Perceived usefulness of innovative technology in retailing: Consumers׳ and retailers׳ point of view

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Abstract

Technology has always played important role in retailing. On one hand, technology enables retailers to improve their services to customers, to improve their management operations and reduce their cost as well. On the other hand, technology brings some benefits to consumers related to short lines at checkouts, higher speed in providing services in the store, no pricing errors, loyalty card programmes, etc. The main purpose of the paper is to discuss the benefits and limitations of technology in retailing in general. For the purpose of getting better insight into the importance of new technological solutions for retailers and consumers, different areas of technology in retailing have been explored in the selected retail context of the Republic of Croatia. The findings of the two-phase study, including a qualitative and a quantitative approach, suggest that innovative technology help consumers to make their shopping decisions, while better understanding of consumer goals and related stored information in turn would help retailers to develop successful retail strategy.

Introduction

To compete effectively, retailers must focus on the customer׳s shopping experience and their expenditures as well. Nowadays, retailers are continually making decisions about whether to implement new technologies or not. Verhoef et al. (2009) highlight the need to understand negative effects of these self-service technologies on employee morale (i.e., the fear of losing one׳s job), as well as the balance between positive timesaving effects and overall negative effects on the customer experience (i.e., no contact with store personnel).

On the one hand, retailers can benefit from the implementation of new technologies (Pantano, 2010), either through better firms׳ management and costs reduction (Grewal et al., 2009) or through improved consumer service and increased sales volume. On the other hand, they are not sure whether consumers will accept new technologies and what are the costs and their desired ROI. Pantano and Viassone (2014) recognized that technical innovation in stores should respond to both to consumers׳ preferences and retailers׳ needs and expectations.

The fact is that retailing technologies are constantly emerging, and retailers have to be involved in the implementation of innovative business practices provided by the technological innovations. Hopping (2000) states that the history of retail is also a history of the role of technology in society, and technology has played a role as the primary enabler of change in retailing.

Retailers place emphasis on new technologies designed to cut costs and to make shopping more exciting for their consumers. Extant studies show that consumers would rationally explore different innovative services (e.g. Liao and Shi, 2009, Lohse et al., 2000, Parasuraman and Zinkhan, 2002, Vijayasarathy, 2004). The use of new technology can influence the consumer shopping experience (Verhoef et al., 2009). Walter et al. (2012, p. 368), note that consumers are exposed to an increasing variety of products, the information about which has to be processed. New retail technologies increasingly are encouraging customers to perform services themselves (Weijters et al., 2007), and customers are being forced to use technology-based self-service (Clodfelter, 2011). It is interesting that the literature (Kim and Kim, 2008) suggests that consumers who enjoy their shopping experience make more purchases.

The main objective of the paper is to investigate the usefulness of innovative technology in retailing. This paper addresses two opposite segments in retailing: consumers and retailers. In this paper we try to find out whether those two segments both have perceived usefulness in using innovative technology, and how consumers have experienced new innovative technologies. Moreover, the main purpose of the paper is to discuss the benefits and limitations of technology in retailing in general.

The constructs of perceived usefulness was derived from the theoretical base (expressed in TAM model). Davis (1989, p. 320) defined it as “the degree to which a person believes that using a particular system would enhance his/her job performance”. For the purpose of getting better insight into the importance of new technological solutions for retailers and consumers the research was guided by the following research questions:

  • RQ1. What are the main benefits and limitations of new technological solutions for various types of retailers?

  • RQ2. Whether interactions with new technology affect consumers׳ loyalty towards specific retailer?

The paper begins with the theoretical background where the benefits and limitations of different innovative technologies in retailing for both customers and retailers are given. The review of the available literature showed that researches differ in discussing advantages and limitations of technology in retailing.

For the purpose of getting better insight into the importance of new technological solutions for retailers and consumers, different areas of technology in retailing have been explored in the selected retail context of the Republic of Croatia. Croatia is the Southeast European country with modern retailing forms (supermarkets, hypermarkets and discounters) which accounted for 76 percent of grocery sales in 2011 (Nielsen Q1 Reports, 2012). Top 10 retailers hold almost 80 percent of the Croatian market, similar to situations on the markets of the developed Central and East European countries. However, there is rather low tendency towards e-tailing. Namely, only 16 percent Croatian consumers, and 27 percent of companies are using Internet for purchasing (Baranovic and Aleksic, 2013, p. 10). In the sections that follows, a discussion on research methodology and results of the two-phase study, including a qualitative and a quantitative approach are given. Finally, a discussion of theoretical and managerial implications including limitations of the study and directions for future research are presented.

Section snippets

Theoretical background

Researches differ in their point of view about the benefits from the implementation of new technologies. Some researches (Greenhalgh et al., 2004, Pantano and Naccarato, 2010, Weber and Kantamneni, 2002) suggest that retailers׳ ability to build and defend their competitive market position depend on their willingness and capacity to use technology. However, there are also those who find out that there has been little evidence what are retailers׳ real benefits provided by the technology (

Methodology

For the purpose of this paper, the two-phase research study was conducted. The study included a qualitative and a quantitative approach: (1) the quantitative study on the sample of 210 Croatian consumers in order to understand the rating of the innovative store technology among other salient store attributes and to examine the overall importance of innovative technology for Croatian consumers, consumers׳ benefits of using new technology in purchasing, the influence of the implementation of new

Results and discussion

In accordance with the research methods, the analyses, as well as the results, first refer to the study on the sample of customers, then to the study among retail companies. What follows is a short discussion of investigated themes and some interpretations.

Future research directions

Similar to any research, this study provides some useful findings but it has some limitations which have to be taken into account through future researches. This study investigates consumers׳ and retailers׳ points of view regarding the importance and the implementation of innovative technology. Moreover, it is trying to integrate both consumers׳ and retailers׳ point of view. Both sides have benefits and limitations in using innovative technology and it is important for retailers to understand

Conclusion

This paper has aimed at contributing to the existing knowledge of technology in retailing by integrating both consumers‘ and retailers׳ point of view. This paper is an attempt to reveal whether innovative technological solutions bring benefits to customers and retailers as well. The literature review suggests that retailers׳ ability to build their competitive market position depends on their willingness and capacity to use technology, and that investments in technologies does not always provide

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