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Linking lifestyle to customer lifetime value: An exploratory study in an online fashion retail market

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  • Dahana, Wirawan Dony
  • Miwa, Yukihiro
  • Morisada, Makoto

Abstract

This study explores how lifestyle can explain the heterogeneous customer lifetime values (CLVs) among various market segments. We develop a latent class model of purchase frequency, lifetime duration, and purchase amount to infer segment-level CLV. Customers' membership to each segment is presumed to depend on their lifestyle patterns. The proposed model is then applied to the transaction and lifestyle data of customers in an online fashion retail market. The empirical analysis reveals four customer segments that each has a unique lifestyle pattern: Individualistic Innovators, Rational Followers, Self-actualized Experts, and Integrated Shoppers. These segments differ in their magnitude of average CLV, partially explainable by segment members' lifestyle characteristics. The paper finally discusses some implications for improving customer relationships and raising revenues.

Suggested Citation

  • Dahana, Wirawan Dony & Miwa, Yukihiro & Morisada, Makoto, 2019. "Linking lifestyle to customer lifetime value: An exploratory study in an online fashion retail market," Journal of Business Research, Elsevier, vol. 99(C), pages 319-331.
    • Handle: RePEc:eee:jbrese:v:99:y:2019:i:c:p:319-331
    DOI: 10.1016/j.jbusres.2019.02.049
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    14. Maria Kubacka, 2020. "Review and Analysis of Selected Customer Value Measurement Methods (Przeglad i analiza wybranych metod pomiaru wartosci klienta)," Research Reports, University of Warsaw, Faculty of Management, vol. 1(32), pages 34-46.
    15. Kohsuke Matsuoka, 2020. "Exploring the interface between management accounting and marketing: a literature review of customer accounting," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 31(3), pages 157-208, September.
    16. Ng, Felicity Zi-Xuan & Yap, Hui-Yee & Tan, Garry Wei-Han & Lo, Pei-San & Ooi, Keng-Boon, 2022. "Fashion shopping on the go: A Dual-stage predictive-analytics SEM-ANN analysis on usage behaviour, experience response and cross-category usage," Journal of Retailing and Consumer Services, Elsevier, vol. 65(C).
    17. Dongyun Nie & Michael Scriney & Xiaoning Liang & Mark Roantree, 2024. "From data acquisition to validation: a complete workflow for predicting individual customer lifetime value," Journal of Marketing Analytics, Palgrave Macmillan, vol. 12(2), pages 321-341, June.
    18. Kessara Kanchanapoom & Jongsawas Chongwatpol, 2023. "Integrated customer lifetime value (CLV) and customer migration model to improve customer segmentation," Journal of Marketing Analytics, Palgrave Macmillan, vol. 11(2), pages 172-185, June.

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