Do Suppliers Benefit from Collaborative Relationships with Large Retailers? An Empirical Investigation of Efficient Consumer Response Adoption

TLDR

Collaborative manufacturer–retailer relationships based on efficient consumer response (ECR) have become ubiquitous over the past decade, yet academic studies of ECR adoption and its impact on marketing relationships are relatively scarce. The authors empirically investigate whether the extent to which suppliers of a major retailer adopt ECR has a beneficial impact on their outcomes. They analyze data on suppliers of a major retailer to assess the relationship between ECR adoption and supplier economic performance, capability development, and perceptions of inequity. ECR adoption improves supplier economic performance and capability development but also increases perceptions of negative inequity; retailer capabilities and supplier trust moderate these effects, and the results hold across supplier size and brand type.

Abstract

Collaborative manufacturer–retailer relationships based on efficient consumer response (ECR) have become ubiquitous over the past decade. Yet academic studies of ECR adoption and its impact on marketing relationships are relatively scarce. Inspired by the relational view of competitive advantage, the authors empirically investigate whether the extent to which suppliers of a major retailer adopt ECR has a beneficial impact on their outcomes. The results demonstrate that whereas ECR adoption has a positive impact on supplier economic performance and capability development, it also generates greater perceptions of negative inequity on the part of the supplier. However, retailer capabilities and supplier trust moderate some of these main effects. The overall results are robust with respect to differences in supplier size as well as between branded and private-label suppliers.