Editor’s Introduction 22(4)

Vladimir Zwass
International Journal of Electronic Commerce,
Volume 22, Number 4, 2018, pp. 477-478.

Online platforms perform as more or less active intermediaries in the interaction of multiple parties engaged in e-commerce. The first paper in this International Journal of Electronic Commerce issue, authored by Esko Penttinen, Merja Halme, Kalle Lyytinen, and Niko Myllynen, focuses on the business-to-business platforms that offer e-invoicing, facilitating transactions between the trading partners. Among several types of the highly successful platform business models, these belong to the class of connectivity platforms and may offer along with invoicing a range of associated value-added services. The principal research questions here are as follows: What are the categories of platform features that matter to the user firms? To what extent do they matter? How does the firm’s size influence the choice of a platform with certain features? The empirics are based on a Web survey and give answers—as well as generating new questions. A high potential of the expanded role of these platforms is to be noted as we move to the algorithmic computer-to-computer transaction processing with smart contracts enacting more complex protocols. At the same time the platforms will be challenged by the blockchain solutions—unless they will manage to migrate in that direction.

The next paper brings us to business-to-consumer e-commerce. Saar Kagan and Ron Bekkerman present a novel method of ad targeting on the Web while preserving individual privacy. Instead of the increasingly problematic individual profiling, the researchers’ method is grounded in profiling the aggregates of Website audiences based on their purchasing behavior. The authors train their classification model on an extensive purchase and visit data and find it predictive of the future behavior of the aggregate panels of audiences. With the advertising-driven business models highly likely to be hemmed in by the regulators in the pursuit of user privacy and their data ownership, this is an important line of research.

With the offline companies moving some of their operations online, but also online firms finding it of advantage to have direct touch with their customers on the ground, omni-channel retailing has been increasingly upon us. With all its advantages on the front end, the logistical challenges of fulfillment often lead to the demise or scaling down of these business models. What to do? Steering the customers to the channel the retailer prefers for the transaction—while not antagonizing the customer—is a part of the solution. The authors of the next paper, Johannes Wollenburg, Andreas Holzapfel, Alexander Hübner, and Heinrich Kuhn, investigate how cross-channel steering of customers in the light of different order-fulfillment options is used and to what effect. The authors use grounded theory methodology to explore this new research arena and thus open it to further investigation. Their results are also of obvious practical merit.

Two papers that strongly close this issue of International Journal of Electronic Commerce are based on formal economic models of online pricing. Lin Chen, Guofang Nan, and Minqiang Li investigate the outcomes of the move by online retailers to the agency pricing model, where they provide a platform for the producers to sell their offerings, with a commission going to the retailer. The authors compare the agency pricing to the traditional dealer model where the retailer acquires and marks up the goods. Customer loyalty presents itself as a key factor in the comparison of the two strategies. The authors derive the effects of the pricing choice on the retailer’s profit, industry profit, consumer surplus, and social welfare. Meaningful recommendations for retailers follow. We have here an interesting development in reintermediation: a move to lower (i.e., less costly) platforms as intermediaries.

In pricing their new offerings, the firms can adopt a myopic pricing strategy by aiming to maximize the current-period profit. Alternatively, a far-sighted pricing strategy can be adopted, to maximize the profits for the long run. Jianghua Wu and Qiuai Huang compare analytically the effectiveness of these two strategies in the presence of what they consider the effect of the electronic word-of-mouth, which may, of course, be positive or negative. Among the interesting results is the determination that the far-sighted pricing does not always lead to maximum long-term profits. The authors present the pricing outcomes for the competing firms in a duopoly market and offer recommendations for pricing strategies.