Local Business Strategies in the Digital Era : A qualitative study exploring digital and physical tools in the retail industry

This study explores what digital and physical tools local retail businesses in medium-sized cities use and how these tools are integrated to be attractive in a digitalized market. Current research is mainly focused on either physical or digital tools, but this study will fill that gap by understanding the combined outcome of using both and how they are integrated. On top of that, previous studies have been mainly focusing on researching the implementation of such tools in chain stores and in larger cities. Therefore, the purpose of this study is to support local communities by exploring how smaller retail stores can be attractive and contribute to the city centres of medium-sized cities. Theories and frameworks used in the thesis includes the experience economy, servicescape and omnichannel-strategies. A qualitative exploratory approach was conducted, with data collected through semi-structured interviews from eight companies and analysed thematically by using the Gioia methodology. The empirical findings indicate that local physical retail stores in medium-sized cities are using physical tools including sensory and visual atmosphere, personalizing service together with experience-based activities to be attractive in the increased digitalized market landscape. This is in combination with digital tools, that include social media engagement, supporting tools and omnichannel. The digital tools are relevant to implement to follow the development of the modern customers' expectations of physical stores and to be considered an attractive option in line with the growth of e-commerce. The physical and digital tools are integrated at various levels of omnichannel integration based on resources and image they want to communicate. The local retail stores in medium-sized cities are creating their brand identity connected to their local involvement, which is a core component in the way they shape their strategies. The study contributes with insights and recommended strategies to the local and physical retail in medium-sized cities including creating an engaging customer environment, aligning channels to provide an integrated digital experience and strategic integration and branding, in which it influences the local physical retail stores attractiveness. By the identified tools and strategies, this study contributes with a proposed framework to both develop the discussed theoretical areas but also for various stakeholders including companies, decision-makers and municipalities. This framework contributes with suggestions to create value for physical retail stores and strengthen the local community.