Personalized Marketing through AI: Its Impact on Customer Retention in Online Retail Market

ABSTRACT Date: 2025-06-03 Level: Master thesis in Business Administration, 15 credit Institution: School of Business, Society and Engineering, Mälardalen University Authors: Mehmet Özer Çetinkaya (90/01/01), Yonas Gebray(87/05/18) Title: Personalized Marketing through AI: Its Impact on Customer Retention in Online Retail Market Supervisor: Olivia Kang Keywords: AI-driven Personalization, Customer Retention, Consumer Perceived Value (CPV), Technology Acceptance Model (TAM), Online Retail Marketing, Privacy Concerns Research questions: How does AI-driven personalization influence customer retention in the online retail market? - To what extent do perceived usefulness and ease of use of AI-generated personalized marketing content influence consumer perceived value, and how does this, in turn, affect customer retention in online retail? - How do trust and privacy concerns moderate the relationship between consumer perceptions of AI-personalized content and their customer retention behavior? Purpose: This study aims to examine how consumers’ perceived value (CPV) influences customer retention in the context of AI-driven personalization in online retail. It also investigates how perceived usefulness (PU) and perceived ease of use (PEOU) of AI-personalized content shape overall CPV. Method: A quantitative survey was conducted with 75 online shoppers experienced in AI-personalized marketing. Data were analyzed using descriptive statistics and multiple regression analysis. Conclusion: The findings reveal that CPV significantly predicts customer retention, while PU and PEOU both have a substantial impact on shaping CPV. Trust and privacy concerns, included as control variables, did not show a significant effect, likely due to the digitally mature nature of the sample. These results support the Technology Acceptance Model (TAM) and highlight the importance of perceived value in fostering long-term customer loyalty in AI-personalized environments.