Omni Supply Chain

It seems to me that supply chain is being driven towards an omni supply chain model where the capabilities are available to deliver to the endpoint customer any time and through multiple methods and customer selected delivery points.  I see this as another opportunity for millennials to open the door to the possibilities and demands to fit into their lifestyles.  This is also a bigger issue in an urban area than in a suburban or rural area so the supply chain and finial carriers must have the ability to support multiple models for the delivery.  The consumer challenge now is for the supply chain to be knocked off-balance and forced to reevaluate their extended supply chain and especially the delivery model.  The bulk of the final delivery has been moving towards the parcel model now for a long time and I think the industry now may be at a tipping point that can be easily pushed by millennials to re-evaluate practices.

One of the most annoying carrier practices in my opinion is the ‘sorry we missed you’ post it note left by carriers.  This practice is especially prevalent in urban settings where there housing is more dense and the need to secure the package when delivering is highest.  This most annoying aspect of this issue is the differences between carriers and even between carrier drivers.  The most annoying experience for me was a FedEx delivery where the only notification of a failed delivery I received was from Amazon tracking and then the driver would not vary his delivery time to coincide with my request to drop the package at a local retailer that would accept the package for me.  This has left a very bad taste for me and it is so bad that now my only recourse for the FedEx delivery service is to have it sent to a local FedEx store where I can retrieve it.  

I bring this up because this is in my opinion the next frontier that will be confronted by consumers for change and carriers and retailers must take this into account.  Most last mile delivery carriers are providing consumers with capabilities and options to adjust the final delivery which is positive.  The end experience though needs to be improved and simplified.  Carriers are still focused on fitting the consumer demands into the actions that easily fit into the carrier’s own existing capabilities which does not take into account the consumer desires.  This is exactly the position that retailers held not so long ago and now you can see that these large retailers are struggling with retention and sales.  

I see another large shift in the horizon focused on consumer interactions with retailers, manufacturers and especially with carriers to adjust to meet the consumer lifestyle demands.  This will again be driven by the imagination of millennials and their comfort in technology and ability to use their imagination to mash up capabilities into new services.  These will be good times for manufacturers as they expand their reach into the marketplace and there will be a quickening of fallout for large retailers and major transportation carriers.

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?

Consumers In The Supply Chain

The supply chain historically has been focused on the marketplace and the support of the marketplace from the point of supplies to the point of delivery to the consumer.  Just as consumers have taken control of their shopping and purchasing capabilities in the retail marketplace they will also take control of the supply chain that supports their retail shopping and purchasing. Consumers, and millennials again will be driving these demands, will use social networking and mobile technology to reshape and build a supply chain that supports their demands and their lifestyle.  Retailers, manufacturers and transportation must learn from the lessons of social commerce changes to the retail marketplace in order to build the flexibility required to support the consumer social supply chain demands.

You see the beginnings of these changes with new services offered by carriers to redirect deliveries to a location at the convenience of the recipient and this is only the beginning.  There is no reason to think that millennials will be limited in their actions to the last mile delivery, and there is no reason to think that manufacturers and carriers will be any more nimble in their interactions with consumers than the large legacy retailers were.  In these areas the FedEx and the UPS stores may be at an advantage and the forefront to react to the changing demands of the consumers.  The USPS is also in a great position to meet changing consumer demands because they have postal locations across the nation and on top of that they deliver on Saturdays as well.  

I see the extended retail supply chain facing the same concerns as retailers, where they are focused on cost efficiencies and reductions to meet the demands of a very large and varied customer base, just as the large legacy retailers.  I think the large carriers, especially the ones providing the last mile delivery to consumers in the supply chain are heading towards a big shake-up as well.  This shake-up will be result again of millennials that will not accept the limitations of these carriers and demand new services and capabilities to meet their own lifestyles.  I also see Amazon again as a force for change in the retail supply chain driving new services and capabilities to create new demands and consumer expectations, just as they have done with retail shopping and purchasing practices.

I see the retail supply chain now focused on market share and cost containment, in the same manner as large retailers in the 80’s and 90’s, and the supply chain is heading for difficulty in support the changing market and demands of the extended supply chain partners.  There are three key catalyst areas for these changes; consumers, Amazon and manufacturers.  The manufacturers are beginning to come into the marketplace now and develop relationships with consumers in addition to retailers and this is another factor that will exert a greater influence on both the retail marketplace and the extended supply chain.

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?

Social Supply Chain

A social supply chain will be the natural result of social commerce and in fact will become another requirement to succeed in the retail marketplace.  As consumer demands increase in velocity and complexity retailers will quickly find out that a command and control structure cannot support these new demands.  Retailers will quickly find that they must collaborate with all partners in their supply chain in order to support consumer demands for social commerce.  The same capabilities and features that consumers are embracing to create the social commerce shopping marketplace should be incorporated by retailers and their extended supply chain to support and even extend the social commerce shopping.

Retailers require near real time status of all product delivery from the manufacturing plant to the consumer door and collaborative social interaction with the supply chain partners will allow the entire supply chain to interact and react to consumer demands in a manner that enhances the social commerce consumer practices.  This information should be shared with all partners across the extended supply chain, including the consumer to help to make informed shopping, purchasing and shipping decisions.  The retail supply chain extended partners have already begun extending the consumer relationship and the expanded and improved interaction developed in support of a social supply chain network will only enhance and improve those relationships.  This social supply chain network actually improves the retailer to consumer relationship and allows the retailer to act as a consumer advocate or consumer agent in the social supply chain.  This is similar to the practices of Amazon in providing a retail outlet for other smaller retailers and also act as an agent of the consumer with these third party retailers and even the transportation partners.

Retailers really must develop their social supply chain network as an extension in order to retain customers and enhance the consumer relationship.  This development of the social supply chain along with the retailer’s extended role and consumer relationships allow the retailer to extend their relationship with the consumer.  With changes and developments in the relationship and role of manufacturers in the retail marketplace, retailers must extend their relationship with consumers to provide interaction with the extended supply chain partners and capabilities.  Retailers must improve their relationships with consumers in order to retain consumer shopping and purchasing habits and provide the reason for consumers to return.  

Consumers have a great deal of choices in making a purchase, from legacy department stores, to online discounts, online retailers and even direct from the manufacturer.  Online retailers currently have a distinct advantage over the legacy retailer because they have focused on developing the online interaction and tools.  This advantage though would disappear though if legacy retailers and large brick and mortar retailers focused on delivering social commerce supported by a social supply chain to address consumer demands.  Legacy retailers must develop the experience that crosses channels and encourages the consumer to return for something other than a discounted 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 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?

Retail Direction

The retail industry can feel very fickle due in large part to trends in products, categories and consumer purchasing habits that seem to change at the drop of a hat.  This is especially true in certain retail and product categories, for instance the fast fashion category is built on the continuous change of new fashion products while home improvement category is a little less volatile (for now).  From another perspective, the impact of these changes and trends is also much more volatile from a retailer perspective due to the speed of change supported by ecommerce and social commerce.  Then from a third perspective the millennial generation is also driving the volatility of the market as a result of their changing demands to fit in with their lifestyle.

The large legacy retailers and especially the department store retailers have been caught off balance with the ‘sudden’ change in consumer shopping and purchasing practices.  I have seen many papers on the direction of consumer shopping moving towards relationship development and the market share of eCommerce purchasing and growth of omni channel consumer demands has been growing.  These large retailers have simply not recognized the changes in culture that have been happening all around them and for many years.  Amazon has been developing consumer relationships for years and yet legacy retailer reaction is to lower their prices and allow consumers to pick up their orders in the store.  Then these retailers must adjust to the lower profit margin and they reduce costs (staff) in their stores to increase their margins again eliminating one of the key factors in developing consumer relationships!

I think that the key factor in legacy retailer sales falling off the cliff is the increases in the millennial consumers in the marketplace.  I think that the millennial consumers have reached a critical mass and their practices in shopping and purchasing are being adopted by the consumer marketplace at large.  Millennials are doing what they have always done - develop a way to mash up social networking with eCommerce to develop social commerce that supports their lifestyle.  As the number of millennials increase in the market their practices become more mainstream and common to the consumer market in general and these practices are then being adopted by other consumers to support their lifestyle.

Legacy retailers must change their strategy to support flexible and discontinuously changing consumer demands.  This will cause a great deal of fallout in the market for the legacy retailers, which we are already seeing.  This will be very difficult for these large retailers because it is a paradigm shift of large magnitude and will ultimately change not only their strategy but their corporate culture and relationship with the marketplace and market partners must also 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 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?

Relationship Retail

Social networks and the growth of social commerce, especially among the millennial generation, highlights the importance of relationship retail and the need for retailers to develop a relationship with consumers.  Social commerce changes are allowing consumers themselves to focus on developing the relationships that are now reshaping the retail marketplace.  Retailers have payed lip service for a long time to the importance of consumer relationships and consumer retention and then their actions focus on cost reductions and reducing the time and resources available to develop a robust consumer relationship. This has not gone unnoticed by consumers and you can see the results as consumers are now abandoning the large legacy retailers in favor of the retailers that have focused on the relationship.

We have always heard that the customer is always right and retailers have professed to focus on customer demands as a means to retain customers.  Yet now consumers are shopping and purchasing from other retailers and leaving the legacy retailers at the drop of a hat.  Take JC Penney as an example, when they changed their product pricing strategy from recurring sales, discount prices and coupons they lost market share and sales.  Penney’s then changed back to their earlier strategy of discounting prices and special coupon offerings.  What this tells me is that JC Penney only fills one consumer demand, low price, or more precisely, perceived low price.  If Penney’s was concerned with the consumer relationship they would have taken the opportunity dig a little deeper into a broad market research rather than simply reverting their strategy they may have discovered the importance of consumer relationships.  Penney’s should have invested in developing consumer relationships when they returned to their old pricing strategy.    

There’s an old saying ‘When the only tool you have is a hammer, everything looks like a nail’.  The low price and sales strategy is the legacy retailer’s ‘hammer’ and their reaction to every change in the market has been to use that hammer and lower prices to attract consumers.  This turns into a downward spiral because in order to survive with lower prices they must lower their costs and this results in reducing staff which in turn then impacts the consumer experience in the stores thereby continuing the cycle.  Even the legacy retailers online experience is similar to the store experience with the addition of waiting for delivery.  

Millennials have grown up with a different social interaction model and they are infusing their shopping practices with their demands and experiences from this model.  They are continuously searching and building new methods to support their lifestyles, including shopping and purchasing.  They have blended their work, leisure and shopping into a social practice that supports their demands in the medium, time and place that makes sense for them and do not bend to the rigid practices and capabilities of legacy retailers.  These demands and capabilities are expanding in the retail market and changing the focus from a simple low price purchase model to a social relationship shopping model and retailers must now focus on developing the relationship across all channels in order to survive 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 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?

Social Commerce Velocity Of Change

I think the best way to describe social commerce is that it combines the shopping and purchasing aspects of the retail marketplace across all channels at the speed of life.  A key struggle for retailers now is building the framework of technology, people and real estate into a cohesive experience that can support the velocity of change that is demanded by the millennials.  Millennials are comfortable with technology and they have also integrated technology into their lifestyles to support the social interactions and their lifestyles.  These practices by millennials is having a greater impact on the retail marketplace as they grow in the marketplace.  As a result of this growth in the marketplace the velocity of change is increasing in a manner that is uprooting the marketplace common practices.

Retailers must realize now that they can no longer control the marketplace and they must change their practices and framework to support the speed at which change is occurring.  To delay means a loss of market share and the beginning of the end for the retailers.  Large legacy retailers are realizing the market is changing and they are now making adjustments to change with the market.  These retailers are incorporating tactics that have been successful in the past to realign their channels to the market.  Time will tell though whether they have started the process in time to overcome the challenge.  

The challenge for retailers is the velocity of change driven into the marketplace by social commerce.  Retailers must address the velocity of change challenge now in order to survive.  This requires a significant change in their strategy and they technology capabilities framework in order to support the velocity of change.  The manner in which the legacy retailers address the change must be significantly revised from a technology along with culture perspective.  Retailers do not have the luxury of reviewing the changes to determine the type of monolithic technology structure will support the requirements.  These large legacy retailers must change their methodology in order to sense and react to changes in the marketplace.  

Retailers can start with a cost reduction and elimination strategy in order to extend the window for them to implement the framework and cultural changes.  They must however  begin the framework and the cultural changes at the same time as cost reductions because there is no time now to wait to free up dollars to pay for the changes.  This is a life or death struggle for retailers and they must realize and embrace the culture of change and also the velocity of these changes in order to survive.  The velocity of change being driven by millennials on the marketplace will leave behind any retailers that do not quickly implement the capabilities and culture to support the velocity 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 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?

Social Commerce Uproots Retail

The trend towards social commerce has been growing for years now and over the last year this growth has really sped up dramatically due in large part to millennial growth and mobile technology.  This year is seeing the dominance of brick and mortar retail staggering and the impact on the large legacy retailers, especially department stores is dramatic.  It seems that each day and week there are more announcements of declining store sales and store closings with the most dramatic being the impact on Macy’s departments stores.  On the other side of the equation we are seeing large investments in online retailers by Walmart and and at the same time large investments in brick and mortar outlets by Amazon.

All of these factors lead to a dramatic upheaval in retail where long held practices and strategies are uprooted by a shift in consumer interaction that has not been anticipated by the legacy retailers.  I have started to refer to legacy retailers as a designation for the larger department store retailers that have been the anchor for large malls and also a driving factor in retail trends.  These legacy retailers seem to be in a major upheaval brought on by this new social commerce and they are frantically trying to adjust and determine a direction to incorporate the changes being demanded of them now.  This requires a shift though in more than strategy, in requires a shift in culture as well. In fact the strategy shift from a corporate perspective is straightforward and simple. The struggle now is the required culture change to define and implement the strategy.  These retailers struggle with the change, they are like a large ocean liner changing direction, when the retail marketplace now requires a nimble sports car.

Amazon is at the forefront now in creating this new retail marketplace and as usual they are not waiting on others to catch up.  Amazon is now putting together the pieces of their services to create a new marketplace that blends services such as video, music and delivery of these services with shopping and purchasing.  Amazon has embraced the concept of social commerce and they are creating the marketplace as the go.  They realize and embrace the requirement for nimble actions and reactions and they have developed a set of services that provide a robust and flexible framework to support social commerce.

There will be no time for the legacy retailers to wait to understand the direction before making a decision and incorporating the change in direction.  This social commerce is uprooting the retail marketplace and legacy retailers must change and embrace this direction or there will be a great deal more fallout and loss of these retailers.  They don’t have time to raise funding they must increase spending and then follow with the adjustments to their real estate holdings.  They must realize that a long term strategy now must focus on making it through the next year.

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?

Retailer Acceptance of Social Commerce

Retailers must now embrace the social commerce in order to maintain their share in the market as a result of the consumer embrace of these practices.  This will be very difficult for retailers because is requires a fundamental change to the manner in which the retailer not only interacts with the consumer but also, and more importantly, the attitude towards consumers.  This change must include retailers collaborating with the consumer to better understand trends and then to react and incorporate these trends.  Then in order to incorporate the trends retailers must also invest in a robust and flexible commerce process and technology platform that supports the velocity of changes that will come about from the consumer collaboration.

A while back when Facebook grew in importance in the retail marketplace many retailers were caught flat footed and had to scramble to implement a process to integrate Facebook into their marketing strategy and toolset.  The retailers incorporated other social networking tools into their practices as well, all pretty much in the same manner; there was a presence created and then the content and interaction from that presence was managed separately outside the eCommerce sales framework.  This worked for a while until mobile and wireless technology grew in acceptance and now the consumer is demanding and integration across social networking and commerce tools to improve their shopping and purchasing capabilities.

These technology changes are the retailer pain point because it essentially requires a new technology framework that supports collaborative and iterative changes without a great deal of overhead.  This is where the culture collides with consumer demands and this is where the large legacy retailers are struggling and losing sales due to their struggle with meeting the new consumer demands.  This is where the legacy retailers will require large technology investments to support the new consumer demands.  Large legacy retailers have a huge investment in real estate and robust operating technology that focuses on the cost reductions that can be realized through scale.  Consumers now are changing their methods of interacting and more specifically shopping and purchasing practices that greatly impacts the retailer investments in real estate and technology.

This is the root of the issue and retailers are now beginning to struggle with these new consumer demands and practices in order to survive.  This is why you see now many large retailers reducing brick and mortar store presence in order to pay for the cultural and technology changes.  These changes will cause additional fall-out in the retail marketplace in the near future as retailers fail to change.  We are already seeing the impact on large legacy retailers that will lead to a dramatically different retail marketplace in the near future. Retailers must act quickly now because the consumer is continuously developing new methods of shopping and purchasing to meet their needs.

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?

Consumer Acceptance Of Social Commerce

Consumers have not just accepted, they have wholeheartedly embraced social commerce to such a degree that it is causing a major disruption in the retail market.  I saw reports of a recent survey stating that consumers are comfortable now with omni channel purchasing and I think this is really an understatement to say the least. Now there are reports on major news outlets trumpeting the potential end of department stores!  As with most reports on the major news outlets this is somewhat inflated and only provides the most basic background related to closings announced and the increase in online purchasing.  As I have mentioned previously we have entered a period of major disruption and there will be a great deal of fall out from this period.

This disruption is not immediate and did not suddenly occur overnight, the signs and build up to this have been accumulating over the previous few years and retailers to their credit have also been adjusting to these changes.  We have reached a point now where there has been a convergence of internal and external factors that have come together to bring a tipping point for the major legacy retailers.  In this case the impact though is on the larger legacy retailers in forcing a quickening of changes that require faster reaction and adjustment times than these large legacy retailers are willing to engage.  This is a cultural impact as well as consumer marketplace demands that have converged to disrupt the retail marketplace.

This convergence from the consumer perspective has come about as a result of a few factors:

• Technology improvements coming from the mobile technology and especially the wireless technology arenas.  Consumers have embraced these technologies to simplify their shopping and support their changing lifestyles.
• Extended supply chain improvements especially in delivery to allow consumers to coordinate delivery in the manner that supports their needs.
• Growth and acceptance of Internet retailers and especially purchase and delivery options offered by Amazon as an example.
• Growth of millennials and their mashing technology tools and social networks to support their shopping and purchasing practices.

All of these factors have come together to dramatically impact the retail marketplace and with it the large legacy retailers that are now struggling to meet these changing shopping demands.  

Consumer acceptance of social commerce is dramatically impacting the retail marketplace and there is now no turning back.  The impact of millennials on the marketplace will continue to grow and the changes they are driving will only speed up as the acceptance grows across the marketplace.  Retailers now must change both their culture and their technology and corporate infrastructure to increase flexibility in order to succeed in the future.  The current marketplace fallout with the large legacy retailers is more the result of these retailers recognizing and trying to account for these changes than the failure of the department store.

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?

Social Commerce Culture

Social commerce growth and adoption by consumers is a culture change for legacy retailers and not just a new method to interact and sell to consumers.  This requires a culture change of legacy retailers to change the way that these retailers interact with consumers and this will be the greatest difficulty for these retailers.  Legacy retailers must revise their own internal and consumer facing activities to take into account and support consumer demands to expand the social interaction across channels and partners in the channel.  This culture change must also extend across all partners in the social commerce marketplace.  This is no longer a question of sales channel, it is now the total consumer interaction across channels and this is the reason for the need of a culture change to support this new marketplace.  

This change coming is can be loosely compared to the introduction of social media networks on the retail marketplace and is beginning to have the same impact on retailers as that first wave of social networks.  You remember the impact of Facebook on retail almost ten years ago when consumers had embraced this new technology to share reactions to interactions with retailers and the struggles for retailers to develop a presence in this new technology.  Social commerce is the natural progression of consumer practices in the mash up of social networking and omni channel retail sales.  You can see this across the span of social networks that have embraced marketing and advertising in their social networks to support these networks.  Another growth area impacting the retail marketplace is the growth and consumer embrace of product search and comparison, especially price comparison.  

The catalyst for this major change in retail is the introduction and embrace of mobile and wireless technology.  These technologies have allowed the consumer to combine and share in new ways that are now significantly impacting the retail marketplace.  This is also impacted by the growth of technology companies such as Google on the retail marketplace.  Retailers seem to be caught flat footed by these changes as they were when Facebook first changed their interaction with consumers.  

Retailers must learn the lesson that consumers are taking control of their interaction with retailers and retailers must change their culture to embrace these new technologies and collaborate with consumers to develop the next generation of commerce.  Retail cultures have been driven by major events in the past and now these major events have morphed into a continuous stream of changes and revisions that must be embraced by retailers and even lead by retailers in order to increase consumer retention in this new and changing marketplace.

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?

Social Commerce Collaboration

Legacy retailers must really step up their collaboration practices in order to succeed in the social commerce market.  This means that they must focus on the technology collaboration tools and integration of mobile collaboration technology while also providing a human interface to the collaboration to support a direct consumer interaction that encourages participation.  These requirements are nothing new to the retail environment, however they take on a much greater level of importance in the social commerce marketplace. Consumers are trying to engage with retailers as is demonstrated by the success of the Amazon customer retention programs legacy retailers must now invest in the technology and the processes and people to support these investments.

Legacy retailers are really in a good position to support these consumer demands because they already have the reputation and the base sales from consumers.  These retailers though must implement a technology investment program in order to support the ongoing demand for these consumer demands.  Consumers will not slow their demands and expansion of capabilities and legacy retailers must implement a continued investment program to support the demands going forward.  This requires a change in culture for the large retailers in order to implement a continuous investment program that supports incremental investments that support changing consumer demands.

Going forward the successful retailers will excell in the social commerce marketplace and this success begins with developing a relationship with consumers.  Legacy retailers have an advantage because they have an infrastructure of physical retail outlets with a consumer base that provides direct interaction with consumers.  These legacy retailers are at a disadvantage though because they are focusing mainly on operating cost reductions.  These retailers need to change their strategy and also their culture to encourage and support direct consumer interaction across sales channels to create a seamless marketplace for consumers to shop and purchase.

Legacy retailers must implement a difficult culture change including breaking down the barriers across channels and changing their technology investment strategy  in order to succeed in the social commerce marketplace.  These legacy retailers do have an advantage in their marketplace framework across channels, however they must change their integration and utilization of the channels in order to create a blended consumer experience that focuses on the positive consumer experience and not the retailer management benefits.  Legacy retailers have been slow to embracing these changes because of the difficulty and resistance to change in the culture.  Legacy retail leaders must focus on changing the culture and this will be a long process to not only start the process but also an even longer process to ensure this new culture will flourish.

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?

Social Commerce Direction

Social commerce has introduced a practice of discontinuous change to retail that will drive the market going forward in a manner that will not allow retailers to rest and will also require a discontinuous level of investment that will be the only thing that remains constant.  In this social commerce model there is no end state there is only a continuous journey with changes and turns that individually are extremely difficult, if not impossible, to predict.  This model is a dramatic change for large legacy retailers that have developed a model that takes advantage of size and bulk to drive profits, this model is being turned on its head by the leveling effect of social commerce that focuses on the consumer demands.

The social commerce impact is reverberating across the market and impacting all areas and partner in the market and one major change in this new landscape is that consumer driven demand and purchasing is no longer driven by the offerings of the large legacy retailers.  It seems that these practices of the large retailers is relegating their market share to commodity type purchases that are based on price and product availability.  This is a very difficult situation to find yourself in because it is so difficult to extract yourself once it becomes the consumer's’ view of your place in the market. On the positive side though, retailers such as Amazon are turning many purchases into commodity type purchases.

In my opinion, Amazon is probably the best example of a retailer that embraces and also is driving social commerce.  I think that Amazon is in fact the one retailer that is focused on building the components now that will make up the framework of the social commerce market.  Amazon has made developed a steady progression of tools and shopping capabilities while at the same time maintaining a focus on consumer social integration that has lead the market in developing and growing social commerce.  Amazon understands that consumers are changing their shopping and purchasing practices and Amazon is continuously experimenting with new tools and capabilities to engage the consumer and encourage active participation by the consumer.

Amazon is leading the way and now and legacy retailers need to develop their own strategy to engage with consumers, they should not focus on copying Amazon tactics, instead they should be developing tools and capabilities that engage their own customers.  Legacy retailers have a great advantage in the span of their consumer interactive options and also their reputation with the consumers.  These retailers are wasting their time in chasing Amazon because they will never win, instead these retailers need to focus on developing their consumer relationships that take advantage of their own strengths.

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?

Social commerce impacts the entire retail marketplace from the retailer to the consumer all outlets in between including real estate, food services and entertainment services.  Consumer changes related to the expansion and embrace of social commerce are impacting the viability of large legacy retailers along with the small and mid-size regional type retailers to meet the consumer shopping and purchasing changes. Real estate is impacted because these social commerce changes are causing a reduction in consumers that shop in all types of malls and especially the large malls that are anchored by the large legacy retailers.  Food and entertainment services are collateral impacts related to the reductions in consumers shopping in all types of malls.

The impact of social commerce on large legacy retailers has already impacted the real estate market for malls in the form of dramatic reductions in consumer mall traffic and also closing of anchor stores in many malls.  This is requiring mall management to develop a new strategy to bring consumers back to the mall and this requires retailers to incorporate consumer social commerce practices into their strategy.  We may be coming into a time where large malls are not shopping havens that depend on large legacy retailers for traffic.  It seems that the small specialty retailers are not impacted as much by the consumer changes brought by social commerce and this must be taken into account.  

This doesn’t take into account the impact on food and entertainment services. Reductions in mall traffic and shifting to eCommerce purchasing is also dramatically impacting the food and entertainment services.  The reductions in traffic, along with streaming video services is impacting the mall related food and entertainment services as well.  These changes require the related food and entertainment services that depended on mall traffic to also retool and develop new methods to draw consumers.  Whatever the outcome of these changes you can rest assured that there will be a cost to the reals estate.

It seems that malls are becoming gathering places for teens that have no other outlet, they are too old to want to stay at home and too young to have the means to explore other entertainment options.  In addition to this they are also not economically capable to support malls with their increased presence in the mall.  These teens and young adults are simply using the mall as a place to gather and interact rather than engage in the ‘normal’ mall economic activities.  Generally their economic activities consist of food and drink purchases from the food court.  The food court has turned into the gathering place and this is further impacting traffic to the malls.

There is a ripple effect across the entire marketplace brought on by consumer social commerce and this is, in turn, driving changes into the entire marketplace.  Consumers have embraced the social commerce practices and now the marketplace is struggling to reconcile and adjust to these changes.  The cost to the market will also be dramatic to adjust to these changes as changes are implemented to address the consumer demands.  This shake-out in the marketplace impacts all participants including employment and at this point it is difficult to foresee the endgame and quite frankly I don’t really know if there is what would normally be considered an endgame in the cards for the market.

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?

Social Commerce

Where omni channel retail supports purchases across all retail channels, social commerce encourages shopping across all channels and social network capabilities to allow shoppers to support their own personal lifestyle requirements.  Where omni channel purchasing requires support from the retailer, social commerce allows the consumer to construct the social capabilities across channels and technologies as required by the consumers’ changing needs at the time.  Social commerce now is at the root of the changes that are confusing the retail market and driving legacy retailers to the brink of failure.  The difficulties for retailers are compounded by the fact that consumers have taken control of their shopping practices and this is disrupting the purchasing methods that are the foundation of retail strategies and support practices.

Social commerce is defined and driven by consumer capabilities and imagination that enhance the consumer shopping capabilities currently supported for the most part by shopping malls.  Retailers are struggling with this concept now because they have not had to take these demands into account in their support activities in the past.  This level of control exerted by consumers now through social commerce is foreign to the large legacy retailers that have been accustomed to allowing shopping malls support the shopping demands of consumers.  The entertainment and food choices that have always enhanced and encouraged consumers to spend time at the mall are also being overwhelmed by the consumer changes driven by social commerce.  Technology now allows consumers to select their need, whether shopping or entertainment and they can compartmentalize to meet their demands to fit into their lifestyle.  Movie theaters are impacted now at the same level as retailers from the expansion of technology capabilities impacting the movie experience such as streaming video.  In addition, social commerce impacts the real estate market and especially as it relates to finding new uses for large malls that are left empty from the reduction in consumer interaction in the brick and mortar stores.      

Social commerce impacts the entire retail supply chain, from manufacturers to the purchase, whether that purchase is online or in a brick and mortar outlet.  The consumer demands are changing faster and more fluid as a result of the growth in purchasing by the millennial generation and these changes are overwhelming legacy retailers because these retailers are struggling with culture changes in collaboration along with shopping and resulting purchasing changes.  The greatest struggle though for these legacy retailers is the cost to retool their legacy technology to allow them to support these fluid and continuous changes.  This cost to retool is where the struggle begins for retailers because they will have no hope of keeping up with the changing shopping and purchasing patterns without significant investments in their infrastructure.  This investment is where the retailers struggle with justification because heavy and early investments in technology will impact profit margins and these investments in leading edge technology also run counter to the retailer culture.

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?

Happy New Year

This year has brought many changes to the supply chain and the retail market which has been both exciting and frustrating for both retailers and consumers.  It's been exciting for consumers because they are finally reaching the critical mass point where the are able to control and direct their activities and interactions with other consumers and the retail market.  Its been frustrating for retailers because I’m sure that it feels to them that now they cannot maintain their control and direction of the retail marketplace and interaction with consumers.  A third aspect to the changes in related to the growth in the market of the millennial consumer base and this is also pushing the consumer demands and activities to a level of interaction and experimentation that has not been seen before.

Retailers are now buffeted by the demands of consumers, the need for cost and inventory controls, the cost of supporting the consumer demands and finally the changes to the retail market that is spilling over to the real estate market. The large legacy retailers hare caught in the middle of an industry upheaval that is changing the brick and mortar market to blend changels more fluidly in order to support consumer demands.  These changes are being driven now by the growth of millennial consumers in the market.  Millennials are now dragging the retail market into the twenty first century by introducing social technology and mash-ups to support their lifestyles.  The growth of millennials in the market is dramatically increasing their influence and the impact of their demands is much greater on the retail market.  The key challenge for retailers is the impact of these activities on the retailer culture and the cost of this impact.

Consumers are embracing the technology introduced through mobile technology, wireless capability expansion and social network utilization along with the capabilities introduced by millennials at a greater rate and velocity to support their lifestyle requirements.  This hearty embrace and growth of technology capabilities is building on existing capabilities to quicken the velocity of change that is being developed by consumers and pushed onto retailers.  Retailers now must prepare and develop a framework and strategy that will allow them to quickly react and integrate new features and capabilities as they are introduced by consumers.  Most important though is that we are entering an age of intense collaboration and retailers must prepare their framework and strategy to quickly identify, react and integrate new capabilities into the market and the best way to support these new requirements is through increased collaboration with market participants.

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?