Investigating the Factors Impacting Retailers Evaluations of Web Solution Providers

Abstract

Retailers are responding to ever increasing competitive challenges by building collaborative relationships with customers, suppliers and service providers. Increasingly SME retailers have been adopting third party web services to help them leverage the technical expertise and knowledge required to become more strategic in their e-business ventures (Ray and Ray, 2006). Such arrangements rely on relational exchange characterized by high levels of trust and commitment (Dwyer et al., 1987; Morgan and Hunt, 1994). There are very few academic contributions examining factors, which influence how businesses develop and evaluate trust and commitment in inter-organisational relationships in an e-business context (Pavlou and Gefen, 2004). Studies in this area have tended to focus on issues associated with hard operational and logistical factors in the supply chain and the tangible benefits of customer relationship management systems rather than focusing on the significance of softer human factors. Consequently, research looking at the strategic value of trust and commitment in inter-organisational relationships between SMEs and web solution providers is almost non-existent. Although the Internet and other new technologies have had high penetration rates in recent years, evidence suggests that there are signs of growing frustration and disillusionment with implementation and use of new technologies both within and outside the organisation (Doherty et al., 1999; Teo and Pian, 2003). White and Daniel (2004) found that one of the many reasons for e-tail failures was a lack of technical know-how required for reengineering the business to make it online compatible. Sourcing and relying on web solution partners for the commercial adoption of the Internet, enables SME retailer’s to speed up the adoption process, bypassing the potentially slow procedures associated with in-house development (Hong and Zhu, 2006) and also facilitating improved competitive advantage (Teo and Pian, 2003). Since the adoption of web services is a new phenomenon, the role of third parties who provide these services in that adoption is highly emergent (Daniel et al., 2004). Furthermore, there is a scarcity of empirical evidence investigating factors that influence trust from a B2B e-business perspective (Pavlou and Gefen, 2004). This is despite the fact that it has been acknowledged that how trust transfers in a multi channel setting, from offline to online channels (Shanker et al., 2002) where retailers rely on the experience and expertise of Web-Service Solution Providers (WSSPs) to design, develop, and/or market their business online, requires further research. This research addresses this deficiency and explores how retailers can leverage the necessary strategic resources and skills from a specialized web solution service company to facilitate their online retailing goals. The paper proceeds with a review of the relevant literature. The exploratory research design is outlined and a profile of the interviewee companies presented. The research findings are discussed and highlight several fundamental issues, which have implications for retail practitioners, web solution providers and academic researchers.