Many impacting directly the physical stores’ future operations. For

Many
authors have contributed to define and describe diverse changes occurring
within the retail industry that are impacting directly the physical stores’
future operations. For instance, Molenaar (2013), took a comprehensive look at
the simultaneous battle of the traditional brick-and-mortar retailer against diverse
threats within the retail context, in order to secure a place in the future
retail environment. These threats include the Internet itself, online retailers
offering better deals, customers’ new buying behaviors and suppliers who were
partners with the retailer in the past, but now are powerful enough to sell
directly to customers.

Similarly,
Brokelmann (2016) described an environment where physical stores are threatened
by the accelerated development of e-commerce, online platforms and
technological advances along with undergoing changes in consumer behavior, characterized
by a tendency to buy more frequently among diverse channels, specially online.
Moreover, he considered the manufacturers’ position in the future retail
landscape as uncertain, due that more and more manufacturers are already
questioning themselves whether just selling to the traditional brick-and-mortar
stores really pays off or whether they should start expanding to sell directly
to customers online, through their own retail channel or partnering with large online
retailers (Brokelmann,
2016).

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Demko-Rihter
and ter Halle (2015, p. 639) focused on analyzing future retail innovations and
under this context they identified new digital and mobile technologies as the
most evident drivers of retail innovations. Additionally, they mention pressure
from competitors as a driving force for bricks-and-mortar to adopt innovative
business models. Complementary drivers of retail innovations were identified within
the study of Sorescu et al. (2011) where they classified drivers into internal
and external drivers to the retailers. Internal drivers relate to the shift
towards a customer-centric approach that represents a major implication for the
configuration and operation of traditional business models. On the other hand,
external drivers to the retailers refer to changes in customer attitudes and technological
advances including the advent of the Internet, the growth of electronic
commercial platforms and the evolution of multichannel business models (Sorescu
et al., 2011).

Significant
consolidation by important players executing acquisitions of smaller merchants,
expansion of existing retailers into new channels and the progressive
manufacturers’ integration are modifying the structure of the retail
competitive industry (Grewal et al., 2010). Within this landscape, customer
retention is becoming harder for physical stores as customers become more
informed and inclined to purchase across diverse retailing channels (Grewal et
al., 2010). This trend derives mainly from the increasing relationship between
customers and technology as a result from the expansion of mobile internet
access and the creation of social media platforms; which in turn, have affected
customer behavior (Nueno, et al., 2013).

Hagel
III et al. (2015 pp. 2-10) categorized the trends shaping the future retailing
landscape into a big concept called “The Big Shift”. Within the study it is clarified
how the “Big Shift” has affected the retail industry in four ways: Firstly, reduced
barriers bring more small competitors, secondly, easier and broader access to
market demand is going beyond geographic limits, thirdly, on-demand fulfillment
technologies are changing the way retailers manage inventories, and lastly, new
technologies are opening opportunities for the creation of new business models in
order to connect more efficiently with consumers and create value. Coinciding
with other researchers (cite
authors), Hagel III et al. (2015) point put that technology advance combined
with shifts in consumers’ mind-set are core trends affecting the operations of
retailers.

Kumar
et al. (2016) focused on developing a strategic framework that retailers may
adopt to overcome the constant vicissitudes of the industry and guide them
about ways of increasing profitability in the future. The industry changes recognized
within the study are the existence of a dynamic competitive market
configuration and the shifts in consumer behavior, which consequently have lead
to the closing of thousands of physical stores, e.g. 100 Macy’s stores in 2016.

Apparently,
the industry is moving towards the adjustment of spaces to diverse format sizes;
this is discussed within Reynolds et al.’s (2006) study, where numerous trends affecting
the future of retail stores in the UK are revealed. These forces of change
comprise economic, consumer behavior, retail competition, innovation and the
rise of specialty formats. In particular, consumer behavior is guiding the way specialty
formats should be planned aiming to meet customer demands for improved services
and hedonic experiences. Hence, the physical stores that own these traits might
have the opportunity to create high quality and profitable retail space. Further
factors of customer behavior highlighted in the study are the search for
convenience and a social responsible mindset towards shopping (Reynolds et al.,
2006). Following the same
research line related to changes on retail spaces, Carlyle (2012), focused on
describing how technology adoption is transforming retailing real state models.
She pointed out that technology and people’s changing purchasing habits are important
aspects changing the role of the flagship store towards its transformation into
a showroom to later perform purchases online.

In
regards to the fashion industry, Kim and Johnson (2009) focused on obtaining
retail professionals’ predictions about the future fashion production and
retailing in the US. Within the findings, advances in technology were mentioned
as the driving force behind the changes in fashion retail due to its capacity
to speed up all aspects of the industry. In addition, mass customization was
identified as a future influence for consumers in relation to clothing and as
an element of change to the traditional roles of customers, manufacturers and
retailers (Kim & Johnson, 2009).

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