Only three in every 100 retailers think their business model and customer proposition will remain relevant over the next five years.
Just over three-quarters (76%) of retailers believe they will need to fundamentally change their proposition, while 21% doubt their model will be sustainable in its current form and think they will need to adapt it.
That is according to research by OC&C Strategy Consultants and World Retail Congress, which drew on interviews, financial performance and customer ratings data from 800 of the world’s largest retailers.
Retailers will need to transition to new models of growth quickly to remain relevant.
OC&C identified six fundamental rules to succeeding in the current challenging environment, which include forgoing some initiatives to focus on strategic priorities; choosing which business to partner with to build an ecosystem; and picking one of four business models to emulate: a value champion such as Aldi, a brand-centric retailer such as Lululemon, a platform model such as Farfetch, or a customer solutions model such as Selfridges.
OC&C international managing partner James George said: “For retailers, a good business model is no longer enough: being great achieves enviable success, but being average is punished hard. Retailers are recognising this: three-quarters said they need to change their business models in order to be relevant in the future.”