Innovations in Retail Business Models

Journal of Retailing, Vol. 87S, No. 1, pp. S3-S16, 2011

Mays Business School Research Paper No. 2012-28

15 Pages Posted: 2 Feb 2012

See all articles by Alina Sorescu

Alina Sorescu

Texas A&M University - Department of Marketing

Ruud T. Frambach

VU University Amsterdam

Jagdip Singh

Case Western Reserve University - Department of Marketing and Policy Studies

Arvind Rangaswamy

Pennsylvania State University - Department of Marketing

Cheryl Bridges

Texas A&M University - Department of Marketing

Date Written: February 1, 2012

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.

Keywords: Business model, Retailing, Innovation, Value creation, Value appropriation

Suggested Citation

Sorescu, Alina and Frambach, Ruud T. and Singh, Jagdip and Rangaswamy, Arvind and Bridges, Cheryl, Innovations in Retail Business Models (February 1, 2012). Journal of Retailing, Vol. 87S, No. 1, pp. S3-S16, 2011; Mays Business School Research Paper No. 2012-28. Available at SSRN: https://ssrn.com/abstract=1997189

Alina Sorescu (Contact Author)

Texas A&M University - Department of Marketing ( email )

430 Wehner
College Station, TX 77843-4218
United States

Ruud T. Frambach

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, 1081 HV
Netherlands

HOME PAGE: http://www.feweb.vu.nl/nl/afdelingen-en-instituten/marketing/staff/t-frambach/index.asp

Jagdip Singh

Case Western Reserve University - Department of Marketing and Policy Studies ( email )

Cleveland, OH 44106
United States

Arvind Rangaswamy

Pennsylvania State University - Department of Marketing ( email )

University Park, PA 16802-3306
United States

Cheryl Bridges

Texas A&M University - Department of Marketing ( email )

430 Wehner
College Station, TX 77843-4218
United States

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