Retail business model transformation in multichannel environment

Abstract

With the advent of internet and e-commerce, the way of carrying out business and transactions has changed to a great extent. Consumers are continuously changing the way they do shopping and this has forced retail business to transform their traditional brick and mortar into adopting multi-channel business models. Retailing is one of the most dynamic and competitive areas of business organization. Effective marketing, customer relationship management is the central dimension of successful retailing and the key to successful retailing is to be aware of the emerging opportunities and threats caused by environmental changes now and in the future.

This thesis paper investigates current conceptualization of ‘brick and mortar’ business models and electronic commerce business models and also tries to identify a unified conceptual model that helps retail business to effectively integrate the two channels and deliver a unique value to the consumers. This is achieved by reviewing the attributes of both the models and finally channeling the reviewed theories to adopting a multi-channel business model. The thesis paper first identifies the concepts of business model, as it is the business model of any organization, that helps to understand what kind of activities are carried out by certain organizations and how and why are those activities carried out. The business model is used to define unique value propositions for the customers of a company, and it is these business models that need transformation, in order for a company to adapt to changing competition and recognizing opportunities in certain scenarios.

The Brick and Mortar model is the oldest model that retailers have been using since centuries, however with the advent of internet; there was a threat of survival as the changing retail environment required retailers to change their traditional business models to adapt to the e-commerce environment. It is however true that, no single model is extremely superior to the other, but they do have relative advantages over the other. It is these differences and pros and cons, that influences a retailer to adapt to a multi-channel or hybrid business model.