Digital Commerce and the Digitally Connected Enterprise
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Paper Type
Complete
Paper Number
1924
Description
We study a self-reinforcing process, dubbed "Red Queen," consisting of actions and reactions of competitors in the digital commerce of experience goods. Based on our analysis of the package tours sold by 114 travel agencies on the world's largest online platform for travel - Trip.com, the findings suggest that, in markets where a seller's reputation is low, incremental innovations in existing products may boost sales, and that a seller operating in markets with high levels of rivalry would be better off with a middle-of-the-road posture for radical innovations such as developing new products. These practical insights can help the sellers of experience goods strategize what, how, and where to innovate in order to beat competition and improve performance in digital commerce. Meanwhile, the study also contributes to an evolutionary perspective on competition in digital commerce and helps expand the scope of Red Queen research in the digital economy.
Recommended Citation
Wang, Ping; Zhu, Zhen; Liu, Qi; and Huang, Qiuyun, "Interplay of Competition, Innovation, and Reputation: The Red Queen in Digital Commerce of Experience Goods" (2020). ICIS 2020 Proceedings. 10.
https://aisel.aisnet.org/icis2020/digital_commerce/digital_commerce/10
Interplay of Competition, Innovation, and Reputation: The Red Queen in Digital Commerce of Experience Goods
We study a self-reinforcing process, dubbed "Red Queen," consisting of actions and reactions of competitors in the digital commerce of experience goods. Based on our analysis of the package tours sold by 114 travel agencies on the world's largest online platform for travel - Trip.com, the findings suggest that, in markets where a seller's reputation is low, incremental innovations in existing products may boost sales, and that a seller operating in markets with high levels of rivalry would be better off with a middle-of-the-road posture for radical innovations such as developing new products. These practical insights can help the sellers of experience goods strategize what, how, and where to innovate in order to beat competition and improve performance in digital commerce. Meanwhile, the study also contributes to an evolutionary perspective on competition in digital commerce and helps expand the scope of Red Queen research in the digital economy.
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