In the new environment, retailers must gauge the value of their investments in digital, partnerships and "experiences" they are creating to draw customers in.
The retail business model is no longer predicting how many more sales a single store will do this year compared with last year, the language its current club of executives is used to speaking. Retailer leaders largely came up through the ranks when the solution to most problems was building more stores or reinvesting in old ones.
"For many years it's been about scaling and optimizing — they all know each other and they really haven't had to look outside their industry as much as they probably should have to navigate the changing tides," said Margot McShane, a partner at executive recruiting firm Russell Reynolds.
Retail companies, by and large, do not force executives who rise through the ranks to work in different departments — like operations or finance — as other industries do. That means those who have risen to the top may have done so only working in areas like merchandise, the job of picking out goods for shoppers months in advance.
That planning skill set is likewise being challenged as shoppers' wants now change on a whim. Today, celebrities and Instagram influencers can drive trends in the time it takes to post a photo of a Reformation dress. Fast fashion has trained shoppers to view trends by the week, not the season. Subscription services like Stitch Fix ship clothing boxes monthly, through data-driven personal shopping.
J.C. Penney saw shares drop to an all-time low last month, when it slashed 2017 profit and comparable-sales forecasts, partially because it had to slice prices of inventory — primarily women's apparel — to move items that were proving unpopular with shoppers.
"It's like playing a different pool table, but it's a completely new table and all the angles are different, and everybody is having to adapt to that," said Josh Chernoff, a managing director in the Parthenon-EY practice of Ernst & Young.