How has Regulation on Amazon’s E-Commerce Affected Seller Reputation? (Research Proposal Sample)

HOW HAS REGULATION ON AMAZON’S E-COMMERCE AFFECTED SELLER REPUTATION?
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How has Regulation on Amazon’s E-Commerce Affected Seller Reputation?
Abstract
New technological innovations have changed how businesses operate. Businesses have adopted new production approaches and business models which have all disrupted traditional businesses. Amazon is one of the companies that have tapped into the e-commerce platforms. As one of the biggest e-commerce markets, Amazon allows its customers to purchase products online. Customers can then make reviews about the products and the services. All other businesses with e-commerce platforms rely on customer reviews to enhance their brands. Customers value the reviews other customers make about the products sold by a company.
Consequently, brands are manipulating customer reviews to influence customer purchasing intention. This informs the recent development where Amazon created a customer review platforms than only allows authentic customers to make reviews. In some way, this has regulated the customer review system. The current study sought to investigate whether the brand’s customer reviews were correlated to its reputation and whether the ratings had resulted in more reviews after 2016 when the system was developed. The findings revealed that authentic customer reviews were directly correlated to the brand’s reputation. Therefore, designers should formulate systems that only allow authentic reviews to enhance the seller’s reputation.
1.0 Introduction
1.1 Background of the Study
In the last three decades, new technological innovations have emerged that have undoubtedly changed how businesses operate. Businesses have developed new business models and production approaches which have all disrupted traditional businesses. The last ten years of the twentieth century were characterized by groundbreaking innovations which has greatly impacted businesses. The new innovations have also contributed to rapid globalization. One of the most remarkable developments was the creating of the internet. Its emergence challenged business owners to rethink their business strategies to tap on the opportunities that it brought. According to Wan and Nakayama (2014), the internet offered businesses an opportunity to rethink their processes, models, and relationships. Between 2005 and 2010, a new business model known as e-commerce emerged. Back then, researchers did not understand what the concept entailed and its potential for growth.
However, many businesses, especially retailers have embraced it to the extent of basing the entire business model on it. E-commerce continues to revolutionize business to business and business to consumer relationships across the globe. Governments and regulators on the other hand continue to face challenges due to the complexity of e-commerce. Some of the most common concerns include privacy, security, infrastructural development, and concern. Businesses on the other hand are worried about the capability of the new marketing and selling platforms to help them increase brand loyalty and sales volumes. Other concerns to businesses include competition and negative reputation. Amazon is one of the companies that have tapped into the e-commerce platforms. According to AlZu’bi et al. (2019), it is one of the biggest e-commerce markets. Amazon recently designed a reputation and feedback system to ascertain whether online reviews impacted its reputation or sales volumes. The current study explores the effectiveness of Amazon’s reputation and feedback mechanism.
1.1.1 The Evolution of E-Commerce
Agreeably, the development of e-commerce was not a single event. According to Nogoev et al. (2011), its development is attributable to a combination of developmental and technological changes. For instance, the internet which was first discovered in the 1960s together with the discovery of the World Wide Web which appeared in the 1990s largely contributed to the development of e-commerce. E-commerce first emerged in the early 1970s with the EFT and the EDI (Santos et al. 2017). EFT which means electronic funds transfer implies the transfer of funds electronically from one organization to the other. EDI on the other hand means electronic data interchange and involves the transfer of documents electronically from one organization to the other. The electronic transfer of financial transactions would then expand to inter-organizational systems such as supply management systems which have been instrumental to the development of e-commerce.
According to Nogoev et al. (2011), the most historical events in the development of e-commerce include the standardization of EDI in 1984 through ASC X12, CompuServe’s platform which allowed customers to buy products online in 1992, and Netscape which developed a simple browser that facilitated safe online transactions. Amazon.com and eBay.com, some of the biggest e-commerce platforms would be born in 1995, ushering in a business model that had not been used before. The e-commerce would be facilitated further by the emergence of the Digital Service Line which provided fast internet services in California. Effectively, people could spend more money and time online which meant that the e-commerce platform was continuing to grow (Khan 2016). By 1999, Business.com estimated the total value of online retail spending to be over $20 billion. Since then, businesses have continued to explore e-commerce platforms. Experts predict that most of the businesses will shift their operations to e-commerce in the future.
1.1.2 Amazon E-Commerce Platform
Amazon’s history dates back to 1997 when a company known as Amazon integrated the markets. The online bookseller which was owned by Jeff Bezos, an American billionaire had employed over 250 people who worked in Seattle. Back then, the company touted itself as the largest bookshop worldwide boasting about a catalogue of over 2.5 million books, several audio cassettes, CDs and DVDs (Majed, Nuraddin & Hama 2018). Even then, Bezos had a dream of owning the world’s biggest retailer. He also wanted his business to start with letter A to make it easier for anyone to search it since A is the first letter of the alphabet. The logo of the company featured an arrow running from A to Z with a smiling face to symbolize a satisfied customer.
Evidently, the founder was keen about customer satisfaction. At its inception, the business model of the company was not common. Consequently, the founders expected to make losses for a few years before the business peaked. According to Tiwari (2018), the founders were disappointed when the company delayed making profits. Nonetheless, they held on and the company made profits during the last quarter of 2001. The profit is attributed to the breaking of the internet bubble when most of the companies that relied on the internet made losses. Motivated about the possibility of even greater profits, the founders fine-tuned the business model in preparation for the future. Two decades later, the company cannot be said to have not only survived, but also to have become synonymous with e-commerce globally.
Amazon has turned around the lives of millions of consumers worldwide by offering them a wide variety of products such a downloadable music, books, software, cameras, computers, CDs, and DVDs. As one of the major e-commerce supply chains globally, Amazon undoubtedly has a high volume of customers (Kaushik et al. 2018). As a result, the brand is concerned about its reputation and the high risk that reputational damage could have on it. In this respect, the brand developed a reputation and customer feedback system that allows customers to rate services received and post reviews accordingly. The current study focuses on the extent that the review system has impacted the brand’s reputation.
1.2 Problem Statement
It is agreeable that technological innovations have impacted various aspects of businesses. However, some of the most notable aspects are the production, supply chain, communication, and marketing functions. Business models have also been greatly impacted resulting in changes in the way businesses operated. For Amazon, technological innovations presented a niche in the retail of products. The company which started as a book store now boasts about being one of the largest e-commerce businesses in the world. E-commerce customers rely on other customers’ reviews and rankings before committing themselves to a brand, something that makes it hard for new entrants. In the last ten years, businesses operating on the e-commerce platform have started realizing the importance of positive customer reviews and ratings on revenues.
This informs the recent trend where brands are using incentives such as promotions, free items or outright payments to persuade their customers to rate their products. In some way, this could take away the credibility of some of the sellers since it creates information asymmetry which denies the customers knowledge about the true quality of the products. As a result, most online platforms allow target customers to see verified purchases reviews. Verified purchases comprise of purchases made without the influence of a promotion code or discount. Agreeably, this changes how buyers perceive the sellers. It enhances the reputation of the sellers on the e-commerce platform. Most of the previous studies on e-commerce focus on the impact of customer reviews on brand loyalty and revenues. However, they do not focus on the reputation of the brand due to the online surveys...