Digital Marketing Capability and Brand Experience as Drivers of Customer Loyalty: The Mediating Role of Customer Engagement in Bekasi Retail Stores

Customer loyalty remains a central marketing management objective, yet loyalty formation is increasingly shaped by firms’ digital capabilities and the quality of customer experiences across digital touchpoints. Drawing on customer engagement theory and relationship marketing, this study examines how Digital Marketing Capability (DMC) and Brand Experience (BE) influence Customer Loyalty (LOY), and whether Customer Engagement (CE) mediates these relationships. Survey data from 200 online retail customers were analyzed using covariance-based structural equation modeling (CB‑SEM; Maximum Likelihood). The measurement model demonstrated satisfactory reliability (Cronbach’s α = 0.901–0.863) and acceptable convergent/discriminant validity; discriminant validity was confirmed using the heterotrait–monotrait (HTMT) ratio. Structural results show that DMC and BE significantly increase CE (β = 0.369 and 0.453, respectively), and CE positively drives LOY (β = 0.460). Mediation testing indicates that CE fully mediates the effect of DMC on LOY and partially mediates the effect of BE on LOY. The findings underscore that investments in digital marketing processes and experience design translate into loyalty primarily by fostering deeper customer engagement. The study contributes to the marketing management literature by integrating capability and experience perspectives within a parsimonious engagement-based loyalty model and offers actionable guidance for omnichannel and e-commerce managers.