Institutional Maintenance of E-Commerce through Traditional Retail

Abstract

This study analyzes the process of opening traditional, physical retail stores by e-commerce companies as institutional work of maintenance. Past research examines internal mechanisms used to maintain institutions and ignores the question of how an external, alternative institution can contribute to the maintenance of another institution. This study shows that traditional retail as a relatively old institution helps maintain e-commerce as a relatively new institution through eight different mechanisms at four levels including customers, employees, suppliers, and companies themselves. For customers, traditional stores help concretize e-commerce companies and personalize customer experience. For employees, they create new tasks and responsibilities and increase their involvement in both strategic and daily decisions. For suppliers, they develop trust by making e-commerce companies a concrete entity to do business with and promote visibility by expanding sales channels and the product range. Lastly, for companies themselves, they increase brand awareness and result in growth through additional marketing and sales opportunities. Traditional retail thus strengthens the position of e-commerce companies in the market by facilitating better relations with their customers, employees, and suppliers as well as directly contributes to the company image and growth.