s failing.  Current platform businesses and multinational retailers are transforming themselves into platform ecosystems, which we expect to take larger market shares in years to come. Platform businesses have grown in prominence over the last 20 years by harnessing the digital market. In some cases, platform business models facilitate the exchange of products and services between two or more user groups – a consumer and a producer. They are increasingly dominating the go-to-market channels and taking a broader approach to target both B2B and B2C offerings. Platforms provide a retail ecosystem offering customers numerous propositions – from retail products to banking services – to maximise customer lifetime value.https://e4e004434e1e55f79675586826ce7a0d.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html Omnichannel retailers will have to focus on the delivery of a seamless, customer-centric, channel-agnostic proposition. This positioning will be comfortable for many retailers and competition in this space will be fierce. A ruthless focus on costs will be required to maintain profitable offerings to customers. Category specialists emerge Meanwhile, category specialists and independents are positioning themselves to showcase their strengths as local, purpose-led organisations. We saw this emerging trend during Covid-19 lockdowns, as ‘shop local’ category specialists offered unique and focused products and services targeted towards a specific retail category or a defined customer. Category specialists often offer considerable expertise in product innovation and enjoy a loyal customer base. The transition to any of the three models – category specialists, platform ecosystems or omnichannel – will require pace, capital, and capabilities. With not all of these available in abundance for most organisations, many will need to pursue partnerships. Investors certainly seem to believe platform business models will continue to dominate the future business landscape. Essentially, these partnerships would serve as ready-made, relatively proven ‘white label’ platforms that enable retailers to evolve and scale without investing lots of capital to develop the capabilities in-house. We need new numbers As retailers determine the model that will drive their success and the partnerships required to deliver it, a need to measure success differently emerges. This will cause a shift in focus from the metrics that matter today to a more holistic view of retail’s staple metrics – sales, profit, and stock. For example, as cost becomes an increasingly important factor in competitiveness for all retailers, effectively measuring the true profitability of transactions becomes key. Retailers have always measured transactions in terms of sales and profit but now the true cost needs to be factored in, too. In other words, how much it cost to serve the customer. Factoring in this cost gives a true picture of where critical cost reductions can be gained, as well as providing a pure view of return on investment. Integrating old and new Traditional bricks-and-mortar metrics, such as gross margin per square metre, are becoming less important on their own, as they no longer tell the full picture in an omnichannel environment. Only when gross margin per area is combined with online metrics such as demand and cost to serve, a retailer can begin to understand how space (across online and in-store) is driving outcomes. In all models, there is a requirement to invest capital in stock and maximise stock turn. In the future, the importance of these measures will be around specificity. As stock moves through different parts of the supply chain, being able to measure it precisely will allow retailers to focus on stock by channel and react when it is outside of what is expected. Regardless of the model, unlocking true value requires retailers to drive an analytics-led culture that leverages an integrated customer and product view. This needs to employ numbers that matter, not legacy metrics that no longer paint the full picture. As customers interact with retailers in different ways, measuring the impact of range across channels and price point in near real time becomes an essential part of decision-making. It enables the agility necessary to react to customers’ changing needs. This article was published in the 2022 Australian Retail Outlook, powered by KPMG.