Excess Loyalty in Online Retailing

Abstract

This study aims to explain the differences in behavioral loyalty that online retailers enjoy—an issue with high managerial relevance, but not systematically addressed before. Utilizing a generalized Dirichlet model, an empirical analysis based on an online panel reveals that customers generally exhibit high excess behavioral loyalty in online purchases and that the loyalty level an online retailer can expect varies across its operating product/service categories. An online retailer's market share, positioning strategy, concentration of customer spending, number of operating categories, and background are all found to be associated with the level of behavioral loyalty in its customer base.

Keywords:

• Behavioral loyalty
• Dirichlet norm
• excess loyalty
• online retailing