The economic turbulence spurred on by the COVID-19 pandemic has had a devastating impact on the retail sector. On and off lock-downs, as well as store customer restrictions, have pushed many brick and mortar retailers to the brink, and at the same time dramatically hastened the importance of e-commerce sales. Those who have survived best are those who were able to rapidly shift to and accommodate online sales. Making this transition, however, has not proven to be equally feasible for all firms. One key differentiator appears to be the growth strategy which the firm has adopted when it comes to its retail footprint. Firms have historically chosen among three primary retail growth strategies: company-owned, franchised, and wholesale/third-party. The question we pose is: What are the implications for the firm when it comes to building its e-commerce business depending on the growth strategy it has adopted? How easy is it to incorporate online sales and manage the digital customer experience if one has chosen to grow through company-owned vs. franchised vs. third-party stores?
In a traditional brick and mortar world, the principle variables that impacted the choice of growth strategy were control vs. cost/risk. E-commerce, however, has made that choice inherently more complicated. To better compare the ability of the three different retail growth strategies to deal with the digitalization, we look at the impact of moving the customer experience from physical to digital, and the sales channel from offline to online. In doing so, we highlight the experiences of three leading firms which represent each of the
