Supply Chain As Retail Channel

The retail extended supply chain has added a new wrinkle to the retail marketplace by becoming a new retail channel.  Retailers have incorporated their suppliers and extended supply chain into their market offering as part of an ‘endless aisle’ strategy. This strategy has created a new retail market channel for the suppliers and provides additional opportunities to for suppliers to develop relationships directly with the consumer.  Suppliers are gaining and developing an eCommerce strategy to interact directly with the consumers.  This new retail channel is beginning to have an impact on the supplier’s plans and focus of activity and spending.  

Suppliers have begun to realize that direct interaction between consumer and supplier provides a very profitable outlet for product sales.  I find this shift in interaction especially interesting because what started out as a method for retailers to offer a wide array of products to their customer has a very real potential to shift these sales from the retailer to the supplier.  This potential is now being actively pursued by many larger and forward looking suppliers and as these suppliers explore and expand into the direct to consumer interaction there will be a larger and larger impact on retailers themselves.  I see the expansion played out now in recruiting sites where more and more manufacturers are actively searching for eCommerce and web strategic leaders to expand their reach into the technology.  

Consumers are also willing and active participants in these expansions through web and mobile technology and as manufacturers expand their footprint into mobile technology consumers will only expand their interaction with the new provider.  Consumers have begun to blur the line between channels and also outlets as a type of strategic direction and it is imperative for retailers and suppliers to recognize and respond to this consumer strategy.

Retailers, and especially the large retailers, have in many cases obtained agreements from their suppliers to not engage in direct consumer sales in areas where the retailer has a presence.  This is a foolish and short sighted strategy and has back-fired time and time again for retailers.  The consumer is starting to take control of their shopping and purchasing through all of the outlets and especially through eCommerce and mobile based technology.  The consumer is exerting their own will in their shopping and purchasing practices and this is beginning to bring an upheaval to not only the retail market but also to the suppliers and supply chain that supports the consumer shopping and purchasing.

The supply chain in which the supplier plays a prominent role is now becoming a retail channel.  Consumers are driving and expanding these changes into the retail market and this means that retailers, suppliers and the carriers and coordinators that connect all the disparate parts of the chain must step up to meet the demands of the consumer.

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 consumer's experience?  Improving the consumer’s 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?