Sustainable Business Model in B2C Online Retailing: An Indian Consumer Perspective

Sustainable Business Model in B2C Online Retailing: An Indian Consumer Perspective

Suhail Ahmad Bhat (University of Kashmir, India), Mushtaq Ahmad Darzi (University of Kashmir, India) and Sami Ullah Bhat (University of Kashmir, India)
Copyright: © 2020 |Pages: 39
DOI: 10.4018/978-1-5225-9940-1.ch009

Abstract

The main purpose of the chapter is to empirically analyze the impact of trust, innovation, usefulness, concentrated product category, and customer support service on commitment which in turn influences eWOM and sustainable consumption. Sustainable consumption ultimately influences sustainable competitive advantage. The study has adopted SEM approach, where an instrument was developed in the form of structured questionnaire (using both EFA and CFA) regarding the above-mentioned variables. A survey has been conducted via online and offline mode in the state of Jammu and Kashmir (India) and a sample of 589 respondents has been drawn randomly from the population of e-shoppers. The results of the study have revealed that sustainable online shopping dimensions have a significantly positive impact on the commitment which in turn has a significantly positive influence on eWOM and sustainable consumption. The study has unique contribution in the online retail industry, which is continuously incurring huge losses in the online marketplace by incorporating sustainability dimensions in B2C business models.
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Introduction

The prerequisite logic of any business model is profit earning and not just a revenue generation. The rationale of such a business model is based on value proposition to customers by creating, communicating and delivering value (in a commercial value chain) to the target customer for profit (Teece, 2010; Laasch, 2017). The emergence of dotcom era has shaped the business model concept leading purely to profit logic of value (Ghaziani and Ventresca, 2005; Nielsen and Lund, 2014). This concept was further shaped by the technological innovation, entrepreneurial ventures and corporate strategy (Teece, 2010; Casadesus-Masanell and Ricart, 2010). Randles and Laasch (2016) have studied the combined elements from commercial, non-commercial and non-market logic. Such value logics have been studied from the institutional lens (Ocasio and Radoynovska, 2016). However, the combination of commercial and sustainability rationale in the business model has very less been studied in e-retailing by the researcher and is particularly relevant in the present context (Jablonski, 2016). Such business models will help in achieving the goals of sustainable development which has become a global issue of our times (Bocken et al., 2014). Sustainable business models will facilitate sustainability in business by bringing innovations to the market, enhancing usefulness of market offerings and building trust among consumers (Stubbs and Cocklin, 2008; Eccles et al., 2012; Bohnsack et al., 2014). Therefore, businesses need to transform their neoclassical business models, by emphasizing on the social, cultural and environmental priorities, into sustainable business model.

The growing digital economy has resulted in a paradigm shift in the retailing business across the world. Internet has given birth to the online retailing and has bought in new challenges and opportunities to both consumer and retailer (Mukherjee and Nath, 2007). Online retailing preferably deals with an exchange of value where parties interact electronically through numerous telecommunication networks (Jones et al., 2000). Perceived insecurity on internet has posed a challenge to online retailers to establish long-term relationships with consumers, as there are apprehensions of high-profile lapses in online security, spamming, hacking of accounts, phishing and fraudulent businesses etc. (Warrington et al., 2000; Newholm et al., 2004). In light of these insecurities in internet shopping, retailers need to build up consumer confidence by encouraging trust, usefulness, innovation, better customer support and service, depth in product and consumer understanding which will foster consumer commitment. Therefore, retailers have recognized a need to implement a triple bottom line approach of Elkington’s (1997) which emphasizes on three core dimensions of sustainability i.e., environment hygiene, social impartiality and economic prosperity (Balderjahn et al., 2003). The business models adopted by the e-retailers should meet all the three dimensions (planet, people and profit) ideally and simultaneously. It has become pre-requisite for business firms to adopt such legislations for long-term competitiveness (Murphy et al., 2013). Similarly, consumers are also expected to pave way for sustainable development by consuming sustainably. Balderjahn et al. (2003) has ascertained that well-studied and revealed consumer consciousness for sustainable consumption will assist and reinforce the marketing tactics of retailers and shall also influence the regulatory framework of legal institutions for achieving the sustainability goals.

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