The effects of IT capability and distribution competence on business performance of retailers in Omnichannel

Abstract

Background: Nowadays, customers expect to have a seamless shopping experience, whether on an e-commerce platform or in brick-and-mortar stores. This requires the combination of online and offline businesses in a unique channel called Omnichannel. To operate Omnichannel efficiently, the role of information technology (IT) and distribution activities is so essential. Thus, this research evaluates the effects of IT capability and distribution competence on business performance in Omnichannel.

Aim: This research aims to examine the direct effects of distribution competence and IT capability on the business performance of retailers in Omnichannel. At the same time, it also considers the indirect effects of these relationships through the mediating roles of customer value creation and competitive advantage.

Setting: The data used were directly collected from 200 managers operating Omnichannel in the retail sector.

Methods: Quantitative research was conducted to measure the effects of independent variables, including IT capability, distribution competence, customer value creation and competitive advantage on the dependent variable, which is business performance. Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to check the relationships among these factors in the context of Omnichannel in Vietnam.

Results: Information technology capability and distribution competence have a direct impact on business performance, with beta coefficients of 0.198 and 0.271, respectively. Meanwhile, the regression coefficients of indirect relationships through mediating variables are 0.204 and 0.097, respectively.

Conclusion: Information technology capability and distribution competence play key roles in the retail supply chain, especially in Omnichannel. To maintain the effectiveness of business operations, increase customer value and enhance competitive advantage, retailers should generate the efficiency of IT and distribution functions.

Contribution: Omnichannel is a relatively new channel in Vietnam. However, this is an essential trend in society. To develop this business model, IT capability and distribution competence are two vital elements. This research helps retailers operating in Omnichannel examine their business performance as well as their positions in competitive environment. On that basis, some solutions are suggested to improve their capacity and optimise resources in Omnichannel.