Reverse Commerce 2.0

Another important aspect to commerce and the consumer shopping demands is the customer returns, or reverse logistics, handling.  No discussion on commerce can be complete without inclusion of reverse logistics.  This was the critical aspect required for the consumer to first engage with eCommerce retailers.  The requirement is the ability of the consumer to return any purchase within a time period for any reason and be provided credit for the purchase.  

This provides additional complications for the retailer to handling the returned product in a manner that recovers the most cost as possible.  The requirements for product handling change dramatically for each product type and each of these requirements must be incorporated in the merchants process flow.  For example, apparel can be easily examined and reconditioned for resale, where electronics can be costly to examine and recondition and even then electronics must be sold at a discount as ‘open box’.  These are all obviously processes and procedures that can be clearly defined and implemented.

The challenge in this though is incorporating these processes and procedures in your collaborative supply chain network to support these requirements.  Handling customer returns is much easier when the retailer provides all services and sales support to the consumer.  However it becomes a little more difficult when you bring additional partners into the equation.  This support will most probably start with a single point of support from the retailer and then as the collaborative partnerships grow the opportunity to push the support of the processes and procedures may be appropriate to shift to one or more partners.  

There are two factors you must take into account with your collaborative supply chain:

1. The support of the consumer especially as it relates to satisfaction.
2. The cost of handling the returned product.

The most critical aspect of these factors is the satisfaction of the consumer.  The merchants and their collaborative supply chains are responsible for containing and recovering the cost of these returns.  The merchant must realize that they will never recover the full cost of the product, services and original shipping and delivery to the consumer.  

The reason why this is so important is because of the impact it has on the consumer retention and long term satisfaction of the consumer.  As I have been saying for a long time now the key to success is the long term satisfaction of the consumer which itself leads to the long term retention of the consumer.  Retailers understand this and have included these processes and procedures as a cost of doing business.  This cost view however sometimes colors the interaction with the consumer.  Retailers must be careful to train and provide electronic services that simplify and even encourage the return of unwanted products.  Too many times this view of a cost is projected to the consumer in their interaction through many questions and complicated procedures to return.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumers’ experience?  Improving the consumers experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Supplying Commerce 2.0

The supply chain supporting retailers’ Commerce 2.0 framework must also be a collaborative and flexible framework in order to support the changing demands of the consumer.  Retailers cannot overlook the requirements to support the demands of consumers’ shopping for both selection and purchase and delivery options.  Just as retailers must revise their sales channels to meet the changing shopping demands, the extended supply chain must also change and increase flexibility to support the changing delivery and demand cycle of the consumers.  

Retailers have tried to meet the consumer purchasing demands through a variety of strategies from earlier purchasing to meet the demand to purchasing after the consumers have ordered to meet the demand of the orders.  As with most strategic decisions the optimum strategy is somewhere in the middle. A collaborative supply chain network provides the framework and the collaborative partners in the supply chain provide the means to meet the changing consumer demands.  The key to the success of the retailers in meeting the demands of the consumer is a collaborative supply chain strategy and the key to the success of this strategy is the partners in the collaborative supply chain network.

This strategy allows the retailer to focus on the consumer shopping demands and utilize the collaborative supply chain to support the purchase delivery.  The consumer shopping demands require the retailer to extend the support of the consumer purchase delivery across the extended supply chain network.  This extension and strengthening of the collaborative network increases the flexibility of the retailers’ commerce network providing the flexibility necessary to support the changing demands of consumers.  This strategic collaborative network extends from the raw material and manufacture of products all the way to the consumers’ door.  

In order to remain successful in this collaborative marketplace, the retailer must support both the shopping and delivery demands of the consumer.  These demands are changing at a much faster rate due to the capabilities and improvements delivered through mobile technology.  This rate of change can only be successfully met through an extended collaborative supply chain.  This strategy allows the retailer to focus their efforts on supporting the consumer shopping demands and then collaborate with the extended supply chain to support the purchase delivery, whether through the brick and mortar store or the the direct delivery to the consumers’ door.

This network supports the consumer demands in two directions; from the purchase to the consumer’s door and then from the consumer to intake back into the extended supply chain.  It is important to remember that the retailer must support the consumer demands in two directions in order to retain the sales.  The consumer returns, or reverse logistics, back into the extended supply chain are a critical aspect to the the customer relationship.

Embracing Commerce 2.0

By all appearances and actions consumers are embracing Commerce 2.0, or the collaborative marketplace, and this is leaving many retailers chasing the market and the sales.  In order to maintain success the merchants must also embrace this new practice and framework.  Consumers are not simply sitting back and waiting for the next product that a major retailer has decided should be accepted and purchased by the consumer, they are actively searching out, and also recommending products through their social networks and the specialized services such as Groupon.  The successful merchants will embrace the collaborative marketplace and focus on the shopping rather than the purchase.

Consumers not only want to get value, they also want to give value.  We are now seeing where consumers will engage in many types of services to provide feedback to improve the service or even the product.  The entertainment and restaurant market is probably the best example of this engagement.  Yelp provides a platform for consumers to engage and network with other consumers to rate service from both merchants, restaurants and entertainment venues.  There are many others providing this same type of service and this is the type of services that the large retailers should embrace.  We already see small local retailers engaging the consumer through social networks, the ‘shop local’ practice is strong and successful not because its a catchy phrase, its successful because the local merchants engage consumers through social networks.  

The initial focus of retailers on social networking was and in many cases still is as a marketing channel and a consumer complaint channel.  This was a good beginning however consumers have progressed dramatically in their capabilities and as their capabilities increase they are also pushing their desires and methods for interacting.  Large retailers must recognize these additional demands and support them in order to maintain their success.  

The greatest challenge for large retailers is to understand and embrace the concept that the consumer has wrested control of their shopping and purchasing from the retailer.  I think the large retailers have been expending a great deal of effort in fighting these trends because first it is hard to recognize the shift and second because it is difficult to give up control.  How will these merchants select products to offer?  This is where the merchants must begin to focus on engaging the consumer and bringing them into the process.  Embracing this method will provide two values to merchants, first it will provide the merchant with the types of products and features the consumer desires, second the engagement will retain the customer.

 

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumers’ experience?  Improving the consumers experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Commerce 2.0

The collaborative marketplace is bringing about a new type of commerce, Commerce 2.0, where the consumer has a great deal of control over the actual marketplace and sales channel.  This enhanced commerce platform focuses on the shopping experience and is being supported and encouraged by the mobile technologies and mobile network capacity available to the consumer for their shopping demands.  These capabilities are crossing economic strata and in fact I think are the most prevalent in the middle class and even lower middle class strata.  Anybody that is being pulled in many directions at once is a target for these enhanced shopping capabilities.  

Unfortunately for the merchants, I see that consumers are in the process of moving away from the omni channel market and are moving towards a collaborative marketplace.  The differences between the two practices is that omni channel focuses on the purchase across channels and the collaborative marketplace focuses on consumer shopping.  Both end in a purchase and the difference is that consumers are integrating mobile technologies and services to support their shopping demands.  Retailers must increase the velocity of their change or be left behind with each cycle of change embraced by the consumer.  

Unfortunately, increasing the velocity of change can be very difficult for merchants because many of these merchants are still dealing with legacy supply chain systems and ERP systems that were used to support their brick and mortar stores.  In this area consumers are also at an advantage because consumers have become accustomed to accommodating changing technologies.  Consumers are at the advantage now because of the earlier changes to mobile technology that allows the consumer to focus on data rather than the application.  We are in a throw away society and consumers have embraced this with their mobile technologies.

One way to view this is that consumers are focused on the process and supporting the process with tools.  I see that consumers support the process changes with the mobile technologies that have come along to support these processes.  Merchants on the other hand must focus on the cost (software license, development and support costs) of the challenge as a major factor and this focus has forced merchants to add new functionality to legacy applications.  This ‘bolt on’ method of development has two results; the solution is more limited and less flexible.  A key result of this method is that the base application becomes more complicated and harder to modify to support new requirements.

The velocity of changing is increasing in speed and this is especially true in the mobile technology arena.  This increasing change will be allowing the consumers to extend their collaborative marketplace capabilities in a dramatic manner and these changes will continue to widen the gap of merchant capabilities they can support unless and until the merchants embrace a framework that supports the rate and type of change.

 

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumers’ experience?  Improving the consumers experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Consumer Collaborative Marketplace

The pull and importance of the collaborative marketplace can be seen from popularity and success of the services that provide consumers with a wide range of special offers.  This consumer collaborative marketplace started quite some time ago in the travel industry with services offered from Priceline to allow the consumer to bid on prices for hotel and airfare across all of the partners; in addition there were similar services offered by sites such as Expedia and this sector has continued to grow with services offered from Kayak as an example.  This marketplace concept has grown with sites offering special pricing on products and services such as Groupon and has extended with new services such as Yelp, UrbanSpoon and Retail Me Not that have extended the offerings to provide location based specials.

These services are providing consumers with the marketplace capabilities through the combination of social networking tools and location based technology to help the consumer shop.  These services are providing the collaborative marketplace framework for consumers and you can see by the success and continued new services coming on the market that consumers are hungry to embrace these offerings.  The challenge for merchants from these services and offerings is how can they mold and guide these services into the direction that benefits the merchants and meets the merchants’ objectives.  The danger to the merchants is that they do not control the message and the focus of these collaborative marketplace tools and services, so the services are free to focus on the objectives of the consumer.  This to me would seem to be the chief concern for merchants, how can they guide the message in a manner that provides the greatest beneficial focus for their products and services?

A third factor and increasingly important factor is collaborative marketplace framework provided by Alibaba.  As background Alibaba is the next major competitor to Amazon coming from China and expanding into the United States.  Alibaba does not offer products like Amazon, instead Alibaba provides the network and marketplace framework for partners to offer goods and services.  The consumer collaborative marketplace provided by Alibaba provides additional competition to the large retailers and must be included in the merchants’ strategies.

I see consumers taking more control of the marketplace and retail environment by embracing and extending the social and collaborative tools and services offered through various channels.  The larger retailers have less and less control over the capabilities of consumers to shop and purchase goods and services.  This collaborative marketplace concept and framework allows the smallest merchant to compete with the largest merchant on an equal footing from consumers’ viewpoint.  This increased competition must be addressed by large merchants in order to be successful in the future.

 

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumers’ experience?  Improving the consumers experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Collaborative Marketplace Importance

The collaborative marketplace is the next generation of the commerce model and retailers would be wise to embrace this model early to take advantage of the benefits.  This model provides a framework for merchant partnerships and then a framework for consumers to essentially shop at a virtual mall.  As an example, in the case of Amazon collaborative marketplace consumers benefit because Amazon assures the quality of the merchant, the delivery and products and the merchant also benefits from this Amazon assurance because they are not required to develop the reputation.  

I think that the key to success is the reputation that Amazon brings to the marketplace of a quality experience.  A second important factor that really closes the deal is the price, Amazon also has the reputation of the most competitive prices.  The marketplace allows Amazon to offer the best price to the consumer by offering a variety of options to purchase, from brand new to refurbished, to used and this is provided all on the same page for the consumer to compare and make a decision. This feature, along with the search and comparison functions and then the ease of purchase (One Click Purchase) and delivery (Amazon Prime) present a compelling package to the consumer.

The marketplace for all intents and purposes is a technology platform, or framework, and this framework simply allows the reputation, selection and shopping experience to be delivered in a standard and extendable manner.  The key to the success of the Amazon collaborative marketplace is quite simply Amazon.  What I mean by this is that Amazon has been steady focused since inception on the customer experience and delivering a quality experience in all consumer interaction.  From the first look for a product on the web site to the call for help with service on an item you can count on a quality experience.  This experience is the ‘secret sauce’ of Amazon’s marketplace success and this reputation of a quality experience brings a huge value to their partners in the marketplace.  

Speaking from my own experiences I can say quite comfortably that I shop at the Amazon marketplace because of the confidence I have that the experience will be positive. From my experience and viewpoint this is the reason why I am a repeat customer and why Amazon is my first stop to shop.  This reputation is also why I will try new services or markets that Amazon offers without hesitation even to the grocery products.  I see this reputation as the differentiating factor for Amazon and they are offering this benefit to their merchant partners.

 

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumers’ experience?  Improving the consumers experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Collaborative Marketplace

I have been discussing the impact of technology on consumer shopping practices recently.  I believe that the mobile technology capabilities are changing the way consumers shop and these new shopping practices must be supported by retailers in across channels in order to retain the customer and sales.  I have come to the realization that we should be viewing and supporting these consumer shopping practices as a collaborative marketplace.  This conveys the concept of shopping and a gathering of both consumers and merchants into a location to shop and socialize and collaborate.  

Amazon provides a good example of a collaborative marketplace.  When you shop at Amazon you are offered reviews of products and also a selection of products that other customers ordered when they purchased the same product.  Amazon takes that another step by inviting consumers that purchased the product to submit a review of both the product and the order experience.  This is really nothing remarkable because everyone provides product or service review capabilities.  What makes the Amazon service stand out is the continued consumer collaboration they encourage through the shopping process.  The service that stands out for me is the ability to submit questions about a product to the consumers who previously purchased that product.  This simple value add encourages a conversation across shoppers when searching for a product.  

The second key factor contributing to the collaborative marketplace is the additional merchants that are supported and even advertised when shopping for a product.  For instance, when I shop for a book or even a vacuum cleaner, the product display returned includes other merchants selling the same product, whether its new or used and even the price they are asking.  This type of service turns the consumer experience into a shopping experience and not just purchase experience.  Amazon has created a marketplace that supports both consumers and other merchants with the goal of providing the consumer with the product they want from a merchant of their choosing.  

Amazon not only understands the importance of the return customer, they have implemented a marketplace that fully supports this concept.  They are not being altruistic in this offering of course, Amazon gets a percentage from any sale for providing the marketplace and they also will charge to provide the fulfillment services.  

This marketplace model is generations ahead of other retailers because Amazon starts with the viewpoint of the consumer.  Consumers are embracing and incorporating mobile technology to support their shopping shopping desires and the marketplace is a format of capabilities that matches up well to fit the consumer needs.  The shopping mall was embraced by consumers because it met two human needs; to aquire goods and services and also to gather as social outlet.  The collaborative marketplace provides these same capabilities in a virtual format and retailers would be wise to embrace this concept before they are left in the cold by market leaders.  

 

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumers’ experience?  Improving the consumers experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Amazon Disruption

Amazon has been disrupting the retail market since it came on the seen and completed changed the way books are sold.  Each step along its history Amazon has delivered capabilities and services that are focused on the customer rather than the sale.  The underlying principle being if it is right for the customer the sales and profits will come.  Starting with the low prices Amazon could deliver to the big data analysis used to recommend purchases, to the Prime service for shipping and the latest Amazon Unlimited to allow consumers unlimited access to books and music for a monthly subscription fee Amazon has been pushing the boundaries of the retail market.  

The key to their success is the focus on customer service that makes purchasing easier.  This is the focus that I have been encouraging for quite some time with every Christmas season.  It gets a little frustrating to see the lack of commitment from omni channel retailers to focus on the consumer desires for shopping improvements rather than a new purchase outlet.  From the retail market perspective, most retailers just miss the point.  Even now the huge announcement from Target simply focuses on cost and the purchase process.  I think that consumers have proven over and over that service is a critical ingredient to successful sales.  The entry and foundation is supporting the purchase and its how you support the shopping that makes the difference.

In every aspect of the site Amazon supports the consumer shopping and has built this capability on top of a solid foundation that supports the purchase.  Amazon is able to do this because they recognized very early in their life cycle the importance of data and analysis.  You can tell from the delivery and the almost immediate acceptance by consumers that each of the new programs coming from Amazon are based on a great deal of data analysis.  Another aspect of the programs is that many collect a great deal of information and then then this information is used in turn to improve service and develop new programs.  The consumer reviews is a good example of this type of program.  It seems very simple at first glance, then the additional capabilities that are derived from this are quite amazing and the both utilize a great deal of data that was originally collected from the customer reviews along with collect a great deal of information to improve programs and services.  

These methods and practices from Amazon should be used by other retailers as a how to guide for developing programs that both excite and retain customers.  Instead what you see from the majority of retailers is a follow the leader process.  To bring Target back to the discussion, how can a retailer lead the marketplace when they are focused on the order value at which to offer free delivery?  The leader in the market offers a delivery program that provides value to the customers and strong shopping retention to the retailer.  

 

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumers’ experience?  Improving the consumers experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Retail Market Disruption

The last week has seen some dramatic announcements of restructuring and refocusing from Target to jump start their sales.  Target outlined plans for $2 billion to $2.2 billion in capital expenditures this year, with $1 billion going to technology investments including its supply chain and inventory management systems. Company officials said this will help it maintain or even grow Target’s 40% annual growth rate in its digital channel.  Target plans to take a “channel-agnostic approach” to growing its business driving the total Target experience throughout online, mobile and stores.  Target has made some dramatic improvements to the user experience of its digital channels. The company has reconfigured its team structure to move faster, and took the friction out of the shopping experience.  Mobile saw explosive growth, Casey Carl, chief strategy and innovation officer for Target, said mobile is “the new front door of Target.”  Ninety-eight percent of Target guests shop digitally.  A vast majority of that shopping occurs using a mobile device.

These announcements align with my recent discussions regarding the changes ocurring in the consumer attitudes and practices in the retail market.  I think this is the first round however in the start of a market disruption and not just a new CEO’s shake up of one major retailer.  Target's plans are not however targeted to the new consumer shopping demands and so this again is the first round of changes.  The focus on the omni-channel purchasing model and the supply chain revision to support that model is a good start, however it only addresses the foundational framework to support purchasing.  

The consumer shopping methods driven and supported by mobile technology is on the verge of causing a major disruption of the retail market.  This disruption is intially being driven by third party services starting with Groupon and extending now to location based notifications from Retail Me Not as examples. These types of services are providing consumers with shopping information that is cross channel and broad focused into many categories.  I can start my shopping at a mall and using one of these services I can conplete my purchases on line and then finish the day with a nice meal at a near by restaurant using discounts from these services.

These services extend mobile technology and with it the consumer shopping capabilities to drive the retail disruption.  This disruption is quickening now as consumers flex their imagination and the mobile technology capabiltiies. I see the reaction and the encouragement from pure Internet players and the best example is Amazon.  For example Amazon has changed the market and shopping patterns with their Prime offering that provide 2 day delivery on all orders and the reaction to this major shift from Amazon is other retailers re-evaluating and lowering the order value totals for customers to receive free delivery.

 

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumers’ experience?  Improving the consumers experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Retail Shopping Paradigm

Retailers have generally viewed the market from a retail purchase paradigm, in other words the vast majority of their focus has been on how the consumer makes a purchase.  You can see this in all aspects of the retail and omni channel market where every aspect of the experience is focused on completing the purchase.  This has been a very successful strategy for retailers in the past and you can see in the eCommerce market for the majority of retailers this same focus on the purchase.  I have been seeing a shift in the consumers purchase habits that has been brought about by technology as a beginning for consumers to focus on the shopping.   

In thinking about this I realize that we are not seeing shift in focus, instead wheat we are really seeing is the true nature of the consumers’ focus.  Consumers have always focused on shopping as the sport that leads to the sale, while retailers have been focused on the most critical aspect of from their perspective, the purchase.  You might think that brick and mortar retailers have always been focused on shopping, however I am now realizing that the focus is simply on the methods that lead to a sale.  This includes the placement of merchandise, the location of the store, the marketing of the merchandise.  What is missing though is the analysis of consumer reaction, retailers have measured consumer reaction through the purchase.

While many consumers, myself included, are focused on the purchase, there are a great deal of consumers that focus on the shopping first and the purchase as one of the benefits of shopping.  Shopping for many consumers is a social activity that may not end in a purchase.  The goal of shopping for many consumers is the social interaction.  Consumers have always been open to using technology to support their shopping and the most obvious example is the consumer window shopping, where the consumer goes to the store to view and touch and try the product but complete the purchase online.  Retailers fought this practice because it impacts their sales, or the purchase.  Consumers have evolved to new methods of integrating technology into their shopping.  

I see that we are coming to a tipping point where the technology supports the desires of the consumer in retail.  I do not think though that most retailers have changed their paradigm yet to a consumer shopping perspective.  Most retailers are still focused on the consumer purchase perspective and I'm afraid that there must be another fall out of large retail failures in order to understand the difference, and importance of the change.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumers’ experience?  Improving the consumers experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Supply Network Planning

The social network tools and capabilities have dramatically impacted the supply chain, for the better, to provide increased information to your extended supply chain network from the manufacture to the delivery process.  These improvements support not only more accurate delivery and flow of data updates providing progress tracking but also allow for more accurate planning and forecasting to manage inventory to both reduce overstock conditions and also higher than anticipated sales volume.  This additional information supports more accurate forecasting and planning along each step of the way.  This accuracy in forecasting and planning supports a wide array of options in meeting the consumer demands.

One of the key factors to improving the forecasting and planning capabilities is the incorporation of Big Data capabilities and principles.  The accuracy of forecasting and planning is directly related to the data that is used to produce the forecasts and plans.  Big Data provides the framework and capabilities to collect and analyze massive amounts of data to support improved forecast and plan accuracy. Don’t get me wrong, I realize that just collecting data does not improve accuracy, you must understand the data and then develop and analyses and algorithms to produce the forecasts.  The improved forecasts are a journey that will benefit from a continuous improvement process.  It is critical though for you to take that first step.

This is just one factor though in your supply network planning and execution practices.  The value of your network will be delivered through the balanced coordination and delivery of product to its destination, on time, at the right cost with high quality.  The additional capabilities and tools provide your supply network with the capability to adjust to changes in demand in a more timely manner.  In order to do this though you must develop your network with the partners that can produce the products more efficiently and quickly.  Off shore manufacturing for example has thrown a monkey wrench into the concept of just in time production due to the length of the supply chain.  Your supply network must take the manufacture and delivery time into account in the forecasting and planning.  

You can take this into account by adding near shore and on shore manufacturing partners to your supply network.  These partners can be used to fill the immediate needs of your network to reduce the length of your supply chain.  There are obviously some markets and products that are currently more conducive to this type of strategy however I see this as a growth opportunity area for the product lines that do not currently fit into this model.  The point is that the social network tools and more importantly capabilities must be embraced to support the increasing demands of your supply network.  

 

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumers’ experience?  Improving the consumers experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Cultural Impact

Every country has its own culture and in addition, every country has subcultures based on geography and descent, or heritage.  In the past many countries have encouraged homogenization of heritage to build the national culture and this was especially true in the United States.  The Internet has opened the door to international communication and collaboration that is bringing dramatic change to both the professional and personal arenas.  Way back 50 years ago people maintained relationships mainly through writing and letters, telephone calls or in person. Now there is an instant communication in both written and direct communications (phone and web conference) that adds to the relationship management tools and that add  immediacy of contact basically free over the Internet.

These tools and capabilities have both encouraged homogenization of contact and some cultural aspects while supporting the culture of descent and heritage.  With the ability to easily and cheaply communicate across geography and time zones the heritage and family support and contact remains strong.  These tools and capabilities are also pushing the boundaries of the supply chain from the raw materials to the end consumer.  With the acceptance and incorporation of the communication tools and capabilities the expectations of both consumers and business partners has changed.  It is no longer acceptable for update communications to simply provide the status when the material is placed on the freight carrier, it is instead now a requirement to provide both the status and the forecast of the manufacture process through the delivery process to the end customer.  As an example, parcel shipment status updates for when the parcel leaves the distribution center and each point along the flow of delivery are now standard and customary.  When I place an order with any eCommerce merchant I can track the delivery of the parcel through each transfer along the way of the delivery and in addition, I can even redirect the delivery of the parcel to another address if necessary up until the day of delivery.

These tools have dramatically impacted the supply chain, for the better I might add, to provide increased information on the manufacture to the delivery process.  These improvements support not only more accurate delivery and flow data updates but also allow for more accurate planning and forecasting to manage inventory and both reduce overstock conditions and also higher than anticipated sales volume.  The additional information supports more accurate forecasting and planning along each step of the way.  This accuracy in forecasting and planning supports a wide array of options in meeting the consumer demands.

 

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumers’ experience?  Improving the consumers experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Collaborative Retail

Omni channel retail is a foundational framework that is the price of entry and must be viewed as what it is; a purchase capability.  The purchase is the end result of the consumer shopping activity and must be viewed as such.  The purchase is one of the tasks within the shopping process.  The shopping process is another story and must be taken as a whole process to fully support the consumer desires.  The shopping process model includes and describes a new shopping process that I call collaborative retail.  

The collaborative retail shopping process describes use of mobile technology to support the model.  The impact of collaborative retail on fulfillment is a game changer and must be taken into account for successful retailers in the future.  In fact I think that the retail fulfillment model must be thought of as consumer fulfillment to better describe the fulfillment process.  Consumer fulfillment can be described as the process to deliver the product to the consumer, this in other words in omni channel fulfillment.  In order to complete the consumer shopping process model you must include omni channel fulfillment.

Another activity within the collaborative retail shopping process is communications between both consumers and the merchant.  This is where mobile technology comes into the picture to support additional consumer capabilities such as consumer network recommendations.  This is also where the communication to the consumer from the merchant is starting to take shape and take advantage of new technologies such as beacons to communicate to the consumer.  Beacon technology truly is in its infancy where it currently is incorporated as a push technology to send information to the consumer to promote shopping.  I see the beacon technology as providing the means to open a two way conversation with the consumer.

This collaborative retail model provides the consumer with options to purchase.  This will turn the merchants’ model on end.  As an example this model turns the retail store into a showroom that the consumer uses for viewing, touching and trying products but the actual purchase may not be made in this showroom and the purchase may be with another merchant.  The merchants will improve the likelihood of consumer purchase through the two way communication with the consumer and the services that the merchant offers.

In the past, the process was viewed from the perspective of the merchant and described how the consumer purchase was fulfilled.  The collaborative retail model views the process from the perspective of the consumer and in this model the consumer purchase is an activity within that model.  This model viewpoint is being driven by mobile technology capabilities that are being embraced by the consumer.  The mobile technology is allowing the consumer to control the shopping process in a manner that was not previously possible and merchants must recognize this in order to be successful in the future.

Listening To The Customer

Retailers must focus on the customers' needs and communicate with the customer in order to not fail.  I wrote it in this way because I believe that the price of admittance in the retail market is the need to listen to the customer.  The importance of customer collaboration cannot be higher. The success of retailers depends on their desire to listen to what the customers are saying to them and their ability to deliver on the customers' demands.

It is no longer enough to simply provide a means for consumers to shop and purchase. These practices will barely allow the retailer to subsist.  I think the worst place in the market that a retailer can claim is based on lowest cost.  This strategy is too fragile to Wal Mart on the one side and added value service providers on the other.  The lowest price strategy is a losing strategy from a retailer perspective for a large stretch of the market.  I understand there is and probably always will be a place for commodity shopping with a focus on low price.  Walmart has cornered this Market though from a brick and mortar perspective and Amazon has done a pretty good job cornering that market in the eCommerce sector.

The successful retailer in the future must engage the individual customer to develop a relationship with that customer.  This can be done through big data techniques and engaging social networking and mobile tools in a way that supports collaboration and one-to-one communication with the customer.  As I have previously discussed consumers are themselves taking some control and shifting the market in their shopping practices by integrating social networks and mobile technology.  This practice will continue and expand as the technology available to consumers expands and the consumers themselves put the technologies together in new ways.  

The young are leading the way in using these technologies and combining in ways that provide the greatest value.  I see this process of discovery of new tools and capabilities, especially in mobile capabilities, as quickly embraced and utilized by older consumers as the cycle of change quickens.  This process of change and continual renewal will be driving the retail environment in the future and this is why retailers must start to develop the collaborative relationship with consumers now.  

I see the future of retail being driven by the collaborative relationship between the retailer and the consumer.  This future will be driven more by the consumer than any time in the past, the consumer will force the acceptance of the collaborative relationship with the retailers.  The market is much too open and fluid for retailers to ignore the demands of the consumer.  The consumer will drive market and the successful retailers of the future will focus on the collaborative relationship rather than purchase channel or price.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumers’ experience?  Improving the consumers experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?