How do retailers increase the benefits of buyer innovativeness?

Abstract

PurposeThe purpose of this paper is to develop and empirically test a model investigating the relationship among inter-departmental communication, buyer innovativeness, and retail competitiveness. The authors also explore whether a retail strategy of supply base diversification for managing suppliers moderates the association between innovativeness and competitiveness.Design/methodology/approachHypotheses were tested using a structural equation model and survey data drawn from general merchandise managers of 149 supermarket retailers in Japan.FindingsThe results indicate that inter-departmental communication between merchandising and store divisions drives innovativeness among retail buyers and ultimately strengthens firm competitiveness. Moreover, when buyer innovativeness is evident and less actively the retail buyers utilize supply base diversification, the stronger is the retailer’s competitiveness. The study failed to find any direct impact of inter-departmental communication on retail competitiveness.Practical implicationsThis study offers managerial insights into the roles that buyer innovativeness, inter-departmental communications, and supply base diversification play in developing effective competitive strategies.Originality/valueThis study makes two key contributions. First, it is novel in using inter-departmental communication to explain the antecedents of buyer innovativeness. Second, drawing on the power-dependence theory, the authors extend the well-established innovativeness-performance linkage by exploring the moderation effect of supply base diversification.