Examining retail business model transformation: a longitudinal study of the transition to omnichannel order fulfillment

Abstract

PurposeThe purpose of this research is to provide a theoretical explanation of the strategic and structural changes occurring in US omnichannel retail supply chains. Using longitudinal data, the research documents transitions in retailers' supply chain strategies, specifically related to the order fulfillment process. It further offers explanation for how and why these transitions occurred.Design/methodology/approachThis research uses a process theory lens to explain the business model transformation of the omnichannel order fulfillment process. Using a case study approach, a longitudinal multicase study was conducted with six large US retailers over a span of 10 years. Within-case and cross-case analysis identifies the sequence and rationale of different strategic and structural shifts in retailers' omnichannel order fulfillment strategy.FindingsThe within- and cross-case analyses offer insight into how the transitions occur, at what rate they occur across several different retailers, and why the rate can differ across the stages of omnichannel transition among retailers. The research documents that retailers took varied approaches to strategically develop and structurally change their order fulfillment processes in their transition to omnichannel retail. The findings reveal that these approaches are dependent on retailers' store-based logistics capabilities and specific supply chain arrangements within their retail segment.Research limitations/implicationsThe longitudinal and theoretically driven approach provides researchers a better understanding of the business model transformation in US retail omnichannel operations. This approach builds theoretical context around why and how strategic and structural changes in omnichannel fulfillment occurred over time. It also explains the underlying omnichannel phenomenon more accurately than research focused on discrete changes at a single point in time.Practical implicationsThe findings and managerial insights can assist practitioners in understanding how environmental changes have led to strategic and structural shifts across different stages of omnichannel fulfillment evolution. These insights also provide guidance to retailers that are currently in early stages of developing their omnichannel fulfillment strategy.Originality/valueLogistics and fulfillment operations of retailers have changed dramatically over the last 10–15 years. The authors apply a process theory lens to explain how and why retailers have integrated their channels to achieve omnichannel success at the store level.