Academic journal article Journal of the Association for Information Systems

Information Technology, Cross-Channel Capabilities, and Managerial Actions: Evidence from the Apparel Industry

Academic journal article Journal of the Association for Information Systems

Information Technology, Cross-Channel Capabilities, and Managerial Actions: Evidence from the Apparel Industry

Article excerpt

(ProQuest: ... denotes formulae omitted.)

1 Introduction

Information technology (IT) allows firms to reconfigure strategic resources and execute managerial actions more effectively, which intensifies competition in many industries (McAfee & Brynjolfsson, 2008). In an increasingly competitive marketplace, products can quickly become obsolete, and competitive positions can rapidly falter. Firms must continue to carry out frequent competitive activities to create and recreate competitive advantage (D'Aveni, 1994). Only those firms that can leverage IT and technology-enabled capabilities to undertake a greater number of managerial actions from more heterogeneous and complex repertoires will continue as sector leaders. Despite the growing link between IT and intensifying competition, little research has investigated the underlying mechanism of how IT combines with other organizational resources to change business processes and help firms cope with intensified competition.

New technologies such as the Internet and in-store technological solutions (e.g., intelligent self-service kiosks) have changed the competitive landscape of the retailing industry. Because customers can move freely between physical stores, PCs, and mobile devices, the retail industry is evolving toward multichannel retailing (Bell, Gallino, & Moreno, 2014; Rigby, 2011). Bryjolfsson, Hu, and Rahman (2013) argue that new technologies and cross-channel retailing (e.g., consumers' ability to shop online and pick up in local stores) make the retail landscape increasingly competitive. Retailers once relied on barriers such as geography and customer ignorance to compete in traditional markets, but technology removes these barriers. It has become critically important for retailers to rethink their competitive strategies in an omnichannel world. This study examines IT applications, cross-channel capabilities, and managerial actions by linking theories in the resource-based view (RBV), IT business value, and competitive dynamics. Our research contributes to the literature by studying how IT allows firms to develop high-level capabilities and how combining IT and firm cross-channel capabilities affects managerial actions in the competitive marketplace.

How IT helps retailers develop cross-channel capabilities to cope with intensified competition is of practical and academic importance. First, cross-channel integration is becoming an operating standard for the retail industry (Kumar & Venkatesan, 2005). According to Rigby (2011), companies must pursue a strategy of omnichannel retailing: an integrated sales experience through all available shopping channels. Many consumers now take for granted the seamless shopping experience that allows them to carry out transactions wherever they are (through a computer, mobile device, catalog, or store visit). Venkatesan, Kumar, and Ravishanker (2007) provide evidence that multichannel shopping is associated with higher customer profitability. Using survey data from 125 multichannel retailers in Singapore, Oh, Teo, and Sambamurthy (2012) found that retail channel integration through using IT allows firms to more efficiently deliver their current products/services and provide more innovative products in the future. The ability to effectively sense, shape, and fulfill customer demand through a customer's channel of choice has become a retailer's new competitive differentiator. Second, IT-enabled omnichannel strategy has become an engine of revenue growth for the companies that process the capabilities. For example, upscale retailer Nordstrom's multichannel strategy allows the company to expand beyond its physical stores to its new Nordstrom Rack stores Nordstromrack.com and flash-scale Hautelook.com channels and to satisfy customers from different segments (Bailey, 2015). Third, enterprise IT and cross-channel capabilities have become catalysts for many innovations and competitive activities (McAfee & Brynjolffson, 2008). …

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