Carrot-or-Stick: How to Trigger the Digitalization of Local Owner Operated Retail Outlets?

Local Owner Operated Retail Outlets (LOOROs) are threatened in their very existence by the digitalization pressure from online and offline competitors on the one hand and by changing shopping habits of their customers on the other. Despite all digitally-enabled opportunities to regain competitive power, LOOROs still hesitate to adopt digital tools and applications. Politicians, city managers and retail lobbies seek for triggers to support the local structures and to push the digitalization efforts of local retailers. Building on Andreoni ́s “Carrot-and-Stick Approach”, this study examines the impact of the availability of resources (carrot) and the perception of pressure (stick) on the use of digital applications among 223 owners of LOOROs from 26 cities in Germany. Our findings show that LOOROs are receptive for “Carrot-andStick”. LOOROs seek for orientation while suffering under a shortage of time and capacities and seem to be disconnected from the development of their competitors and their customers.

[1]  J. Russell,et al.  An approach to environmental psychology , 1974 .

[2]  J. Migué.  Controls versus Subsidies in the Economic Theory of Regulation , 1977, The Journal of Law and Economics.

[3]  I. Ajzen,et al.  Attitude-behavior relations: A theoretical analysis and review of empirical research. , 1977 .

[4]  F. Bookstein,et al.  Two Structural Equation Models: LISREL and PLS Applied to Consumer Exit-Voice Theory , 1982 .

[5]  B. Wernerfelt,et al.  A Resource-Based View of the Firm , 1984 .

[6]  R. Westbrook.  Product/Consumption-Based Affective Responses and Postpurchase Processes , 1987 .

[7]  S. Peltzman.  The Economic Theory of Regulation after a Decade of Deregulation , 1989 .

[8]  Fred D. Davis,et al.  User Acceptance of Computer Technology: A Comparison of Two Theoretical Models , 1989 .

[9]  M. Fleischer,et al.  processes of technological innovation , 1990 .

[10]  I. Ajzen.  The theory of planned behavior , 1991 .

[11]  J. M. Carroll,et al.  On the bipolarity of positive and negative affect. , 1999, Psychological bulletin.

[12]  T. Jelassi,et al.  The converging business models of Internet and bricks-and-mortar retailers , 2000 .

[13]  L. Salamon,et al.  The tools of government : a guide to the new governance , 2002 .

[14]  William T. Harbaugh,et al.  The Carrot or the Stick: Rewards, Punishments and Cooperation , 2002 .

[15]  Marios Koufaris,et al.  Applying the Technology Acceptance Model and Flow Theory to Online Consumer Behavior , 2002, Inf. Syst. Res..

[16]  Cheryl Burke Jarvis,et al.  A Critical Review of Construct Indicators and Measurement Model Misspecification in Marketing and Consumer Research , 2003 .

[17]  Marcel Creemers,et al.  Understanding online purchase intentions: contributions from technology and trust perspectives , 2003, Eur. J. Inf. Syst..

[18]  Joseph F. Hair,et al.  Multivariate data analysis -6/E , 2006 .

[19]  Judy A. Siguaw,et al.  Formative versus Reflective Indicators in Organizational Measure Development: A Comparison and Empirical Illustration , 2006 .

[20]  Peter Kawalek,et al.  SME Adoption of Enterprise Systems in the Northwest of England - An Environmental, Technological, and Organizational Perspective , 2007, Organizational Dynamics of Technology-Based Innovation.

[21]  Leonardo Liberman,et al.  Toward a Model of Understanding Strategic Decision-Making in Micro-Firms: Exploring the Australian Information Technology Sector , 2010 .

[22]  Ottmar Edenhofer,et al.  Renewable Energy Subsidies: Second-Best Policy or Fatal Aberration for Mitigation? , 2011 .

[23]  M. Minor,et al.  Aesthetics and the online shopping environment: Understanding consumer responses , 2011 .

[24]  Richard Widdows,et al.  Consumer responses to high-technology products: Product attributes, cognition, and emotions , 2011 .

[25]  Marko Sarstedt,et al.  Partial least squares structural equation modeling (PLS-SEM): An emerging tool in business research , 2014 .

[26]  Bo Wang,et al.  Retailer Adoption of Mobile Payment: A Qualitative Study , 2013, J. Electron. Commer. Organ..

[27]  P. Vink,et al.  Pleasure, Arousal, Dominance: Mehrabian and Russell revisited , 2014, Current Psychology.

[28]  C. Stangor.  Affect, Behavior, and Cognition , 2014 .

[29]  C. Anthony Di Benedetto,et al.  Diffusion of Innovation , 2015 .

[30]  S. Kurnia,et al.  E-Commerce Technology Adoption: A Malaysian Grocery SME Retail Sector Study , 2015 .

[31]  M. Hynes,et al.  AFFECT , 2015, The Atlas of AI.

[32]  L. Bollweg,et al.  MIND THE GAP! ARE LOCAL RETAILERS MISINTERPRETING CUSTOMER EXPECTATIONS REGARDING DIGITAL SERVICES? , 2015 .

[33]  V. Navickas,et al.  Paradigm Shift of Small and Medium-Sized Enterprises Competitive Advantage to Management of Customer Satisfaction , 2015 .

[34]  R. Rahayu,et al.  Determinant Factors of E-commerce Adoption by SMEs in Developing Country: Evidence from Indonesia☆ , 2015 .

[35]  Sunmee Choi,et al.  Customer emotions and their triggers in luxury retail: Understanding the effects of customer emotions before and after entering a luxury shop , 2016 .

[36]  Coşkun Can Aktan.  REGULATORY PUBLIC POLICIES : AN INTRODUCTORY SURVEY , 2016 .

[37]  Richard Lackes,et al.  Digitalization of Local Owner operated Retail outlets: the Role of the perception of Competition and Customer Expectations , 2016, PACIS.

[38]  Laure Latruffe,et al.  Subsidies and Technical Efficiency in Agriculture: Evidence from European Dairy Farms , 2017 .