How will digitalization enhance retailersʼ competitiveness? Focus on supplier relationships【Articles】

How will digitalization enhance retailers’competitiveness? Focus on supplier relationships
デジタル化で小売の競争力はいかに強化されるのか？
─サプライヤーとの関係を中心に─
KIM Woonho
金雲鎬HIDAKA Yuichiro
日

高

優一郎

AKIYAMA Shuichi
秋

山

秀

一

Contents
1. Introduction
2. Conceptual Framework
2.1. Retail Characteristics, Merchandising Capability, and Information Systems
2.2. Relationship Quality
3. Hypothesis
3.1. Information Systems and Merchandising Capability
3.2. Information Systems and Relationship Quality
3.3. Relationship Quality and Competitiveness Advantage
4. Method
4.1. Sample and Data Collection
4.2. Measurement
4.3. Reliability and Validity
5. Results
6. Discussion and Conclusion
6.1. Discussion
6.2. Implications
6.3. Limitations and Future Research― 49 ―+KIM Woonho氏他.indd 49『商学集志』第 92 巻第 1 号（’22. 6）2022/06/16 9:34:20

How will digitalization enhance retailersʼ competitiveness? Focus on supplier relationships（Abstract）
This study explores the relationship between retail information systems and the quality ofsupplier relationships. Retail information systems were analyzed separately for the information technology used in supplier relationships (supplier-IS) and customer relationships(customer-IS). Hypotheses were tested using structural equation modeling of data collected
through a questionnaire survey of Japanese retailers. The analysis results revealed that customer-IS is more relevant than supplier-IS, and that the quality of the relationship needs tobe analyzed by elemental decomposition. Retailers trying to raise competitive advantage bycollecting and utilizing customer data through information and communications technology often
focus on customer relations; however, this study suggests that both customer and supplier
relations must be considered. This discovery will be eﬀective for customer relationship management and multi-channel retailing and for enhancing omni-channelization strategy building
and social media utilization, which has recently gained momentum.
Keywords: Customer-IS; Supplier-IS; Relationship Quality; Merchandising; Retailer

1. Introduction
To interact with their customers, retailers have been increasingly using information and communications technology (ICT) (Sanders, 2008; Grewal et al., 2011; Peltier et al., 2013; Thatte
et al., 2013; Renko and Druzijanic, 2014; Zerbino et al., 2018; Ying et al., 2021). As interaction has implications on exchange and communication, this study deﬁnes digitalization as ICT
utilization for customer interaction. Hence, we deﬁne digitalization strategy as the means toachieve a competitive advantage through digitalization. More than 20 years ago, digitalizationof retailers aimed at interaction with customers had already begun in customer relationshipmanagement (CRM) and multi-channel retailing (Zhang et al., 2010; Zerbino et al., 2018; Ying
et al., 2021). The digitalization strategy of retailers continues to evolve as smart devices
become ubiquitous and social media technology develops further (Grewal et al., 2017; Ratchford et al., 2022).
Can interest and investment in the digitalization strategy of retailers produce results thatmatch expectations? In CRM research, utilization of the CRM system has enhanced customer
satisfaction and royalties, but there is skepticism regarding its relevance to competitive advantages (Hendricks et al., 2007; Schumanna et al., 2014). Unless these problems are resolved, it
is diﬃcult to acquire competitive advantages. These limitations cause diﬃculty for retailers indecision making with respect to digitalization strategies. To resolve this problem, we must
explore new possibilities in a digital strategy. Thus, this study focuses on aspects where customer data gathered through digitalization positively work for supplier relations.
Most existing research on the eﬀect of digitalization in retail focuses on its eﬀect on cus『商学集志』第 92 巻第 1 号（’22. 6）+KIM Woonho氏他.indd 50― 50 ―

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How will digitalization enhance retailersʼ competitiveness? Focus on supplier relationships

tomer relations (Ratchford et al., 2022). However, retailers achieve their competitive advantage
by enhancing customer and supplier relations. Previous studies on B2B marketing suggest that
digitalization, such as the integration of information systems among businesses, promotes cooperation and joint innovation with suppliers, which in turn improves competitive advantage (Donget al., 2009; Zhao et al., 2011; Thatte et al., 2013; Ganbold et al., 2021). Nevertheless, notmany studies have considered how retailersʼ use of information systems for consumer relationsaﬀects their relationships with suppliers.
Customer data gathered on the retail side include information about each customerʼs purchasing behavior, such as time of purchase and products purchased. Therefore, retailers cancollect and analyze these data through digitalization to understand the latest trends of customers regarding their purchasing behavior (Peltier et al., 2013; Renko and Druzijanic, 2014;
Zerbino et al., 2018; Ying et al., 2021). As suppliers do not have direct access to these data,retailers can use these customer data to improve their relationships with suppliers and gain acompetitive advantage based on this relationship. Therefore, the following research question
can be considered:With respect to retailers and digitalization strategies, to raise practical implications, it
may be necessary to clearly reﬂect the retail characteristics in hypothesis model construction
and analysis. Most studies on the eﬀect of digitalization note that digitalization facilitates
retailersʼ interaction with consumers and enhances retailersʼ marketing capabilities, which
increases competitive advantage (Zerbino et al., 2018; Ying et al., 2021; Ratchford et al.,2022). This insight is crucial to utilizing digitalization and can be highly generalized, which
may be why retail characteristics are often overlooked.
The behavioral characteristics of manufacturers and retailers are obviously diﬀerent fromeach other. Manufacturers communicate with their customers through their products and create their product brands. Meanwhile, retailers communicate with their customers through theirstores and create their store brands (Sethuraman and Gielens, 2014). While product development is the primary resource for manufacturer competitiveness, merchandising (such asassortments) is the primary resource for retailer competitiveness, as they do not engage inproduct development.
With respect to the aforementioned factors, this study 1) focuses on customers and suppliersʼ relations, 2) gives suﬃcient consideration to retail characteristics, and 3) conducts aquestionnaire survey and applies the structural equation modeling technique.

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How will digitalization enhance retailersʼ competitiveness? Focus on supplier relationships

2. Conceptual Framework

Compared to manufacturers, the most common characteristics of retailers are the source ofcompetitive advantage and organizational structure. Making comparisons with manufacturers is
an eﬀective approach to highlight the distinctive characteristics of retail companies, and themerchandise that increases their competitive advantage. While manufacturers achieve competitive advantage by making a ﬁxed set of products, retailers achieve competitive advantage by
providing services that involve assorting a wide variety of products that are available in themarket (Alderson, 1957; Dawson, 2000; Mantrala et al., 2009). In merchandising, to easeassortment planning and product sourcing, retailers require the cooperation of suppliers. Supplier relations, as a basis for competitive advantage, seem to be more aﬀected than otherindustries such as manufacturing.
The complexity of organizational structure is a characteristic of retailers. While theretailers who seek to grow their business operate multiple stores to overcome geographicalconstraints, manufacturers usually take on the form of a single-unit organization. However,retailers take on the form of a multi-unit organization that consists of the head oﬃce andstores (Chang and Harrington, 2000).

The retail characteristics seem to suggest that two points need to be considered when constructing and analyzing the hypothesis model̶one is to focus on merchandising capability(MDC). Merchandising requires various tasks, such as assortment planning, sourcing, and promotion (Lambert, 1979; Lumpkin, 1985; Pettigrew et al., 2005; Chaudhuri and Ligas, 2009;
Thatte et al., 2013), but the task of each department is diﬀerent. Although there is a diﬀerence
depending on whether it is a centralized structure or a decentralized structure, assortment
planning is undertaken by the buyer department, sourcing by the logistics department, and promotion by the shop management department or store in general.
Therefore, in addition to the capabilities of each department in-charge, communication
between functions (that is, between functions in headquarters or between head oﬃce and store)
is required. Furthermore, collaborating with suppliers requires merchandising, so the communication activity required to execute merchandising becomes complicated. As MDC seems to be
an important factor in considering the competitive advantage of retailing, the study incorporates it in constructing and analyzing hypothetical models.

The next consideration for the hypothetical model of this study is to focus on two types of
information systems that take place at retail sites. One is an information system for supplier『商学集志』第 92 巻第 1 号（’22. 6）+KIM Woonho氏他.indd 52― 52 ―

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How will digitalization enhance retailersʼ competitiveness? Focus on supplier relationships

relationship (hereafter, supplier-IS)(Rai et al., 2006; Dong et al., 2009; Zhao et al., 2011; Ganbold et al., 2021). Supplier-IS aims to integrate information processes with suppliers to ensuresmooth and accurate communication and to increase procurement eﬃciency. Further, it isexpected to simultaneously save operational costs and improve inventory management eﬃciency.
The other is an information system that is utilized for the purpose of communication with customers (hereafter, customer-IS) (Sanders, 2008; Grewal et al., 2011; Peltier et al., 2013;
Renko and Druzijanic, 2014; Zerbino et al., 2018; Ying et al., 2021; Ratchford et al., 2022). A
typical customer-IS is CRM. In CRM, it is expected to maintain relationships with customers
and collects and analyzes customer data and uses them to solve marketing problems.

We attempt to understand supplier relations in terms of relationship quality. For this study,
we adopt trust, commitment, and communication as the core components of relationship quality
and evaluate their impact on MDC. Since Dwyer et al. (1987), relationship quality researchhas explored the topic from a broad perspective, based on multiple dimensions (trust, commitment, satisfaction, communication, conﬂict, power, bonds, adaptation, fairness, etc.) (Ulaga andEggert, 2006; Fang et al., 2011; Change et al., 2012; Sheu, 2015; Casidy and Nyadzayo, 2019;
Najaﬁ-Tavani et al., 2022). Regarding dimensions, there is a tendency to select components
according to the research purpose; there does not appear to be a ﬁxed analysis framework.
However, many studies have adopted trust and commitment as major dimensions, and they tend
to add other variables according to their research purpose. In numerous studies, satisfaction
has also been adequately analyzed, and while it can be considered a major dimension, it is often
analyzed as customer satisfaction. As this study does not analyze retail customer satisfaction,
we disregard it as a major dimension.
Similar to previous studies, this study considers communication as a dimension of relationship quality (Fynes et al., 2004; Lages et al., 2005; Richard et al., 2007), as communication
problems are important for the retailerʼs competitive advantage. Figure 1 represents theresearch framework. We build a hypothetical model based on this basic concept for investigating the research question.

Information
Systems

Competitive
Advantage

Relationship
Quality

Figure 1. Research framework― 53 ―+KIM Woonho氏他.indd 53『商学集志』第 92 巻第 1 号（’22. 6）2022/06/16 9:34:21

How will digitalization enhance retailersʼ competitiveness? Focus on supplier relationships

3. Hypothesis

Supplier-IS oversees business process integration with information ﬂow (Rai et al., 2006;
Dong et al., 2009; Zhao et al., 2011; Ganbold et al., 2021). Supplier-IS involves the minimization of communication and coordination eﬀort between activities (Sikora and Shaw, 1998;
Volkoﬀ et al., 2005; Zhao et al., 2011; Ganbold et al., 2021). Often, communication eﬃciency isparticularly mentioned as an eﬀect of supplier-IS in supply chain management (SCM) research.
Studies show that it also enhances relationships quality, competitive advantage, and ﬁnancial
outcomes. Mohr and Spekman (1994) list accuracy, timeliness, adequacy, and credibility as elements that enhance the quality of communication. Supplier-IS enables them to share
information precisely and in real time̶this means that the eﬃciency of communication in the
supply chain (SC) is increased (Cachon and Fisher, 2000; Croson and Donohue, 2003; Hendricks et al., 2007; Zhao et al., 2011). This improvement can reduce forecasting, planningerrors (Hendricks and Singhal, 2003), and order-to-fulﬁllment cycle time (Cachon and Fisher,
2000; Croson and Donohue, 2003; Hendricks et al., 2007; Dong et al., 2009; Zhao et al., 2011).
Increasing the communication eﬃciency of SC means increasing responsiveness to the market(Ettlie and Reza, 1992; Dong et al., 2009; Zhao et al., 2011; Ganbold et al., 2021). Supplier-IS
is expected to increase assortment planning and sourcing capabilities, especially among merchandising-related tasks. Thus, we predict
Information
Systems

Relationship
QualityCompetitive
Advantage

H1(+)

IT used forsupplier
relationships(supplier-IS)

H3(+)

Trust

Commitment

IT used forcustomer
relationships(customer-IS)

H5(+)

Competitive
Advantage

H4(+)
Communication

H2(+)

Figure 2. Hypothesis model『商学集志』第 92 巻第 1 号（’22. 6）+KIM Woonho氏他.indd 54― 54 ―

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How will digitalization enhance retailersʼ competitiveness? Focus on supplier relationships

H1: Supplier-IS enhances retailersʼ competitiveness advantage.
While supplier-IS is expected to increase competitive advantage as in hypothesis 1, customer-IS may also increase retailʼs competitive advantage in a mature market. As markets
mature, consumer needs become more diverse and short-cycle. This makes it diﬃcult to predict
consumer needs in this market environment. There is a limit to the extent to which conventional information systems can handle this problem, and it is expected that customer
relationship information systems, including big data, will be utilized to solve this problem.
Customer data collected from CRM activities, such as loyalty programs, contain information on
who bought what product, when, and by whom, and these data can be analyzed to understandcustomer attributes (Sanders, 2008; Grewal et al., 2011; Peltier et al., 2013; Renko and Druzijanic, 2014; Zerbino et al., 2018; Ying et al., 2021). Based on customer attributes, moreaccurate market segmentation is possible, which is expected to increase product planning capability (Capizzi and Ferguson, 2005; Ferguson and Hlavinka, 2006; Liu et al, 2013). In addition,
the promotion capability is expected to increase, as it would be possible to discriminately propose attractive products to each target based on customer attribute information (Cigliano et al.
2000; Lemon and Wangenheim, 2009; Grewal et al. 2011). From this relationship, the following
hypothesis can be derived:
H2: Customer-IS enhances retailersʼ competitiveness advantage.

As mentioned in the previous section, we take trust, commitment, and communication as thedimensions of relationship quality. Trust is formed by an assurance of the fulﬁllment of promises (Dwyer et al., 1987). Anderson and Narus (1990, p. 45) deﬁned trust as “the ﬁrmʼs belief
that another company will perform actions that will result in positive actions for the ﬁrm, as
well as not take unexpected actions that would result in negative outcomes for the ﬁrm.” The
deﬁnition of trust involves two dimensions: credibility and benevolence (Moorman et al., 1992;
Doney and Cannon, 1997). Credibility focuses on the reliability of a partnerʼs words, while
benevolence focuses on the partnerʼs prosperity and pursuit of joint interests.
Commitment has been deﬁned as “an enduring desire to maintain a valued relationship”(Moorman et al., 1992, p. 316). If commitment is formed, not only will we strive to maintainrelationships, but we will also avoid changing our partners even if our partnerʼs rivals present
a far more valuable oﬀer (Ulaga and Eggert, 2006). As this relationship becomes future-oriented, special investment in assets is undertaken with partners (Anderson and Weitz, 1992).
Commitment is similar to trust as it motivates collaboration with partners; however, it focuseson long-term relationships.
Communication is deﬁned as “the formal and informal sharing of meaningful and timely
information between ﬁrms” (Anderson and Narus, 1990, p. 44). Morgan and Hunt (1994) argued
that frequent and timely communication is important for solving conﬂicts and matching recogni― 55 ―+KIM Woonho氏他.indd 55『商学集志』第 92 巻第 1 号（’22. 6）2022/06/16 9:34:22

How will digitalization enhance retailersʼ competitiveness? Focus on supplier relationships

tion and expectations among companies. However, Mohr and Spekman (1994) cited accuracy,
timeliness, adequacy, and credibility as elements that improve the quality of communication.
Naturally, insuﬃcient communication is prone to conﬂict, so eﬀective communication is indispensable for collaboration with partners to succeed (Monczka et al., 1995).
When supplier-IS is in place, it means a greater degree of interaction and cooperation
between companies and improved quality of communication (Håkansson, 1982). Supplier-IS
enables them to share information precisely and in real time (Cachon and Fisher, 2000; Crosonand Donohue, 2003; Hendricks et al., 2007; Dong et al., 2009; Zhao et al., 2011; Ganbold et al.,2021). Improvement of communication eﬃciency of SC by supplier-IS seems to enhance bothbenevolence and credibility trusts. Coordinated planning and ﬂow of materials and information
among SC partners can mitigate the bullwhip eﬀect (Lee at al., 1997). Mitigation of the bullwhip eﬀect by supplier-IS increases the benevolence trust for retailers to directly contributeto the supplierʼs ﬁnancial outcomes. However, supplier-IS increases the visibility of information (Lehtonen et al., 2005; Williams et al., 2013), and this visibility is expected to increasecredibility conﬁdence in patrons. If there is benevolence and credibility trusts, commitment is
promoted. Thus, we predict
H3: Supplier-IS enhances suppliersʼ relationship quality.
H3a: Supplier-IS enhances suppliersʼ trust quality.
H3b: Supplier-IS enhances suppliersʼ commitment quality.
H3c: Supplier-IS enhances suppliersʼ communication quality.
Customer-IS enhances SC suppliersʼ relationship quality in terms of the attractiveness of
information and communication eﬃciency. First, we consider the attraction of information ascustomer data̶in the form of customer characteristics on purchasing behavior̶captured by
ICT retailers (e.g., Sanders, 2008; Grewal et al., 2011). Therefore, retailers with customer
data can conduct accurate and multi-faceted segmentation, which enhances their planning capabilities (Capizzi and Ferguson, 2005; Ferguson and Hlavinka, 2006; Renko and Druzijanic,2014). In addition, retailers with such information can promote diﬀerent products by target
customer (Lemon and Wangenheim, 2009; Grewal et al., 2011). In this situation, retailers cangenerate information appealing to suppliers.
Information is useful for decision making concerning inventory and production quantities,
such as inventory information. Information is also useful for product development and advertisement strategy (e.g., information on brand switching or whether the manufacturerʼs new
product was purchased by the intended target or not). Attractive information can be a resourceof power, while simultaneously drawing out cooperation from the other party (Harris et al.,
2003; Hald et al., 2009; Peltier et al., 2013; Cui and Wu, 2016).
We expect the eﬃciency of communication in the SC to be enhanced by the customer-IS.
In retailing, the role of boundary spanning with suppliers is often the task of the buyer department. Therefore, when a supplier intends to obtain market information from a retailer, the『商学集志』第 92 巻第 1 号（’22. 6）+KIM Woonho氏他.indd 56― 56 ―

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How will digitalization enhance retailersʼ competitiveness? Focus on supplier relationships

supplier must go through the individual in-charge of the buyer department. Market informationis accumulated in multiple divisions (stores, head oﬃce, store operation department, information department, or merchandise department) through various channels. Customer-IS has theeﬀect of summarizing customer information scattered within the retail organization, andimproving communication eﬃciency with suppliers even outside the organization. Thus, we predict
H4: Customer-IS enhances suppliersʼ relationship quality.
H4a: Customer-IS enhances suppliersʼ trust quality.
H4b: Customer-IS enhances suppliersʼ commitment quality.
H4c: Customer-IS enhances suppliersʼ communication quality.

Social psychology deﬁnes cooperation as the behavioral manifestation of trust (Deutsch, 1949).
The cooperative relationship between retailers and suppliers implies that they manifest trust
for each other. Trading partners with trust tend to exhibit a higher degree of cooperativenessand commitment builds cooperation in relationships (Kumar et al., 1995; Lancastre and Lages,
2006). The more committed the partners, the longer this cooperation lasts. Higher cooperativeness increases the speed of decision making in SC (Soosay et al., 2008).
Finally, cooperativeness, in this sense, means achieving a common goal with trading partners and joining forces to solve problems that are presented to them (Helper, 1991; Morgan
and Hunt, 1994; Wilkinson and Young, 2002). The lack of common goals is one of the inhibitorsof collaboration in planning and sourcing (Chung and Leung, 2005). While companies withcooperativeness are expected to be able to learn from each other eﬃciently, such interorganizational learning can become a source of competitive advantage for each company (e.g., Vickery
et al., 2003; Ulaga and Eggert, 2006). Thus, trust enhances supplier cooperativeness, and motivates the pursuit of joint interests with partners. The more the commitment in SC, thestronger these intentions are̶this means that supplier cooperation can be obtained in MD as
well.
However, information sharing at the SC enhances the visibility of information, which
increases information transparency (Lehtonen et al., 2005). More collaborative planning is promoted with higher transparency and visibility (Holweg, 2005). Increasing the speed of
information sharing in the SC means that the speed of decision making and responsiveness tocustomers also increases. Thus, we predict
H5: Retailerʼs competitiveness advantage rises as the level of suppliersʼ relationship quality
improves.
H5a: Retailerʼs competitiveness advantage rises as the level of suppliersʼ trust quality
improves.
H5b: Retailerʼs competitiveness advantage rises as the level of suppliersʼ commitment quality― 57 ―+KIM Woonho氏他.indd 57『商学集志』第 92 巻第 1 号（’22. 6）2022/06/16 9:34:23

How will digitalization enhance retailersʼ competitiveness? Focus on supplier relationships

improves.
H5c: Retailerʼs competitiveness advantage rises as the level of suppliersʼ communication quality improves.
4. Method

A questionnaire survey for Japanese retailers was conducted to verify the hypotheses. The
questionnaires were sent to the senior managers of the departments of business planning,
information systems, and sales planning at retailers, which included both listed and unlistedcompanies. Of the 6494 candidates, 926 senior managers responded (14.3% response rate). If
cases where the survey was sent to multiple departments of the same company and multiple
responses were received, the data was averaged (simple average).
The respondents were from general merchandise stores (13.7%), convenience stores (6.3%),
grocery and food specialized stores (20.5%), non-food specialty stores (38.7%), department
stores (14%), and independent retail stores (42%). We excluded respondents who listed theirindustry as “other” because they were likely to be employed by wholesalers and trading companies. We checked missing values and analyzed 335 samples.

Measures were used according to existing research for reliability and validity as far as possible. Regarding independent variables, the supplier-IS is measured by three variables according
to Dong et al. (2009) and Zhao et al. (2011). With customer-IS, utilization of customer data
through CRM system was adopted as the surrogate variable, as the CRM system data shouldbe the most utilized “big data” in retail. According to the annual report of a Japanese grocery
chain store, 79.3% of Japanese retailers have adopted a CRM system as of 2012. As this is
assumed to be a straightforward measure of customer interaction information systems in existing research, the three variables were adopted according to Zander and Kogut (1995), Gupta
and Govindarajan (2000), Susan et al. (2010), and Huang and Wang (2013).
Regarding relationship quality, the study used major items̶Gansen (1994) and Morgan
and Hunt (1994) for trust, Anderson and Weitz (1992) and Gansen (1994) for commitment, andHeide and John (1992) and Morgan and Hunt (1994) for communication. With respect to competitive advantage, we focused on MDC, which is an important factor that enhances the abilityof assortment, a traditional resource of competitive advantage. MDC consists of three capabilities: assortment planning, sourcing, and promotion capabilities.
To continuously achieve attractive assortment, retailers need to appropriately select andpurchase products that will attract customers, which may be termed as assortment planningcapability (e.g., Lambert, 1979; Lumpkin, 1985). In addition, retailers must form inventories toensure that products are available for purchase when customers need a required quantity (e.g.,
Pettigrew et al., 2005; Thatte et al., 2013). In this context, inventories must be constantly『商学集志』第 92 巻第 1 号（’22. 6）+KIM Woonho氏他.indd 58― 58 ―

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How will digitalization enhance retailersʼ competitiveness? Focus on supplier relationships

maintained at the proper level, which may be termed as sourcing capability. Furthermore, even
if retailers have succeeded in procuring appealing products, they are futile without customer
awareness of these products. Therefore, retailers are required to eﬀectively communicate
product and pricing information, besides implementing eﬀective bargain and discount strategies(e.g., Ailawadi and Keller, 2004; Grewal et al., 2011). This form of communication requires theright mixture of media and marketing messages, which may be termed as promotion capability.
Based on these existing studies on MDC, we created three items for MDC.
We implemented procedures recommended by Podsakoﬀ et al. (2003) for avoiding common
method bias and found no concerns. Then, we conducted an exploratory factor analysis for all
variables (principal factor analysis, no rotation), and six factors were extracted that had aneigenvalue over 1.0. The contribution rate of the ﬁrst factor was 26.8%; therefore, it did notconstitute a majority. Hence, it was determined that the common method bias was not signiﬁcant for these samples.

A conﬁrmatory factor analysis for all variables (maximum likelihood method and promax rotation) was conducted. As the relative  2 = 1.72 ( 2 = 178.526, df = 66, p < .01), the model
goodness of ﬁt is within the tolerable range (Carmines and McIver, 1981). In addition, CFI =.976 (>.920) and RMSEA = .046 (<.08) were favorable, considering that the number of data
samples was 335 (over 250) and the number of observed variables was 17 (between 12 and 30,
inclusive) (Hair et al., 2013).
Table 1. Construct measures and CFA results
Constructs

IT used for supplier
relationships(supplier-IS)(1=strongly disagree,
7=strongly agree)

IT used for customer
relationships(customer-IS)(1=strongly disagree,
7=strongly agree)

Indicators

SD

Your companyʼs database is highly integrated
with the databases of your customers and business partners

0.79

3.84

1.12

Your companyʼs information system is eﬀectively
integrated with the systems of your suppliers

0.86

3.93

1.34

Your companyʼs operational procedures arehighly integrated with the operational procedures of other companies that are in cooperative
relationships with your company

0.91

3.86

1.25

Your company is using the same data processing
system throughout the organization for gathering data through the CRM system

0.79

4.60

1.48

Your company applies the same know-how
throughout the organization for analyzing thedata that have been acquired through the CRM
system

0.94

4.12

1.39

Your company adopts the same procedurethroughout the organization for using the datathat have been acquired through the CRM system

0.96

4.20

1.44

― 59 ―+KIM Woonho氏他.indd 59

FactorMean
Loading



CR

0.89

0.76

0.92

0.74

『商学集志』第 92 巻第 1 号（’22. 6）2022/06/16 9:34:23

How will digitalization enhance retailersʼ competitiveness? Focus on supplier relationships

Trust(1=strongly disagree,
7=strongly agree)

Commitment(1=strongly disagree,
7=strongly agree)

Communication(1=strongly disagree,
7=strongly agree)Your company can trust suppliers about conventions

0.87

5.54

0.76

Your company trusts suppliers regarding protecting our conﬁdentiality obligation

0.78

5.49

0.84

Your company believes that suppliers are doing
business as professionals

0.81

5.44

0.79

Your company emphasizes maintaining ongoing
business relationship with suppliers

0.84

5.85

0.85

Your company emphasizes the fact that the supplier has past transaction records

0.68

4.97

1.11

Your company emphasizes that you can continue
to trade suppliers

0.87

5.65

0.85

Your company has a method by which to obtain
useful information from other companies thatare in cooperative relationships with your company

0.72

5.25

0.70

Your company has any opportunity to exchange
expert knowledge with the employees of othercompanies that are in cooperative relations withyour company

0.78

5.18

0.82

Your companyʼs sales and sales promotion capabilities (compared within the industry thatconcerns your companyʼs core business)

0.74

4.36

1.09

0.76

4.62

0.96

0.68

4.67

0.95

Your companyʼs product procurement capability
Competitive Advantage(compared within the industry that concerns(1=strongly disagree,
your companyʼs core business)
7=strongly agree)
Competitiveness of the products that your company sells in terms of their product quality(compared within the industry that concerns
your companyʼs core business)

0.86

0.86

0.84

0.82

0.78

0.78

0.77

0.77

With respect to reliability, Cronbachʼs  for all constructive concepts were over .70 (.75‒.92), and composite reliability for all constructive concepts were over .60 (Table 1) (Baggozi
and Yi, 1988). Regarding validity, the path coeﬃcients from the latent variables to theobserved variables all surpassed .50 (p < .01), and the AVE of each constructive concept wasover .50 (.52‒.80) (Fornell and Larker, 1981; Bagozzi and Yi, 1988), except for one constructive concept.
Table 2. Correlations matrix
Constructs

AVE

1

2

1 Supplier-IS

0.69

2 Customer-IS

0.73

0.32

3 Trust

0.73

0.26

0.28

4 Commitment

0.64

0.05

0.27

3

4

0.57

0.29

0.35

0.52

0.31

6 Competitive advantage

0.80

0.15

0.16

0.15

0.13

+KIM Woonho氏他.indd 60

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0.53

5 Communication『商学集志』第 92 巻第 1 号（’22. 6）

5

0.28

― 60 ―

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How will digitalization enhance retailersʼ competitiveness? Focus on supplier relationships

In terms of discriminant validity, it was conﬁrmed that the AVE of each constructive concept exceeded the squared correlation coeﬃcient between the diﬀerent constructive concepts(Fornell and Larker, 1981), as shown in Table 2.
5. Results
To evaluate the proposed model ﬁt,  2/df and the combination of CFI and RMSEA were usedbased on Carmines and McIver (1981) and Hair et al. (2013), respectively. As the score of eachindicator showed that the ﬁt of the model was good ( 2/df. = 2.945, CFI = .932, and RMSEA =.076), the model was used to verify the hypotheses.
The paths that are signiﬁcant are those between supplier-IS and trust (H3a), supplier-IS
and communication (H3c), customer-IS and trust (H4a), customer-IS and commitment (H4b),
customer-IS and communication (H4c), and communication and MDC (H5c). Consequently,
hypotheses 3a, 3c, 4a, 4b, 4c, and 5c were supported, while hypotheses 1, 2, 3b, 5a, and 5b
were not supported (Figure 3, Table 3).

Information
SystemRelationship
QualityCompetitive
Advantage

H1(+)
.06

H3a(+).19 **IT used forsupplier
relationships(supplier-IS)

Trust

H3b(+)-.03

H5a(+)-.02

H3c(+).22**

Commitment

H5b(+).07

Competitive
Advantage

H4a(+).23***IT used forcustomer
relationships(customer-IS)

H5c(+).27***

H4b(+).30***
H4c(+).26***

Communication

H2(+)
.05

**p<.01; ***P<0.001

Figure 3. Results― 61 ―+KIM Woonho氏他.indd 61『商学集志』第 92 巻第 1 号（’22. 6）2022/06/16 9:34:24

How will digitalization enhance retailersʼ competitiveness? Focus on supplier relationships

Table 3. Hypothesis testing
Hypothesis
H1

Path directions

EstimateSEt-value

Hypothsis testing
resultSupplier-IS → CA

0.04

0.05

0.78

Not Supported

H2

Customer-IS → CA

0.03

0.05

0.71

Not Supported

H3aSupplier-IS → trust

0.12

0.04

3.23**

Supported

H3b

Supplier-IS → commitment

-0.02

0.04

-0.52

Not Supported

H3c

Supplier-IS → communication

0.19

0.03

3.24**

Supported

H4a

Customer-IS → trust

0.13

0.03

4.00***

Supported

H4b

Customer-IS → commitment

0.18

0.04

4.94***

Supported

H4c

Customer-IS → communication

0.12

0.03

3.73***

Supported

H5a

Trust → CA

-0.02

0.08

-0.31

Not Supported

H5bCommitment → CA

0.07

0.07

1.01

Not Supported

H5cCommunication → CA

0.39

0.11

3.76***

Supported**p<.01; ***P<0.001

6. Discussion and Conclusion

In CRM research, the utilization of the CRM system has enhanced customer satisfaction andloyalties (Mithas et al., 2005; Leenheer, and Bijmolt; 2008) , but there is some skepticism
regarding its relevance to competitive advantages (Hendricks et al., 2007; Schumanna et al.,2014). We examined how retailers can leverage customer-IS, such as CRM, to gain a competitive advantage. To this end, we focused on the aspects where retailersʼ use of customer-IS has
increased their competitive advantage as a result of enhanced relationships with suppliers. We
expected that the eﬀects of customer-IS would become clearer through comparison with supplier-IS.
Hypotheses 1 and 2 were not supported, suggesting that the introduction of information
systems alone does not increase the competitive advantage of retailers. There are factors thatmediate or moderate the relationship between information systems and competitive advantage.
The results of hypotheses 3, 4 and 5 indicate that information systems tend to increase competitive advantage by mediating relationship quality with suppliers, which answers ourresearch question. However, careful interpretation of the results of hypotheses 5a, 5b, and 3b
is required.
Information systems enhance the competitive advantage of retailers through the mediationof communication, while trust and commitment were not observed to work in this way. This
result does not imply that there is no relationship between trust and competitive advantage, orcommitment and competitive advantage. Cooperative relationship can increase ﬁrmsʼ mutual
proﬁtability (Anderson & Weitz, 1992) through product diﬀerentiation and creation of barriers『商学集志』第 92 巻第 1 号（’22. 6）+KIM Woonho氏他.indd 62― 62 ―

2022/06/16 9:34:24

How will digitalization enhance retailersʼ competitiveness? Focus on supplier relationships

to competitorʼs advantage (Dwyer et al., 1987). The higher the level of trust and commitment,
the more cooperative the relationship (Dwyer et al., 1987; Morgan & Hunt, 1994). The resultsof hypotheses 5a and 5b suggest that there may be a third factor, such as a mediating or moderating factor.
It should also be noted that hypothesis 3b was not supported. The antecedents of commitment include a variety of concepts, such as business network connection, interdependence(Clarke, 2006), and value (Ulaga & Eggert, 2006). A good relationship is necessary to implement and utilize information systems with suppliers. The more the supplier-IS operates, thestronger the business network connection and interdependence. Therefore, commitment is also
expected to be stronger. However, as hypothesis 3b was not supported, it is possible that supplier-IS weakens commitment in the retail industry.

This study provides theoretical implications for relationship quality and negative aspects ofrelationship. Existing studies on SC reveal that information systems among ﬁrms deepen cooperative relationships. However, when we separated the relationship quality components andlooked at the relationship between the two types of information systems, we found that there
are diﬀerent relationships among the relationship quality components. Customer-IS was foundto be more eﬀective in enhancing relationship quality than supplier-IS. Furthermore, supplierIS deepens trust and promotes communication but has no eﬀect on commitment. This suggeststhat future discussion on relationship quality should always take this heterogeneity into
account.
Many studies that focus on the negative aspects of relationships, such as Villena et al (2011)and Day et al (2013), problematize the link between relationships and outcomes. Our researchsuggests that there are still research questions regarding the negative aspects of the link
between relationships and antecedents as well. Supplier-IS is frequently utilized in SCM; fromthe standpoint of social exchange, it is believed that the commitment among companies becomesstronger with enhanced SCM. However, as SCM progresses, relational inertia may arise,
resulting in a dilution of commitment. Research needs to be conducted to clarify the conditions
under which antecedents that are expected to strengthen commitment weaken it.
Additionally, this study provides practical implications for retailersʼ digital strategies.
Retailers trying to raise competitive advantage by collecting and utilizing customer data
through ICT often focus on customer relations. This study suggests that both customer andsupplier relations must be considered. This discovery has relevance for CRM and multi-channel retailing, and for enhancing omni-channelization strategy building and social media
utilization, which has recently gained momentum (Verhoef et al., 2015; Ying et al., 2021;
Ratchford et al., 2022).

This study has certain limitations. To analyze the relationship quality, we included trust, com― 63 ―+KIM Woonho氏他.indd 63『商学集志』第 92 巻第 1 号（’22. 6）2022/06/16 9:34:24

How will digitalization enhance retailersʼ competitiveness? Focus on supplier relationships

mitment, and communication, but power relationships must also be incorporated into theanalysis. Cooperation from suppliers can be received in both cooperative and power relationships. As it is diﬃcult to collect customer data directly, they have the potential to be a
powerful resource for suppliers.
Another limitation of this study is that customer-IS was measured only by CRM. Retailersʼ use of information technology for consumer relationships is not limited to CRM alone, butalso includes multi-channel, omni-channel, SNS, AI, and many others. These may work heterogeneously in relation to relationship quality. Therefore, future research should take into
account the diversity and heterogeneity of information systems.
This study suggests that attention needs to be paid to the heterogeneity of trust and commitment. In relationship marketing research, trust and commitment are representative conceptsof relationships. It has been said that the correlation between these two concepts is high (Morgan and Hunt, 1994). However, a positive correlation was found between supplier-IS and trust,
but no signiﬁcant correlation was found for commitment. Investigating the third factor between
supplier-IS and commitment may provide insight into understanding commitment.
Furthermore, a third factor may exist between relationship quality and competitive advantage. Although this study analyzed information system as an antecedent of trust andcommitment, future research to examine utilization of the information system as a mediating or
moderating factor is needed.

Acknowledgements
The authors would like to thank two anonymous referees for helpful comments and suggestions. And the authors
would like to acknowledge the ﬁnancial support provided by Grants-in-Aid for Scientiﬁc Research (Grant Nos.
24243050 and 20K01959) from the Japan Society for the Promotion of Science. The authors also thank Professor Chieko Minami of Kobe University, Associate Professor Fumikazu Morimura of Kobe University andProfessor Kimihiko Kondo of Otaru University of Commerce for their generous support.

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（要旨）
本研究は，小売の情報システム活用とサプライヤー関係との関連性を探るものである。小売の情報システム活用がサプライヤー関係の質と小売競争優位を高める関係について，2 つの情報システム，サプライヤー関係において使われる情報システム（supplier-IS）と顧客関係において使われる情報システム（customer-IS）で分けて比較を行った。仮説は，日本の小売業者を対象に集めたデータに対して構造方程式モデリングを使って検証した。分析の結果，3 つの関係質（信頼，コミットメント，コミュニケーション）の中で，コミュニケーションが競争優位を高めることと，サプライヤーとの関係質に対して customer-IS が supplier-IS より全体的に関連性が高いことが確認された。特に，supplier-IS とコミットメントの間に正の相関がない結果に対して，customer-IS とコミットメントの間に有意な正の相関が確認された。この結果は，顧客関係のみではなく，サプライヤーとの関係質の向上のためにも customer-IS が活用されることを意味する。この発見は，customer-IS の活用においてさまざまな側面を考慮した戦略意思決定が求められることを示唆するものである。

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