Impact of Capabilities on Firm Value Offering in the E-Commerce Service Setting

E-commerce and online shopping have changed the retail environment. At present, companies rely on extensive customization of information systems and business processes in order to provide enhanced online customer service experiences. In today's rapidly expanding service economy, businesses need more service capabilities in order to outperform competitors. The authors identify four capabilities: innovation-based, marketing-based, collaborative, and absorptive to assess the relationship of these capabilities of online shopping websites in relation to the firm's value offering to its online customers. The results indicate that capabilities indeed play an important role for online shopping providers in the area of value creation for online consumers. This suggests to online retailers that capabilities have a positive effect on value offerings; thus, it is imperative that firms use more of their resources to develop capabilities.