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

Wirawan Dony Dahana, Yukihiro Miwa and Makoto Morisada

Journal of Business Research, 2019, vol. 99, issue C, 319-331

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.

Keywords: Lifestyle; Customer lifetime value; Segmentation; Latent class model (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:99:y:2019:i:c:p:319-331

DOI: 10.1016/j.jbusres.2019.02.049

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