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Dynamic capabilities in the Realisation of

omnichannel
realisation of retailing

omnichannel retailing
Birgit Andrine Apenes Solem 21
School of Business, University of South-Eastern Norway–Campus Vestfold,
Tonsberg, Norway Received 21 December 2021
Revised 11 January 2022
Jan Ivar Fredriksen 9 June 2022
Accepted 13 July 2022
School of Business, University of South-Eastern Norway–Campus Drammen,
Drammen, Norway, and
Øystein Sørebø
University of South-Eastern Norway–Campus Ringerike, Honefoss, Norway

Abstract
Purpose – Omnichannel retailing emphasises the interplay between channels to provide seamless customer
experiences across shopping journeys but is challenging for retailers to implement. This research explores the
necessary actions and dynamic capabilities needed of retailers to create, extend and modify the organisational
resource base required for realising omnichannel retailing.
Design/methodology/approach – A qualitative exploratory design with in-depth interviews of Generation
Z customers and retail firms was used to provide insights into the dynamic capabilities necessary for obtaining
omnichannel retailing.
Findings – This research elaborates on the dynamic capabilities needed for omnichannel solutions related to
(1) the underlying technology (i.e. develop an Enterprise Resource Planning (ERP) system and online store), (2)
customer experience optimisation (i.e. develop product delivery, return routines, supply chain management,
curated exhibitions, showrooms and pop-up stores), (3) internal and external collaboration (i.e. collaborate
across business units, strengthening the core leadership team and collaborate and align with service ecosystem
partners and (4) overall omnichannel functionality (i.e. establish a customer-oriented retail culture, and
integrate marketing communication and customisation through data exploration).
Originality/value – This research enriches the retailing literature on omnichannel solutions and responds to
the need for theoretical anchoring by applying the dynamic capability perspective to address actions useful for
realising omnichannel retailing.
Keywords Omnichannel retailing, Dynamic capabilities, Retail firm activity, Channel management
Paper type Research paper

1. Introduction
Digital technologies have broadened interactions between retail firms and their customers,
thereby blurring the boundaries between offline and online existence (Brynjolfsson et al., 2013;
Tueanrat et al., 2021). Since customers have become more experienced with digital technologies
(Immonen and Sintonen, 2015), they are no longer satisfied with companies that operate in
isolated channels, thus expecting their purchase experiences to be completely integrated across
channels (Piotrowicz and Cuthbertson, 2014; Barbosa and Casais, 2022). This phenomenon has
generated the concept of omnichannel retailing, which emphasises the interplay between
channels to provide customers with seamless experiences (Voorhees et al., 2017; Jocevski et al.,
2019; Chang and Li, 2022), often explained as an “all channels together” solution (Cui et al., 2021;
International Journal of Retail &
Picot-Coupey et al., 2016). The omnichannel solution provides a holistic purchase experience Distribution Management
(Quach et al., 2020), whether the customer enters a physical store, navigates through the website Vol. 51 No. 1, 2023
pp. 21-38
or uses the smartphone to search for products (Barbosa and Casais, 2022). Omnichannel © Emerald Publishing Limited
0959-0552
retailing allows customers to access, buy and receive products from all available and fully DOI 10.1108/IJRDM-12-2021-0599
IJRDM integrated channels (i.e. from brick-and-mortar stores to an array of digital channel solutions;
51,1 Verhoef et al., 2015). As such, online and offline channels complement each other, conveying a
sense of continuity, which is highly valued by the consumers, leading to satisfaction, loyalty
and favourable word of mouth recommendations (Kumar and Reinartz, 2016; Leroi-Werelds
et al., 2014; Quach et al., 2020; Barbosa and Casais, 2022).
Consumer’s expectations have increased the pressure on retail companies to integrate all
channels (Cook, 2014; Gallino and Moreno, 2014; Herhausen et al., 2015), with a need to move
22 from a multichannel solution towards an omnichannel solution (Beck and Rygl, 2015; Barbosa
and Casais, 2022). Realising omnichannel retailing is challenging for practitioners (Hajdas et al.,
2020) because of the need to develop appropriate actions, integrated systems of applied
platforms and digital solutions to facilitate seamless and interchangeable channel use (Hansen
and Sia, 2015). The operational perspective of omnichannel implementation has been limitedly
analysed in the literature (Galipoglu et al., 2018), except for the recent study by Barbosa and
Casais (2022). These authors point to barriers and demonstrate how retail companies overcome
these barriers through integration of information technology, accomplishment of organisational
changes and optimisation of customer feedback. As Barbosa and Casais’ (2022) study emerged
from Portuguese case studies of retail companies, studies from other countries are considered
useful and welcome because of the diversity of customer expectations, the maturity of digital
transformation and the stage of omnichannel implementation in each country.
There is still a need for research about how the transformation process of omnichannels
occurs (Barbosa and Casais, 2022; Hajdas et al., 2020). Chen et al. (2018) and Lehrer and Trenz
(2022) argue that more research is needed to explore the critical capabilities needed to achieve
omnichannel business from technological, organisational and market perspectives. In this
study, we contribute to the existing research by providing more insight into key factors in
overcoming omnichannel challenges and for implementing omnichannel solutions by
highlighting dynamic capabilities necessary for realisation.
Moreover, extant literature has to a certain extent focused on the customers’ perspective, e.g.
interests and expectations in obtaining online convenience (Duarte et al., 2018) and seamless
experiences (Gasparin et al., 2022; Li et al., 2018; Chang and Li, 2022), which inspired our research.
We conducted a two-phased study, first by interviewing Generation Z customers about their
current experiences with and expectations of seamless retail solutions. Second, by interviewing
retail business firm managers and consultant experts for their opinions on the abilities and
routines needed for obtaining omnichannel retailing and fulfilling the customers’ expectations.
Consequently, the present research contributes to a better understanding of the dynamic
capabilities that retailers must develop to overcome omnichannel challenges and fully realise
omnichannel solutions that meet customer expectations. Our paper addresses the following
research question: What dynamic capabilities are critical in realising omnichannel retailing?
The following sections outline the theoretical framework used to highlight the concept of
omnichannel retailing. Next, we introduce the dynamic capability perspective and offer an
overview of what constitutes dynamic capabilities and the principles for utilising these
capabilities in realising omnichannel retailing. We then explain our methodological approach
to our empirical studies, i.e. a preliminary and a primary exploratory study. Lastly, we
thoroughly discuss the results, elaborate on the implications of our two studies for
researchers and practitioners, and address both the limitations of our research and avenues
for future research on omnichannel retailing.

2. Conceptual framework and theory

2.1 The concept of omnichannel retailing
From a historical perspective, the conceptual development of channel approaches in retailing
can be characterised by their level of integration—from unichannel, via multichannel to
omnichannel—ranging from low-level to high-level integration (Beck and Rygl, 2015; Realisation of
Ailawadi and Farris, 2017). We understand omnichannel retailing as “all-inclusive” or “fully omnichannel
integrated” (e.g. Brynjolfsson et al., 2013; Verhoef et al., 2015; Xu and Cao, 2019), thus
representing the next developmental step after multichannel retailing. The purpose of
retailing
omnichannel retailing is to offer customers an optimal experience through unified commerce
(Brynjolfsson et al., 2013; Rigby, 2011), thereby enabling them to move seamlessly between
channels during one integrated purchasing process (Cai and Lo, 2020; Verhoef et al., 2015).
Ideally, omnichannel retailing achieves customer value through efficient and frictionless 23
integration of multiple touchpoints (Larke et al., 2018; Barann et al., 2020). For example, when
employees in physical stores have full access to customer history data, they can provide
relevant goods and services, consequently facilitating more personalised and positive
customer experiences throughout all touchpoints of the customers’ journey. Enhanced digital
user behaviour permits digital customer behaviour in more touchpoints along the customer
journey (Gasparin et al., 2022), involving showrooming (Rapp et al., 2015), webrooming
(Verhoef et al., 2015), click-and collect and click-and-reserve solutions (H€ ubner et al., 2016b).
Customers may also apply digital platforms and channels for searching, and after-sale
activities (e.g. complaints, word of mouth and customer reviews) after shopping in a brick-
and-mortar store. Customers leave behind large amounts of information in every channel;
therefore, retail firms with omnichannel solutions have a large amount of stored data. The
ultimate goal is to generate real-time information from the data stored in an ERP system,
which is capable of offering individual and customised experiences throughout all channels
(Barbosa and Casais, 2022). Here, price and information integration should also be identical
regardless of the channel (Chen et al., 2018). More than ever, changes in customer preferences
towards digital behaviour actualise omnichannel solutions for communication and sales
campaigns (Chen et al., 2018; Larke et al., 2018), increasing sales (Barbosa and Casais, 2022)
and providing synergy across channels (Xu and Cao, 2019). In ensuring an optimal
omnichannel retail solution, retailers must know how to utilise vital material resources, such
as infrastructure and software, and immaterial resources, such as business model
understanding and digital competence amongst employees (Barbosa and Casais, 2022).

2.2 Dynamic capabilities needed to realise omnichannel retailing

Implementing an omnichannel strategy has significant implications not only for customers’
interactions and transactions with the firm but also for the retail firm’s resources and
capabilities (Lehrer and Trenz, 2022). Our study is anchored to the theoretical perspective of
dynamic capabilities (Teece et al., 1997), which is built on evolutionary economics and
extending the resource-based view (Barney, 1996; Augier and Teece, 2009; Kurtmollaiev,
2020). Dynamic capabilities are those abilities needed to create, extend and modify the
organisational resource base, necessary for organisational change (Teece et al., 1997; Helfat,
2007; March and Simon, 2005). Here, it is central to understand how people interactively
organise and utilise the resource base (March and Simon, 2005) and develop appropriate work
routines (Helfat, 2007). According to Teece et al. (1997), dynamic capabilities constitute the
firm’s ability to integrate, build and reconfigure internal and external competences to address
rapidly changing environments, and the organisation’s ability to achieve new and innovative
forms of a competitive advantage given path dependencies and market positions. This
perspective on dynamic capabilities includes an individual’s regularly emerging intentions to
change the status quo. Based on the organisational resource base, it, for example, implies a
manager’s influence over the resources and routines of employees. Arguably, a central
element in “moving” a retail firm’s channel solutions from multi-to omnichannel is changing
the retail firm’s involved managers and employees’ perspectives and work routines.
Omnichannel retailing requires certain capabilities (i.e. both ordinary and dynamic),
exemplified by retail software systems that are fully integrated and unify data on products,
IJRDM customers, shopping and communication, to be accessible across online and physical
51,1 channels (Pedersen et al., 2018, p. 6; Beck and Rygl, 2015). For example, following H€
ubner et al.
(2016a), how logistics are reorganised through development and modification by focussing on
last mile order fulfilment and delivery may be considered a dynamic capability in becoming
an omnichannel provider.
The infrastructure of existing systems must be exchanged or fully integrated to optimise
the realisation of omnichannels (Barbosa and Casais, 2022). Even though the one-time cost
24 seems high when it comes to the work of combining new channels with the existing, Larke
et al. (2018) argued that omnichannel retailers must arrange an entirely strategic
implementation process to avoid asymmetric integration. To implement omnichannel
solutions, there is a need for organisational changes involving interdepartmental processes,
which are vital to generating interactions and thus avoiding isolated work related to various
channels (Piotrowicz and Cuthbertson, 2014; Barbosa and casais, 2022). Such a strategic
implementation process entails dynamic capabilities as it generates the creation, extension
and modification of the organisational resource base for optimal omnichannel solutions. As
Schrey€ogg and Kliesch-Eberl (2007) argued, central to dynamic capabilities are acting and
practicing, while Teece (2012) claimed that certain dynamic capabilities may be based on the
skills and knowledge of a few executives (e.g. employees) in a firm. There is still a lack of
knowledge about the key factors needed for successful omnichannel integration (Galipoglu
et al., 2018; Barbosa and Casais, 2022). Retail companies need to change, which implies
restructuring the whole organisation, requiring integrated processes and focussing on the
customer as the core of the strategy (Barbosa and Casais, 2022). In this paper, we integrate the
dynamic capability framework to omnichannel solutions to provide a general understanding
of necessary organisational processes, work routines, actions and collaboration underlying
the omnichannel strategies employed by retail firms and the capabilities necessary for the
executing managers and employees. Building on the dynamic capability perspective (Teece,
2012), we provide insights into the actions and dynamic capabilities needed for retail firms to
successfully execute omnichannel retailing.

3. Methodology
3.1 Research setting, methods and case descriptions
An exploratory research design including a qualitative approach was applied to our two
studies (Kvale and Brinkmann, 2015). The preliminary study yielded insights from the
customer side, representing Generation Z (those born between the mid-to-late 1990s and the
early 2010s; Williams, 2015) and concentrated on expectations of omnichannel solutions
throughout the shopping journey, particularly which solutions facilitate seamless customer
experiences. Based on the findings from this study, we yielded useful insight into factors for
further elaboration in the primary multi-case study, from the retail provider’s perspective.
The primary study involved in-depth interviews with five retail firm managers from
experienced Norwegian retail firms and one expert from an IT consultant company. The main
criterion for selecting those retail firms was their experiences with well-planned omnichannel
strategies. The firms had to sell online and offline with the integration of channels to assure
omnichannel conceptualisation. Diverse retail areas were represented by the selected retail
firms, spanning from cosmetics to products for agriculture and gardening, branded clothing,
electronics and knitting and needlework. The cosmetics retailer is a chain with a global
presence, operating in 69 countries, with approximately 3,000 physical stores and 10,000
employees. The agriculture and gardening provider operates as a cooperative owned by
about 41 thousand farmers. The cooperative has about 104 physical stores throughout
Norway, serving farmers with technology and equipment. It is also present in Sweden as a
subsidiary, with 110 physical stores serving the same target group. The brand clothing store
provider originated in the USA and was established in 1949. It now operates as a multi- Realisation of
national retailer of clothes and accessories for men, women, teens and children. Today, the omnichannel
company operates in 70 countries and its products are available in 4,000 retailer- and 590
brand stores worldwide. The electronics retailer operates as a market leader in the Nordic
retailing
countries, with retail established in Norway, Sweden, Denmark and Finland, in addition to
franchise operators in Greenland, Iceland and the Faroe Islands. This electronics retailer
employs over 10,000 people in the Nordic countries and 4,000 in Norway, operating 140
physical stores in Norway. The provider of knitting and needlework is a national provider 25
through its online store, with one physical local store in a middle-size town of Norway, having
eight employees, including one responsible for the online store. As such, the multi-case study
contains both multinational, national and local retailers. All cases have both brick and click
stores, the possibility of returning online purchases in brick stores and social media pages on
Facebook, Instagram and YouTube. Four out of five retailers are also present on LinkedIn. All
of the retailers were considered to be at the maturity stage of implementing omnichannel
solutions; thus, they were able to reveal the barriers and opportunities for improvements in
their current implementation processes.

3.2 Data collection and informant descriptions

The preliminary study, conducted in February 2020, involved interviews with 30 university
students enrolled in a retail management course, representing Generation Z. The insights
gained from these interviews concerning customer expectations in obtaining seamless
experiences pointed to factors necessary for optimal omnichannel solutions from retailers.
Hence, we wanted to elaborate on these factors and the dynamic capabilities needed from the
retailers’ perspective. Purposeful convenience sampling (Strauss and Corbin, 1990) was used to
recruit the informants from the retailing sector and we arranged in-depth interviews with five
retail business managers and one IT consultant as key informants because of their positions in,
or relations with, the retail companies described above, with omnichannel strategic work and/or
experiences with CRM, ERP systems and big data. A semi-structured interview guide included
interesting concepts revealed from the customer interviews as well as concepts extracted from
the existing literature on omnichannel phenomena. These extracted concepts included issues
such as perceived challenges of becoming an omnichannel retailer and experiences with the
implementation process (Barbosa and Casais, 2022; Cao, 2019), together with abilities and work
routines necessary for sensing, seizing and re-configuring omnichannel realisation (Teece et al.,
1997; Teece, 2012). The study allowed us to compare and contrast similarities and differences in
the retail firms actions to create, extend and modify the organisational resource base to realise
omnichannel retailing (Palinkas et al., 2015).
The key informants were invited to participate via email and follow-up phone calls, and
the interviews were conducted in April 2020. Four of the interviews were organised in person
at the informants’ workplace, while the other two interviews were conducted digitally (by
Skype for Business); each interview lasted 45–55 min. Probing and follow-up questions were
deployed to delve deeper into the informants’ responses (e.g. regarding human capital and
competence, technology, time and infrastructure), which permitted the openness and
flexibility needed to further explore the informants’ diverse opinions, views and emergent
insights (Edwards and Holland, 2013). The in-depth interviews were recorded, and all
interviews were transcribed verbatim, after which they were deleted due to anonymity and
privacy considerations [1]. Table 1 outlines the key informants and their roles and positions.

3.3 Data analysis

The in-depth interviews were coded and analysed in NVivo 12 software. First, the data were
categorised according to pre-defined etic [2] codes and temporal bracketing principles
IJRDM Key informants Role and position
51,1
Pre-study
Informants Students 20–30 years of age – representing Generation Z
(N 5 30)
Main study (N 5 6)
26 Informant 1 E-commerce manager, with experience in webshop development
Retail manager
Informant 2 E-commerce manager, with experience in specialist trading, channel integration of
Retail manager webshops, and brick-and-mortar shops
Informant 3 Marketing manager in a clothing chain, with experience related to customer service and
Retail manager digital marketing, and social media strategies
Informant 4 Information systems manager in a retail firm operating in a global market, responsible
Table 1. Retail manager for the software and customer databases of the firm
Key informants and Informant 5 CEO and owner of a medium-size retail firm, with experience in brick-and-mortar stores
characteristics of the Retail manager but now expanding to online platforms through a webshop solution
retail firm managers Informant 6 Digital consultant for a media agency, with experience related to CEOs and CEMs, and
and the retail expert Retail expert who advises on online store development for retail managers

(Langley, 1999). In this process, we grouped conceptually linked data and reduced them to a
set of meaningful concepts (Glaser and Strauss, 1967). Customer expectations (from
Generation Z) based on first-order statements generated the analysis of second-order
categories of expectations towards retailers, on how they were expected to optimise
omnichannel retailing for seamless customer experiences. Contrasts and challenges reported
by retail managers and the IT consultant positioned in central roles yielded useful data based
on explanations of the status quo related to omnichannel strategies, implementation,
activities and experiences. Our research was based on a systematic search for meaning
(Savin-Baden and Major, 2013, p. 435). By combining open coding with pre-defined coding of
concepts and categories extracted from the literature, we developed first-order statements to
describe the informants’ experience with the omnichannel implementation process, barriers
perceived as challenging and abilities and routines necessary for sensing, seizing and
re-configuring new omnichannel opportunities. Then, based on the first-order statements,
axial coding was employed to derive insights, in turn leading us to aggregate a list of eight
second-order categories (Alvesson and Sk€oldberg, 2018) of underlying dynamic capabilities
needed for omnichannel optimisation.

4. Study results
4.1 Preliminary study results
Our analysis revealed six categories of Generation Z expectations of future retailing and
retailers’ actions to deliver seamless customer experiences. The interviews showed that
customers expected future retailing to become modernised, with full channel integration as an
essential issue. They expected the delivery of several activities and retail solutions from the
supply side, such as hybrid stores. One interviewee also noted that dedicated customer
accounts (e.g. protected with online login) allow customers to view and save their shopping
history so they can continue to shop either online or in a brick-and-mortar store. Another
interviewee highlighted the importance of storing a digital shopping chart for later digital or
physical shopping. Yet another shared a negative experience that underscored the
importance of integrating channels and offering hybrid stores:
I was visiting an online store and recognised that there was one more product left. Then, when I came
to the physical store to pick it up, it was gone . . .
Expectations of channel integration included the integration of physically curated concepts Realisation of
with online store offerings. One interviewee emphasised the importance of arranging concept omnichannel
stores across brands and products, representing overarching themes and handpicked
products (e.g. fashion, beauty and homewares) and evoking a lifestyle appealing to their
retailing
interests as future retail customers.
Retail store availability is highly expected to become omnichannel, from the customer
perspective, thus, providing access to attractive products across channels. Further, one
interviewee mentioned the importance of easily finding online and physical stores through 27
online searches for products or brands. Another interviewee felt it important to access online
stores from social media (e.g. Facebook newsfeed).
From the customer viewpoint, integrated price policy is an important criterion for
becoming an omnichannel retail provider. Foremost, interviewees expected identical product
prices across channels with a price transparency system. When shopping on global retail
platforms or online stores, customers expect taxes and fees to be included in the stated price
or clearly communicated by retailers. Lastly, prices should be coordinated and updated
across channels.
The customers highlighted the importance of systems that save customer data securely and
reliably in predicting their future shopping patterns. They were inherently sceptical about
being monitored, about how their data were stored or shared and how retail firms used
cookies to direct later product offerings tailored to customers. Thus, they believed that
customer data should be stored only to facilitate their shopping, online or offline, not for other
purposes.
Several customers expected omnichannel retailers to ensure hassle-free solutions for
product delivery and product return, such as flexible delivery options and inexpensive or free
product returns. Moreover, optimal omnichannel retailers should permit customers to
exchange products bought online in physical stores if desirable.
Finally, optimal omnichannel suppliers should provide personal and targeted marketing
based on customers’ previous shopping history, thereby enhancing marketing relevance to
customers. One interviewee argued that exclusive memberships (e.g. customer clubs) with
offerings and services tailored to customers would be valuable. Another interviewee claimed
that, to be considered professional and trustworthy, omnichannel retailers should align
marketing communication to demonstrate a consistent brand voice across channels (e.g.
various social media channels).

4.2 Results from the primary multi-case study of retail managers

The results concerning Generation Z expectations served as the baseline content for the
in-depth interviews with retail managers and the experienced IT consultant.
Foremost, two retail managers (informants 1 and 5) noted that developing a fully
integrated digital ERP system to connect sub-systems or replace outdated systems was
crucial. The data revealed that antiquated systems often hinder retailers from becoming
omnichannel providers. As informant 1 stated:
Technical problems are often a challenge. We see examples of systems that are not able to talk
together, old systems that are outdated and that customer data are missing. (E-commerce manager)
Hiring IT consultants or employing personnel with expertise in integrating systems and
software solutions was also considered vital. Informant 6 emphasised that although
upgrading and linking systems can be costly, a well-integrated ERP system can align
different assortments and generate a consistent price policy across channels, arguably
making such upgrades profitable in the long run.
Becoming an omnichannel provider entails the critical capacity to develop and optimise an
online store, mobile application, and links from social media platforms and search engines.
IJRDM Online stores especially must be continually improved with higher-quality content, more
51,1 effective shopping options, enhanced page optimisation and customer-friendly chat
functionality. Informant 4 argued that, as increasing numbers of customers are visiting
online stores from their mobile devices, the stores must be optimised for such devices.
Further, the informant underscored the importance of finding online stores easily on search
engines (e.g. Google) and via social media platform links, including retail announcements and
advertisements on newsfeeds. Omnichannel retailers and their key employees must therefore
28 work systematically and collaboratively to optimise search engines and social media links to
attract the maximum number of consumers.
Omnichannel retailers must also develop appropriate product delivery and return routines
and supply chain management as a crucial, dynamic capability in becoming an omnichannel
provider. Several interviewees remarked that a broad spectrum of delivery solutions should
be offered to customers, such as click-and-collect, direct home delivery, and pick-up-points or
“hubs” close to home. Another essential capability is the provision of simple, “easy to use”
options for product returns, both online and offline. Retailers aiming for omnichannel
development must also ensure effective logistics in their supply chain, integrating all
producers and suppliers, sub-contractors, partners and retail stores (e.g. at a common digital
platform). To achieve such integration, all personnel involved in the “service ecosystem” must
be appropriately trained and instructed to establish new knowledge and work routines.
As omnichannel strategies combine digital and physical channels, retailers should,
according to informant 6, pursue enhanced visibility of both their company and their brand at
physical touchpoints, in line with Generation Z’s expectation of physically curated concepts or
fashion exhibitions. One interviewee argued that brick-and-mortar stores could be
modernised and designed like curated exhibitions, permitting physical visitation while
simultaneously facilitating online shopping. Accordingly, informant 6 speculated that
traditional physical stores might eventually become product delivery and pick-up hubs, with
actual shopping performed primarily online. Additionally, retailers could reorient physical
stores as showrooms and pop-up stores, the main purpose for which would be to interact with
customers in person to demonstrate product concepts, brands, etc.
Another dynamic capability needed for omnichannel retail is collaboration across business
units and strengthening the core leadership teams, thereby enhancing in-house competences.
Uniting cutting-edge expertise with interdisciplinary competences across units could
arguably foster the development of optimal omnichannel solutions and encourage the
cultivation of competences in big data analytics and related tools. According to one manager,
to integrate channels more systematically, collaboration should be encouraged, as it would
prevent departmental silos. Further, the introduction of new performance requirements for
employees will be accompanied by new work tasks, and as such new performance indicators
and measures will be required. Lastly, one interviewee argued that retail firms wishing to
pursue optimised, holistic omnichannel business strategies should determine whether they
will need to reorganise or add competences to their core leadership team.
Becoming a successful omnichannel retailer will likely require collaboration with retail
suppliers and partners in service ecosystems. All study informants, particularly informant 6,
articulated the need to collaborate and outsource special tasks, such as web hosting, data
warehousing, software solutions and logistic operations. As informant 1 stated:
These projects are often bigger and more complex than many are aware of, and help from outside the
firm may be useful or even necessary (E-commerce Manager)
Optimal collaboration with all external contributors is even more crucial for retailers so that
the service ecosystem—and consequently, shopping journeys—can function seamlessly.
Payment solution providers and product delivery companies are examples of such external
contributors. As one manager asserted, the prime objective of an omnichannel retailer is to
offer tailor-made solutions for customers alongside shopping journey touchpoints, the Realisation of
achievement of which requires integrated systems, software and collaboration. omnichannel
Even though the online presence of retailers is increasingly expected, informant 5 claimed
the following about the importance of developing and maintaining a customer-oriented retail
retailing
culture:
We need to develop a retail culture that permeates every channel that we are using while meeting up
with our customers (CEO and firm owner) 29
This statement demonstrates the necessity of providing customers with services throughout
their shopping journey, both online and offline, thus, for the services to become an integrative
dynamic capability. Despite the increasing centrality of online presence, physical touchpoints
are still crucial to retailers in planning and implementing omnichannel strategies.
Accordingly, online channels should be integrated with physical channels—not serve as
their replacements. About this, informant 1 remarked:
For many brick-and-mortar stores, the extension to an additional online store becomes a separate
non-integrated unit beside the traditional business. To be honest, many physical store operators do
not give enough priority to the online shop and consider them as competitors (E-commerce Manager).
This statement indicates that retailers should consider the online store as a positive resource,
but should also holistically focus on making all channels mutually supportive and on making
future retailing sustainable via a customer-centric approach. This exact issue was
highlighted by informant 3:
To become an omnichannel retailer is about being available on the customers’ premises and in the
channels that they prefer from time to time (Marketing Manager)
Like the interviews with Generation Z customers, the interviews with retail managers also
revealed the importance of integrating marketing communication across channels. Foremost,
as part of implementing an omnichannel strategy, retail firms and their brands must be
perceived as trustworthy across digital and physical channels (i.e. social media channels,
traditional media channels, online stores, physical stores and other physical touchpoints with
customers), and towards this end they must present a consistent and persistent brand voice.
Further, customer data exploitation was highlighted as a critical dynamic capability for
successful omnichannels (e.g. utilising big data). Informant 2 argued that safely stored and
well-integrated customer data across channels could be analysed and deployed to reveal
market trends and personalise marketing and services.

5. Discussion
The data from Generation Z customers generated six categories of expectation concerning
future retailing and necessary actions to become an omnichannel retailer and thus, deliver
seamless customer experiences (cf. Section 4.1). Based on arguments by Chen et al. (2018) and
Lehrer and Trenz (2022) on the need for more knowledge on critical capabilities necessary for
omnichannel implementation, these customer perceived categories were subsequently used
to design the in-depth interviews focused on the resources and dynamic capabilities valuable
for retailers in implementing omnichannel solutions.
Eight dynamic capabilities were considered crucial for a retail firm to succeed in
omnichannel retailing (see Table 2).
The first two capabilities are related to the underlying technology dimension of
omnichannel retailing: (1) the ability to develop and implement an integrated digital ERP
system, and (2) the ability to develop and optimise the online store, solutions for mobile usage
and links from social media platforms and search engines.
IJRDM The first factor, developing and implementing an integrated digital ERP system, was
51,1 described by Hansen and Sia (2015) as one of the significant elements in Hummel’s successful
transformation to omnichannel retailing. One success factor that Hansen and Sia (2015)
pointed out was that the IT department must work closely with the digital business
department throughout the integration process. The digital business department should
decide on the digital business plan, such as the need for digital channels and “rich” product
data (e.g. videos, size guides and ratings). Accordingly, the digital business department
30 should focus on the front-end IT, which the customers see (e.g. web shops, social media), and
the IT department should be responsible for back-end IT (e.g. ERP), and oversee the
technological transformation (Hansen and Sia, 2015). As our study results highlight system
integration, they appear to align well with Hummel’s study, and advices described by Hansen
and Sia (2015). Further, the back-end IT and ERP can be used for big data analysis as a
capability in offering customers tailored solutions, supporting the studies of Mikalef et al.
(2018), De Luca et al. (2020) and Barbosa and Casais (2022).
Concerning the second factor, developing and optimising the online store, solutions for
mobile usage and links from social media platforms and search engines, we argue that
optimising online stores deals primarily with functionality layout design, the retailing
atmosphere and customer experience. Wu et al. (2014) demonstrated the importance of these
elements, i.e. that choice of layout design (e.g. helpful signage) and atmosphere (e.g. lively and
bright colours) influences customer experience. Examples of design features that should receive
attention were addressed by Samuel et al. (2020) in offering virtual mannequins for “try on”
purposes, and easy-to-search product catalogues enabled by well-designed search algorithms.
As up to 97% of users are involved in various purchasing activities through mobile
devices, we argue that retail firms should optimise solutions for mobile usage, in line with
arguments made by Kaczorowska-Spychalsk (2017). Smartphones allow consumers to find
products and stores, compare prices, read reviews, check for availability and do many other
things “on the go.” Fuentes et al. (2017) found that these usage patterns were not the result of a
centrally orchestrated change programme but instead the consequence of the new and
unintended role acquired by smartphones as every day, multipurpose tools. Therefore, the
challenge for retailers is to seize the opportunity and integreate it with the ERP-system to
provide customers with helpful information through, e.g. an in-store companion (i.e. to find
product location) or a loyalty program app (i.e. to identify personalised offers). Recognising
and utilising such smartphone opportunities is likely one of the more forward-looking
dynamic capabilities in omnichannel shopping.

Dynamic capabilities needed for omnichannel solutions

Related to the Related to customer Related to internal and Related to overall
underlying technology experience optimisation external collaboration omnichannel functionality

Ability to develop and Ability to develop Ability to collaborate Ability to establish and
implement an product delivery, return across business units maintain a customer-
integrated digital ERP routines and supply and by strengthening oriented retail culture
system chain management more the core leader team
effectively
Ability to develop and Ability to offer curated Ability to collaborate Ability to integrate
Table 2. optimise the online exhibitions, showrooms, with retail suppliers and marketing communication
The eight second-order store, solutions for and pop-up stores for partners in service and provide customisation
categories of dynamic mobile usage, and links physically anchored ecosystems through data exploitation
capabilities sorted from social media customer experiences
according to four platforms and search
aggregated dimensions engines
 As a dynamic capability, the underlying technology dimension of linking social media and Realisation of
search engines to online stores and web shops is guided by the rationale that both search omnichannel
engines and social media represent critical touchpoints for consumers through their
omnichannel retail journeys. A recent study by Hallikainena et al. (2019) found that
retailing
conventional digital touchpoints with straightforward functionality, such as websites and
search engines, were the preferred touchpoints for customers when purchasing. Furthermore,
they claimed that social media was the most beneficial channels by which retail firms could
cultivate interest in their brands and products. 31
Another two dynamic capabilities under the aggregated dimension named customer
experience optimisation in Table 2, are (1) the ability to develop product delivery and return
routines and supply chain management more effectively, and (2) the ability to develop curated
exhibitions, showrooms and pop-up stores for physically anchored customer experiences. The
first of these deals with integrating online and in-store channels to provide a seamless front-end
customer interface, one that links them to the back-end system. Taylor et al. (2019) stated that
the core of omnichannel logistics is the integration of channels on the back end. They also
identified different omnichannel fulfilment strategies that have been described in previous
research. Example of such strategies includes BOPS (buy-online-pickup-in-store), BOSS (buy-
online-ship-from-store) and BORIS (buy-online-return-in-store). We argue that developing
appropriate product delivery and return routines and effective supply chain management
involves establishing the best mix of omnichannel fulfilment strategies in connection with a
preferred omnichannel retail solution of customers. Hajdas et al. (2020) pointed to potential
obstacles in realising a customer-friendly omnichannel infrastructure because of a lack of
transparency and comprehensive communication policies related to return options.
The second dynamic capability concerning customer experience optimisation is the ability
to develop curated exhibitions, showrooms and pop-up stores for physically anchored
customer experiences. Alexander and Alvarado (2017) stressed the importance of this
capability, claiming that omnichannel implementation focusses on digital channels and
consequently, fundamentally alters the form and functions of physical stores. Moreover, they
argued that physical stores, as a part of omnichannel retail, should offer spaces for
interactivity, socialisation and communication through atmospheric cues that appeal to the
senses. Curated exhibitions, showrooms and pop-up stores have the potential to realise these
three qualities by representing multi-functional hybrid retail spaces. These physically based
initiatives are expected to be supported by promotional activities (e.g. promotional codes or
special editions) and digital technology (e.g. smartphone apps) to facilitate an interactive,
event-based retail experience. In other words, curated exhibitions, showrooms and pop-up
stores can be considered complementary to digital channels. These multi-functional hybrid
retail spaces are enabling physical customer contact and positive experiences, thus,
supporting the sensing dimension of Teece (2007), thus, making them applicable
omnichannel capabilities.
Two dynamic capabilities related to the dimension of internal and external collaboration in
Table 2 are (1) the ability to collaborate across business units and strengthening the core
leadership team, and (2) the ability to collaborate and align with retail suppliers and partners
in service ecosystems. The first of these can be divided into two sub-elements: (a)
collaborating across business units and (b) strengthening the core leadership team.
Collaboration across business units requires spanning capabilities, i.e. internal work
processes and routines that support collaboration and communication across different
functional areas (e.g. Helfat, 2007; Mirsch et al., 2016). The core of collaboration and
communication across business units is “to build and maintain a data-rich, 360-degree profile
of each customer” (Stone et al., 2002, p. 49). The purpose of such profiles is to “be able to
provide up-to-date consumer information, ideally in real-time to personalise the relevant
channel and create a seamless customer experience across all channels” (Mirsch et al., 2016,
IJRDM p. 8). It is thus necessary to strengthen the core leadership team, especially their omnichannel
51,1 management competence, to realise 360-degree customer profiles. This competence includes
knowing the genuine aspects of an omnichannel concept, which means understanding the
importance of suggesting goals of total sales over channels and how to integrate channels for
seamless retail experiences, as well as how to optimise digital services (web, app, etc.) and
mass communication (TV, radio, etc.) customer touchpoints (Verhoef et al., 2015). To illustrate
how the core leadership teams’ competence can be strengthened, e.g. through a better
32 understanding of how to achieve seamless retail experiences, we refer to Chang and Li’s
(2022), recent demonstration that a seamless experience consists of six different dimensions:
availability of links, consistency of sale strategies, information visibility, simplicity of
payment, flexibility of fulfilment and convenience of sharing.
The second dimension associated with the dynamic capability dimension of internal and
external collaboration is having the capacity to collaborate and align with retail suppliers and
partners in service ecosystems (Koskela-Huotari et al., 2016). Interdependencies amongst
supply, merchandising and customer experiences require such collaborative capacity. The
objective of collaborating with, e.g. suppliers in service ecosystems, is to leverage real-time
inventory information from different nodes in the retailer’s network for effective order
fulfilment. A critical step here is to realise the digital transformation process of digital supply
chains established by more or less disjointed business entities within the retail enterprise. A
successful digital transformation implements the logic of the service ecosystem to provide
digitally enabled capabilities that create opportunities for data sharing and, thus, better
operational supply chain performance and improved customer experience along the customer
journey (Ishfaq et al., 2021). Hence, having the dynamic capability to share data across
retailers and enhance collaboration amongst organisational entities in the digital service
ecosystem is well aligned with the reconfiguring dimension (i.e. embracing open innovation)
introduced by Teece (2007), and thus, critical to ensure a seamless customer experience across
all channels.
Two dynamic capabilities related to the aggregated dimension of overall omnichannel
functionality in Table 2 are (1) the ability to develop and maintain a customer-oriented retail
culture, and (2) the ability to integrate marketing communication and provide customisation
through data exploitation. The first deals with the movement towards a retail culture—or,
more precisely, an omnichannel retail culture that are customer-oriented. Wirtz (2017) claimed
that retailers with the ambition to deliver an external omnichannel experience should create
an internal omnichannel culture. However, what it means to create this type of culture
remains unclear. We believe that an omnichannel retail culture is related to the practical
meaning of an omnichannel such as, e.g. integrated touchpoints (i.e. media and social and
conventional channels), uncompromising delivery and simultaneously updated information
on behalf of the customer (Akter et al., 2021), and as such, becoming more customer-oriented.
Hence, a customer-oriented retail culture should be based on employees who strongly focus
on value creation together with customers, value delivery and unified commerce as dynamic
capabilities. This means a cultural transition from a product focus to a customer and service
focus, from a traditional selling culture to a value delivery culture and from a high/low pricing
strategy to a holistic customer value creation focus.
The last capability related to overall omnichannel functionality deals with two elements,
namely (a) the ability to integrate marketing communication across channels, and (b) the
ability to provide customisation through data exploitation. The first of these concerns the
integration of communication across social media, mass media and conventional channels.
We support the study by Verhoef et al. (2015), which stressed that all communications
through social media and mass media should be integrated with traditional channels within
omnichannel management. Verhoef et al. (2015) further explained that the notion of one-way
and two-way communication is becoming less apparent from an omnichannel perspective in
contrast to the multi-channel perspective. In practice, this means that customers can Realisation of
communicate with a service avatar, through a digital touch-screen kiosk within the physical omnichannel
store, and with advertisers through mobile apps while watching television advertisements,
thus, challenging the competence of the retail firm to develop such kind of solutions.
retailing
The capability to provide customisation through data exploitation concerns the analysis
of structured (e.g. sales data) and unstructured (e.g. textual data from social media) data to
identify product segments and customer behaviour patterns (Wulf et al., 2017). In practice, a
competent retailer can use customer data to customise offerings, e.g. products, services, 33
promotions and replacement offers (Hoberg and Alicke, 2016), by themselves or in
collaboration with other retailers in the service ecosystem.

5.1 Theoretical implications

We conclude that research on the transition of retail firms from multi-to omnichannel retailing
can benefit from a more integrated approach with the dynamic capability perspective (e.g.
Augier and Teece, 2009; Teece et al., 1997; Teece, 2012). Even though previous literature has
highlighted the concept of omnichannel retailing and has emphasised the need for interplay
between channels (Voorhees et al., 2017; Jocevski et al., 2019; Van Nguyen et al., 2022) and to
overcome the barriers and constraints to implementation (Barbosa and Casais, 2022), our study
contributes additional details regarding the actions needed for achieving this transformation by
applying the dynamic capability perspective to retailing, as recommended by Picot-Coupey et al.
(2016). Contributing to the understanding of the theoretical embeddedness of research in
omnichannel retailing (Galipoglu et al., 2018; Jocevski et al., 2019), our study provide details on
how to realise omnichannel solutions by suggesting eight dynamic capabilities underlying the
four dimensions of (1) underlying technology, (2) customer experience optimisation, (3) internal
and external collaboration and (4) overall omnichannel functionality. Our framework was
generated from interviews with both Generation Z customers about their expectations of future
retailing and retail firm managers regarding their experiences and ideas concerning
omnichannel retailing. By theoretically anchoring omnichannel issues to management, work
routines, internal actions and external collaboration needed for obtaining omnichannel retailing,
we offer a more holistic picture of useful operations and transformative processes involved. By
applying the dynamic capability perspective in extending previous research that are primarily
focussing on barriers and challenges of implementation (e.g. Barbosa and Casais, 2022), we
contribute to theoretical embeddedness of research in omnichannel retailing, as required by
Galipoglu et al. (2018) and Jocevski et al. (2019). As such, our research provides useful
implications for future studies of omnichannel retailing and may help other researchers delimit
and focus future research by applying the dynamic capability perspective.

5.2 Managerial implications

Our research offers four managerial implications. We briefly describe four dimensions
consisting of eight dynamic capabilities derived from the combined study of customers and
retail managers. First, we suggest that retail managers should determine which departments
should work closely with front-end and back-end IT solutions to implement technology
adjustments and thereby develop an integrated digital ERP system showing instant data, one
which can be linked to the online store or e-commerce website, can identify solutions for
customer mobile usage, and can establish links from social media platforms and search
engines to the online store. Second, retail managers should continually motivate all
employees to strive for positive customer experiences along the omnichannel retail journey
by establishing appropriate and effective daily product delivery, return routines and supply
chain management. Retail managers should also consider the value of physical channels,
such as curated exhibitions, pop-up stores and showrooms, for offering spaces for
IJRDM interactivity, socialisation and communication with customers, thus, complementing digital
51,1 channels. Third, retail firms should, in addition to encouraging internal collaboration across
business units and teams, also engage in formal partnerships and alignments with external
actors in the surrounding service ecosystem to deliver valuable offerings at every touchpoint
alongside and across partner-related customer journeys. Lastly, for retail firms to become
omnichannel providers and ensure overall omnichannel functionality, we recommend that
they should seek to develop and maintain a customer-oriented retail culture amongst all
34 employees centred on value creation and value delivery and pursue the integration of
marketing communication across all channels to exploit customers’ data to optimise their
experiences.

5.3 Limitations and future research avenues

Extending previous research on omnichannel integration (e.g. Barbosa and Casais, 2022), we
believe that our study can help both researchers and retail managers to better understand the
importance of becoming an omnichannel provider and the dynamic capabilities needed to do so.
However, our research had some limitations. First, it was based on a limited sample of
interviewees, and as such future in-depth studies with larger samples would be productive.
Another potential avenue for future research would be to employ both qualitative and
quantitative methods, as each could complement the other and thereby generate more well-
balanced, comprehensive and valid findings. For example, researchers could focus on the
omnichannel retail journey and elaborate on the dynamic capabilities needed along different
touchpoints during the journey. Studying these dynamic capabilities with respect to across-
partner-related customer journeys would be even more interesting, as it could incorporate several
retail providers in a single service ecosystem. Future research on omnichannel retailing should
also consider the retailers’ appearance on digital market platforms as platform complementors
(e.g. through multi-homing solutions; Cennamo et al., 2018; Cusumano et al., 2020).

Notes
1. Data were collected as part of a Master Thesis conducted by Jørgensen and Radic (2020), at the
University of South-Eastern Norway, School of Business.
2. Etic coding refers to language and concepts that are not necessarily those of the interviewed people
but that seem appropriate to us within the scholarly field of interest (Belk et al., 2012, p. 141).

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Corresponding author
Birgit Andrine Apenes Solem can be contacted at: birgit.a.solem@usn.no

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