Internet Usage and Traditional Distribution Channels: The Moderating Effect of the Firm’s Size in Jordan

Abstract

Internet importance and effect is increasing in every part of daily life, especially in business where internet can provide some serious solutions for many issues, it can alter many traditional methods and procedures that would include distribution. Distribution channels are traditionally the organization, or set of organizations, responsible for delivering a product from the manufacturer to the end-users, Internet has affected traditional distribution channels in developed countries and markets, in fact; internet itself can be viewed as a new distribution channel. Accordingly, this study aims at identifying the effect of internet usage on the traditional distribution channels in Jordanian private commercial firms in terms of creating new direct online sales channel and reducing the numbers of intermediaries. The study also examines the moderating effect of firm's size on the original relation between internet usage and traditional distribution channels. In order to achieve these objectives, two main hypotheses were formed based on the literature review. A regulated research methodology was applied to test the hypotheses over a proportional systematic random sample from large, medium, and small private commercial firms in Jordan. A questionnaire was constructed and distributed to top and middle management of private commercial firms in Jordan. 904 screened and filtered questionnaires were processed using SPSS. The results of the statistical analysis were demonstrated, showing that internet has a partial effect on traditional distribution channels, the effect is limited to creating new direct online channel, and even this effect is weak, and got even weaker as the firms size got smaller.