Bridging the Digital Divide in Online Retailing: The Effect of a Strategic Focus on E-Commerce Fulfillment Offerings

Abstract

The digital divide is an area of significant concern as society increases its reliance on the internet for everyday tasks. Retail operations are no exception to this trend where the use of the online sales channel has become ubiquitous. As retailers seek to provide a high-quality customer experience across socioeconomic groups to maximize sales potential, they must find ways to bridge the digital divide and ensure consumer access to their products. Embracing resources and appropriation theory and the consumer transaction cost perspective, we hypothesize on the efficacy of strategically focusing on omnichannel fulfillment offerings and online fulfillment offerings as operational tools retailers can employ to expand access to their products and improve sales to the diverse populations affected by the digital divide. We contribute to the digital divide research in operations management by showing that a strategic focus on e-commerce fulfillment capabilities is associated with a reduction in the negative impact of the digital divide. We further disaggregate the digital divide into its two component parts, infrastructure deficiencies and socioeconomic factors, to delve into the nuances of the hypothesized relationships. The findings indicate that e-commerce fulfillment strategies are broadly effective at ameliorating the negative effects of infrastructural elements of the digital divide while overcoming the socioeconomic-related component of the digital divide is more nuanced. To further understand the complexities of the socioeconomic element of the digital divide we disaggregate the measure and explore the impact of an emphasis on omnichannel and online fulfillment offerings to help alleviate the problems of the digital divide for the following vulnerable consumer populations: those who are living in poverty, are over 25 and have less than a high school education, are age 65 and over, or have a disability. Our results show that while these vulnerable populations can be aided by carefully selecting which omni or online fulfillment offerings are available to consumers, not all fulfillment offerings are effective.