Collaboration Control Tower Framework

The control tower concept and capabilities will help to drive the retail omni market to new heights and capabilities to support the increasing velocity of change.  This collaboration control tower will also require a robust framework of distributed management and also more importantly distributed data management, storage and analytics to support the requirements of a distributed collaboration control tower.  This will be a huge challenge for the partners in this collaboration control tower and will also require a strategy to continuously evaluate both capabilities and demands on the retail omni market to ensure that the control tower is maintained to meet the potential and also continue to provide value to all of the partners.  This must be viewed as a continuous improvement and maintenance exercise that will continue to grow in capabilities and value.

It is critical for this collaboration control tower fromework to be developed as a distributed framework that is flexible to support the current demands and that  is robust to support the increasing demands for interaction and analytics. The greatest value of the collaborative control tower is the connectivity to partners and the data that can be shared by the partners to improve analytics to identify and support strategic initiatives to support the retail omni market.  The types of analytics and the value provided by the results of the analytics is only limited by the imagination of the partners and the data made available by the partners.

The challenge though in developing the control tower framework is the acceptance and embrace of the concepts by the partners involved and the interaction of these partners with each other and the customers with whom they interact.  This means that partners must embrace the collaborative practices and also accept the concept of change that drives the consumers and the retail market. It is impossible for any one partner in the retail omni market to be able to go it alone in this new market because of the velocity and volume of change that drives the market now.  This velocity and volume of change requires that the partners collaborate in order to both understand and meet the demands. This also requires that the partners change their culture form one of control to one of collaboration or these partners will fall by the wayside because they simply cannot keep up with the volume and velocity of change.

These changes are in the early stages of identification, acceptance and implementation currently in very early stages of recognition.  This will grow over time into a tidal wave that will overrun retail market participants that refuse to embrace the model. While this will start small with a few visionaries I expect that this will grow over a very short period of time as more retail market participants recognize the difficulty meet the demands and weigh against the ability to survive on their own.  Timing of this new wave may be questionable however I believe that the tide will quickly change as success grows with the collaborative control tower. The biggest hurdle to the change though is the framework supporting the collaborative control tower and the framework is also probably one of the easiest requirements to meet.

Collaboration Control Tower

The control tower concept is really going to come of age in the retail omni market to support and improve collaboration across the and among the retail partners.  Collaborative support activities may be one of the best applications of the control tower concept, just as important, if not more important that the supply chain control tower concept and tools. The control tower provides the perfect structure and concepts to pull together the disparate participants and diverse objectives of the participants into a cohesive structure that can provide the data in a manner that supports value added analytics in a manner that cannot be supported in any other way, really.  Effective collaboration requires and especially collaboration across the number and types of participants requires a loosely connected federation of data and tools to analyze the data and the control tower brings these together in an effective manner.

One of the most valuable concepts of the control tower is the ability to add to both the connections along with the data collected to grow with the collaborative demands and growth.  Retailers, and really all partners in the retail omni market, will be forced to expand their collaborative practices in order to succeed as the retail omni market grows and changes to support the market demands.  I do not believe there is any one partner within the retail omni market that can hope to meet the changing demands across the market without the support of other partners within the marketplace. The complexity of demands along with the complexity of relationships precludes the ability of any one partner to go it alone.

This is actually a good thing from the perspective of the marketplace and the ability to react to the changing demands quickly and efficiently.  The growth of collaboration is really the next logical progression of the partners that support the marketplace. Leaders in the marketplace such as Amazon have truly changed the retail market and they will continue to have an oversized impression and impact on the market because their practices have focused on the consumer.   I do think though that we are reaching the end of the period where a handful of leaders will continue to direct and shape the market.

Technology and consumers’ embrace of technology is reshaping the market now into a more flexible and dynamic market that requires collaboration across a broad spectrum of partners to support the changing demands.  The market is continuing to turn and while it will be quite some time before Amazon peaks and levels off, however the demands for flexibility to quickly react to changing demands is certainly laying the framework for Amazon to become another large retailer that falls to the disruption of the market. The collaboration control tower can provide the framework that can support and encourage another market disruption and retailers must recognize the opportunity and embrace the capabilities to reshape the market again.  Retailers should not hesitate but should embrace the collaboration control tower now to begin the transformation and prepare for the futures.

Consumer Collaboration In The Omni Market

Consumers have embraced a wide variety of tools provided by retailers, carriers of various sorts, manufacturers, search engines, GPS and shopping apps at various times and for various capabilities and even in various combinations in order to meet their lifestyle needs at the time of shopping and purchasing.  Consumer shopping requirements and practices are molded by their requirements at the time of their activities and the demands and requirements changes at the time of their shopping and even the products for which they are shopping. These various types and degrees of shopping and purchasing demands can make it very difficult for all participants to respond and even more important make it very difficult for the participants to coordinate and support across the various partners because of the number of potential partners involved and the number of combinations that can be involved.

When you stop and think about the shopping methods practiced based on the types of products, the consumer involved (man, woman and generational), the time of day, the channel, the consumer mood, special price offers and even the time of year you can see the challenge for the participants in the experience.  I know that my shopping practices and demands are different if I am shopping for groceries or shopping for apparel and my wife’s shopping practices are different from my practices and level of comfort for technology interaction at the time and type of shopping. For instance, sometimes shopping can simply be a social experience where ther purchase is spur of the moment and completely random and other times shopping is specific with specific objectives for instance groceries or gifts.

The partners across the retail omni market have the unenviable task of trying to define and support the consumer interaction and collaboration opportunities across all of these many combinations.  As you can imagine there is no possible way for partner retail participants to define and support all options, however retailers have the requirement to provide support options that allow the consumer to create their own combinations based on their requirements at the time.  I think this is the most important point related to the collaboration opportunities with consumers; provide options that can be combined by the participants at the time to meet the specific requirements at the time.

This is where the control tower concept can be incorporated to support the consumer and partner requirements at the time of the engagement.  This control tower is where the participants in the retail omni market can come together in a collaborative environment with a tool that provides the means to coordinate both capabilities and data with and across the partners.  It will be extremely beneficial and quickly become a base requirement for participants in the retail omni market to have a place and a tool that provides the framework for collection and analytics of the large amounts of data that is available in this new market capabilities and then use these analytics to develop and implement new collaborative methods and practices to support these requirements.

Consumer Mass Customization Support

Product customization has been supported in the retail environment for a very long time and now the retail omni market tools and capabilities expand and enhance these capabilities to a level that will allow imaginative manufacturers and retailers to partner for all new levels of customization.  I see these opportunities and potential to expand as one more very important means to improve the efficiency of product lifecycle and replenishment while simplifying the sales and delivery of goods and services to support changing consumer lifecycle demands. The cycle of demand and change velocity has been increasing almost exponentially over the past couple of years to the point where it is hard to keep up with the velocity of change.  The expansion of mass customization provides a method and means for manufacturers and retailers to keep up with the change.

It is only a matter of time now before manufacturers develop the means to efficiently provide mass customization services for most products.  This next round of retail change will very likely be led by manufacturers through enhanced collaboration with retailers and especially with enhanced direct interaction with consumers.  The danger for retailers now is that manufacturers will edge out the consumer relationship through direct interaction and engagement in producing the customized product. Manufacturers have the tools to interact directly with consumers in a new sales channel for manufacturers that allows the manufacturer to interact directly with consumers to collaborate directly in product development activities.  The next logical step for the manufacturer is the expansion of the consumer relationship for the direct sales of their products.

Many manufacturers already provide a sales channel outlet for consumers to shop and purchase products and customized products offered by the manufacturer. This is where retailers need to focus in this next wave; support the consumer interaction and consumer relationship to promote these mass customization offerings.  Retailers can run the real risk of being edged out by manufacturers and leading omni market mass retailers like Amazon and Alibaba if they do not focus on enhanced consumer relationships and collaboration.

Retailers currently have a distinct advantage as far as the consumer relationship is concerned but this advantage has been diminished over the years by the expansion of technology and the ability to interact directly with the all partners in the supply chain.  This direct interaction has enhanced the ability of retailers to quickly react to support demands such as enhanced delivery services. The technology though can also be the means of the retailer downfall if the retailer does not focus on the consumer relationship and collaboration.  Retailers have always excelled at the consumer relationship aspect of the retail market through human interaction and personalized direct relationship management. This is in the process though, of being turned upside down as a result of technology and the consumer embrace of this technology.

The challenge for many retailers now is developing the practices and procedures to support the enhanced collaboration to support the necessary interaction, planning and execution capabilities to deliver on the mass customization demands of the market.  Retailers must now add enhanced relationship development and management and enhanced collaboration practices with other partners supporting the market in order to maintain a significant place in the market. Consumers will flow to the most efficient shopping, purchasing and delivery methods and retailers must provide the glue that connects the partners in the extended retail supply chain.

Retail Omni Market Product Customization

Production customization, or more accurately, product mass customization is a capability that was waiting for the tools to be put into place in order to delivery on the promise.  Now in the retail omni market these tools are gaining critical mass to support the opportunity to expand into this area and be very successful. This is also a capability that would take off with the consumer market although it would need to start with the types of products that best fit the mass customization model to succeed at first.  Another capability that really goes hand in hand with the mass customization capability is just in time manufacturing. Both of these capabilities bring important benefits in inventory forecasting, management and overstock reductions to the retailer and these can off set any change in the manufacturing and delivery process incurred through the mass customization.

Both just in time manufacturing and mass customization products start with a base par-complete product and when the consumer completes an order the product can be finished and then shipped to either the retail outlet or directly to the customer.   A very straightforward example of the process can be found in apparel and trousers where the length of the inseam can be customized for each customer. The retailer would stock trousers by waist size and unfinished length hems and when the consumer places the order the specific length of the inseam would be requested by the consumer and the hemming would be completed after the order has been placed for delivery to the customer.  This delivers a great deal of benefits to both the consumer and the retailers for instance the retailer can forecast by waist size and simplify the forecast and reduce overstock, while the consumer can select specific lengths and even different length by leg to produce a trouser that is customized to their fit eliminating the need for a tailor.

This functionality requires increased collaboration and coordination with manufacturing and the supply chain partners to coordinate the final steps of the manufacturing along with the delivery to the consumer.   This will also be improved through the use of increased data modeling and analytics to understand both the consumer demand actuals and potential along with the analytics to tune and improve the customization and the delivery of the products.  This will greatly benefit from the improved collaboration tools and especially from the improved data collection and analytics when combined with improved collaboration across all partners supporting the consumer shopping and purchasing market.  The tools developed to date and the potential of improved tools and collaboration made possible by the retail omni market combine to put these new capabilities in reach form both a functional perspective and and execution perspective.

The questions now are how and when will mass customization be expanded in the retail omni and who will be the first to deliver these capabilities to the mass market for an expansion of products.  Mass customization is available for many products already that are mostly related to personalization. The opportunity waiting is for the first retailer to make this capability available for more products.  The only thing holding this capability from mass distribution is imagination to identify products that can benefit. My bet is on Amazon as the next big game changer to the retail market.

Supporting Tools in Retail Omni Market

Just as the retail omni market is continuously changing now and the tools and capabilities required to support these demands are continuously changing and improving, so too are the tools and capabilities related to big data data management and analytics.  In addition to the explosion of capabilities in big data analytics there are also dramatic changes in collaboration practices and capabilities across the retail omni market partners and especially the extended supply chain partners. All of these tools are in their early formative and maturing time period and it is a great time for the retail participants to jump on the opportunity.  In fact partners across the retail omni market and extended supply chain should learn from the recent experiences in the retail transformation and add to their focus the collaborative practices and tools so they can be prepared for the continued transformation.

My interests and focus has always been on collaboration and the impact of collaboration on the retail market and the extended supply chain supporting the retail market place.  From the signs and the activities involved in the retail and the supply chain transformation I see that the next key opportunities in both the retail market and supply chain supporting this market will be focused in collaboration across the partners to bring new capabilities.  I see data and analytics as having driven and continuing to drive a continued transformation of the marketplace and the next phase and stage to the continued transformation will be driven by the leaders that focus on information sharing and collaboration to bring new value and benefit to the marketplace.

At this point in the continued transformation of the retail market and supply chain the collaboration tools are still being defined and developed, similar to the retail transformation from a multi channel marketplace to an omni market retail marketplace.  The collaboration tools and capabilities required to support the continued transformation will be defined and developed as the need is identified, similar to the omni market tools and capabilities. The requirements will be driven by the demands of consumers and the tools developed by third parties that determine how to take into account IoT and blockchain capabilities into new capabilities ot plan forecast and track products through the supply chain.  These new track and trace capabilities provide new opportunities for collaboration and management through the supply chain from suppliers to the end consumer.

Just as third party organizations developed the tools used by the consumers to begin the retail transformation I see a similar opportunity in collaboration capabilities and the tools that will take advantage of IoT connectivity and the AI capabilities developed by Amazon and Google for their home automation tools like Alexa and Google Home.  The next frontier is the incorporation of the AI tools and the connectivity that will allow consumers to direct and redirect their purchases based on the continuously changing lifestyle demands. The end to end retail marketplace and supply chain will continue the transformation through extended collaboration and connectivity and the marketplace partners must get on the band wagon now in order to maintain their place in the market.

Next For The Retail Omni Market

As discussed previously the velocity of change is increasing in all practices that support the retail omni market and the velocity of these changes will only increase and the types and span of changes across practices will only increase.  The ability to sense and respond to these changes is important for all of the practices and the next frontier for the retail omni market is the coordination and implementation of these changes and especially the ability to sense change demands and coordinate across practices. The coordination will require the collaboration across practices in a manner that provides a control tower concept of consolidation and communication across the practices and partners.  This is the next frontier for the retail omni market, it is not any specific change in any specific practice, rather it is the coordination and communication across practices that will be the next frontier.

The industry leaders have done a great job in sensing and responding to change in their individual practices to meet the new demands and these leaders have transformed their individual practices to provide a means to not only meet the current demands but also provide the framework and foundation to provide a flexible means to meet new demands.  The challenge now for the next generation of transformation is the collaboration across practices to coordinate the response across the market and practices supporting the market. None of these practices supporting the retail omni market can succeed alone in the future and that is why the leaders’ next step is to improve and extend their collaborative efforts and coordinate these effort through a robust control tower framework to support these efforts.

The challenge as I see it with this control tower concept to coordinate and enhance the collaboration is the ownership of the framework.  I really don’t see any individual partner supporting the retail omni market as willing to give up the type of control and valued information that is part of this framework.  As I see this there is a new opportunity for partners across the practices supporting the retail omni market to share information from individual partner control tower frameworks and collaborate on the analysis and the support of the demands across the entire retail omni market.  This means both stepping up the collaborative practices among and across partners along with a method to efficiently and quickly share and connect large volumes of data across the network.

The tools and capabilities are available to collect, store and share large volumes of data across distributed networks to create a distributed control tower strategy and framework that allows partners to tap into these disparate data structures to improve the accuracy and value of the analysis of demands and opportunities.  This next frontier of a distributed control tower is the next logical extension of a big data concept that begins to take advantage of data collected to support analytic practices in each practice supporting the market in a manner that brings a new understanding and also allows the partners in the retail omni market collaboratively develop new solutions that will bring the next transformation to the retail marketplace.

3PL Omni Market Support

Leaders in the 3PL market realized the transformation coming as a result of the retail transformation to the omni market structure and, more importantly, the impact to the market from the discontinuous changes demanded by consumers.  The impact and resulting transformation to support the retail omni market has spread across industries to drive transformation into all of the industry and practices supporting the retail omni market. This transformation is and the effects of the retail omni market are most outwardly visible in the parcel and last mile delivery to the consumer.  The consumer lifestyle demands for delivery of purchases is most impacted in this area and has driven, at least initially, the greatest transformation. This transformation crosses through not only the delivery services and also includes the tracking and scheduling of these services along with the communications and directive input from consumers to schedule and coordinate the final delivery.

These carriers and third party logistics providers have really been going through similar struggles to meet consumer lifestyle demands as the major retailers.  This has crossed over how and where product is stored along with the delivery methods and new services developed to date to improve flexibility and extend capabilities.  These delivery services started with the simple parcel tracking notifications to the addition of direct communication to coordinate delivery, to the redirection of delivery and now to parcel drop boxes where the consumer parcel can be dropped near the delivery address for the consumer to pick up based on their schedule.  These are a brief litany of the types of changes that are the initial manifestation of the transformation driven into the delivery market and the transformation is really just gaining steam.

The 3PL market supporting retail and eCommerce has been driven into a similar type of transformation from two directions really; both the demands of the retailer and the requirements of the last mile delivery services.  The leaders in the 3PL market embraced the transformation and have developed a flexible strategy and selection of services that can support the delivery coordination demands in an efficient and cost effective manner with the intent to provide the type of strategic services that most retailers struggle with to implement.  3PL providers are prepared and capable to efficiently outsource inventory management to provide a structure that can support two day delivery at zone 1 pricing for all major metropolitan areas.

This type of investment for most retailers is insurmountable and would leave them at a strategic disadvantage.  The 3PL provider brings a great deal of value to the omni market support to allow small and mid-sized retailers compete cost effectively with the large retailers.  The 3PL providers have carved out an important niche in supporting the retail omni market demands and the benefit there is that retailers can focus on the consumer relationship and product development and outsource the supply chain and logistics to experts that focus on these capabilities.  Retailers can no longer afford to support the demands of supply chain and logistics and this provides a great opportunity to partner with a 3PL that is focused on innovation and supporting the retail transformation.

3PL Market Transformation

Just as the retail marketplace is going through a transformation in the way the retailer interacts with the consumer and the challenge of changing consumer demands, the 3PL marketplace is going through a similar transformation to react and support the product delivery requirements to meet both retailer and consumer demands while juggling labor, carrier and physical challenges especially in the last mile delivery.  The leaders in the 3PL marketplace have recognized the challenge and are focused on meeting these challenges now because they see the future of the marketplace and the opportunity available for these leaders that are able to sense and respond to the changes in a manner that supports their customers. The leaders in the 3PL market are transforming or disrupting the industry to provide a wide array of services based on demand just as the retail leaders such as Amazon transformed the retail experience.  

I believe the transformation and the ensuing growth of importance and influence of third party logistics providers started with the recession when retail and other organizations shed supply chain expertise in an effort to reduce costs and survive.  Many of these experts found a place with third party logistics providers and this allowed the the 3PL industry to expand and support new opportunities that developed as a result of the recession and need for organizations to reduce costs. Initially the focus on the 3PL services was cost savings, a way for organizations to eliminate costly investments in real estate and replace with charges based on demand and complexity of activities.  This provided a means for the 3PL customer to reduce long term costs which was important during the recession and the aftermath.

Leaders in the 3PL industry took the long term view to develop strategies to cement their partnerships with their customers to provide industry leading services and strategic capabilities to their partners based on their supply chain expertise and the demands and future vision of the industry demands.  These leaders took stock of their existing capabilities to how to improve and expand to meet the strategic future demands and set about to develop and acquire these capabilities. This has paid off for these 3PL leaders that invested in the future and these capabilities are now aligned with the demands in the retail market from consumers to support their lifestyles.  Now these providers are consolidating and developing new capabilities to support a flexible and cost effective services to support distributed inventory management to provide consumer delivery capabilities that would require significant investment and time for retailers to develop themselves.

Leaders in the 3PL industry realized early that their skillset and also physical distribution center networks would provide  strategic advantage that would support the retail omni market demands and they focused on developing the capabilities to provide cost effective support to their partners.  These leaders have transformed the 3PL market with these services and I expect this to be just the beginning. We can look to the future with new consolidation of products and services to extend the capabilities of the 3PL leaders to strengthen and extend their positions.  I see this to be the beginning of an increase in the 3PL market resulting from more and more retailers using a 3PL to support their supply chain and logistics.

Benefits From 3PL In Retail Omni Market

A third party logistics provider that supports the retail omni market can bring some valuable benefits to the table for many retailers to seriously consider. A 3PL provides experience and expertise gleaned from a broad spectrum of the retail market and both the driving factors of the market and the requirements and demands of their other partners, never discount this power in the retail supply chain.  Just as importantly though the 3PL also provides a network of locations across the country and in some cases globally, that provide an immediate opportunity for the retailer to improve their time to deliver to customers at a very competitive rate. Retailers must be focused on the customer experience and a partnership with the right 3PL can provide the support in the supply chain and last mile delivery to the customer that would allow the retailer to focus more on the overall customer experience.

There are many other benefits to be gained for the retailer from a partnership with a 3PL that would depend on the position and needs of the individual retailer, however the experience opportunity alone can provide a compelling reason for retailers to seriously consider this option.  While retailers were cutting costs during the recession, one of the greatest cost savings was provided in the supply chain through reductions in labor and consolidation of activities which caused a bit of pressure on the supply chain leadership remaining to maintain their place in supply chain development and improvements.  During this same time, the 3PL industry saw reductions in demand as well, however the 3PL industry maintained it’s focus on engineered solutions and industry changes and improvements, in addition to 3PL market consolidation, to help their partners meet demands of both features and functionality and cost improvements. The result of these changes in focus was a reduction in retailer supply chain capabilities and an improvement in 3PL capabilities and, most importantly, maintenance of the industry expertise and ‘brain power’ of the 3PL.

Recently 3PL’s focused on the retail marketplace have begun to take advantage of their distribution center network to provide their retail partners with the ability to utilize this network to improve efficiencies in customer last mile delivery.  Third party logistics providers have also combined their network of distributions centers with big data analytics to help retailers distribute the inventory to regional locations to support two day shipping to most of the country without increasing the transportation charges.

Third party logistic providers have maintained their focus on supply chain and logistics to maintain their place in the market and support their customers needs.  This focus has allowed the 3PL to develop a knowledge and expertise base that when added to the network of distribution centers allows them to bring value to their customers and, in turn, allows their customers to focus on consumer demands and product development.  This may not be a good fit for all retailers but retailer should explore the opportunities to determine if they can achieve benefits in both cost and features.

Role Of 3PL in Omni Market Retail

Retailers have a difficult challenge between meeting the continuously changing shopping and purchasing demands from customers and meeting the changing demands and capabilities from their extended supply chain and especially changing parcel delivery capabilities.  This is where a third party logistics provider can help to meet the delivery and store replenishment demands with a flexible network of distribution centers across the key geographic and population locations ready to meet the consumer demands for fast delivery without the requirement for the retailer to invest in real estate and labor to support these demands. The 3PL can provide these capabilities and most importantly flexibility tot meet the changing demands in a cost efficient and timely manner.  

A 3PL with a network of distribution centers can provide quickly provide shared capacity in locations that can allow the retailer to meet two day delivery demands across the country without upgrading service.  This in itself can be a compelling financial benefit to the retailers and then add to this ability to flex services such as customization and even store replenishment to the mix and it becomes compelling argument.  The flexibility alone provided by 3PL capabilities allows the retailers to quickly offer new services without a costly investment and at a cost effective charge because these retailers not only take advantage of the 3PL capabilities but they can also take advantage of the favorable transportation rates that the most 3PLs can obtain through volume shipping.  This is no small benefit in itself and then you add to the the cost of maintenance and support of software plus the costs of real estate and building maintenance and not to mention equipment maintenance and you will pretty quickly reach a compelling reason.

The reality of the landscape and capabilities now is that many of the midsize to large retailers have been focused on the consumer face and meeting the changing consumer demands in shopping and purchasing to maintain their place in the market and they have focused mainly on cost savings that can be generated by their internal supply chain.  During this same time 3PL providers have been focused on improving their efficiencies by investing in software and automation along with the distribution center network in many cases. These investments by the 3PL are necessary for the 3PL to maintain their place in the market and meet their customer demands.

By this point you should also see the similarities between the retailer and the 3PL markets, they are both focused on meeting their changing customer demands and investing to meet these demands.  This is now a good place for the retailer to seriously explore a partnership with a 3PL to provide the supply chain services to meet their delivery needs and allow the retailer to focus on consumer demands.  The demands are changing quickly across the retail market in consumer shopping, purchasing and delivery so retailers would do well to focus on the activities and capabilities that differentiate them in the market and outsource the things, such as consumer delivery logistics, to a partner that specializes in those activities.  The point here is that both the retailer and the 3PL can partner to benefit from each other’s specialties.

Retail Supply Chain Transformation

At the same time that the retail marketplace is the midst of a transformation, the retail supply is also experiencing a transformation that is in part at least driven by the retail marketplace demands.  The consumer delivery demands and fluid store replenishment demands fall squarely on the supply chain. These changes are not going to diminish and will only increase and build on each other to continue the transformation.  As with the retail market, the supply chain transformation is built upon a series of continuous changes based on the demands of consumers and the supply chain made possible with new applications of technology. These factors are driving supply chain partners to use technology to deliver new services to simplify the end consumer delivery and in so doing are themselves driving increased traffic to the omni market retail marketplace.

Parcel carriers and retailers, especially Amazon, are focused on simplification of delivery services to the end consumer to improve the consumer experience in the online shopping and purchasing practices.  These new services such as advanced delivery notification and scheduling available from the parcel carriers allows consumers to better plan their delivery which increases satisfaction while reducing the chances of theft at the same time.  Amazon has revolutionized the online purchasing and delivery experience with their Prime membership. The Amazon Prime member benefits has revolutionized the online shopping and purchasing experience by allowing and encouraging consumers to purchase on demand based on the immediate need without incurring a delivery charge.  This allows consumers to for instance run out of Kleenex and simply click on Amazon to order and have their supply replenished. This encourages consumer shopping and purchasing as the desire arise and where the desire arises to shift the purchasing from the retailer hours, if you will, to the consumer hours when they realize the need.

Technology plays an important role in these advances and the supply chain is still in the early stages of this transformation and still experimenting with the technology and data to identify and implement service improvements and cost reductions.  One example of a service improvement that also deliveries cost efficiencies is the automated drop point that Amazon and UPS have started. These drop points are automated lockers that allow the delivery to be dropped by the driver in the event you can’t sign for the delivery and then consumer can pick up the package, at their convenience, using the tracking number and a form of ID.  If there are any difficulties with the pickup the consumer can also use the pickup kiosk to speak to a phone rep who can address the issue and open the locker remotely.

The supply chain will see a dramatic changes through mobile, wireless, IoT and Blockchain technologies and combination of all these technologies through experimentation to improve services and efficiencies.  The supply chain and extended partners must increase collaboration and engagement across the supply chain in order to sense the direction and demands of both the consumer and the supply chain to understand and determine methods to meet the demands and reshape the supply chain.  This will be made up of a series of small changes that can be combined and put together in ways that may not be foreseen today. The trick though is the supply chain partners must focus on engagement and responding to the changing demands as they arise rather than waiting for the demand to overwhelm them.

From Small Change To Transformation

The retail marketplace transformation was not the result of a ‘big bang’ type change event, it was the result of a series of continuous changes to the marketplace enacted and invoked by retailers, consumers and technology.  I think the greatest influence and impact came from technology and the ways that both retailers and consumers embraced the technology to reshape the marketplace to meet their needs. The transformation was the result of years of experimentation and trial and error and failure and most important people pushing the limits of capabilities and experimenting with new combinations.  If you had been sleeping for 15 years you would be amazed at the transformation and yet living through it every day you may take for granted the changes and transformation that took place during this time.

The point is that transformation is the result of the changes that drive the market forward and you must pay attention and engage in the small changes in order to maintain your place and success.  The challenge now is that technology has quickened the velocity of change and this makes it even more important for retailers to engage with the market and consumers to embrace the changes so they are not left behind.  This requires a strong continuous change process to allow the retailer to sense and respond to the changes. This is not to say that retailers must enact every change although they must evaluate the change to determine if and how it can impact their business and their relationships to the consumer.  

I believe the changes coming will be focused more on relationships and less on operational execution.  The execution and delivery tools are in place now that can support the needs and demands of the consumer. The challenge going forward is grouping and regrouping these tools to support the changing market demands and most importantly the changing consumer demands to meet their lifestyle.  Meeting the needs of the consumer is the key to success more than ever and this means a continuous stream of small changes and re-configurations that will come together to continuously transform the market.

Retailers must focus on flexibility and configurability in order to keep up with the experiments of the consumers in shopping and purchasing.  Retailers must focus on developing and improving the omni channel framework that allows the consumer to blend channels depending on their needs at the time.  We have reached this transformation in the retail market where consumers are not concerned about the channel they use to shop or purchase the consumers are simply focused on convenience and efficiency.  It is important that retailers embrace a collaborative relationship with consumers in order to improve their ability to sense and respond to the consumers experiments.

The difference between small change and transformation is simply the time frame from which you view the market.  All transformations are really a combination of small changes that have come together to change the market. The trick for retailers is to increase consumer collaboration and engagement so that they can maintain the pace of small changes rather than waiting until the transformation and they are forced into disruptive change.  Amazon certainly did not disrupt the retail market overnight it took a period of time of small changes coming together to ignite the transformation.

Change Is The New Normal

Change is the only thing that you can count on in the retail marketplace and in addition to this, the rate of change is quickening.  The velocity of change is what retailers are scrambling to address in the marketplace through development and acquisition activities over the last couple of years.  I see the changes in operational and transportation stabilizing now to a low roar and the change in shopping and purchasing increasing as the relationships with the consumers continue to change at a very high velocity.  I believe that it is a bit of a no-brainer to say that retailers and their entire extended chain of partners must not slow and continue to change through improved methods and practices to sense and respond to change in the marketplace.  These sense and respond capabilities will identify the winners and losers in the future market and will drive dramatic new capabilities in collaboration with consumers to meet the changing consumer demands.

The difficulty in this retail marketplace and the reason for the velocity of change is the experimentation by consumers to test their demands against the retailer capabilities.  In other words, these changes are the result of experiments by consumers to support their needs in better ways. Its something like furniture in a room; I’m comfortable with the way the configuration supports my living needs but ‘what if’ I moved the couch to another place and the easy chair to another place, do I like it better that way?  Technology as made this practice available for consumers in their shopping and purchasing practices; if I’m in the store and I see and item I like but the store doesn’t have my size, can I order online and deliver to my house, or does another store have it, for instance. The combinations are like a Rubik's cube in possibilities and there are so many customers shopping there is a good chance that you will need to support multiple combinations for each option.

This is where consumer collaboration and relationship development practices become more important.  It is important that retailers develop the relationship with their customers through collaboration so that these customers will first experiment with you before jumping to another retailers to purchase.  You cannot stop, or block, consumers from expanding their shopping to other retailers because of the availability of technology and improved networks and apps to support the shopping. You can though encourage shoppers to first search your opportunities to address their questions and meet their desires.  In the past, this is where the sales clerk played an important role and now the retailers must fill that gap of the personalized relationship with the consumer through strong collaboration and virtual interaction with the consumer.

The way to encourage shoppers to return first in their search is to provide them with a reason to return.  This reason to return is generated in a variety of ways, including but not limited to collaborative engagement with the individual consumers, embrace of changing technologies to support improved features, and change itself to ensure that the interaction and the face of the retailer to the consumer is vibrant and continuously changing, whether virtual or physical this change will give reason for consumers to explore.  All of these things really come as a package deal for retailers because if you settle or slow your support on any one of these the consumer will sense the change in the support for change and while that is not a reason for them to not return, it is a reason for them to return less frequently. In addition, this is truly an omni channel change model that must be supported across all channels.

Enhancing Consumer Experience

The next key area of focus for retailers must be the customer experience.  Retailers must realize that with all the available outlets in the marketplace they must provide a differentiating factor and this factor must be the customer experience.  The consumer experience must include the physical experience along with the virtual experience. There are so many choices now in the marketplace that consumers really do not need to shop at any one particular outlet and with the drive for lowest price almost universal, retailers must now look to enhancing the consumer experience to attract more customers and encourage customers to return.  Outside of special holidays such as Christmas or back to school, most consumer shopping is opportunistic based on either an immediate need or an impulse based on some factor that peaked the consumer’s interest so retailers must enhance the experience with the understanding that it could be the reason for the consumer to return.

The challenge is what is factor, or factors, enhance the consumer experience?  This is where the retailer can utilize their collaborative network with the consumer for direct interaction and relationship building with the consumer.  The way to enhance the consumer relationship is to develop and grow the relationship with the consumer. Remember that shopping, even virtual shopping, should be viewed as a social experience and an opportunity for the retailer to develop and strengthen their relationship with the consumer.  This starts with collaboration and the methods to virtually interact with consumers and then using the information developed from this interaction to shape and focus the shopping experience to meet the customer needs.

This is where the online marketplace really brings value to the retailer when combined with customer rewards programs and memberships the retailer can track and trace the customer activities and purchases to customize the shopping experience based on past purchases or just past searches.  You see this type of activities now with many retailers and the practice is growing and expanding to support the desires of the consumers. These types of experience enhancements can be focused to individuals now to make individualize the experience.

Just as consumers are experimenting with shopping and purchasing practices crossing virtual and physical outlets, retailers must also experiment with interaction and capabilities across the virtual and physical outlets using collaborative techniques along with the information they collect from consumer online activities to react and adjust to revise and enhance the experience.  Consumers search for the personal interaction in their shopping and will return if retailers provide this personalized interaction. This personalized interaction started rather crudely with email blasts to notify consumers of sales and now have improved to combine mobile technology and push notifications to be able to personalize the communications to individual tastes and also needs.  

These capabilities grow with the amount of data collected and especially as analysis tools and methods improve.  The requirement, though, is continuity. Retailers will find that as they take these steps that they will continuously be pushed into the next level of personalization, as long as they are open to new information and especially experimentation.  Retailers can use the tools to return to the individual personalized consumer experience and consumers will, in turn, return because of this engagement. The engagement must be fresh though and continuously renewing in order to maintain the customer interest.