E-Commerce in Agri-Food Sector

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This entry is adapted from the peer-reviewed paper 10.3390/jtaer16070182

Agricultural e-commerce (AE) has attracted substantial attention within various research disciplines for several years. In this paper, we present a literature review of the recent state of AE research published from 2000 through to 2021 in 83 journals. Based on Service-Dominant Logic (S-D logic) and Qualitative Comparative Analysis (QCA), we identify six research themes, and a theoretical continuum is applied to reveal how research themes and scholarly approaches fit into the S-D logic framework. A general increasing trend in the number of articles confirms the escalating interest in AE research; however, different themes perform unevenly with S-D logic. Even though research themes such as Consumer Willingness are getting closer to S-D logic premises, and ideologies that are increasingly approaching S-D logic have been applied to analyzing AE topics, unfortunately, there remains a paucity of papers that wield S-D logic in the AE field. Our research focuses on an innovative emerging AE field and, simultaneously, provides an approach of integrating S-D logic into analyzing academic papers in the AE domain. This research may shed some light on future possibilities that S-D logic could support the co-creation of value between consumers and agribusiness managers, and other broader disciplines such as management and marketing.

agricultural e-commerce (AE) customer relationship management value co-creation service-dominant logic (S-D logic)

1. Introduction

E-commerce is developing rapidly and has penetrated almost all sectors. Agriculture is identified as being promising due to its high level of fragmentation ^[1]. The benefits of E-commerce, inter alia, are that it boosts the circulation of agricultural products and development ^[2], enables smoother communication and better experiences ^[3], and promotes market transparency and price discovery ^[4]. To sum up, e-commerce brings various benefits to the agricultural sector, which have been promisingly predicted for potential success in AE field.

Customer relationship management is a critical factor in e-commerce ^[5]. Customer relationship management provides an opportunity to create loyal e-commerce consumers who make repeat purchases ^[6], as increasing purchase intention is an essential goal when it comes to e-commerce success ^[7]. Researchers have sought to understand the connections between consumers and e-commerce, and the main findings suggest there is an interplay effect. On the one hand, e-commerce has enhanced the efficiency of interaction with consumers ^[8]. Furthermore, it provides firms with the ability to reach new customers, as well as old customers, in new ways ^[9]. On the other hand, e-commerce is a convenient way of obtaining products and services ^[10], also leads to greater customer satisfaction ^[11], and is expected to attract more consumers and increase demand ^[12] of a company’s products.

In connecting e-commerce with agriculture, Zeng et al., (2017) ^[13] are one of the first in building a systematic literature review on agricultural e-commerce (AE). However, their review is focused on factors affecting firm-level adoption and regional development of AE, leaving customer-related themes in the sidelines. Other authors also conduct research about potential reasons for consumer reservations to buy agricultural products online. The reasons found are quality and service concerns ^[14]. The nature (fragility, perishability, etc.) of agri-food products is also seen as one of the main reasons slowing down e-commerce adoption in agriculture (G Baourakis et al., 2002) ^[15]. However, due to a relatively new state of e-commerce in agriculture, its impact has not been widely measured and documented ^[16], and thus, there remains a need to proceed with comprehensive research on consumer behaviors of e-commerce in the agricultural environment ^[17]. Therefore, we argue that there is a gap in the disciplinary research of customer–company interaction related to agricultural e-commerce. This gap exists especially in modern conceptualization of value co-creation and the core philosophical nature of the phenomenon itself. We use the Service-Dominant Logic (S-D logic) developed by Vargo and Lusch (e.g., 2004, 2016, 2018) to evaluate the agricultural e-commerce literature and its approach to company–customer interaction.

Replacing what Vargo and Lusch (2004) label goods dominant logic with S-D logic, we obtain a new perspective understanding the set of processes through which value is created and delivered to the consumer. The key is the notion that the customer should be considered as a major element in the value co-creation process. While some researchers have applied S-D logic to understand value creation in AE field—for instance, Xiaoping et al. (2009) ^[18] and Carpio et al. (2013) ^[19]—there is still a lack of comprehensive discussion of how S-D logic has been applied to the AE domain and what are possible new angles that S-D logic could provide us with. Thus, this paper makes an effort to bridge some of the above-mentioned gaps in the scholarly literature. We do this via a literature review where the scholarly papers are classified into classes based on key S-D logic dimensions. As data, we use the published AE journal articles existing in the Scopus and Web of Science databases. In line with Webster and Watson (2002) ^[20], we choose literature review as an approach as it creates a foundation for advancing knowledge, facilitates theory development, and uncovers areas where research is needed. A literature review also allows researchers to build a basic understanding of where the scholarly discussion is going (ibid.). Therefore, this paper tries to answer the following questions:

(RQ1) What are the major research themes and current focuses in the already published papers within the domain of AE?

(RQ2) How do the research themes and scholarly approaches fit into the S-D logic framework?

(RQ3) What possible future directions need to be drawn from the previous two?

The paper proceeds by introducing a discussion of S-D logic, followed by analyzing the research themes, keywords and theories prevailing in the existing literature. We then design a classificatory tool to answer the above questions. In the end, we discuss the conclusions that can be drawn from the analysis.

2. Service-Dominant Logic Explained

Service-Dominant Logic (S-D logic) was first put forward by Vargo and Lusch in a seminal paper in 2004 and, since then, it has been the most cited article in the Journal of Marketing in the last decade ^[21]. From 2004 to 2016, Vargo and Lusch (along with other researchers) jointly published more than 200 articles on S-D logic and its related foundational promises. In this service-dominant view of exchange, tangible goods should be seen merely as vehicles of service provision ^[22]. Service, or the actual value received from the service, is the basis for market competition, and the customer is seen as an operant resource (ibid.). Customer experiences ^[23] are important and value is phenomenologically born out of exchange settings, but is unique to those involved in the exchange. Thus, the customer should always be regarded as a co-creator of value ^[24]. In addition, S-D logic treats all customers, employees, and organizations as operant resources, thus seeing them as endogenous to both the exchanges and the value-creation processes ^[25]. The relationships are not company–customer or producer–user relationships, but Actor-to-Actor (A-to-A) relationships. In conclusion, the core of the theoretical work in the S-D logical sphere is to build an axiomatic basis for economic exchange in a way that would include how value, social systems, capabilities, and resources explain the birth of prosperity out of human economic relationships ^[26].

Service-dominant logic opens an insightful view to reconsider the value that the exchange setting brings. S-D logic sets out several foundational premises that comprehensively challenge traditional marketing assumptions ^[27]. Therefore, while it is seen as good commercial sense to improve customer retention rates ^[28], S-D logic brings in the customer as a value co-creator in the equation (e.g., Vargo and Lusch, 2004, 2008, 2016).

According to Vargo and Lusch (2004, 2008), a goods-dominant logic (G-D logic) is the prevailing, traditional idea of marketing exchange. G-D logic probes into the process of value creation, and assumes value is created by the firm and distributed through the exchange of goods and money, while the role of consumer is to “use up” or “destroy” the value created by firms ^[29]. Once the value creation process is pre-defined as an input by the manufacturer, the consumer is regarded as a “receiver” because their role is limited to only receiving the outcomes of the exchange. By contrast, in S-D logic, “producer” no longer has a dominant leading role in value creation. The customer (or beneficiary) is now considered as a major part in the value co-creation process of the exchange setting (Vargo and Lusch 2004, 2008). Secondly, the distinction between “receiver” and “producer” disappears, because value is co-created through the combined efforts of firms, customers and employees, and other entities related to any given exchange setting (ibid.). In other words, market relationships are not built on separate units interacting with each other sporadically but, instead, intertwined tightly when value creation is seen from the S-D logic perspective. Service-dominant logic empowers consumers and highlights the fundamental role consumers play in the market.

2. Theoretical Implications

As e-commerce is gaining more and more attention as a domain, and its combination with agriculture increases AE’s strong competitive strength, more and more research is appearing. Our systematic literature review collected 776 hints in the first searching trail, including research in Web of Science and Scopus. However, only 106 journal articles are left for further analysis when narrowing down our research focus closely with consumer, agriculture and e-commerce. Previous researchers have analyzed the AE phenomenon from various angles, for example, factors affecting AE performance, possible opportunities and barriers existing in AE domains; a certain set of solutions are given to guide future AE development. There are also plenty of articles putting their attention on consumers’ choices, working on how to improve consumers’ acceptance and satisfaction, etc. This orientation puts the consumer in a central position and tries to understand consumers in their context, what S-D logic has been reinforced as since its proposal. When comparing our research findings with other prior research that borrows S-D logic and conceptualizes consumers’ collaborator role in various scenarios such as business systems and marketing practice ^[30]^[31], the highlights of this pioneering research are as follows. In this research, S-D logic serves as a basis for understanding value co-creation in a virtual agricultural e-commerce context. Through a comprehensive scanning of literature review work, we are able to investigate the locus, contribution, and lacking circumstances within this spectacular research scope, and how to reformulate our focus accordingly.

In detail, six themes occupied different percentages in the total research collected, for instance, the Performance theme only has 4 papers, History and Influence has 7 papers, Opportunities and Barriers (11 papers). By comparison, Consumer Willingness and Possible Solution have 21 and 37 papers, respectively, indicating that the research focus in the AE area is not even, the consumer theme and the solution theme being more popular recently. When combing S-D logic into the analysis of themes, various themes have a more unbalanced position on the three axes of S-D logic. For example, the theme of History and Influence along with Performance are inferior in the value creation axis and the logic of exchange axis, while Possible Solutions and Consumer Willingness are in the leading role on almost every axis of S-D logic. This indicates various AE themes still have gaps to fill to achieve a more systematic value exchange, especially those themes focusing on the AE phenomenon and tangible infrastructure.

Moreover, since S-D logic shows a powerful guidance in the AE field and applications are ready to launch, we would suggest that future research could apply S-D logic directly in this specific domain. Possible orientations might be: improving AE adoption from understanding the consumers context and meeting consumers’ satisfaction; integrating companies’ capabilities with social networks to strengthen companies’ competitiveness; consumers as the central role in integrating intangible resources in the AE transaction process; connections and possibilities between AE and S-D logic, and so on.

3. Managerial Implications

From a managerial perspective, the research findings demonstrate the importance of understanding how the consumer is probing into participating in the interactive value co-creation process, and the promising opportunities waiting for marketers to initiate certain circumstances to co-create values together with their consumers. E-commerce, social media commerce, smartphone accessibility and digital technologies enabled consumers to actively engage with brands and create various types of user-generated content (UGC) ^[32]. It is insightful for AE service providers to meet consumers’ willingness to better anticipate this collaborative process, and to encourage consumers to generate a favorable reputation of their brands. In here, we would like to introduce an excellent formula of embedding S-D logic into marketing that “The goal for marketing is to engage the supplier with significant customer practices and to contribute to value creation in those practices in a mutually beneficial way” ^[33], to shed a light on what the participants who are involved in the value creation process can do, to achieve maximum benefit. While this formula may originate from marketing, since the AE domain is interweaved considerably with the marketing section, this enlightenment may be applicable in a broader sense.

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