Actors outside of traditional retailing gain ground by introducing various types of digital retail platforms with new business models. What can retailers do to ensure strong positions in the future? Research suggests a number of major ways to deal with this challenge:

1. Retailers are already highly competitive in retail sectors where products are sold without strong complementarity in production or consumption, such as grocery retailing. The challenge for these retailers can be to confront platforms and develop their retail offer in attractive ways.
2. Retailers can sell their product on platform ecosystems. This is the one of the most talked-about role for retailers and allows retailers to offer their products on a platform while still maintaining their own retail channels. In this case, retailers rely on getting value from being available for big number of customers. Retail differentiation is of less importance in this case.
3. Retailers may fully embrace the platform business model and compete directly with platform companies as a retail platform. Here, they may use their retail expertise on assortment, promotions and so forth to create relevant platform offers comprising their own products and from other retailers. They can also build strong multidimensional customer relationships on brand flagship platforms adding value by combining transactions with guidance, inspiration, community building, and knowledge sharing. This idea works best for narrow assortments with a high degree of category specialization. An inspiration here might be Nike+ where platform participants (e.g. consumers, suppliers, platform company) get increased value from broad interactions on a range of complementary products on the platform.

2023-05-10