A Study of the Factors That Drive Customer Retention in the E-commerce Industry: Basis for Marketing Strategies

Vol.4, No.1

Abstract

The e-commerce industry has been greatly impacted by the pandemic, and the number of
online businesses has increased, where online shopping has become a trend for consumers.
For customers, product information like price, product quality, place/medium, and promotions
are very important and should be transparent as they affect their buying choices. Online
businesses are competing for customers in a wide market like never before. Customer
retention gained increased value in e-commerce. Generally, it is recognized that there is a
positive relationship between customer retention and profitability, as customer retention
allows a corporation to boost profitability and revenue by constantly purchasing a product from
an online store.

The findings of the study revealed that the employed and unemployed group of respondents
strongly agree that price, product quality, place/medium, and promotions influence customers
buying behavior and affect customer retention. Moreover, the results of the study revealed
that there is no significant difference between the cited variables. The main problems
encountered as to the listed variables were overpricing, product quality being far from the
customer’s perceived value, errors in websites, and defective freebies.

This study proposed to improve the rate of customer retention by having a strong foundation of
marketing strategies, as it can be seen as a big factor that affects the business's longevity in
the industry.