AI-POWERED RECOMMENDATION SYSTEMS AND THEIR ROLE IN ENHANCING E-COMMERCE CUSTOMER RETENTION
DOI:
https://doi.org/10.1234/aira.v2i1.40Keywords:
AI-based recommendation systems, customer retention, e-commerce, personalization, Generation Z, Indonesia, quantitative analysisAbstract
This study investigates the impact of AI-based recommendation systems on customer retention within e-commerce platforms, focusing on the Indonesian market. The rapid growth of digital commerce has elevated the significance of customer retention, a critical metric for sustained profitability and competitive advantage. AI-based recommendation systems, which leverage algorithms to personalize user experiences, have emerged as powerful tools for enhancing customer loyalty. Despite extensive research on customer satisfaction and loyalty, a gap exists in understanding the precise influence of AI-driven personalization on long-term retention in diverse market contexts. This study adopts a quantitative correlational design, surveying 100 Generation Z consumers using a structured questionnaire with a 5-point Likert scale. Data were processed using SPSS version 26, including validity testing (r > 0.195), reliability testing (Cronbach's Alpha > 0.70), classical assumption tests, and multiple regression analysis to assess the relationships among customer experience, system usability, trust, value perception, and loyalty as predictors of retention. Key findings revealed that all independent variables significantly influenced customer retention, with customer experience (t = 97.893, p < 0.001) exhibiting the strongest impact, followed by system usability (t = 93.375, p < 0.001), customer trust (t = 96.270, p < 0.001), value perception (t = 95.149, p < 0.001), and loyalty (t = 84.205, p < 0.001). The overall model demonstrated statistical significance (F = 7.845 > F-table 2.31, p < 0.05), confirming the joint effect of these factors on retention. This research contributes to theoretical advancements in social commerce by providing empirical insights into the synergistic role of AI technologies in customer retention. It offers practical implications for e-commerce firms seeking to optimize personalization strategies and enhance long-term consumer loyalty, serving as a foundation for future studies.ations for businesses, and a foundation for future research exploring the dynamics of marketing strategies in e-commerce.
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