Business model innovation in retail sector

Inspiration and experimentation rooms for future-proof retail


Competition from the online trade, changing inner cities and new customer purchasing behavior: brick-and-mortar retailers have been hit hard by digitalization. And the COVID-19 pandemic has heaped even more pressure on the sector.

How should small and medium-sized brick-and-mortar retailers respond to these pressures? Where will they find the ideas that will put their business model on a new, sustainable footing? As each retail concept, with its specific products and customer groups, has to be evaluated individually, standard solutions are of only limited utility. Retailers must actively experiment with their business model and value proposition. To do this, they need inspiration and practical support.

This is where “Experimenting in Retail” comes in. In this project, funded by the Günther Rid Foundation for Bavarian Retail, we built up a database by systematically screening competitions, trade journals and newsletters and supplementing this with interviews. The database describes innovative, forward-looking concepts in retail and evaluates them in relation to business model changes and market readiness. This has created a source of inspiration about current trends, among them 24/7 opening hours, self-checkout and the shopping experience. Concepts that combined several trends into harmonious overall concepts were deemed to be particularly innovative and promising. However, this combination must be realized in practice by retailers themselves, so that the concepts suit the company’s existing value proposition to its customers.

For this reason, we also got together with downtown retailers, politicians and research organizations to develop an innovation infrastructure concept, which encompasses elements such as providing spaces for experimenting with new ideas, helping and guiding businesses with quick and pragmatic implementation, choosing suitable technologies and trend scouting. Michaela Pichlbauer, Chair of the Rid Foundation, is very satisfied with the initiative: “We’re excited about a solution-oriented cooperation between the retail sector and Fraunhofer. Through this kind of joint experimentation, digitalization will become a genuinely useful tool to solve real problems in retail.”

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