Customer Retention in Food Delivery Applications: A Strategic Perspective for Open Innovation Business Models

Developing business models based on open innovation (i.e., the sharing economy business model) has become a global trend. Through diffusion of innovation theory and the roles of stakeholders, this study established a conceptual model and evaluated the impact of several factors on customer retention using the food delivery application service. The results of the partial-least-squares–structural-equation-modeling analysis revealed that, except complexity, all four elements of the diffusion of innovation construct, namely, compatibility, relative advantage, trialability, and observability significantly promoted customer retention. Furthermore, several factors that reflected the role of stakeholders such as promotion, timeliness, restaurants' brand trust, and payment convenience also affected customer retention. In particular, in addition to its role in inhibiting customer retention, this study also highlighted the negative impact of perceived health risk on both brand trust and promotion. These findings suggested several implications to enterprises, stakeholders, technology providers, and business models based on open innovation.