Retail Relationship Collaboration

I am convinced, and have been for a long time, that collaboration in the supply chain environment and among the extended partners is critical to the success of the supply chain and all the partners within the supply chain.  I have seen evidence now of the extension of these collaboration practices extended by supply chain partners to the end consumer. The best example is parcel delivery of orders where the major carriers have developed collaborative tools to interact directly with the consumer to plan and re-plan parcel deliveries.  This example shows the benefits that can be achieved by all parties in the transaction when they are open to the suggestions and comments of the other participants in the transaction. This example can, and must, be extended throughout the retail omni marketplace to proved reasons for the consumer to return.

Retailers and especially the large legacy retailers fell into a trap of chasing the lowest price offerings for the goods and services in the hope of encouraging consumers to return when in fact the practice created a monster that required continuous feeding in order to survive.  The fact of the matter is that consumers only returned and purchased when the retailers offering was the lowest price and this drive to the bottom created an almost overwhelming need to continuously reduce costs and expenses. Rather than a continuous improvement program this created a continuous cost and expense reduction process that may have produced sales but the sales could not be expected to support a vibrant business offering.

In the meantime leaders in the dCommerce marketplace such as Amazon were focused on developing the collaborative relationship with the consumer because they realized early on the importance of the collaborative relationship with consumers.  Amazon came into the market realizing they must develop a relationship with their customers and as a result they focused on collaboration and continuous improvement of their relationship with their customers. Now, I agree and understand that Amazon came into the market with a huge cost advantage that it leveraged to provide the lowest cost offering for so many of their products that consumers gave them a chance and placed their orders.  Amazon also focuses on technology to enhance the consumer experience. These a big differences than the viewpoint and direction of the legacy retailers who moved into the eCommerce channel as a means to reduce the sales transaction costs and open another sales channel.

The large legacy retailers must now extend their focus and their efforts towards developing a collaborative relationship across the marketplace as a means to survive.  This is a huge shift in focus and effort and most importantly a shift in culture for these large legacy retailers to collaborate in decisions that will benefit all participants and engage with the participants.  While this is extremely difficult it is also absolutely necessary activities for the large retailers in order to survive. This is not a project though, it is a program that requires continuous effort to engage and collaborate.  This will be difficult at first however when they begin to realize the benefits it will encourage them to continue and grow the collaborative relationships. This has been a great area of success for Amazon and there is no reason that the large legacy retailers cannot also gain from these activities.