On retail digital platforms suppliers have to become responsive customer service organizations
ISSN: 1087-8572
Article publication date: 20 December 2018
Issue publication date: 28 February 2019
Abstract
Purpose
We illustrate how multi-sided retail marketplaces enabled by a digital platform, engage suppliers, creating new rules of retail altogether. Specifically, we describe how these marketplaces create relational value for their suppliers, as through marketplaces like Amazon.com, suppliers are fully integrated members of the value-exchange relationship with the platform’s end-customers.
Design/methodology/approach
This paper is the result of a study of three leading marketplaces. We compared the marketplaces to understand the impact of the platform economy on the retail industry, including on the governance mechanisms and earnings logic. We identified supplier management as a key theme in our analysis, as on marketplaces such as Amazon.com, the management of supplier relationships differs from more traditional forms of retail, as in platforms, supplier quality reflects strongly on the reputation and reliability of the marketplace.
Findings
Our findings show that in addition to well-known customer engagement processes, the marketplaces also have supplier engagement processes in-place. Through engagement processes, marketplaces are able to lock-in suppliers, thus increasing the total value of the marketplace. For suppliers, marketplaces create relational value, in an industry where competition has traditionally centered on price, selection and location.
Originality/value
Thus far, studies have shown that companies differentiate through customer engagement. This paper looks at the same phenomena from the supplier side. We contribute to the understanding of complementor management in the platform economy. Based on our study, we expect that the novel concept of supplier engagement will transform how retailers interact with suppliers.
Keywords
Acknowledgements
Erratum: It has come to our attention that “On retail digital platforms suppliers have to become responsive customer service organizations” by Mikko Hänninen and Anssi Smedlund, published in Strategy & Leadership, 2019, was published with an incorrect title. The title has since been corrected online. Emerald sincerely apologise for this.
Citation
Hänninen, M. and Smedlund, A. (2019), "On retail digital platforms suppliers have to become responsive customer service organizations", Strategy & Leadership, Vol. 47 No. 1, pp. 37-43. https://doi.org/10.1108/SL-04-2018-0036
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited