Business-to-Business Online Purchasing: Suppliers' Impact on Buyers' Adoption and Usage Intent

By Deeter-Schmelz, Dawn R.; Bizzari, Aric et al. | Journal of Supply Chain Management, Winter 2001 | Go to article overview

Business-to-Business Online Purchasing: Suppliers' Impact on Buyers' Adoption and Usage Intent


Deeter-Schmelz, Dawn R., Bizzari, Aric, Graham, Rebecca, Howdyshell, Catherine, Journal of Supply Chain Management


SUMMARY

Experts predict that the Internet will become the primary low-cost network for business-to-business commerce transactions. Both buying and selling firms can benefit from the cost savings and productivity improvements associated with online purchasing. Although more organizational buyers are turning to the Internet for purchasing activities, challenges exist as some buying firms harbor concerns. To assist suppliers in the development of effective strategies aimed at increasing online purchasing among professional buyers, a study was designed to investigate the impact of supplier support on buyers' adoption of the Internet for corporate-related purchasing activities. Path analysis was used to examine the relationships among four variables: supplier support, communication convenience, buyer adoption behavior, and Internet usage intent. The results suggest that suppliers play a critical role in the adoption of this new innovation. By offering encouragement, guidance (e.g., training), and incentives (e.g., price d iscounts) and by stressing convenience of use, suppliers can increase the likelihood that buyers will adopt and use this new method for purchasing.

THE INTERNET'S EFFECT ON THE SUPPLY CHAIN

"The Internet's effect on the supply chain will rival the interstate highway's impact on the transportation industry" (Carter et al. 2000).

Recent reports in the business press indicate that the Internet is playing an increasingly critical role in the industrial marketplace. Indeed, the press is replete with predictions concerning business-to-business (B2B) e-commerce. Forrester Research predicts B2B e-commerce sales of $2.7 trillion in 2004, up from $406.2 billion in 2000 (Blackmon 2000). Deloitte & Touche predicts that by 2003, B2B e-commerce will be six times as large as business-to-consumer (B2C) e-commerce. A recent study by Goldman Sachs concludes that B2B e-commerce could reduce processing costs by more than 20 percent in the electronics and freight transport industries and that overall business costs could fall by more than 12.5 percent. Boston Consulting Group suggests that B2B e-commerce could lead to productivity improvements of 9 percent within the next five years (Cohn, Brady, and Welch 2000). If these predictions are realized, the Internet could become the primary low-cost network for B2B commerce transactions (Wenninger 1999).

Although more buyers are turning to the Internet during the buying process (Callahan 1999; Lancioni, Smith, and Oliva 2000), challenges exist. Some buying firms fail to see the benefits of logging on to the Internet for tasks conveniently accomplished by phone (Weber 1999). Others harbor concerns about security, the risks associated with sharing information, and the costs associated with switching from another system, e.g., EDI (Carter et al. 2000; Sheth 1981; Wenninger 1999). Yet the potential for dramatic cost savings and productivity improvements suggests that both buying and selling firms would benefit from increased use of the Internet for corporate-related purchasing activities. Thus, suppliers with online purchasing capabilities, as well as those considering an implementation of such a system, need to devise ways to increase the usage of online purchasing among their industrial customers (Hill 1999; Weber 1999). Developing effective strategies for increasing online B2B buying requires an understanding of the factors that contribute to buyers' adoption of the Internet corporate-related purchasing. Accordingly, the purpose of this article is to investigate the impact of supplier support on buyers' adoption of the Internet for corporate-related purchasing activities. The following sections review the background for the study and identify key relationships among variables. The research methodology is then presented, followed by a discussion of the results and managerial implications.

THE ROLE OF SUPPLIERS IN B2B ONLINE PURCHASING

Online B2B purchasing is a relatively new phenomenon. …

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