Information technology (IT) may represent a source of competitive advantage for businesses in general and for retailers in particular. However, there is debate in the literature over the usefulness of investing in technology. This paper aims at analyzing the relationship between consumers’ perception on the use of information and communication technology by the retailer and consumer satisfaction with retailer technologies. Results support the need to restrict the investment in IT to what is strictly necessary, although there are significant differences according to retailer activity.
Organizations must cope with an increasingly changing environment. Such a change derives essentially from the evolution and changes in customers’ needs, technological advances to satisfy those needs and the evolution in business management (Porter, 1997).
A study of successful retailers reveals that the business ability to build and defend a competitive position in the market depends to a great extent on the capacity to invest and use information (Weber and Kantamneni, 2002). In this regard, Buxmann and Gebauer (1999) consider information technology to be a key factor for the organization's success.
Advances in information technologies (IT), such as customer relationship management (CRM), enterprise resource planning (ERP), quick response technologies (QRT), point of sale (POS), universal product codes (UPC), radio frequency (RFID) and payment methods, offer new possibilities for the management of retailing companies. The need to investigate these possibilities in the field of logistics from a marketing channel approach has been raised by several researchers. In particular, Dresner and Xu (1995), Luque (1995), Denis and Czellar (1997), Van der Veeken and Rutten (1998) and Mentzer and Williams (2001) have highlighted the need to research different aspects of the logistics function such as quick response, physical delivery and information system management. Nevertheless, research in these areas is still scarce.
Some authors, however, warn about the risk of “overengineering” or investing excessively in technology ( Sethuraman and Parasuraman, 2005), pointing out that good technology is “appropriate” technology. In contrast, practitioners tend to consider that more technology is always preferable to less technology ( Palmer and Markus, 2000). To evaluate this aspect, it is essential to measure the effects of IT solutions on perceived quality and consumer satisfaction ( Gurau and Ranchhod, 2002; Weinstein, 2002; Servera et al., 2006). Little attention, however, has been given to customer satisfaction with technology-based improvements and/or upgrading of existing services ( Timmor and Rymon, 2007) and the differences across service activities ( Drennan and McColl-Kennedy, 2003), even though both factors should be considered in investment decisions. In fact, several types of retailers analyzed in the literature present peculiarities ( Berry and Barnes, 1987) that may make difficult the extrapolation some investment patterns to other retail activities.
Focusing on retail distribution, the present paper aims at testing empirically for differences in customer perception and evaluation of the retailer's IT solutions according to retail activity, as well as assessing the influence of the use and evaluation of the those technologies on consumer satisfaction. We attempt to identify the most relevant technologies for four types of retailer: grocery, clothing and footwear, electronics and electrical appliances, and furniture and decoration.
In order to achieve this aim, the present paper is structured as follows. The existing IT literature in the context of relational marketing is revised below. Section 3 describes the methodology used. This is followed by the presentation and the discussion of the results. Section 5, the final part of the paper, contains the conclusions, limitations and new research lines.
Our results support the existence of a positive relation
between consumer perceived intensity of use of retail IT solutions
and customer satisfaction with such technology. In this sense, our
findings agree with
Palmer and Markus (2000)
and with the position that higher levels of and more advanced technologies are
always better than lower levels of technological development.
Nevertheless, not all technological solutions are equally valued
by the customer and, in particular, there are significant differences
in the evaluation of the intensity of IT solutions across retail
activities. This can be explained by the peculiarities of the buying
process of non-durable goods in comparison to durable goods, as
well as to the information necessary to satisfactorily complete
such processes and the importance of communications with the
retailer for post-sales service delivery. Notwithstanding, IT
solutions such as credit card and bar codes/scanner should be
present in every store regardless of its retail activity, as we find
high intensity of use of this technology and no significant
differences across retail activities.
In this sense, retailer investment in technology can be
considered as a quality guarantee of its goods and services,
especially in the distribution of durable goods that represent a
major percentage of consumer expenditure and high consumer
involvement.
Thus, the present paper supports the need for retailers to
invest in IT solutions, with recommendation to prioritize those
technologies that are more valued by the retailer’s customers,
since only some IT solutions (e.g. payment facilities, design
software) show a significant effect on customer satisfaction with
the retailer technology. In this regard, even if the results of our
regression analysis show that the consideration of customer
opinion in retailer IT coordination and development does not
significantly influence customer satisfaction with retailer tech-
nology, we understand that retailers should evaluate customers’
needs as a preliminary step for technology investment decisions.
Additionally, some retail technologies such as office and design
programs may be difficult to evaluate by customers and conse-
quently, retailers should consider the possibility of having basic
programs and outsourcing the production of more complex
communications to customers elaborated with this type of
technology. Furthermore, cost and impact on business perfor-
mance are both relevant issues to be considered by retail
managers.
The fact that certain IT solutions do not help to increase
customer satisfaction with retailer technology can be explained
because, following
Meuter et al. (2000)
the main benefits of such
technologies
—
e.g. time saving, ease of use, and cost saving
—
might not be appreciated by consumers. In other words,
customers may not attribute the nature of their experience in
the store to IT solutions. In this way, following
Liljander et al.
(2006)
, we consider that retailers should implement strategies to
create positive customer attitudes towards these IT solutions,
especially for consumers over 65.
Furthermore, results may be influenced by the fact that the
definitions of IT advancement and IT alignment used in our
research are focused on the company point of view but may be not
related to customers’ perceptions. Additionally, high-touch and
low-touch retailers may differ by their nature in terms of their IT,
thus reflecting our results the logical differences across retail
activities. Moreover, it is not surprising that more performance
improvements a