“transformative business models”


In January 2017, the World Economic Forum has published together with Accenture, an interesting report about a very controversial and hot subject: The future of retailing.

After the “empowered consumer”  and  “disruptive technologies” the third and last trend highlighted by the report is about Transformative Business Models affecting retail. This part of the report considers how the brick and mortar retailers have to evolve to offer customers “stories” instead of stores. This transformation has three key enablers:

1- A differentiated customer experience.

This first enabler would be to build spaces where customers would interact with products and benefit from personalised services, supported for example by technologies. This is already largely used by retailers in their flagship stores all over the world… but mainly in capital cities today. The trend is clear but the generalisation of the model is not obvious from my point of view. If a flagship store does not have to be profitable from a “selling machine” perspective as it is considered more as a marketing tool, the extension of the model would seriously suppose a problem for the retailers. Besides, the “showroom” concept works with a limited flow of customers and takes away one of the important benefits of going to the store, which is to have the stock available instantly. But anyhow, the retailers will have to invent a new reason for customers to come to them and this is some sectors has still to be invented.

2- A new frontline (digital) workforce.

This is a clear transformation already started in many stores. When the human interaction has no added value (still not clear for whom) the process will be automatised. Everyone has seen the Amazone Go shop with no interaction at all with a human being. This can look contradictory with the “personalised experienced” and the challenge will not be to find a way to take away workforce and replace them with robots but to find the adequate balance that fulfils both retailers and consumers needs.


3 – Stores as hubs for social interaction.

“To appeal to local communities, stores will have a strong local flavour, complementing their core business proposition with ideas, themes and events designed for the local consumer base.” The list of possibilities to reposition the retailer’s stores is unlimited. Big retailers are already testing do-it-yourself training courses (cooking, decoration, etc..), collaboration with NGOs, funding of social projects at global or local level. The challenge here will be to secure that these initiatives, instead of multiplying themselves, have a lot of meaning for the customers.

Finally, o close this chapter the World Economic Forum offers a classification of four categories of emerging business models in retail that will disrupt existing models or help retailers to disrupt themselves.


A – The next generation of sharing economy

These already quite extended services at least in the capitals – you can easily share your home, cars, tools, workforce, clothes – are still representing a very tiny part of the retail business. The next generation of model will talk more to the next generation of consumers and the offer is extending every day.

B – The Personalisation economy

To answer the trend of customer empowerment and the need of personalisation, new business models using or not technologies are growing. The reports gives the example of that offers “surprise boxes”  of clothes but adapted to your own style. The development of materials available for professional 3D printers will probably be a booster for a lot of small companies within this area.

C- The on-demand economy

The example taken for this category is again from Amazon and it is the famous dash bottom. The benefit claimed is of course not to have to order goods that you consume frequently, ordering (or even shopping) them has no interest at all for the consumers. There is another benefit connected with the trend of avoiding waste in particular for food. With this technology the consumer would be able to order more often smaller quantities even without any packaging. See also “delivery to… your fridge“.

D – The service economy

The last category of emerging businesses is about service economy. Instead of increasing consumption of goods (there is a limit anyway) these new companies will offer services adapted to the need of customers (eventually connected with products)  and therefore provide experience and on-demand offer, supported by IOT that would predict or suggest the type of needed services (eg. health & home care).

As a conclusion you can even read some attempts to evaluate the value of the different business models in the full report.

Full report here.