Abstract
Digital technology (DT) is critical for realizing customization to create business value. However, research on how DT affects customization and customer relationship performance is limited and lacks clarity. Drawing upon organizational learning theory, we examine the impact of firms' DT use on customization and subsequent customer relationship performance. Using survey data from 214 Chinese firms, we find that both DT use for customer exploitation and DT use for customer exploration have positive effects on customization. The effect of DT use for customer exploration on customization is moderated by absorptive capacity. Customization has a positive impact on customer relationship performance. This study contributes to the current literature and managerial practice by promoting a systemic conceptualization of customization and empirically examining the mechanism of DT-driven customization and its benefits.
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