Retail Virtual Relationships

The retail omni market and the omni supply chains supporting this marketplace now require the development and extension of virtual relationships across all partners and participants within the extended marketplace.  These virtual relationships are required now as an extension to the relationships across the marketplace and as a result, these virtual relationships are required, especially, to extend the consumer relationships. The retail omni market itself provides a means and the capabilities for consumers to shop when it makes sense for them and this leaves a hole in the consumer relationship with the retailer.  This is where the retailer must focus the virtual relationship to engage the consumer in their shopping and purchasing practices. This virtual relationship will augment the consumer relationship in some cases but there are many cases and situation where the virtual relationship will replace the personal relationships from the brick and mortar channel.

Consumer relationships should be extremely high on the retailer list of priorities because of the potential impact on their success.  Without the personal relationship and a reason to encourage consumers to return the retailer must focus on the price aspect of the shopping equation.  There is no room for differentiation in the order delivery since Amazon introduced the Prime service in addition to standard free delivery from so many other Internet retailers it's now common practice for free deliveries so there are basically two areas of differentiation; product price and consumer relationship. For the large legacy retailers the strategy to compete on price alone is a losing proposition because there is always someone that will offer a lower price and the Internet makes it so easy to search for the lower price, including apps that search in the background, that make it so difficult to compete on price alone.

This leaves the consumer relationship and collaboration as a key factor to differentiate the legacy retailers.  The large retailers must leave the low price war to others and stay out of that fray, it doesn’t mean that these retailers should not compete on price but it does mean that the low price or more appropriately - fair price - strategy combined with a strong collaborative relationship with consumers will allow the retailer to stand out in the market.  I suggest that the new feature for focus by retailers should be the virtual and collaborative relationship with consumers as a differentiating factor. Any other retailer can copy an operational process but it is much more difficult, really impossible, to duplicate a relationship and this is why the large legacy retailers should focus on this aspect.  

This will require two types of work to implement; capital investment for hardware and software to support the integration and abilities to connect and collaborate with consumers (this is the eay part of the equation), personal commitment and even culture change to support relationship development and maintenance (which is much more difficult because it involves personal involvement).  This can be done and the good news is that the capital investment is relatively easy and quick to complete, leaving the more difficult effort to develop the relationship. The relationship development requires overcoming a couple of hurdles that are easy to call out and very difficult to overcome. This effort requires both a long term commitment from the retailer leadership which is very difficult in itself and then the actual investment of time and effort to develop and maintain the relationship.  This is not a zero sum option, it requires a long term commitment and investment in time and people, however the payback can be phenomenal.