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E-Commerce and Firm Bargaining Power Shift in Grocery Marketing Channels: A Case of Wholesalers’ Structured Document Exchanges

Electronic commerce is transforming interorganizational relationships in marketing channels. Reports frequently note that ‘power’ goes to those who gain relevant trading information in marketing channels. The paper then asks whether and how structured or ‘automated’ trading information exchanges (e.g. electronic data interchange (EDI) links) between suppliers and wholesalers impact on their bargaining power in grocery marketing channels. This paper starts with the view that automated information exchanges favour the suppliers because they obtain trading information and gain marketing flexibility more than the wholesalers do. Focusing on the perspective of grocery wholesalers, the paper examines the relationships between (1) EDI use, (2) suppliers’ incentives for EDI, (3) wholesalers’ perceived bargaining power and (4) trust and cooperation between wholesalers and suppliers. Based on exploratory survey data from 33 grocery wholesalers, the paper finds that automated information exchanges may lower wholesalers’ perceived bargaining power. It also shows that an appropriate level of incentives from suppliers tends to compensate for the power loss. This results in higher trust and cooperation in their trading relationships.