Information technology use in retail chains: Impact on the standardisation of pricing and promotion strategies and performance

The objective of this study is to investigate the effect of IT use for exploitation and exploration on the standardisation of pricing and promotion strategies and business performance in retail chains. We used a questionnaire survey to collect data from 314 retail chains in Japan and the data was analysed using structural equation modelling. We found that IT use for exploitation has a positive effect on the standardisation of promotion strategies, whereas IT use for exploration has a positive impact on the standardisation of pricing strategies. In addition, we found that IT use for exploitation moderates the relationship between IT use for exploration and the standardisation of promotion strategies. A standardised pricing strategy has a negative impact on business performance. In contrast, a standardised promotion strategy has a positive effect on business performance. The contribution of this study is the development of an integrated framework to analyse the effect of IT use for exploitation and exploration on the standardisation of pricing and promotion strategies including the interplay between the two different uses of IT.