Timing Strategies in Introducing Digital Sensory Technologies for Online Retailers

This paper builds a dynamic multi-stage technology supply chain model including a technology provider and two competitive retailers, explores the timing strategies in introducing digital sensory technologies (the DSTs) for online retailers and analyses the impact of technology provider’s response polices on retailers’ decision-making. The results show that, when a retailer firstly introduces the DSTs and another retailer is taking a wait-and-see attitude towards introducing the DSTs (i.e., under the WAS strategy), a long period of monopoly period can stimulate retailers to introduce the DSTs, and the lower technology service fee will encourage the latter (retailer) to enter the market ahead of time, so that the latter retailer has an incentive to shift strategy choices and introduce the DSTs together with the competitor or sooner. Instead, the retailers will choose the AAS strategy, i.e., they vie to be the first to introduce the DSTs. Under certain conditions, the technology provider can satisfy the strategic needs of both the former and the latter through different (uniform /reinforcing /weakening) response policies, and strengthen or weaken the relationship between two competitive retailers through the standardized technology service fee, which plays a“Management Leverage” role.