The retail market has become increasingly dynamic mainly spurred by consumer behavior. Competition has intensified as new retail formats emerge and the combination of the internet and mobile devices puts retail prices and product availability at consumers’ fingertips for immediate comparison. Meanwhile, extreme cost fluctuations – and the challenge of how to deal with them are an opportunity for alliances and partnerships between retailers and manufacturers. Retailers need to be ready to engage their customers through “omnichannel” shopping. With this a mixture of digital and physical experiences is offered to the customers in order to enhance the shopping convenience. In America 9% of total retail sales comes from online sales. The corresponding figure is about 10% in North Western Europe, 3% in Asia, and 2% in Latin America. Globally, digital retailing is probably headed toward 15% to 20% of total revenue.
In the last decades we have shifted from a product push oriented to a product pull oriented approach in which the customer need has taken a central place. The life cycle of consumer goods has shortened and with the world wide web the consumer has the opportunity to shop globally seven days a week twenty four hours a day. Companies determining the future of retailing exploit smart business models based on smart alliances and technologies that come with really integrated digital services for its consumer. Against the background of these developments revenue models will be redefined and this will also impact the quality of cash flows.