Investigating the Role of Product Assortment in Technology-Enabled Sales Platforms

Abstract

Throughout a distribution channel, multiple sales platforms and technologies are leveraged to expand market reach and manage offering assortments. Yet, the literature is limited on how buyers who are channel intermediaries make purchase decisions across sales platforms particularly when platforms vary in their degree of technology enablement. This research investigates how B2B buyers respond to the offering, in terms of numerical assortment and quality, when the sales environments vary in their level of technology enablement. We examine the buyer's sales platform choice, purchase quantity, and tackle the seller's challenge of assortment integration. Buyers have a choice of purchasing from a low-tech platform where buyers are in-person and an auction determines sales, an Internet-enabled platform where remotely located buyers are price takers, and a hybrid platform that has a high level of technology enablement such that co-located and remotely located potential buyers simultaneously bid on the offering. A Hidden Markov Model captures the impact of different need states on buyers' decisions. Our findings: (1) uncover three distinct buyer profiles that have unique sales platform preferences and multiplatform buying tendencies that relate to their comfort with technology-enabled markets, (2) show that buyers exhibit distinct and dynamic needs that affect their sales platform choices and response to the platform offerings, (3) reveal that buyers experience diminishing returns to product assortment and condition at varying rates depending on their need state. Supporting our key findings, we find evidence of similar behaviors among consumers in a B2C multichannel context that includes an omnichannel. Additionally, we offer recommendations for B2B sellers regarding allocating and adjusting assortments to drive sales platform choice and revenues per buyer.