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Abstract: Retailers are facing new challenges like changing customer behavior into digital channels. The aim of this paper was to contribute to the need for retail store business model development with digital innovations We conducted three experiments to advance retail store customer experience and boost customer - store personnel interaction. Current study revealed both theoretical and practical contributions. It improved our understanding of different store innovation paths and their implications for store stakeholders, such as customers and store personnel. While digital innovations in general were adopted well among store customers, study indicated that changes in established and familiar user interfaces can have negative consequences for customer experiences. Our study underlines value-related actions, innovations, and development processes executed at the store level, where customers are in contact with services and store personnel. While the lifespan of the retail business model is getting shorter, ongoing innovation activities are critical for successful retail operations.
Keywords: Retail store, digital innovations, customer experience, business model, digitalization, digital technology.
1.Introduction
Traditional retail stores, particularly brick-and-mortar establishments, face huge challenges. Even shopping malls are experiencing diminishing customer demand (Ameen et al., 2021). Some reasons for this include the relationship between retail and urban cycles and a manager's ability to adjust to change, an aging population, and saturation in demand (Ameen et al., 2021; Das, 2015). One important reason for declining customer visits to physical stores is the fact that many customers have changed their buying behaviors to digital platforms like e-commerce. (Pantelimon, Georgescu and Posedaru, 2020; Mäki and Toivola, 2021). The growth of domestic and global e-commerce is gaining more market share and consumer acceptance. The pandemic has strengthened this trend, with advanced companies leveraging their capabilities and know-how to sell products and services online. Moreover, customers' willingness to buy online is a megatrend (see Mäki and Toivola, 2019). City centers have faced diminishing customer flows, partly due to the increased prevalence of distance work and the success of malls (Tena-Monferrer et al., 2022). When we add soaring inflation, energy costs, and diminishing consumer buying power, the challenges are even larger. All of these developments and trends have added pressure to traditional retail concepts.
The described trends underline the need for retail renewal and development. Although the scope of retail innovations...