Understanding E-Commerce Market Using Cluster Analysis: A Case Study of the CRM Programs of Online Shopper

The purpose of this research was to segment customers of e-commerce platform based on their preference on Customer Relationship Management (CRM) programs and socio-demographic. The study surveyed 100 respondents who have bought products from e-commerce platform. The research employed cluster analysis to group customers of e-commerce platform with similar characteristics and preferences. Using CRM programs as measurement variables, the results suggested three groups of customers, they are, Lifestyle driven segment, Selective driven segment and Penny-wise driven segment. The results also showed Lifestyle driven segment as the most dominant type of customers who strongly driven by lifestyle trend and dominated by millennial. Understanding the differences between these three group segments should provide company with important information to successfully create a proper CRM programs for each segment. Therefore, effective Customer Relationship Management (CRM) programs can help a company to retain customers. The recommendation to improve CRM program effectiveness based on each cluster preferences are provided in the paper.