Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

The Future of Retail - Business Model Trend Report


Published on

Until recently, retail business models were considered one of the most invisible aspects of retail. But thanks to innovative companies like Amazon, Apple and Zara, business models are receiving considerable attention from consumers, media and retailers alike. Nurun’s report includes a thought-provoking look at six key trends, along with a series of provocative questions that will help retailers consider how they might evolve their current business model.

Published in: Business, News & Politics
  • Be the first to comment

The Future of Retail - Business Model Trend Report

  1. 1. The Future of Retail November 2012 | Business Models
  2. 2. Business Models | November 2012 2 Executive Summary Business models are no longer an invisible component of retail strategy. Changes in customer expectations and technology have spurred the development of innovative new business models that are shaping the future of retail.To help retailers navigate these changes, Nurun has prepared a report that identifies and describes six key business model trends: Trend 1: The conflicted consumer Retailers are struggling to adapt to a world of opposing consumer tensions. Trend 2: e-commerce converges with bricks-and-mortar (and vice-versa) Formerly separate business models are slowly amalgamating. Trend 3: Vertical integration makes a comeback Some of the most recent retail brands have embraced vertical integration from day one. Trend 4: Affiliate marketing has its moment A new wave of e-commerce built around affiliate marketing has emerged. Mini Trend 1: Paying for usage Temporary ownership of cars, dresses and toys is growing in popularity. Mini Trend 2: Please subscribe New automated subscription services are providing enhanced consumer convenience and product variety. Along with a thought-provoking look at each of these six trends, this report contains a series of provocative questions for each trend that will help retailers consider how they might evolve their current business model.
  3. 3. Business Models | November 2012 3 Manage the ambiguous future with strategic foresight Daily blog posts. Monthly magazines. Quarterly trend reports. Must-read books. Anyone who works at the intersection of technology and people is swimming in information.This data smog can make deciphering the implications of the latest tech and social developments difficult. One solution is strategic foresight, which can help you make sense of emerging trends and clearly evaluate your options for the future. It’s a tool to manage risk when facing ambiguity in the marketplace. Strategic foresight doesn’t predict the future, but it does help prepare you for it by envisioning a number of different, yet possible, future states in the market landscape 10+ years from now.These future states are often described as a set of scenarios, and they emerge from an analysis of current trends. So, as a simple example, the increasing popularity of pop-up retail spaces, combined with the high adoption of mobile devices, could develop into a future filled with transient storefronts.This scenario would be made possible due to the minimal wired infrastructure required for information and payment. The rapid uptake of technology means that our social lives, cultural experiences, policies, regulations, ecological landscape, and business models are increasingly intertwined.Through its very design, strategic foresight is built to accommodate complexity by considering trends from a multi- dimensional perspective. Steps of strategic foresight Trend scan Identify trend drivers Evaluate critical uncertainties Future scenarios Strategic implications Action plan Monitor trends 1 2 3 4 5 6 7
  4. 4. Business Models | November 2012 4 Why Retail Foresight? The Nurun Strategic Foresight team has launched a strategic foresight initiative to articulate the future of business-to-consumer (“B2C”) retail and commerce, and explore implications for Canadian and U.S. retailers.The scenarios we generate will give our retail clients the toolkit necessary to start imagining (and preparing for) the possible futures in the marketplace. The first of seven steps in the strategic foresight process involves trend scanning.The trends we capture will be published as a series of trend reports that focus on five domains of importance to both online and omni-channel retailers. This is the second of five trend reports, and it looks at retail through the lens of business models. Next will be a report on transactions and payments, followed by analytics.The culmination of trend scanning and subsequent phases will inform future scenarios in our final stratgic foresight report. For more information, you can follow the project on Nurun’s blog, Digital for Real Life or subscribe to our email list, Steps of strategic foresight Trend scan Identify trend drivers Evaluate critical uncertainties Future scenarios Strategic implications Action plan Monitor trends Marketing and Merchandising Business Models Transactions & Payments Analytics Emerging Technology Platforms Preparing for the Future of Retail: A Strategic Foresight Report 1 2 3 4 5 6 7
  5. 5. Business Models | November 2012 5 Introduction For many decades, business models were one of the most invisible aspects of retail. But changes in consumer culture, customer expectations, market forces and technology have spurred the development of new retail models. The resulting success and influence of companies like Amazon and Apple on the traditional retail landscape has resulted in considerable attention from consumers, media and retailers alike (Internet Retailer, 2012). Given the necessity of rethinking retail strategies in an era of innovative busi- ness models, Nurun has prepared a report that identifies six key trends. As a starting point, Nurun used the definition provided by Alexander Osterwalder andYves Pigneur in their book Business Model Generation: “A business model describes the rationale of how an organization creates, delivers and captures value.” Building on this, we defined value along three dimensions: · Customer (utility) · Business (financial) · Social (community impact) We also used Osterwalder’s business model canvas as a tool to help us un- derstand the key components of various business models and relationships between the different building blocks during our trend scan. For many established retailers, a recent challenge has been to try and seam- lessly integrate new business models with their existing retail approach. In the process, core aspects of traditional retail business models are being rethought, often out of necessity. New online revenue streams have added complexity to business models that were originally designed to deal only with straightfor- ward in-store retail transactions.This means finding new ways to drive profit and stay competitive in an omni-channel environment. Changes in consumer expectations and behaviours will continue to drive the evolution of new retail models. As evidenced by The Conflicted Consumer trend, many retailers are still struggling to adapt to a world of opposing con- sumer tensions, such as a desire for the benefits of both local and global retail. This confusion might be a necessary, but temporary aspect of the transfor- mation of retail.The e-commerce converges with bricks-and-mortar (and vice-versa) trend suggests that two formerly separate retail business models are starting a slow and uneven process of amalgamation. Just as with music or clothing, certain business models go in and out of fash- ion.The retail trend of Vertical integration makes a comeback demonstrates that extending an existing business model into new parts of the value chain can give it a new life. In other cases, new business models have been made possible by the Internet, explaining the Affiliate marketing has its moment trend. Along with these larger shifts in retail business models, Paying for usage and Please subscribe are two mini trends that we believe will persist over the long term and are worth watching closely. This report offers a thought-provoking look at each of the six trends men- tioned above, along with a series of provocative questions that relate to each trend. Defining Our Terms Given our expertise in the realm of digital retail, we defined retail marketing to include: • Product findability and discoverability • Recommendation and comparison tools • Social commerce • Issues relating to consumer privacy Our examination of merchandising trends focused on: • Pricing • Localization of assortment • Product presentation
  6. 6. Business Models | November 2012 6 A complete strategic foresight report that incorporates these six retail business model trends, along with key retail trends relating to marketing and merchandising, value exchange, analytics and emerging technology platforms, will be released in 2013. (Our first trend report on Marketing and Merchandising is available here.) The conflicted consumer eCommerce converges with bricks-and-mortar (and vice-versa) Vertical integration makes a comeback Affiliate marketing has its moment Paying for usage Please subscribe Major Trends Mini Trends Nurun Toronto found four major trends and two mini trends relating to retail business models: 1 2 3 4 1 2
  7. 7. Business Models | November 2012 7 Trend The conflicted consumer 1 3 42 1 Trend Consumer expectations for retailers continue to evolve due to a variety of social, economic and cultural factors.These factors include a greater degree of social re- sponsibility, a pressing need for convenience and a new awareness of shopping local in a global marketplace. In order to stay competitive and respond to new consumer demands, some forward-thinking retailers have developed innovative new business models. The result of this mutual influence is an ongoing dance between customer expecta- tions and new business models.This has helped to encourage the rise of the conflict- ed consumer, a development that has become more noticeable as startups, boutiques and niche retailers populate the marketplace and highlight these new consumer inclinations and points of tension. Everything vs. one thing Consumers appreciate the wide assortment and one-stop shop aspect of the “everything for sale” approach made popular by Walmart. At the same time, they also find that niche retailers like Lululemon or Dollar Shave Club provide them with an opportunity to display their sophistication or save significant amounts of money. As a result, the growth of both long-tail models and specialized niche retailers in the age of e-commerce has led to an increasing polarization in retail business models. Consumer vs. citizen Many people are now trying to satisfy a human desire to contribute to the greater community when they shop. In response, companies like Toms and Warby Parker have woven a commitment to social responsibility into the core of their business model.Toms donates a new pair of shoes to a child in need for every pair purchased. Warby Parker follows the same model, only with eyeglasses. Permanent vs. occasional retail Work pressures due to a challenging job market, along with a variety of related time constraints means that consumers are demanding an increasing amount of conveni- ence when they shop. One of the biggest attractions of online retail is an always open, 24/7 shopping environment.While convenient, e-commerce can also decrease the urgency of purchase. One response to this challenge is the creation of retail scarcity and novelty through location and product stock.This approach acknowledges that many consumers gain social status and pleasure from owning “limited edition” items.This helps to explain the continued popularity of pop-up shops that remain in a temporary location any- where from a few hours to a few weeks. Some stores, including Toronto’s Dough by Rachelle (Liu, 2012) and The Doughnut Vault in Chicago (2012), are taking this idea further, staying open only as long as they have inventory to sell. Hyper-local vs. mega-global Due to the popularity of farmer’s markets and a newfound focus on the merits of buying local, consumers have become more aware of the distance food travels to reach their plate. Recent developments have also sparked similar conversations about local versus global retail.
  8. 8. Business Models | November 2012 8 1 3 42Trend In the Canadian retail landscape, new entrants such as Marshalls, Nordstrom and Target serve as a reminder of the global reach of retailers. At the same time,Toronto- based website Shopcaster curates products from local indie stores that do not consider e-commerce to be their core strength. Meanwhile, recent entrant aims to combat the growing dissatisfaction felt by Canadian online shoppers when faced with high shipping costs and duty charges from American retailers (Silcoff, 2012). What new retail opportunities might emerge as a result of conflicting tensions in consumer attitudes and behaviours? How might you showcase specific products while also offering customers a wide array of options? What values and beliefs does your brand hold true? How might you incorporate sustainability and social responsibility practices into your business model? How might you cater to both convenience-seeking customers and those looking for unique products and experiences with exclusivity? What actions are you taking to make localization a part of your national or international retail strategies? FORWARD THINKING
  9. 9. Business Models | November 2012 9 Trend e-commerce converges with bricks-and-mortar (and vice-versa) 1 3 42 2 Trend Consumers have always formed their understanding of brands through a culmination of interactions and experiences.They expect consistency across touchpoints, despite the prolifera- tion of channels in recent years. The result is that after amassing more than a century of retail expertise following the emergence of the department store, many traditional bricks and mortar retailers have had to add an online component.While the goal is to offer customers a seamless omni-channel experience, a smooth transition from bricks to clicks has been difficult for all but a handful of retail- ers. New and improved in-store retail Despite the numerous challenges facing traditional retailers, having a physical location still provides many advantages. As Jerry Storch, Chairman and CEO of Toys ‘R’ Us argued dur- ing’s annual summit, “While there has been much focus on online-only shopping—and our own e-commerce sites have grown to a $1 billion business—the reality is that the vast majority of sales still occur in physical stores.” The trick has been finding the best way of combining e-commerce with in-store to create a connected retail experience.The first step is rethinking multiple pools of inventory for each channel (e.g. in-store, online, etc.) and instead shifting towards centralized or fluid inventory. Such a shift allows retailers to ship products between stores to meet customer demand, or provide “endless aisle” options through the use of in-store technologies. It also means giving custom- ers the option to buy online and pick-up in-store (B.O.P.I.S.) or buy online and return in store (B.O.R.I.S.). In doing so, previously separate supply chains are now merging in order to help retailers lower their costs.These and other related omni-channel tactics were discussed in our previous report on Marketing and Merchandising. Multi-Channel HIGHLOW HIGH LOW Seamless Omni-Channel Traditional Vertical Integration functional integration channelintegration Retail channel and department integration matrix “Managing customer service in e-commerce is a totally different job than managing customer service in bricks and mortar. There are different skillsets and rules and you have to understand what excellence means in each channel.” Dr. Donna Smith Professor in the Ted Rogers School of Retail Management, Ryerson University
  10. 10. Business Models | November 2012 10 1 3 42Trend A recent study from CrossView demonstrates that B.O.P.I.S. and B.O.R.I.S. provide opportunities for retailers to demonstrate superior approaches to customer service that are not possible with pureplay eCommerce (McCue, 2012).This explains why some retailers, are using drop shipping (consumers buy online, but products are shipped direct from the vendor to the purchaser).This allows for enhanced selec- tion and helps companies shift their warehousing and inventory costs to funding programs that improve the customer relationship.This strategy is not without risks, however, as it adds complexity into the value chain through a need to coordinate multiple organizations (both retailer and vendor). Meanwhile, some bricks and mortar retailers are also trying to enhance their in-store experiences, such as lululemon offering free weekly yoga classes in stores and show- rooms (lululemon athletica, 2012) and Reebok opening a gym in its NewYork store (Pinter, 2012). Making clicks more like bricks While pureplay e-commerce offers many advantages, consumers are still hesitant to fully embrace online shop- ping in categories where being able to touch or try on an item prior to purchase is considered central to the experience. But new options have emerged to help close the close the gap between online and in-store experiences, including virtual fitting tools like (2012). After taking a few basic measurements, will display garments on a representative version of the customer called a “FitBot.” New and nimble online retailers will continue to experiment with fresh approaches to retail, thanks to business models that have been built from the ground up. But for all their cutting edge approaches, certain online retailers are now realizing that e-commerce has limits and are starting to contemplate the previously unthinkable— a move into physical retail. Convergent retail made simple Emerging technology solutions are making it easier for smaller retailers to offer convergent retail solutions through platforms such as LightSpeed. LightSpeed integrates front-counter Point-of-Sale with eCommerce and also offers interactive sales tools via the iPad and mobile solu- tions (LightSpeed Retail Inc., 2012). In a recent Reuters article about the 2012 holiday shopping season, HSN Chief Executive Mindy Grossman noted that, “I still see people looking at their e-commerce strategy and saying mobile comes later. Actually, it should be the opposite.” (Bhattacharjee, 2012). “We really believe in the integration of online and offline. That’s why we offer the free monthly home trial—because we know that some guys need more than pictures. They need to touch and feel and try on the clothing.” Hicham Ratnani, CFO of Frank & Oak Inventory Customer Demand Online Channel Customer Retail Store Retail Store Inventory Inventory B.O.P.I.S. Buy Online, Pick-up In-Store B.O.R.I.S. Buy Online, Return In-Store Multi-Channel HIGHW HIGH LOW Seamless Omni-Channel Traditional Vertical Integration functional integration Vertical integration reduces the distance between manufacturer and customer
  11. 11. Business Models | November 2012 11 1 3 42Trend Shopify, meanwhile, makes the process of creating and managing a small online storefront as simple and seamless as possible, thanks in part to a recent shipping partnership with Canada Post (Bury, 2012).The growth of convergent retail platforms such as LightSpeed and Shopify now allow smaller retailers to focus on other aspects of their omni-channel retail strategy, such as findability (the ease in which customers can actively seek out an a retailer’s website), conversion (the activities designed to convert shoppers into buyers) and transactions (the ease in which customers can pay for goods and services). Are you ready for a world in which the distinction between online and offline channels no longer exists? Is your team ready to build seamlessness into online and offline, along with all the channels through which you deliver experiences? FORWARD THINKING
  12. 12. Business Models | November 2012 12 Trend Vertical integration makes a comeback 1 2 43 3 Trend Vertical integration is by no means a new business model—Ikea, Sony and Danier have spent decades bringing their manufacturing and retail operations in sync. Lately however, certain retail sectors have rediscovered vertical integration because it can offer a distinct competitive advantage when combined with other retail strategies. For Zara, vertical integration was crucial in creating a fast fashion business model that allows stores around the globe to stock new clothing twice a week. Manufacturers set up shop Companies that began as manufacturers are now morphing and extending themselves into the retail space.These include Apple (who started opening retail locations in 2001), and Lego, who has spent the past few years updating and expanding their retail presence (Wikipedia, 2012a).The move from making to selling requires moving away from drop shipping and shifting into customer experience and service, which usually requires outside expertise and significant investments. Moving into retail does allow the manufacturer to better align the brand promise with the customer experience and offer a complete assortment of products.This approach also increases profits, since the manufacturer no longer has to provide a discount to another retailer in order to carry their products. Conversely, retailers that do not produce their own products are finding that vertical integration can turn former partners into competitors. Think vertical from day one Some of the most recent innovative retail brands have embraced vertical integration from the start. These include Warby Parker, Frank & Oak and Shoedazzle. As venture capitalist Boris Wertz recently argued in TechCrunch, “By eliminating stores from the supply chain, these companies bring products directly to consumers from the factory without the bloat of the traditional retailer.This translates into high-quality products ... at significantly lower prices.” (2012). In some ways, vertical integration is the ultimate expression of a private label approach to retail. (For more thoughts on private labels and the rise of Sophisticated Frugality, see our previous trend report on Marketing and Merchandising.) “Historically, Canadian retail investment in technology has involved a relatively long cycle. The trouble today is that the technology in the consumer’s hands is better [than the retailer’s] and it’s refreshing faster.” Joe Jackman, CEO of Joe Jackman Brand Inc. r Demand Customer Customer Design & Manufacturing Retail Store S. up In-Store S. rn In-Store wholesale fulfillment Supporting B.O.P.I.S. and B.O.R.I.S. through fluid inventory
  13. 13. Business Models | November 2012 13 1 2 43Trend How are you approaching fulfillment, an often overlooked part of a vertical integration strategy, especially for e-commerce retailers? How might you extend merchandising into a new realm of product design and manufacturing? What is the role of e-commerce in a vertically integrated company? FORWARD THINKING Fulfillment beckons Another example of vertical integration can be seen in the launch of Amazon Lock- ers.These lockers serve as a convenient way for customers to receive and pick up shipments from self-serve stations, allowing Amazon to compete with the immediacy of bricks and mortar (Manjoo, 2012). In the future, vertical integration might mean eliminating the retail experience altogether, thanks to 3D printing marketplaces such as Shapeways (Shapeways Inc., 2012).
  14. 14. Business Models | November 2012 14 Trend Affiliate marketing has its moment 1 2 3 4 4 Trend Affiliate marketing was popularized thanks to Amazon’s widespread adoption of the technique in 1996 (Wikipedia, 2012b). Amazon helped drive book sales and improve its online reach by paying a commission to websites willing to embed custom widgets or otherwise link to specific books on their site. More recently, new business models have emerged that prioritize affiliate marketing, as this approach provides a fixed cost per new customer acquisition, among other advantages. Large-scale networks such as Commission Junction have also made it easier for retailers to quickly plug into a large and extensive database of relevant affiliates (Commission Junction Inc., 2012). The second wave of affiliate retail Despite lower prices and increased convenience, convincing consumers to shop online can still require a shift in habits and mindset, especially in Canada, where e-commerce adoption has been slower (eMarketer, 2012). Affiliate marketing can help with this shift, which explains why newer online retailers such as Ebates (Ebates Performance Marketing Inc., 2012), Upromise (Upromise Inc., 2012) and (2012) have built their business around affiliate marketing. Skimlinks (Skimbit Ltd., 2012) provides another approach, providing bloggers with an automated affiliate process by searching for keywords in blog posts and providing links to the products and services mentioned. As consumers spend increasing amounts of time online, it’s important for retailers to appear on the sites that their customers are already using.This is especially true of sites where customers tend to research new products. Affiliate relationships A successful affiliate marketing program requires a series of strong, personal partnerships between retailers and affiliates. In order to better incentivize and customize their affiliate program, Canadian health and beauty e-commerce retailer built an entirely new platform to manage their relationships with bloggers and deal sites (Banduk, 2012).This platform provides more control, access to real-time info, and helps offer more personalized and creative promotions to their affiliate network. “Affiliate programs are really great for getting better reach across the Internet.” Sameera Banduk, Marketing Manager, “When a customer is doing research on a product shopping engine, and you’re not there, that’s a core business issue. I think affiliate marketing will continue to be a important part of running an e-commerce business.” Sarah Trimble Associate VP, Interactive Marketing & Community, Sears Canada Large Retailer Affiliate (e.g. Blogger) omer traffic commission Large Retailer Affiliate (e.g. Vendor) traffic commission Affiliate versus reverse affiliate relationships
  15. 15. Business Models | November 2012 15 Are you able to provide affiliates with unique and exclusive offers on an ongoing basis to keep customers (and affiliates) interested? Have you considered integrating your affiliate marketing strategy with popular loyalty programs like AIR MILES? FORWARD THINKING Reverse affiliate Along with bringing affiliate marketing to prominence, Amazon has also developed a reverse affiliate program through their Marketplace. In this case, retailers pay Amazon a commission to list their products alongside the rest of the website’s comprehensive product assortment. also offers a related service (Sears Brands LLC, 2012). As with traditional affiliate marketing, the goal is to gain access to a wider audience. For Amazon or Sears, a reverse affiliate model provides another way to increase site monetization by selling access to their already sizeable customer base. Social commission Along with traditional approaches to affiliate marketing are sites that employ various forms of social commission.These include China’s Vancl Star (Daohen, 2011), sneakpeeq (2012) and Lockerz (2012), which was mentioned in our previous trend report on Marketing and Merchandising. In exchange for promoting specific products or services through social media ordinary consumers earn points that can be exchanged for discounts or cash. 1 2 3 4Trend
  16. 16. Business Models | November 2012 16 Mini Trend Paying for usage 1 Since Ford launched the Model T car in 1908, owning a vehicle has become one of the most visible status symbols for North Americans. But as Generation Y (Millennials) continues to face serious economic pressures, buying a car has lost its luster. As Josh Allan Dykstra argues in a July 2012 Fast Company arti- cle, a number of factors, including the popularity of cloud-based music services and alternate forms of transportation in urban centres, are helping to shape a new approach to ownership. Rachel Botsman and Roo Rogers provide a more detailed exploration of the evolution of ownership in their 2010 book What’s Mine IsYours:The Rise of Collaborative Consumption. Zipcar, zipdress, zipbag, ziproom This new paying for usage mentality helps explain the growth and popularity of Zipcar and other car sharing options. But the idea of short-term rentals is no longer limited to expensive items such as cars. It’s now possible to rent dresses (, handbags (, children’s toys ( and apartments ( Want to gain access to the private habits of influential cus- tomers? Be prepared to openly barter for this information. FORWARD THINKING 1 2Mini Trend Our research uncovered four significant trends in retail business models, along with a handful of smaller trends that do not yet warrant a full de- scription. However, we believe that both of the following mini trends merit inclusion in this report given their rapid uptake and popularity.
  17. 17. Business Models | November 2012 17 Mini Trend Please subscribe 2 In order to provide consumers with a reliable and convenient way to receive staple goods, a number of new automated subscription services have emerged. The business model for subscription retail is relatively straightforward, but has been tweaked in order to make it easy to return unwanted items. Cheese, wine and underwear of the month A wide variety of retail items are now available through automated subscriptions, including cheese (Monforte Dairy Company, 2012), men’s clothing (Frank & Oak, 2012), women’s shoes ( Inc., 2012), household products (, 2012), cosmetics (, 2012), diapers ( LLC, 2012), wine (Zagat Wine, 2012) and digital books (24symbols, 2012).Walmart Labs recently launched the Goodies Co. (Walmart Stores Inc., 2012), a monthly subscription service that delivers an inexpensive box of sample-sized servings of artisanal food products.The goal of the service is to encourage customers to order full-sized versions of their favourite new products. Subscription services tend to improve customer retention rates and provide a predictable source of income, as customers often create standing orders for staple goods.There is, however, additional pressure on subscription retailers to ensure a sufficient amount of relevance and novelty when including new items in order to maintain customer satisfaction and loyalty over time. 1 2Mini Trend “We realized that young men now spend $50-$150 per month on clothing or acces- sories, instead of $500 twice a year. It’s similar to how these men consume informa- tion. They use Twitter and Facebook and blogs instead of reading a gigantic book every six months.” Hicham Ratnani, CFO of Frank & Oak As part of our research, Nurun also considered evolving legislation that will continue to affect retail business models, including: Attempts at patenting user experience elements such as Amazon’s one-click checkout (Kalanda, 2012) The push for sales tax on online orders in the US through the Marketplace Fairness Act (Chen, 2012) The California transparency in supply chains acts of 2010 (Spuhler, 2010) New Crowdfunding legislation such as the Jumpstart Our Business Startups Act (JOBS) (Huhman, 2012) The legality of short-term rentals through services such AirBnB (Yglesias, 2012) and Uber (Auto Rental News, 2012) How legislation is responding to business model innovation How will you keep customers engaged once the initial novelty of subscribing wears off? FORWARD THINKING
  18. 18. Business Models | November 2012 18 What’s Next Methodology Our next report will look at retail trends through the lens of emerging transactions and payments, followed by analytics, and technology platforms. Once these trend reports are complete, we will move to the next phase of strategic foresight: identify- ing the driving forces underlying the trends.Those driving forces will inform future scenarios, leading to the last phases in this strategic foresight initiative to articulate the future of B2C retail and commerce. For more information you can follow the project on Nurun’s blog, Digital for Real Life. If you have any questions, or want to receive an email reminder when our next trend report is published, please contact The Nurun Strategic Foresight team performed a horizon scan using the “STEEPV” framework to locate current and emerging trends and signals in the following areas: Social,Technological, Economic, Environmental, Political, and Cultural Values.This scan generated over 60 relevant trends. These signals and trends were then clustered and sorted into six overarching trends. Each of these overarching trends required the support of three to five strong signals or examples. Some trends had an excess of signals—in those cases, excess signals were catalogued for future inclusion or consideration. Sincere thanks to the business model experts who graciously shared their insights with us for this report: Sameera Banduk Marketing Manager at Sameera is a key member of the team that brought the first Virtual QR Code Store to North America in April 2012. Sameera is also an organizer of e-commerce Camp Toronto events and believes that the opportunity for the growth of e-commerce in Canada is virtually endless. Katherine Hague CEO/Co-founder of ShopLocket Katherine is a graduate of the Schulich B.B.A. program and ran her own marketing consultancy throughout university where she worked with companies ranging from the Fortune 500 to startups. Prior to co-founding ShopLocket she was the Market- ing Manager for Toronto-based energy solution company and one of the first Shopify Theme developers.You can find Katherine online at katherinehague. com. Hicham Ratnani CFO of Frank & Oak Hicham has a background in engineering and worked for several years as a strategy consultant at Deloitte before co-founding Frank & Oak in 2012. As the company’s CFO, Hicham manages the technology and finance team, and was named one of Correction In our previous retail trend report on Marketing & Merchandising, Nurun described Krush as a retailer, when it is in fact a social discovery and recommendation site.We apologize for this inaccuracy.
  19. 19. Business Models | November 2012 19 Montreal’s Top 25 Emerging Entrepreneurs at the 2012 international C2 (Commerce + Creativity) Conference. Dr. Donna Smith Professor in the Ted Rogers School of Retail Management, Ryerson University Donna’s current research examines the influence of family business on retailer- vendor strategic partnerships. In September 2010 she won the Best Paper Award in the Doctoral Colloquium at the International Colloquium in Relationship Marketing in Henley-on-Thames, England. Donna was President of the American Collegiate Retailing Association (2006-2008), a global network of university professors who teach and conduct research in retailing. Sarah Trimble Associate VP, Interactive Marketing & Community, Sears Canada Sarah has been in marketing for over 10 years. Her marketing experience has covered both traditional and digital media, with roles at a major multi-national book publish- er along with Indigo and Sears Canada. In her current role, Sarah is responsible for the strategy, optimization and management of all digital marketing programs at Sears Canada, including the affiliate program. Sarah recently finished her Executive MBA at the Richard Ivey School of Business. The Nurun Strategic Foresight team will continue to monitor and collect new developments in business models to inform subsequent strategic foresight work, especially scenario development.
  20. 20. Business Models | November 2012 20 About Nurun Nurun is a global design and technology consultancy that works with some of the world’s most innovative companies.We create products and services for the connected world through a combination of human insight, new technology and smart thinking. Clients include Adidas, BBVA, Bouygues Telecom, Coca-Cola, Electronic Arts, General Electric, Google,The Home Depot,Tesla Motors, Sony and Walmart. Headquartered in Montréal and with 12 offices across North America, Europe, and Asia, Nurun has multidisciplinary teams of more than 1,200 anthropologists, designers, strategists and software engineers. Nurun is a wholly owned subsidiary of Québecor Média Inc., one of Canada’s largest tele- communications and media providers. Meet the Nurun Strategic Foresight Team Ryan Bigge As a Content Strategist at Nurun, Ryan Bigge combines over 12
years of experience as a freelance journalist with a passion for design thinking and interactive art. His writing has been published in the NewYork Times Magazine, Report on Business and the Toronto Star. Ryan recently spoke at SXSW Interactive about analog souvenirs and physidigital trends. Jen Chow As Nurun’s Design Strategist, Jen utilizes a diverse set of consumer research tech- niques to uncover insights and shape new opportunities for various retail clients. Jen recently co-authored a report on the future of consumer-to-business payments that focused on the Canadian banking industry as part of her work in OCAD University’s Master of Design Foresight & Innovation program. Jen’s work fuses her eclectic background in accounting and finance with her keen interest in sociocultural trends and technology. Kira Levine As Senior Retail Strategist at Nurun, Kira’s focus is on translating consumer needs into viable retail solutions, bridging both in-store and online capabilities.
She brings a unique blend of passion for retail with over nine years of experience in category and product management. She holds a Bachelor’s degree in Retail Management and an International MBA. Audrey Carr As Vice President, Strategy, Audrey guides Nurun’s cross-functional teams in identi- fying, framing and solving customer-centric opportunities across
our omni-channel retail clients, including Sears Canada,The Home Depot Canada, Acklands-Grainger and the LCBO. She also leads the development and evolution of Nurun Toronto’s strategic capabilities in design research, design & retail strategy, analytics and inter- action design.
  21. 21. Business Models | November 2012 21 Sources 24symbols. (2012). 24symbols. Retrieved November 26, 2012, from http:// (2012). Retrieved November 26, 2012, from https://www. Auto Rental News. (2012, January 11). Legislation OKs Peer-to-Peer Car Sharing in Oregon - Fleet Insurance. Retrieved from nel/ Fleet-Insurance/News/Story/2012/01/Peer-to-Peer-Car- Sharing-Now-Legal-in- Oregon.aspx Banduk, S. (2012, November 6). Interview with Sameera Banduk from Bhattacharjee, N. (2012, September 18).Walletless Shopping Still a Dream This Holiday. Reuters. Retrieved from http:// retail-summit- mobile-idUSBRE88G0Z020120918 Bury, E. (2012, October 5). Shopify Partners with Canada Post to Turn Brick- and-Mortar Into Brick-and-Click. BetaKit. Retrieved from http://betakit. com/2012/10/05/shopify- partners-with-canada-post-to-turn-brick-and-mortar-into- brick-and-click Chen,T. (2012, August 7). Small Business And Internet Sales Tax. Forbes. Retrieved from moneybuilder/2012/08/07/small-business-and- internet- sales-tax/ Commission Junction Inc. (2012). CJ -–Your Performance Marketing Partner. Retrieved November 26, 2012, from Ebates Performance Marketing Inc. (2012). Coupons, Promo Codes and Cash Back Savings - Retrieved November 26, 2012, from eMarketer. (2012, October 19). Retailers in Canada Make Strides in the e-commerce Channel. Retrieved November 26, 2012, from http://www.emarketer. com/ (S(yfpqyw55tpu1ag45nnu4gdjl))/Article.aspx?R=1009427 (2012). – Virtual Fitting Room. Retrieved November 26, 2012, from Frank & Oak. (2012).Welcome – Frank & Oak. Retrieved November 26, 2012, from Huang, D. (2011, March 25).Vancl Tries Out e-commerce 2.0 : BeijingToday. Retrieved November 26, 2012, from http:// tries-out-e- commerce-2-0 Huhman, H. R. (2012, April 5). JOBS Act to Jumpstart the Job Market. Forbes. Retrieved from sites/work-in-progress/2012/04/05/jobs-act- to-jumpstart- the-job-market/ LLC. (2012). Diaper Bundles – Retrieved November 26, 2012, from Internet Retailer. (2012).Top 500 Guide.The Top 500 List – Internet Retailer. Retrieved November 26, 2012, from
  22. 22. Business Models | November 2012 22 Kalanda, R. (2012, March 31). Does Amazon’s “One- Click” Success Mean Business Method Patents for All? e-commerce News. Retrieved from http://www. LightSpeed Retail Inc. (2012). LightSpeed Retail Point of Sale (POS). Retrieved November 26, 2012, from http://www. Liu, K. (2012, June 14).The Beast is Selling Back-alley Donuts.The Grid TO. Retrieved from life/food-drink/the-beast-is-selling-back- alley-donuts/ Lockerz. (2012).Top Finds From Friends & Celebrities – Lockerz. Retrieved September 11, 2012, from http:// Lululemon Athletica. (2012). ComplimentaryYoga Classes – The Gift ofYoga From Lululemon Athletica. Retrieved November 26, 2012, from http://www.lululemon. com/ community/giftofyoga Manjoo, F. (2012, July 11). Amazon same-day delivery: How the e-commerce Giant Will Destroy Local Retail. Slate Magazine. Retrieved from cles/ business/small_business/2012/07/amazon_same_day_ delivery_how_the_e_com- merce_giant_will_destroy_ local_retail_.single.html McCue,T. (2012, July 31). Best Ways to Combat Showrooming Trend. Forbes. Retrieved from http://www. com- bat-showrooming-trend/ Monforte Dairy Company. (2012). Monforte Subscription Offering. Retrieved November 26, 2012, from http://www. offering.html Pinter, D. (2012, August 22). Reebok Opens Fitness Focused Retail Store and Gym in NYC [Pics]. Retrieved November 26, 2012, from reebok- opens-fitness-focused-retail-store-and-gym-in-nyc-pics. html (2012). Canadian Store Deals, Coupons, and Sale Promotions – Retrieved November 26, 2012, from http://www.redflagdeals. com/ Sears Brands, LLC. (2012). Seller Portal – Account Selector. Retrieved November 26, 2012, from https://seller. jsp Shapeways Inc. (2012). Shapeways – Make & ShareYour Products With 3D Printing. Retrieved November 26, 2012, from Inc. (2012).Women’s Shoes, Handbags and Jewelry – ShoeDazzle: Your Personal Stylist – ShoeDazzle. com. Retrieved November 26, 2012, from http:// www. Silcoff, S. (2012, June 18).What Keeps Online Retail in Canada From Clicking? The Globe and Mail.Toronto. Retrieved from on- business/what-keeps-online-retail-in-canada-from-clicking/ article4178807/ Skimbit Ltd. (2012). Skimlinks – Affiliate marketing made easy – content monetization – Skimlinks. Retrieved November 26, 2012, from sneakpeeq. (2012). sneakpeeq – Style, Home and Gourmet Food DiscoveriesYou’ll Love. Retrieved November 26, 2012, from
  23. 23. Business Models | November 2012 23 Spuhler, B. K. (2011, September 30). Compliance with California Transparency in Supply Chains Act of 2010. Corporate Compliance Insights. Retrieved from http:// compliance-with-the-califor- nia-transparency-in-supply- chains-act-of-2010/ The Doughnut Vault. (2012).The Doughnut Vault. Retrieved November 26, 2012, from http://thedoughnutvault.tumblr. com/ (2012).TOPBOX – Luxe Beauty Samples Delivered toYou in a Beautiful Box Each Month. Retrieved November 26, 2012, from Upromise Inc. (2012). Upromise by SallieMae. Retrieved November 26, 2012, from welcome Walmart Stores Inc. (2012).Welcome to – Retrieved November 26, 2012, from https://www. Wertz, B. (2012, September 29).The Next Big E-Commerce Wave:Vertically Inte- grated Commerce.TechCrunch. Retrieved from the-next-big-e-commerce-wave-vertically-integrated- commerce/ Wikipedia. (2012b November 21). Affiliate Marketing – Wikipedia, the Free Encyclopedia. Retrieved November 26, 2012, from filiate_ marketing Wikipedia. (2012a November 26). Lego – Wikipedia, the Free Encyclopedia. Retrieved November 26, 2012, from http:// Yglesias, M. (2012, June 5). Is Airbnb Illegal? Why Hotels Are So Upset AboutYou Renting a Bedroom to a Stranger. Slate Magazine. Retrieved from http://www.slate. com/articles/ business/moneybox/2012/06/is_airbnb_illegal_why_ hotels_are_so_up- set_about_you_renting_a_bedroom_ to_a_stranger_.html Zagat Wine. (2012).The Zagat Wine Club – Zagat Wine. Retrieved November 26, 2012, from http://www.