The Role of Personal Data in Shaping Customer Loyalty

With sensitive data becoming an increasingly important source for competitive advantage retailers increasingly leverage consumer data across channels in order to provide superior shopping experiences and fuel customer loyalty. On this background, this study investigates the role of sensitive data in shaping customer loyalty, whereby the proposed conceptual model takes both a negative (through psychological risk) and a positive (through convenience and inspiration) pathway into consideration. The results of a representative field study with n=884 customers confirm that the extent of sensitive data available to a retailer increases psychological risk. However, customers also benefit from having made available more sensitive data as they evaluate their retailers more positively with regard to the provision of convenient and inspirational shopping experiences. Furthermore, by showing that these relationships are partly dependent on a retailer’s ability to handle sensitive data and retailer-customer relationship age, the study sheds light on two important boundary conditions.