There is a great decoupling happening in retail, a structural change. Similar to the decoupling that the computing industry went through, going from being vertically integrated to horizontal specialist. What does this mean for retailers? Retailers need to be clear on what their unique selling proposition is, that is why do customers choose them vs their competitor, or substitute; then double down on those things. Is it your wide assortment, price, convenience, customer service, maybe safety now, or some thing less rational. Everything else should be considered for outsourcing to horizontal specialist, those who are optimized to delivery a particular service, or product.

Within any company, typically the most valuable resources are centered around the making and the selling organizations. There is no difference in retail; instead it’s the merchandising and store operations organizations, and I would add human resources to being core. Most other functions should be evaluated for their need to be an in-house capability.