The Effect of Digital Transformation on SMEs using O2O Platforms : Focusing on Customer Engagement

Abstract

This research investigates the effect of SMEs' digital transformation (DX) efforts in O2O platforms on customer engagement. Among the three DX stages (i.e., digitization, digitalization, and DX), this study focuses on digitalization, a practically viable DX phase for SMEs using O2O platforms. This study categorizes the DX efforts of SMEs into three: information diversity, responsiveness to customers, and the degree of functional use. To analyze the impact of these efforts on customer engagement, we conduct the zero-inflated negative binomial regression using the dataset of Naver Smartplace, one of the representative O2O platforms in South Korea. The analysis result confirms that all three factors have positive impacts on customer engagement. Therefore, this study demonstrates that employing O2O platforms can be an effective strategy for SMEs lacking resources to achieve successful DX.