We define a RBM innovation as a change beyond current practice in one or more elements of a retailing business model (i.e., retailing format, activities, and governance) and their inter- dependencies, thereby modifying the retailer’s organizing logic for value creation and appropriation. First, this definition implies that the innovations in retail business models are system-wide changes: even though the change may originate in just one ele- ment of the business model, it also triggers changes to other parts of the system. Indeed, an isolated change in one of the business model elements that does not affect the other elements may be a retailing innovation, but would not be considered an RBM innovation. Second, a fundamental aspect of business model innovation is that it is intended to materially alter the firm’s value creation or appropriation logic. Therefore, focusing on the potential changes to the value creation and/or appropriation logic is a critical lens for examining and classifying business model innovation. Such a focus helps managers set revenue expectations, and evaluate the firm’s performance following the implementation of a business model innovation. Third, we take the perspective that for a change to qualify as a business model innovation, it should be a method of conducting business that has not yet been implemented in practice at the time of its intro- duction. In other words, such an innovation embeds “new to the world” formats, activities, governance mechanisms, and the interdependencies among them.