Online-To-Offline (O2O) Business: Empirically Examining the Adoption Vs. Non-adoption

Abstract

The growth of Online-to-Offline (O2O) business is accompanied by a number of failures. Compounding the problem, theoretically-informed knowledge about "why firms adopt O2O" remains limited. The purpose of this study is to address this gap and examine the reasons that influence organizational decisions to adopt (or do not adopt) O2O. Informed by synthesis of Diffusion of Innovation (DOI) and Technology-Organization-Environment (TOE) theories, the data collected from 24 qualitative semi-structured interviews were analyzed using content analysis techniques. The results show that firms adopt O2O to: (1) cope with the shift in marketplace (one from sellers to buyers) by adding flexibility and security into offerings, (2) improve engagement with customers through expansion of scope of relationship and reach, and (3) enlarge customer portfolio and profitability. Unexpectedly, the results show that one of the reasons firms not adopt O2O is because they believe that their existing engagement with customers is mature and stable, changes to which could be determinantal. Managerial inertia is another roadblock. Theoretically, the findings build new knowledge on the adoption/non-adoption decision of O2O and reasons thereof. The results equip managers with insights from industry and provide them an understanding of the challenges as well as reasons for adoption/non-adoption of O2O.

Factors of the Adoption of O2O Service Platforms: Evidence from Small Businesses in Korea

“…First, this study is an exploratory study on the factors affecting the adoption of O2O service platforms by small businesses and is expected to contribute to revitalizing research in this field. Most studies related to O2O services have focused on the use of O2O services from the consumers' perspective [4]. This study was conducted from the perspective of O2O service providers, which are small businesses.…”

“…Although many studies have been conducted on the O2O services in the industry [2,3]. most of them have focused on the acceptance of O2O services from the customers' point of view; little is known about small businesses that are O2O service providers [4]. argue that the lack of research on the adoption of O2O platform services by organizations causes a knowledge gap.…”