conducted to collect data from consumers with varying levels of brand loyalty. The questionnaire primarily measures consumers’ brand loyalty, purchase intentions, and brand transgression tolerance. The results indicate that although the “Xinjiang Cotton” controversy substantially impacted the ZARA brand, consumers with high brand loyalty exhibited a significant buffering effect. These consumers are more inclined to invite the brand’s transgression and continue to support it. Brand loyalty plays a crucial protective role when a brand faces crisis. The research results show that after the incident in China, a certain group of consumers with high brand loyalty was almost not affected, which means that brand loyalty helps reduce the effect of brand transgression. The findings also show that consumers with high brand loyalty are willing to forgive a brand’s transgression. Nevertheless, brand managers should make efforts to prevent brand transgressions in their daily management practices and reduce the recovery time following a brand’s transgression to minimize losses.