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Published in: Electronic Commerce Research 4/2022

10-07-2020

Monopoly or competition: strategic analysis of a retailing technology service provision

Authors: Fengying Hu, Zhenglong Zhou

Published in: Electronic Commerce Research | Issue 4/2022

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Abstract

To improve the consumer shopping experience and to remain competitive, an increasing number of retailers continue to increase their investment in technology services and actively seek help from technology service providers to transform and upgrade their retail business. Technology service providers deliver new technological solutions for retailers by providing professional retailing technology services (e.g., building omnichannel retailing modes). Considering this context, we seek to understand whether retailers expect to use technology services and service providers’ expectations of providing retailing services. In this paper, we build a two-tier supply chain with one upstream technology service provider and one downstream retailer (or two competitive retailers) to analyse the strategic choice of the retailer(s) and the service provider. We find that the retailer(s) can purchase a professional retailing technology from the technology service provider and that the service provider is willing to provide technology to two competing retailers, which can increase market demand and yield higher profits. Furthermore, we find the impact of the technological contribution level, retail competition intensity, the power structure, and the technology marketing effect on decision outcomes is significant. Therefore, retailers should consider the influence of these factors when service providers deliver a retailing technology service.

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Appendix
Available only for authorised users
Footnotes
3
Notably, the technological contribution level indicates the level of the technological contributions made by the technology service provider to deliver the omnichannel service or chain store service in the supply chain. In our model, the technological contribution level is shown in formula (2).
 
4
Technology marketing effect measures marginal demand with respect to the technology output level by technology marketing, which indicates the influence of the retailer’s technology marketing on demand.
 
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Metadata
Title
Monopoly or competition: strategic analysis of a retailing technology service provision
Authors
Fengying Hu
Zhenglong Zhou
Publication date
10-07-2020
Publisher
Springer US
Published in
Electronic Commerce Research / Issue 4/2022
Print ISSN: 1389-5753
Electronic ISSN: 1572-9362
DOI
https://doi.org/10.1007/s10660-020-09426-z

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