Innovations in retail business models

Alina Sorescu, Ruud T. Frambach, Jagdip Singh, Arvind Rangaswamy, Cheryl Bridges

Research output: Contribution to journalArticle

207 Scopus citations

Abstract

A retail business model articulates how a retailer creates value for its customers and appropriates value from the markets. Innovations in business models are increasingly critical for building sustainable advantage in a marketplace defined by unrelenting change, escalating customer expectations, and intense competition. Drawing from extant strategy and retailing research, we propose that innovations in retail business models are best viewed as changes in three design components: (1) the way in which the activities are organized, (2) the type of activities that are executed, and (3) the level of participation of the actors engaged in performing those activities. We propose six major ways in which retailers could innovate their business models to enhance value creation and appropriation beyond the levels afforded by traditional approaches to retailing. We also describe the drivers of business model innovations, the potential consequences of such innovations, and numerous examples from retail practice that highlight our concepts and arguments. In doing so, we provide a starting point for academic research in a domain that is deficient in theoretical and empirical research, and offer retailing managers a framework to guide retail business model innovations for sustainable competitive advantage.

Original languageEnglish (US)
Pages (from-to)S3-S16
JournalJournal of Retailing
Volume87
Issue numberSUPPL. 1
DOIs
StatePublished - Jul 1 2011

All Science Journal Classification (ASJC) codes

  • Marketing

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    Sorescu, A., Frambach, R. T., Singh, J., Rangaswamy, A., & Bridges, C. (2011). Innovations in retail business models. Journal of Retailing, 87(SUPPL. 1), S3-S16. https://doi.org/10.1016/j.jretai.2011.04.005