Retail Relational Data

There is a massive amount of data available to retailers from their eCommerce site also their social media interactions and the key challenge for retailers is to put this information to use to help them to build and maintain a virtual relationship with consumers.  Retailer must first recognize the importance of this data and then develop the tools to first collect the information and then to analyze this data. The data available will allow retailers to understand the paths that retailers take through their shopping and purchasing and this information will allow the retailers to enhance their brick and mortar channel along with the online environment and the information will allow the retailer to identify, understand and track consumer trends in both products and also in practices to search and purchase products.

In the brick and mortar channel there is not nearly the volumes or types of data available to help the retailer to track and understand shopping and purchasing practices and these activities were performed by sales clerks.  Unfortunately, large retailers eliminated all but the most essential floor employees and for the most part the remaining employees only have the time to focus on restocking product and ringing up sales. In my opinion this is a major issue for retailers that impacted sales across the brick and mortar channel. In addition to the reduction and refocus of store staff these large legacy retailers the culture of the retailer and the leadership focused on controlling the shopping and purchasing which caused a rift between consumers and these retailers and in many cases driving consumers to the online focused retailers.

This leave retailers behind the curve from a consumer relationship perspective and struggling to understand and keep up.  You see this struggle with retailers acquiring operational capabilities over the last few years. Now in my shopping I’m beginning to see a more collaborative relationship building growing with retailers.  These changes are manifested through consumer research groups from the retailer and expansion and simplification of loyalty programs. As an example, it is no longer enough retailers to focus on the email blast to engage the consumer, now they must add to this additional consumer research surveys on advertising, products and placement within the store and the online site.  

Retailers can now use these expanded consumer notifications and engagement to enhance and inform the information gathered from the consumer online shopping and purchasing patterns to refine and focus on enhancing the consumer experience.  The consumer experience is the key to relationship building and this requires a focus on collecting and analyzing data available from many different sources to guide the retailer. Another major benefit to the analysis of the data and the enhanced collaboration it encourages with consumers is the regular return of consumers to the web site.  All of these activities should be used to encourage the consumer to return on a regular and frequent basis and not just on the sale. The sale is important, obviously, but the relational data, as I call it, encourages the consumers to continue to return and the more consumers return the more sales will result.

Consumer Virtual Relationships

Consumer relationships in retail now are more important than previously because there are more choices and options in shopping and purchasing than ever before.  Retailers today have great tools and large amounts of data available to help them develop a virtual relationship with consumers and they must focus on a strategy that utilizes the data available to help them to fully engage the consumer to develop the relationship that will encourage the consumer to return.  This is a most serious requirement for the large legacy retailers that started in the brick and mortar world because these retailers were never previously required to develop the virtual relationship and could depend to the sales clerk to develop the relationship. The data now is available to develop a virtual relationship and retailers must focus on the identification, collection and use of this data to build a strong virtual relationship that will bring the consumer back over and over again.

The challenge for these retailers is first to collect the data and second to determine how to utilize the data to develop the consumer relationship and third, and perhaps most important, develop the process to continuously review the relationships to determine how and what additional data can be utilized to improve the relationships.  These are all difficult challenges that require focus and strategy to enact and the first step is not only the most important but the most difficult as well. This first step though requires that these retailers recognize and embrace the reality that consumers have used technology to take control of their shopping and purchasing practices and this means that retailers must accept the new fact that they are no longer in control of the relationship and must collaborate with consumers to develop and grow the relationship.  

The focus going forward for retailers developing the consumer relationship must be on data and effective use of that data.  There are huge amounts of data available for collection through the eCommerce channels that allow the retailer a greater and more accurate perspective of consumer shopping and purchasing decisions and practices.  While effective analysis of these practices requires huge amounts of data for collection and analysis the hardware required to support these activities is commonplace now and reasonably priced. In other words, cost can no longer be used as a deterrent to engaging.  Retailers must engage without delay in order to build the base of information.

In the past these large retailers were able to utilize sales clerks to develop the relationship with the consumer and these sales clerks used data collected during the personal interactions and good sales clerks were able to quickly develop strong relationships with their customers.  In the new omni market retail environment retailers must utilize data collected through the online environment and then develop and implement both the analytics to analyze these large amounts of data and then develop the methods and practices to implement continuous improvement methods and procedures to continuously review data and practices to support changing consumer practices.

Retail Consumer Relationships

Technology starting with the high speed Internet and continuing with mobile and wireless technology improvements have been continuously changing the relationships between retailer and consumer.  This started with the consumer wresting control of their shopping and purchasing to support their lifestyles and continues with continuous experimentation and changing practices and demands from consumers.  The changes started with the Internet and eCommerce and have continued to progress with wireless and mobile technology along with millennials that bring with them a comfort with technology and a tendency to experiment with technology capabilities to support their lifestyle demands.  This is spreading to change the relationship between consumer and retailer to take into account the need to develop a virtual relationship.

This virtual relationship is the next frontier in the retail omni market and may be one of the most important developments in retail since the Internet.  Consumers have been striving to develop relationships with retailers really since the Internet changed the marketplace starting with the embrace of Facebook to reach out and connect first to friends and family and next with retailers.  Unfortunately for the large established retailers they were compelled to focus on cost competition to remain competitive in the marketplace and this seems to have precluded focus on developing the virtual relationships. In fact this focus on cost has resulted in the reduction of clerks in brick and mortar stores in order to cut costs to support the product price wars with online and multi channel retailers.  

Retailers have been struggling to keep up with the changes in operational processes to support consumer shopping and purchasing in the changing marketplace.  This focus on the functional rather than the relationship has, in turn, caused these retailers to now struggle with developing and maintaining relationships in the new marketplace.  This seems to be a hold over from the practice of attempting to control the relationship with consumers. The challenge for the larger legacy retailers is accepting the change in control and then developing the capabilities to build the virtual relationships with consumers.

Amazon, for example, has practiced a two prong approach in retail and developing relationships with the consumer.  Amazon has realized early on the need to develop the relationship with the consumer early on because they did not have the physical presence and therefore a physical relationship with the consumer.  This required that Amazon develop the tools to develop a virtual relationship with consumers while they were encouraging consumers to purchase through a lowest price strategy. This strategy to develop the virtual relationship while encouraging consumers to return has continued and unfortunately for the legacy retailers, they only focused on the lowest prices and operational side of shopping and purchasing so they are not struggling to maintain their place in the market.

The large retailers are lucky, though, because it seems that the operational changes have slowed at a time when the relationship changes and requirements have increased in importance.  This gives these retailers an opportunity to develop the tools and capabilities to develop and maintain a virtual relationship. Retailers must understand and accept though that this is a continuous program that must be maintained and improved over the long run.

Retail Collaboration And Engagement

Collaboration and engagement are two key factors in the retail omni market that are required to extend and improve the relationships with not only consumers but all partners across the extended supply chain.  Large legacy retailers must increase collaboration with encourage consumers to engage with the retailers through a virtual market to extend the physical relationship with their customers. All retailers must increase collaboration and engage with the extended supply chain partners in order to increase their ability to sense and respond to changes in the consumer demands and market offerings.  A significant key to success in the retail omni market is the collaboration and engagement methods and practices to allow the retailers to develop and strengthen relationships across the marketplace.

Collaboration requires sharing control across the marketplace and this practice will require significant cultural changes for the large legacy retailers. These changes started years ago with the addition of Facebook to solidify the social networking platform and it has continued to grow over the years with the improvements in technology and mobile network technologies.  In the early years of the retail omni market revolution the large legacy retailers fought the changes from consumers to open the market, the showroom concept is the best example of this where retailers fought consumers who went to the store to view and touch the product and then purchased online. These large, multi-channel retailers realize now that they must loosen their controlling nature to provide consumers the flexibility to support their lifestyle.

One of the key focuses of retailers has been on price comparisons to meet or beat the lowest price offered for products.  This has also forced the large retailers to reduce operational costs, including headcount formerly focused on customer service.  While some customers will always only focus on the price, there are many customers that place a great value on the relationship and softer values that come with building a relationship between consumer and retailer.  Amazon is a great example of a retailer that has developed a two prong approach; low cost and consumer relationship development, that has changed the retail marketplace and provides a great model for the large multi-channel retailers.  Google has also entered the arena of virtual customer relationships in a big way with their reviews and recommendations capabilities that encourages your feedback when you shop or dine using your phone location capabilities to identify your travels.  

These are just a couple of examples of the changes in virtual consumer relationships and these capabilities are growing and building upon current capabilities and practices swiftly.  Retailers cannot afford to wait to develop their abilities to engage and collaborate with their customers to develop the relationships. The lesson that retailers must embrace is changes are easier when they are incremental so it is critical to develop the ability to quickly and efficiently sense and respond to these changes.  This is where collaboration and egagement across the entire supply chain from supplier to consumer comes into play to support the efficiency in sensing changes and responding.

Omni Market Extended Supply Chain

The extended supply chain supporting the retail omni market is a critical success factor for retailers providing retailers the data and early warning to help retailers sense and respond to the market changes.  The caveat to this statement is that these retailers and the extended supply chain supporting the retailers must have the tools and procedures in place to collect and understand the information that can be provided by the extended supply chain.  These methods require an increased collaboration and engagement across the entire extended supply chain in addition to a change in the retailer (especially large legacy retailer) culture to encourage increased collaboration in order to engage the extended supply chain.  Each of the partners in the extended supply chain must understand and embrace the fact that the retail omni market requires a dramatic increase in the collaboration and engagement across the entire extended supply chain in order to meet the demands.

It takes a fully engaged and collaborative extended supply chain in order to meet the changing demands and, most importantly, the velocity of experimentation and change in the marketplace by consumers.  A tag line that is appropriate in this case is that retailers and their extended supply chain must support change as the speed of life. This means that retailers can no longer spend extended amounts of time on analysis in reaction to marketplace, and consumer demands, retailers must respond with a heightened sense of immediacy in order to maintain the pace of meeting changing demands.  It requires a great deal of information in order to identify and react to changes and the extended supply chain can supply a valuable level of detail regarding the market demands from other perspectives that will allow retailers to better understand and react to the demands.

A critical tool in these efforts to increase collaboration and engagement across the extended supply chain is the control tower practice, or method, to manage and direct information.  In the past this may have been viewed as an internal tool used by the retailer to collect data and support analysis of the data. This functionality of the tool remains the same and the universe of data should be extended across the entire extended supply chain in order to provide the means and the data to effectively and efficiently analyze the data input collected across the supply chain.  Data is the fuel to the collaboration and engagement engine that will be used by the retailer and the extended supply chain to support retail omni market.

Retailers, again especially the large legacy retailers, must overcome their cultural nature to try to control the marketplace and this change can be supported through increased collaboration and engagement across the supply chain.  This increased collaboration can provide the information and early warning of changes in consumer purchasing and shopping practices through the integration of shipping and delivery information available from transportation partners, for instance.  Consumer reactions and demands can be unpredictable in this marketplace, especially because of the velocity of technology change available to the consumer. This means that retailers and their extended supply chain must be dramatically more responsive to changing demands and this increased responsiveness can only be supported by increased collaboration and engagement across the extended supply chain.

Omni Market Sense And Responde

Retailers must implement a method to systematically and continuously sense and respond to changes in the retail omni market whether from consumers or from the extended supply chain partners.  The difficulty is implementing the control tower methods that allow for the information to be collected and stored for analysis from many different functions and activities across the entire omni market, from the eCommerce channel, to the brick and mortar channel, to the social media interactions with consumers, to the developments and new capabilities available from the transportation partners.  This require not on methods and capabilities to collect and analyze data inputs from many different sources, it also requires implementation of methods to support collaboration with partners and consumers across all channels.

This sounds like a simple process and the goal is simple; collect and analyze information to understand and guide the interaction and support the demands of consumers and develop a relationship with consumers to encourage returns and purchases..  This simple goal though requires a robust method first to collect information, second to analyze and understand the information and third to encourage and support collaboration and engagement of across the entire extended supply chain from supplier to consumer.  This goal of the sense and respond control tower is the price of entry and most importantly success in the omni market retail environment.

A strong relationship with consumers is required for success in the retail omni market and the large legacy retailers must build this control tower infrastructure to replace the personal relationships that have been developed with consumers through the network of sales clerks.  This relationship is paramount to the success of these retailers in the omni market age and this is where these legacy retailers must focus now that the operational functionality supporting the eCommerce channel have been implemented. The eCommerce channel and the experimentation of consumers with mobile and web technology has fundamentally changed the retail marketplace.  This change is driving the demands for increased collaboration across the supply chain and these demands for increased collaboration across the supply chain require a means to collect and analyze data and consumer interaction.

The good news in this story is that the technology is currently available through big data capabilities and retailers are more than likely using this technology to support other areas of their operations.  This requires a strategy to incorporate the data collected from all areas into a cohesive tool that supports current and future analysis of this information. This requires an expansion of the collection activities that will allow the retailer to incorporate the data into the store for analysis.  All of this analysis though will not generate success for the retailer in the retail omni market though, success in the retail omni market requires the retailer to develop a new method to help them to develop and strengthen relationships with consumers and this control tower functionality can provide the foundation and the means for these large retailers to develop these relationships.  The relationship with consumers provides the reason for consumers to return and returning consumers drives increases in sales.

Omni Market Gazelles

The gazelles (retailers able to shift directions quickly) in the the retail omni market have a distinct advantage over the large legacy retailers that have historically struggled with no only quickly changes but more importantly changing their culture to support quick changes in practices.  These large retailers have been stuck in a culture and a world of their own making that believes that changes require detailed planning and costly development cycles to implement change. This reality is changing though as a result of the retail omni marke that focuses on quick and incremental changes to adjust to the demands of consumers.  In order to succeed in the future retailers must recognize the difference between large business directional changes and the incremental changes required to support the retail omni market. This difference in viewpoint between the types of changes is will be the difference between success and failure in the retail omni market.

In the current state of the retail marketplace and the focus of consumers in this marketplace, the retailer must focus on the difference between business directional changes and incremental strategy and direction refinement.  This difference between business directional changes and direction refinement is also the difference between the gazelle and the large battleship in ability to shift direction. Retailers must first focus on identification of the type of change and then they can determine the best method and schedule to implement the change.  This requires a change in culture along with the shift in viewpoints for the retailers to enact the changes. This sense and respond method of continuous change in the retail omni market will allow the large retailer to react as a gazelle in the important consumer facing areas while still taking the time necessary to support the large business directional changes.

Over the recent years retailers have focused on business directional changes, as they should have, to support the omni channel retail operations.  This was required t in order for retailers to implement omni channel business functionality to support consumer purchasing demands. At this point though, the major operational support requirements for consumer purchasing across channels has been implemented and retailers now need to focus on the collaborative consumer interaction to support the changing consumer shopping demands in the developing retail omni market.  This current phase of supporting consumer shopping demands requires incremental changes in consumer facing areas to develop relationships and shopping methods that support the consumer demands. This is an experimental process for consumers and requires a method (such as consumer/retailer collaboration practices) to sense and respond to the incremental shifts and changes.

Large legacy retailers can be successful and react as gazelles by implementing a consumer collaborative practice to allow these retailers to sense and respond the shifting incremental changes before they become business operational changes.  This requires a flexible control tower type framework that supports the collaborative practices and then supports the incremental changes required to support the consumer experimentation. This practice will be difficult to enact without a change in culture to focus on consumer collaboration and recognition of the change in the retail omni market direction and requirements.

Collaborative Commerce Framework

Consumers have entered into an experimentation phase of shopping and purchasing that demands increase levels of collaboration to first identify and then support the changing demands.  Retailers now must develop a control tower framework that provides the flexibility and functional integration to quickly and easily support the changing collaboration demands of both consumers and extended supply chain partners.  The difficulty for retailers in this environment is that the changes are not large wholesale changes to the shopping and purchasing marketplace, rather they are what I would term as minor course corrections that although minor in nature they bring a great benefit to the consumer to support their lifestyle needs.  The control tower framework allows the retailer to sense and respond to these course corrections in a timely and efficient manner that will help to develop a stronger relationship and two way conversation with the consumer.

We are now past the age of large operational changes to support the retail omni market and are now in the relationship development phase of supporting the retail omni market.  This relationship phase requires less large wholesale changes operation or capabilities and more minor in nature refinements to the ways that consumers and retailers can utilize these operational capabilities to support the shopping and purchasing demands of consumers.  While the types of changes in this phase may be minor in nature, they will have a huge impact on the consumer relationships and therefore on the sales and success of the retailer. The consumer relationship with the retailer provides the ‘stickiness’ and reasons for the consumers to return to the retailer for shopping and the longer that the consumer stays with the retailer, either virtual or physical, the higher the likelihood that the visit will end with a purchase.  

Retailers should not delay in the implementation of this collaborative control tower framework because the delays can and will result in the inability to identify and adjust to the consumer demands.  This new environment is another example of an environment that is impacted by waves of minor changes and revisions that will quickly add up to major changes in the marketplace. The control tower framework is a critical piece to the strategy to sense and respond to the minor changes quickly so they retailer is not impacted by eventual major changes in the marketplace.  Again, the nature of the changes is such that if the retailer falls too far behind these retailers will not be able to catch up because the cycle of change is too quick.

The nature of the marketplace is geared towards the gazels that can quickly sense and react to changing demands.  Unfortunately for the large legacy retailers, they have fallen into the structure like a large ocean liner that does not allow for quick and dramatic course changes.  It is for this reason that these large legacy retailers must develop the collaborative control tower that will allow these retailers to sense and respond to the minor course corrections before they can combine into major changes in direction that cannot easily be supported.  

Consumer Collaborative Commerce

We are entering into a new age of commerce that is driven by consumer experimentation with shopping and purchasing practices driven by their embrace of technology (Internet, social, mobile and network) along with a drive to support their lifestyle through experimentation with technology.  The experimentation with technology is driving the retail impact and requires a collaborative practice and reaction from retailers to support the quickly changing demands and consumer practices. Consumers are really not sure how technology can be used to support their lifestyle needs and this leads to a trial and error process that can best be described as a continuous improvement process that has been adopted by consumers to develop and change shopping and purchasing practices to meet their lifestyle demands.  This process leads to a highly disruptive retail environment that requires retailers to collaborate not only with their extended supply chain partners but also with consumers to develop the methods to support the consumer demands.

Most consumers are open to social interaction and especially the millennials and this is driving this surge in consumer collaborative commerce.  Consumers are going to interact with other consumers and they are also going to use the technology and the tools available to support their shopping.  Retailers need to recognize, and embrace, this simple fact in order to succeed. Consumers will collaborate with all partners and the large legacy retailers are fooling themselves if they think that they can control consumer interaction in shopping and purchasing.  Consumers have demonstrated over and over that they will utilize collaboration and technology tools to overcome limitations in their shopping and purchasing capabilities that are either planned or inadvertently enacted by retailers.

The only way that retailers can successfully react to these consumer changes and demands is to get ahead of the curve through increased collaboration with consumers.  This increased collaboration is the means to develop relationships with consumers in the retail omni market and retailers must embrace this practice in order to survive.  There really is no other way to look at the current retail marketplace and the sooner retailers themselves understand and embrace this new reality, the sooner these retailers will be able to sense and respond to the changing demands.  The large legacy retailers have systematically eliminated the direct consumer interaction through their drive in cost reductions and reductions in sales staff developing the relationships with consumers. This must now be re-learned by these same retailers and most importantly learned to support in the virtual retail marketplace that is now so important to consumers.

The genius of Amazon was the recognition of the importance of the consumer collaborative relationship and their focus on developing this relationship.  This focus on developing the relationship has paid off dramatically now as the retail marketplace has evolved and even been driven by experimentation from both consumers and Amazon.  The large legacy retailers now must recognize their deficit in consumer collaborative commerce and focus on the development of these capabilities. Consumers will continue to experiment and push the limits of technology and collaborative shopping and purchasing while Amazon continues to experiment as well with new capabilities.  There is no time left for the large legacy retailers to delay their embrace in these capabilities, they must also embrace collaborative commerce with consumers and this means dramatic changes in the culture and the retail framework.

Collaborative Commerce

Collaborative commerce is an interesting term that brings the method of shopping to attention as it relates to the purchasing aspect of the retail omni market.  Collaborative commerce really describes the omni market shopping and purchasing practices that focus on the relationships between consumers and retailers. This is the bottom line and frankly the key factor to the changes experienced now in the retail marketplace.  These changes will not slow and retailers will only be able to support the changes by changing their focus from control to collaboration with the customer. Collaborative commerce is the natural result of the changes demanded by consumers to support their lifestyle needs.  Again, consumers have used technology and the Internet to support their needs. They have been open about their desires to simplify the shopping and purchasing process and retailers must now catch up and support these demands to survive.

Consumers and retailers have been at odds with each other it seems for a long time and it two the Internet and a visionary retailer like Amazon to take advantage of this consumer unrest.  Consumers are not unreasonable in their demands, in fact consumers are the driving factor behind collaborative commerce practices. It did however require a retailer such as Amazon to recognize and react to these consumer demands.  Consumers are more than happy to share their considerations and desires for shopping and purchasing capabilities. Collaborative commerce is nothing more than the next stage of the retail evolution and relationship between retailers and consumers.  

The challenge for retailers is the relationship. Retail has always been a social activity and consumers have always been drawn to the relationship and retailers have always depended on the sales associate.  The challenge for the larger and especially the legacy retailers is they have been focused on cost cutting measures that resulted in reductions in the sales associates that supported the consumer relationships.  The desire for the relationships did not subside, only the retailers’ support for the relationships. Now these same retailers that have focused on cost cutting measures to meet consumer demands are forced to create the abilities to support the virtual relationships with consumers.  This seems to have caught these retailers unprepared and requires a concerted effort develop the capabilities.

The good news is that consumers are more than willing to help in developing the collaborative commerce capabilities if only the retailer would ask.  This has been the focus of Amazon since their inception because they recognized the need to develop virtual relationships with consumers. More than anything else that Amazon has done in developing into one of the largest and most successful retailer, their development of the personalized relationship with consumers has probably been the greatest factor in their success.  It seems to me that Amazon recognized the consumer relationship deficit early and focused developing the virtual relationship to make up for this deficit. In addition to the virtual relationship, Amazon focused on a means to encourage the consumer to return to the site based on cost in product and delivery.

Adaptive Omni Market

The retail omni market is built on the concept of adaptation and flexibility to meet the demands and velocity of change required to meet the demands.  This requires not only a focus on flexibility to support the changes it also requires the ability to sense the changing demands to allow the retailers and the market to respond to the changes.  The ability to sense the changes requires a dramatic increase in consumer and retailer collaboration and engagement. This challenge requires that retailers step up their game to meet the new demands and retailers, especially the large legacy retailers, will never be able to meet the consumer demands in the short timeframe without developing an adaptive ability to change and most importantly the ability to sense the changes in a time frame that allows the retailer to adapt to the changes.

Adaptation takes on a whole new meaning in the retail omni market and this includes a focus on flexibility and velocity, or speed of delivery.  Retailers cannot follow the same rules or practices followed in the past to adapt to changing market demands and requirements. Consumers have a new viewpoint and most importantly a new level of control in the market that requires retailers to redefine their definitions of adaptation. This new definition of adaptation is driven to a very large extent by consumer lifestyle changes and the consumer reaction to their lifestyle changes.  When consumers add this new definition to the technology, especially mobile technology, and network capabilities it gives them a dramatically higher level of control in the omni market that retailers must recognize and support.

The level and velocity of adaptive demands now requires the retailers to recognize and redefine their own understanding of adaptation.  This is a large challenge for retailers not because of the technical or practical aspects of the challenge, it it more the control aspect of the challenge that will challenge the retailers.  As time moves along in the retail marketplace retailers have been forced to give up controls each step of the way in order to survive and this has now reached the point where the control of the relationship and really last remaining stronghold of retailer control has been attacked by the consumer demands.  

Adaptation now requires a continuous change cycle to allow experimentation by the consumer to help them identify the appropriate direction.  This trial and error practice is best supported and requires a high level of collaborative engagement with the consumers to allow them change, measure, react and change again.  This is the really the process required to develop and strengthen the relationship between consumer and retailer. This new retail omni market incorporates technology to allow the consumer to develop a relationship with the retailer that augments the person-to-person relationships with their customer.  This requires creation of a new method and type or personalized relationship with the consumer that takes advantage of the technology to allow consumers to interact and relate with the retailer in a manner that suits the consumer demands.

This new relationship requires a high level of adaptation because the consumer is continuously defining and redefining the practices of the relationship.  Technology augments the relationship and consumers have embraced the technology to support their new lifestyle demands. This requires a greater level of adaptation and collaboration because consumers are still trying to figure out what is required to best meet their lifestyles.  This is not about continuously changing lifestyles it is about continuous changes to determine the best method to support the lifestyle.

Omni Market Transparency

Consumers now are searching for transparency in their interactions with with retailers and the entire extended supply to allow them to meet and react to their lifestyle.  This requires collaboration across all participants in the extended supply chain to allow consumers, retailers and the extended supply chain partners to understand and react to the changes in the consumer interactions.  The extended collaboration and increased engagement within and across all aspects of the consumer relationship is the new challenge for retailers and unfortunately this is also the most difficult challenge because of the velocity of changes and types of changes resulting from the consumer embrace of technology and WiFi capabilities.  These changing expectations and demands from consumers will drive the marketplace now for some time to come and retailers cannot afford to ignore the changing demands.

Retailers must fight their general tendency, especially for the large legacy retailers, to follow the lead and wait for the change to settle.  The reason for this is simple; the change in this case will not settle and will continuously build upon yesterday’s changes to create new experiences and shopping interactions.  The consumer in this case is searching for information and integration with the retailer and this search will continuously change to react to both consumer needs and also the extensions of technology to enhance the interactions and bring a more personalized interaction with consumers.  This requires a general increase in retailer transparency as its related to the shopping experience and the product usage and capabilities.

Retailers must change their practices now to focus on consumer collaboration and engagement in order to meet the consumer changing demands.  Consumers are searching now for transparency in their interaction and relationships with retailers and this transparency has traditionally been a challenge for retailers.  Retailers have traditionally focused on control and exclusivity whereas today the exclusivity has been dramatically curtailed as a result of the expanded retail market resulting from Internet sales.  Control was one of the first aspects in the retailer to consumer relationship that was eliminated through the Internet and it seems that the large legacy retailers have been attempting to regain the lost control ever since.  

Consumers are searching for transparency in their interactions with retailers and this provides a means to develop and enhance the relationship with consumers.  Success in the retail marketplace will rely on the relationships developed and encouraged over time between retailers and consumers. The means and glue that will hold these relationships together is the transparency that is developed through enhanced collaboration and engagement with and between consumers, the retailers and the entire extended supply chain.

You will notice that I do not mention exclusivity in this discussion on consumer relationships and transparency and this is because there is really no place in this new retail marketplace for the controls and limitations to consumers that would be required for exclusivity.  In my opinion, transparency in relationships with consumers leaves no room for controls and limitations in the relationships. Consumers demand collaboration and engagement with retailers to develop a mutually beneficial relationship and this relationship provides the basis for the enhanced retail marketplace.  

Omni Market Social Interaction

The retail omni market is now driving change through social interaction across the entire extended supply chain and especially with the consumer.  The retail omni market has reached a point such that the product price, availability and delivery via any means desired by the consumer is no longer a differentiating factor because these functions have essentially become baseline functional requirements. The changing factors now are driven by the social interaction of consumers across the entire extended supply chain and with just about every partner in the extended supply chain.  This social interaction is now the key driving factor to the change impacting the retail omni market and this must be the focus of retailers and especially the large legacy retailers.

The previous few years have focused on the price, availability and delivery to support the retail omni market and retailers have been driven to provide this baseline functionality across the all interactions with th sales and delivery to the consumer.  Now, however, the consumer focus has shifted to the social interaction and relationships with retailers. This is a much more volatile area and requires more flexibility and imagination from the retailers to support. The good news is that these large legacy retailers should now be familiar with the process and speed of change as a result of the recent and the bad news is that I just don’t think these same large retailers have learned the lessons of the retail omni market to help them to support the level and velocity of change demanded by the omni market social interaction .

Consumer social interaction brings with it and even greater velocity of change than experienced with the previous round of purchase and delivery changes.  The key to supporting the level and velocity of change is the ability to sense and respond to the consumer reactions and shift priorities. There must be a fluid interaction between the consumer and the retailer that requires a focus on collaboration and engagement between consumer, retailer and other partners in the extended supply chain.  The collaboration and engagement provides the foundation for the enhanced sense mechanism to understand and react to the shifting social interaction requirements.

This enhanced collaboration and engagement requires retailers to step up their game which requires taking the culture changes to another level.  Retailers have been able to focus on the operational side of the relationship with consumers to meet the demands of pricing, availability and delivery.  Now, however, retailers can no longer delay in developing the relationship and social interaction with the consumer and this will require an increased level of collaboration and engagement with consumers and the other extended supply chain partners.  There is really no time left for retailers to embrace these demands as the velocity of changing demands increases.

Retailers cannot afford to delay in supporting the changes in the retail omni market and this requires a continuation of the cultural changes to increase social interaction with consumers and across the entire extended supply chain.  Consumers are definitely encouraging this interaction and the improvements to mobile technologies and wireless network capabilities to support these demands are definitely keeping pace and even driving the changing consumer expectations.  The challenge though is the continued cultural changes required of retailers to support these changes. Retailers cannot rest, they must continuously change and react to the consumer demands for social interaction and a relationship with the retailers and retailers must realize that their reaction to these demands will allow them to succeed in the future.

Supporting Retail Velocity of Change

The retail omni market has reached the level where what I would refer to as the ‘base’ functionality such as inventory availability, price and even to a large extent delivery options and costs practices are no longer differentiating factors and are now baseline requirements.  The challenge now for retailers it focused on the social aspects of the retail omni market such as shopping and consumer interaction to ensure the customer regularly returns to the retailer through any channel. This area of social interaction is where the challenge comes into play due to the velocity of the changes that consumers implement changes to their practices.  This is also the area where consumers are using technology easily available to allow them to implement change in their practices, thereby effectively turning the tables on retailers and wresting control of the social interaction and with it the direction of retail shopping and purchasing.

As a result of this retailers must extend the flexibility of framework and foundational technologies to support the capabilities and, most importantly, the velocity of change in these capabilities that consumers are implementing in their shopping and purchasing.  This is a major shift in the retailer practices from a closed environment that controls shopper interaction, to an open and distributed environment that supports and encourages collaboration and customer engagement with the retailer to ensure the return of the customer.  Since price and availability are no longer a differentiating factor, retailers must focus on the social interaction and collaboration with consumers is probably the greatest factor in this social interaction. This is really no surprise to retailers and in fact the leaders in retail have been moving in this direction for quite some time.

The leaders in this retail change in practices such as Amazon have been focused on the social interaction and collaboration aspect of the consumer experience for quite some time.  Online retailers especially have had to focus on the technology social aspect of retail because of the simple fact that without a brick and mortar presence these online retailers have not had the luxury of human interaction with the consumer.  On the other hand, retailers with the brick and mortar presence have overlooked the technology social aspect of retail because of their long standing human interaction. These retailers have focused on the operational side of the retail equation though and now must play catch up with the technology social aspect.  

The key requirement for this social interaction, consumer collaboration and engagement is speed of delivery to support the velocity of change.  The velocity of change in consumer social interaction requires a heightened awareness to sense the change and even to guide the change in the social interaction and collaboration.  This ability to sense the change requires the retailer to improve their collaborative practices across the entire extended supply chain and especially the communication links with consumers.  This is the next frontier where the legacy retailers must focus to play ‘catch up’ with major online retailers such as Amazon. These legacy retailers must focus on the velocity of changing dimensions and explosion of interaction with the consumer across the entire retail omni market environment.  It can be very intimidating to the legacy retailers when behemoths such as Wal Mart are forced to play catch up. It also speaks to the types and scope of change that has pushed Wal Mart into this corner.

Retail Speed of Delivery

Consumers in the retail omni market now are focused on changing lifestyles and how the retail marketplace can meet the demands of their changing demands to meet their lifestyles.  It’s not necessarily that the consumer lifestyle is changing so dramatically or even so quickly, consumers are refining and changing how they meet their lifestyle demands. The focus on in the retail omni market requires a focus on speed of delivery in order to the changing consumer demands.  This means that speed of delivery in the retail market must be a focus of retailers in order to maintain their place in consumer shopping and purchasing. This retail omni market provides a level of choice to consumers that has not been available to consumers in the past and now consumers are really focused on taking advantage of these choices.

This is interesting because consumers have come to a place in their shopping and purchasing practices that focuses on shopping and purchasing capabilities that meet their lifestyle rather than focus on product availability.  Consumers and their interaction with the retail market has reached the point where the product and price priorities have leveled and the differentiating factor now is the ease of shopping and purchasing. Consumers have reached the point where price and availability are expected to be comparable across the marketplace and they now focus on the selection and delivery to meet the consumer needs and demands.  

This change in consumer focus is bringing a new level of change for retailers that is the focus now and driving the disruption in the marketplace.  Unfortunately for retailers, consumers are using the technology available to focus on their priorities which is bringing this new level of disruption to the market.  Retailers must realize that the cycle of change is going to remain and only the focus of the change will shift. Consumers are a fickle bunch and they have embraced the new fact of the retail marketplace that the technology available encourages consumers to put things together in new ways to support changing needs and demands.  

Retail sales outside of the necessities of food and medicine are based on relationships and opportunities and consumers are now in the position to put technology capabilities togethers in ways that can dramatically increase the opportunities, both timing and types of opportunities. This means that retailers must increase their level of flexibility with process process and functionality to meet the changing consumer demands in addition to increasing the level of consumer engagement and collaboration in order to build the relationships that allow retailers to identify the changing demands.  

Retail functionality has reached a point where flexibility is the focus and the framework that many of the larger retailers have implemented to support the flexibility has also reached a point where is can swiftly react to market demands.  The requirement now for retailers is the identification and reaction time to the shopping and purchasing demands. You can see that the recent focus has been on shopping and purchasing capabilities and that price and availability is now the price of admission.  Rather than focusing on the capability retailers must now focus on how they identify the changing demands because this ‘how’ will allow these retailers to identify and react to the future market disruptions.