Customer Loyalty and Disloyalty in Internet Retail Stores: Its Antecedents and its Effect on Customer Price Sensitivity

Abstract

Despite growing popularity of electronic commerce, many e-retailers are exiting from cyber markets as a result of failing to gain and maintain a loyal customer base and under pressure of intensified price competition and low profitability. To cope with severe price competition and the resulting undermined profitability, this paper argues that raising customers willingness to pay more via two-dichotomy customer management strategies (managing customers loyal behavior and managing customers disloyal behavior) are essential. From an empirical study, using a sample of 159 shoppers who have experiences of purchasing products from an Internet retail store, we identified that three quality factors from the perspectives of information technology, retailing, and customer service that exert significant influence on customers loyal/disloyal behaviors. Additionally, customers loyal behavior and disloyal behavior mediate the relationship between those Internet retail store quality factors and price sensitivity.