THE GOOD, THE BAD, AND THE DYNAMIC: CHANGES TO RETAIL BUSINESS MODELS DURING COVID-19

Abstract

Crises, such as the COVID-19 pandemic, challenge the economy and require firms to become resilient to external change. During COVID-19, the retail industry faced double-edged consequences. While brick and mortar business models (BMs) were discontinued, online retail thrived. Extant BM research has investigated several crises; however, it still lacks an explanation of how BM change increases resilience to cope with crises. We analyze the BMs of 45 European retailers and the BM changes implemented during the COVID-19 pandemic and their influence on the retailers' revenue. We identify three types of retailers implementing different strategies to cope with the crises: the»good,« the»bad,« and the»dynamic.« These represent resilient BMs, un-resilient BMs, and BMs becoming resilient enabled by digital technology. We show how BM change creates resilience and performance benefits. For practice, we show how retailers adapted their BM to a crisis leveraging digital technology.