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How to leverage blockchain to react to consumer reference effects and develop a distribution strategy in online retailing?

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Listed:
  • Ma, Deqing
  • Li, Kaifu
  • Hu, Jinsong
  • Wang, Xue

Abstract

False marketing on online platforms may distort consumer perceptions of product quality and exacerbate the negative impact of the reference quality effect (RQE). Blockchain technology (BCT) enables credible quality disclosure and is seen as a critical tool for brand manufacturers to combat false marketing. This article focuses on a platform-based supply chain comprising one brand manufacturer and one online retail platform. In this case, the brand manufacturer defines the product quality strategy and BCT implementation strategy, and the platform is responsible for online marketing and developing the distribution strategy. This paper clarifies when the manufacturer should implement BCT and how BCT affects the platform’s distribution strategy when both RQE and reference price effect (RPE) are considered. The analytical results reveal four effects of BCT implementation: the decision motivation effect, marketing leverage effect, positive externality effect, and collaboration-enhancing effect. In addition, previous studies have suggested a negative impact of the RQE and RPE. We confirm that this occurs when online marketing is efficient and brand goodwill dominates demand. Counterintuitively, the two reference effects show positive impacts when online marketing is inefficient or the RPE dominates demand. The interaction between the two reference effects is further strengthened by BCT. Regarding the platform’s distribution strategy, we confirm that the main results of previous studies occur when online marketing is efficient. Counterintuitively, when online marketing is inefficient, the platform will choose reselling at both lower and higher commission rates. Besides, agency selling is employed at moderate commission rates. Furthermore, it is demonstrated that BCT helps supply chain members reach stable and long-lasting cooperation on more product categories.

Suggested Citation

  • Ma, Deqing & Li, Kaifu & Hu, Jinsong & Wang, Xue, 2024. "How to leverage blockchain to react to consumer reference effects and develop a distribution strategy in online retailing?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 187(C).
    • Handle: RePEc:eee:transe:v:187:y:2024:i:c:s1366554524001704
    DOI: 10.1016/j.tre.2024.103579
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