Unlocking chaotic lock-ins : Swedish retail chains’ changed strategies and operations in the wake ofthe pandemic

The 2020’s will probably be remembered in history as a “crisis decade” and industries such as the retail sector have been hit hard by the Covid-19 pandemic. The pandemic is a crisis that has differed from previous crises caused by for example economic factors, as it is much more complex, is characterized by an increased volatility and unpredictability. This, triggering a restructuring of the economy and retail sector. Even before the pandemic, retailers’ strategies and operations were changing due to digitalization (Hagberg, Sundström & Egels-Zandén, 2016) and increasing competition from pure e-commerce players. In the wake of the pandemic, there has been signs that the Swedish retailers facing the greatest challenges have been store chains. However, the challenges have differed depending on their product offering. In this study we address the following research questions: 1) Which opportunities have emerged in the wake of the pandemic for retail chain operations? and 2) Which mistakes from the past have been brought to light in the wake of the pandemic and how are retail chains addressing them? The aim of the paper is to investigate how retail chains have responded to change, adapted to new conditions, and recovered in the wake of the pandemic. In doing so, it identifies the principal lock-ineffects1 and how they have been replaced with new strategies and operations. In this context, the pandemic crisis is viewed as a turning point, which while it increases ambiguity and volatility also provides opportunities for creativity and innovation by reconfiguring the strategies and operations of retailers. Methodologically we present retail chains’ recovery strategies and operations from the perspective of before and after the pandemic, identifying lock-in effects and how such effects have been released in the wake of the pandemic. In this presentation, we analyze empirical data from seven Swedish retail chains in fashion/sport, DIY, furnishing, and electronic devices using in-depth interviews with 12 senior managers at the highest level of each company. The study is unique in that the empirical data consists of five in-depth interviews with each respondent (60 interviews), performed between January 2022 – September 2022. Each interview runs between 60-90 minutes, is recorded audio/visual, transcripted and analyzed, rendering very rich and in-depth empirical data. The authors use chaos and resilience as theoretical framework. The concept of resilience generally means the capacity to recover swiftly from difficulties or adverse conditions. There is a great amount of literature available on building a resilient organization. Such an organization can withstand changes in its environment and still function either without having to adjust or adapting to new conditions in a manner that better suits the new environmental conditions (McCarthy, Collard & Johnson, 2017). Chaos theory is suitable to examine the dynamic and nonlinear unfolding of how order emerges from a crisis (Lewin, 1999; Speakman & Sharpley, 2012; Thiétart & Forgues, 1995; Waldrop, 1992). This perspective is critical to 1 Inherited innovations in the past that had a lasting effect, even though occurred changes in the conditions may have made the initial response redundant. disentangle the complexity of crises for the retail sector characterized by the interaction of multiple factors, the effects of which are not easy to predict. This can help us to better understand how retail managers respond to the ambiguity and volatility of a crisis affecting the juncture of the retail sector with allied systems and structures (e.g., supply chain, urban structure, etc.). From this standpoint, retailing can be seen as a complex adaptive system of interactions, exchanges, and relationships. These interchanges make up a chaordic system: that is a complex adaptive system of dynamic connections between elements that form a unified whole, whose behavior is simultaneously unpredictable (chaotic) and orderly (Olmedo & Mateos, 2015). A crisis increases complexity and volatility by causing turbulence to the retail environment, until ‘self-organization’ takes place with order re-emerging out of a random phase (Boukas & Ziakas, 2014). From a resilience-building standpoint, by viewing retail chains as chaordic adaptive systems, we can comprehensively examine and better understand how such entities react during crisis. Preliminary findings indicate different recovery strategies and changed operations related to the specific retail field that the chains operate in but also depending on existing working-from-home practice and whether fixed store settings are owned or rented. Furthermore, the study brings insights into how selforganization took place regarding business operations. The study contributes to the retailing field by bringing light to how stakeholders adapt to change and self-organize recovery strategies for greater resilience. Recovery management is in this light, a balancing act between adaptation to change and stability. References Boukas, N., & Ziakas, V. (2014). A chaos theory perspective of destination crisis and sustainable tourism development in islands: The case of Cyprus. Tourism Planning and Development, 11(2), 191-209. Hagberg, J., Sundström, M., & Egels-Zandén, N. (2016). The digitalization of retailing: an exploratory framework. 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