Retail Strategy in the Age of Retail Apocalypse – Exploring the Role of Customer Experience Orientation on Retail Performance

The retailing industry is in constant change and consequences of the digitalisation are visible through dramatic shifts in closing numbers of physical stores. However, in this age of “Retail Apocalypse”, different retailers with different retail formats show different opening/closing conduct. From a competitive strategy view, cost-oriented retailers such as discounter or warehouse clubs show increase in openings, whereas differentiation-oriented retailers such as apparel or luxury retailers show a decline in their store numbers. At the same time, the notion of customer experience emerges as the new imperative in the industry and underlines a new principle to follow in the whole digital transformation process. For retailers, it is now key to generate distinctive customer experience to succeed and comply to the new rulebook of the industry. However, investigating a retailer’s customer experience orientation in the context of opening/closing behaviour remains an open topic in retail research so far. Through a mixed-method approach, this study investigates the relationship between a retailer’s customer experience orientation and retail performance (opening/closing of stores). Findings show on the one hand a possible relation between store openings (closures) and a retailer’s low (high) customer experience orientation and on the other hand a consistency in retail strategy, aligning competitive strategy, customer experience orientation, price orientation, profit strategy and retail format. Implications open further questions on the underlying reasons for the potentially increased vulnerability of high customer experience-oriented retailers