Business Model Transformation in Moving to a Cross-Channel Retail Strategy: A Case Study

Although cross-channel retailing has become a game changer for retailers, few previous studies have looked at the problems from the inherently holistic perspective of a business model approach. Using a single case study but multiple data collection methods, including interviews, observations, and document analysis, on the biggest Chinese retailer in consumer electronic appliances, the present study examines how different aspects of the business model changed after the retailer launched its cross-channel strategy. The results identify the major changes on three fronts: redefinition of target clients, a new proposition for shopping value, and redesign of the value chain. Findings suggest that a retailer shifting toward the cross-channel strategy will follow the stage-of-adoption model, which may be in five stages, and that the physical store as a hub linking different channels will become the source of value creation. To facilitate the strategic shift, retailers should optimize rather than merge their activities across channels, reinforce the strengths of the physical store, develop co-creation value with stakeholders, and revamp their organization.