A new column in Harvard Business Review posits an interesting theory about the Amazon-Whole Foods deal.
According to columnist James Heskett, the wheel of retailing is a concept that has been used to describe phenomena in which retailers use low-price strategies to build market share, to the point where the goal shifts from attracting new customers to building margins and profits through higher prices. This creates room for retailers with new low-price business models to create a further turn of the wheel.
Heskett says Amazon’s success raises questions about the future of retailing. Is an “Amazon 2.0” even now in the early stages of design and introduction? Is the wheel of retailing any longer a valid or helpful concept?
Read the column by clicking here.