AI-Powered Personalization in Online Shopping: Key Factors Influencing Customer Retention
DOI:
https://doi.org/10.13052/jmm1550-4646.2125Keywords:
Consumer behaviour model, physical factors, social factors, personalize online shopping, AI-powered personalization, customer retentionAbstract
Customer retention is essential for the sustainability of retail businesses. Particularly as digital technology and AI personalize online shopping experiences. This study develops a consumer purchase behavior model for online shopping by categorizing retention factors into two groups: physical (technology readiness, information availability, ease of use) and social (perceived personalization and social norms). Personalization is shown to positively influence customer relationships and retention. Data were collected from 410 respondents in Thailand who had experience using online retail platforms, and the analysis was conducted using the PLS-SEM method. The findings indicate that AI-driven personalization significantly enhances customer retention. Among all factors, ease of use exerted the strongest influence (β=0.405, p < 0.05). However, the influence of social norms showed a negative path coefficient (β=−0.110, p <
0.05), suggesting that some customer segments remain socially hesitant in adopting such technology.
To address these concerns, online retailers should clearly communicate the security measures of AI-based shopping, especially regarding data privacy and protection. Strengthening trust in AI-powered personalization will improve customer retention, enhance shopping experiences, and drive sales growth.
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