Modeling Online Retailer Customer Preference and Stickiness: A Mediated Structural Equation Model

These past few years have seen a rapid explosion of the number of online retailers as well as online buyers. Comparable growth in sellers and buyers means that Internet retailers have to understand how to make customers choose them over the competitors and make customers stick to their stores. The objective of this study was to build a model that will show what aspects affect customer preference and stickiness in online retail business. Based on prior literature, some of the aspects that contributed to customer stickiness and customer preference were community involvement, convenience, site’s appeal, entertainment aspect of online shopping and customer satisfaction. A data-driven structural equation modeling technique employed showed that these five factors contributed to customer preference and customer stickiness in similar fashion: community involvement and site's appeal predicts entertainment which in turns predicts customer stickiness/preference, while site's appeal and convenience predicts customer satisfaction which in turn also predicts customer stickiness/preference. Comparison of the two models revealed that customer stickiness was much better explained than customer preference.