Impact of Customer Traffic and Service Process Outsourcing Levels on E-Retailer Operational Performance

Production and Operations Management, 24(11):1794-1811.

Mays Business School Research Paper No. 2892717

34 Pages Posted: 5 Jan 2017

See all articles by Olga Perdikaki

Olga Perdikaki

Texas A&M University - Department of Information & Operations Management

David Xiaosong Peng

University of Houston - C.T. Bauer College of Business

Gregory R. Heim

Texas A&M University - Department of Information & Operations Management

Date Written: January 14, 2015

Abstract

Many service firms deliver services via a mix of internally developed and delivered (i.e., insourced) and externally developed and delivered (i.e., outsourced) service processes. Service process outsourcing is especially common in e-retailing. Portions of e-retail customer ordering processes and delivery processes can be digitized and contracted to third-party vendors. Via outsourcing, service systems change from dyadic to triadic. Prior research examines consumer perceptions of dyadic (consumer to e-retailer) outcomes, but little research considers service co-delivery with outsourcing partners (i.e., triadic systems). Literature also does not focus on joint associations of service process outsourcing and customer traffic with e-retailer operations. We analyze several years of data on North American e-retailers. We first examine factors associated with e-retailer outsourcing levels, for front-end and back-end service processes. We observe customer traffic is positively associated with future outsourcing. We then examine how outsourcing moderates associations between contemporaneous customer traffic and e-retailer operational performance, as measured by numbers of processed orders, website response times, and customer satisfaction. Results suggest outsourcing levels are associated with operational outcomes, yet surprisingly, high outsourcing and high traffic jointly may not benefit e-retailers.

Keywords: customer traffic, service process outsourcing, third-party vendor, e-retail

Suggested Citation

Perdikaki, Olga and Peng, David Xiaosong and Heim, Gregory R., Impact of Customer Traffic and Service Process Outsourcing Levels on E-Retailer Operational Performance (January 14, 2015). Production and Operations Management, 24(11):1794-1811.; Mays Business School Research Paper No. 2892717. Available at SSRN: https://ssrn.com/abstract=2892717

Olga Perdikaki

Texas A&M University - Department of Information & Operations Management ( email )

430 Wehner
College Station, TX 77843-4218
United States

David Xiaosong Peng (Contact Author)

University of Houston - C.T. Bauer College of Business ( email )

Houston, TX 77204-6021
United States

Gregory R. Heim

Texas A&M University - Department of Information & Operations Management ( email )

320 Wehner Building
4217 TAMU
College Station, TX 77843-4217
United States
979-845-9218 (Phone)

HOME PAGE: http://mays.tamu.edu/info/

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