A new business model (BM) for small independent retailers

Purpose: The purpose of this paper is to advance understanding of the key elements of a new business model (BM) for independent retailers, which reflects their current competitive position within the retail ecosystem. It is a conceptual paper, drawing on theory and practical examples of strategy changes made by independent retailers during COVID-19. Design/methodology/approach: This conceptual paper builds on existing research into retail BMs and independent retail strategies during COVID-19. It incorporates findings from a significant review of UK Independents’ performance during the pandemic, titled “Against All Odds, a Grimsey Review research paper (2021)”. It highlights changes in business format, activities and governance during the pandemic, alongside managers’ reflections on the impact of these changes on their businesses. This paper advances theory by adapting current conceptualisations of a retail business model with insights from value co-creation found in Service-Dominant logic (Vargo and Lusch 2008; Vargo et al., 2023). Findings: This BM identifies a set of design principles and design elements/themes, which allows for a clearer delineation of the sources of competitive advantage for the sector moving forward. Design principles include the adoption of a hybrid format with resource configuration capturing co-creation activities and governance co-ordinated by institutions and institutional arrangements. Consumers lie at the heart of value co-creation. Design elements/themes need to be underpinned by value drivers including flexibility and agility, a dynamic IT capability and collaboration and community engagement. Originality/value: This paper makes a two-fold contribution. Firstly, drawing on theory and practical examples of change made by business owners during the pandemic, the authors develop a new BM for independent retailers that captures key elements and relationships relevant to their competitive position in the sector. Secondly, the authors draw on the model to advance a set of propositions to be tested by further research to support a more stable and sustainable future for the sector.