Remaking The Retail Supply Chain

While the retail marketplace is remaking itself through the collaboration and cooperation of all partners involved, the retail supply chain is also in the midst of a tumultuous reimaging of the supply chain services and interactions of the supply chain partners.  The challenge with the supply chain is helping their supply chain partners in the retail market to catch up with the supply chain capabilities in not only service offering but most importantly in their collaboration practices and capabilities. The retail supply chain as a whole is really far ahead of the curve of collaborative networking to support the demands of the market and the retail supply chain must help their partners in the retail market to build a robust network to support the demands.  This extension of the retail supply chain network will drive a remaking of the entire retail supply chain to extend services and capabilities seamlessly across all partners.

The supply chain has been embracing the technology and practices of technology capabilities and services for a long time as a means to support the demands of supply chain partners and most importantly to as a means to address cost and transparency pressures from the supply chain market.  The supply chain and supply chain partners are now in a position where they can guide and support their retail market partners in their initiatives to develop and support a similar collaborative network. This would include a maintenance program that incorporates a robust continuous improvement program that reviews and analyzes the demands and the capabilities to address the demands of the marketplace efficiently and quickly.

The retail supply chain has been continuously building out the collaborative network foundation and the capabilities to communicate transparently across the supply chain for a long long time.  This supply chain has developed and embraced a process of continuous change that has supported the pressures and demands for improvements in efficiencies and transparency for years. This foundation now will be used to extend the supply chain capabilities and services across a wider spectrum of partners and outlets.  The supply chain foundation of services and technology will first help their extended retail partners to quickly plug in and take advantage of the services and technology and then to follow on with support and guidance in developing and supporting new services and capabilities.

This is how the retail supply chain will remake the network, not a rebuild but a continuation of the collaborative and continuous improvement practices across a wider network.  The retail supply chain has reached a level of capabilities and practices where they can spread the benefits deeper into the retail marketplace. The retail supply chain brings the benefits of technology and a continuous improvement process to the table to help incorporate these processes that embrace the change process rather than ingnore or fight the change process.  This is where the change will occur in the retail supply chain, and extension of the network deeper across the partners.

The supply chain will be encouraged to take a leadership role in the growth and remaking of the retail marketplace from the perspective of implementing and growing the collaborative network that can support a continuous improvement process from end to end of the network. This will require perseverance and patience in the supply chain partners to continue to push and it will require the retail marketplace to change themselves in both culture and practice to embrace and encourage change.

Retail Supply Chain Disruptors

The retail supply chain is certainly going through a disruption period now for a while from a few factors including the Internet of Things and changes to consumer delivery practices.  There are many other results of this period of disruption and it certainly seems at this point that we are entering into a period of continuous disruption in the supply chain. There are many factors driving these changes and is see the latest ones as coming from Amazon and third party logistics providers and the collaborative network.  Amazon is a continuing disruptor that has developed a culture of disruption in the retail market that people have been chasing since it entered the marketplace. Third party logistics providers and the collaborative network are the new players in the continuing disruption and it will be interesting to see how this plays out in the future.

Third party logistics providers have been around and developed a strong catalog of services and capabilities to support the retail market that have allowed retailers to outsource their needs effectively and quickly.  The 3PL market enables their partners to quickly achieve capabilities that would have cost a great deal of time and effort to develop on their own. The 3PL provides the service and takes on the risk of fulfillment for product types and demands and the retailers can take advantage of the service for a fee.  This type of fulfillment model is ideal for this disruptive retail market to provide the services to retailers based on their demands at the time. The benefits to the retailer are speed to market and reduced risk. This is delivered by the 3PL through their network of locations and services that the 3PL has been developing for many years.  This model was an early precursor to the collaborative network and essentially proved the concept and the benefits of the collaborative network.

This brings me to the collaborative network and the growing and potential benefits of the network to support and drive the continued disruption of the retail market.  Similar to the third party logistics partners, the collaborative network provides the foundation and the framework for the partners in the network to collaborate to develop new services and also supports the extension and growth of niche service providers to flourish and quickly support the changing demands of the retail market.  These services and demands are the result of both market demands and the experimentation of partners in new services to support the retail market, very similar to the 3PL providers. This collaborative network provides the benefits of the services and capabilities from partners in the network without the efforts and time to develop the services themselves.  This network provides the environment that encourages and supports experimentation while sharing the cost and the risk across a broad spectrum of partners.

The combination of 3PL partners and the collaborative network provides the basis for a continuous disruption pattern and delivery across the retail market.  In the past this type of disruption was driven by large players such as Amazon and they were very successful for a long time. Now though the collaborative network partnerships present this same ability and potential that Amazon developed internally for the partners in the network.  This is no small feet and the potential and relative risk to the partners in the network negligible as it relates to the potential rewards.

Crowdsourcing Retail Solutions

The collaborative network provides an opportunity to leverage the network partners to build and roll out solutions which should not be overlooked as a benefit of the network relationships.  The collaborative network allows the partners to effectively crowdsource solutions and and new features in a manner that allows these new features to be delivered more quickly and cost efficient and most importantly more robust than if the individual partner were to release on their own.  In a world of change at a high velocity that regularly disrupts the market the speed to delivery and flexibility are critical factors to meeting the demands. We have reached a point in the market where services and capabilities are delivered at an overall breakneck pace across the market and it can be very difficult to maintain the pace of change without continuously reviewing and changing with the market.  

The concept of competitive advantage takes on a new meaning though in the collaborative network model because the solutions are partnered and the collaborative network benefits from them as well.  This is not a bad thing because as a result of the collaborative network the partners should never fall behind the curve of change, requiring massive investment and delays in completing. In effect, the collaborative network becomes the market competitive advantage.  This is a very important concept and one that will carry the partners in the collaborative network to the next level in the retail marketplace.

The power of collaboration will deliver on the crowdsourcing promise to produce higher quality solutions faster within the collaborative network.  The network provides the connectivity and the means to support niche solutions that bring value to the network and the market that would require an unreasonable amount of research and development if any one retailer attempted to deliver.  There is no secret in the fact that retailers as a matter of course now will follow the leader and then use the solution in their offerings and this collaborative network provides the technical framework and the partner relationships to deliver on these specialty solutions more efficiently and quickly.

If you were to compare the actions taken by retailers over the last three or four years you would see that retailers have spent a great deal of time, effort and capital to acquire the eCommerce solutions offered by specialty providers.  Based on the common practice for these retailers to acquire the capabilities through acquisition or licensing you can see that the collaborative network partnerships could eliminate a great deal of the current activities and dramatically speed the solution delivery.  This, in a nutshell, is probably the greatest value to be achieved through the collaborative network partnerships.

The retail marketplace now is going through dramatic changes at an amazing velocity, driven by thought leaders and market disruptors such as Amazon.  In order for retailers to survive they must also increase both the velocity and capacity of change. The market disruptors have left a series of failed retailers in their wake as a result of either incapacity to maintain the change, or the market changes making them unnecessary.  It only makes sense now for retailers to take the next step to developing a collaborative network that will allow them to navigate the changes and disruptions successfully.

Breaking the Large Retailer Mold

The large retailers have traditionally followed the lead of smaller retailers in responding to consumer demands and market demands because of the level of effort required for these large retailers to change direction and also because of the level of change generally required.  This has resulted in these large retailers almost struggling and fighting the changes. Now, over the recent four to five years retailers have been shortening this timeframe through a combination of acquisition of capabilities and their own internal development of services in their omni channel in order to remain competitive. These recent developments have been focused on operational capabilities and lend themselves to purchasing the capabilities. There is, however, a much deeper and cultural change in the market that requires these large retailers to break the mold and push the market changes earlier and more quickly in order to compete with agile retailers such as Amazon.

These recent developments now require a focus on collaborative development and delivery of services that cross partners and requires a continuous process of change that allows the retailer to sense and respond to the demands and challenges.  Retail services and demands will continue to change and grow and now the challenge for retailers is to be able to maintain the pace of the change in a continuous process. There is no time now for the large retailers to let someone else develop and perfect the services, these service delivery models are changing and becoming collaborative services offered by niche players in the collaborative network model.  If retailers were to wait now for someone to perfect the services to allow the retailer to acquire the service it will be too late for the large retailer to respond because the market will have moved to the next demand. The delivery cycle is no longer measured in months or quarters it is measured in weeks or months.

This increase velocity of change and demands from the market will impact the culture of these large legacy retailers to incorporate the tools and the processes to sense and respond to the market demands.  The legacy practices of these retailers to wait while the market decides on the direction and the solution is implemented will no longer work because by the time a solution is identified the market demands will have moved on to the next change.  The impact of technology is such that these larger retailers must change their methods to incorporate a continuous change model that provides the means to sense and respond the demands more effectively, and quickly. The retail marketplace and especially consumers are all about the speed of delivery now and if the retailer waits for the solution to be vetted they will only fall further and further behind.  We have seen this recently where Wal Mart invested large sums of money to acquire companies that could provide the types of services demanded by the market.

Large legacy retailers must embrace the collaborative network model to provide the means to both sense changes and new capabilities and services and also to provide the support to efficiently react to the demands.  This network provides the foundation to support the partners across the supply chain and to the end consumer in a robust framework that supports the changing demands. This network allows the retailers and their partners to support each other in a manner that would not be achievable alone.

Technology In Retail Supply Chain

Technology has played an important role in the retail market and especially in the supply chain to bring improvements in transparency and efficiencies.  This use of technology has been so important that today the supply chain has become dependant on the technology and these same practices in technology are being imported to the retail market practice supporting consumer shopping and purchasing.  In fact, while the retail market is the reason for these improvements in the supply chain, the reality is that the supply chain has truly lead the way in technology and capabilities to support the retail omni market and as a result the supply chain practice of integrating and leveraging technology to support market demands more efficiently and transparently.  The supply chain method for continuous improvement along with the capabilities to identify, integrate and leverage technology must continue to be expanded into the retail market in order to support consumer demands.

Technology is not necessarily the answer to all the retail marketplace challenges, instead I believe the practices designed and defined by the supply chain leaders will allow retailers to more efficiently support the consumer demands on shopping and purchasing.  I believe these engineered-based supply chain practices provide the foundation for retailers to sense and respond to changing demands of the consumer and the changing demands and capabilities of their supply chain partners.Technology provides the tools that can be utilized by the retail marketplace and supply chain from the supplier to the consumers to support the demands and expansion of the markets and supply chain supporting these markets.  

All of the technology and capabilities though does no good at all if there is not a repeatable process in place that first identifies the problem and this is where the continuous improvement process comes into play.  A robust and transparent continuous improvement program has really been a key contributing factor to the improvements in capabilities and transparency in the supply chain and these same benefits can be realized by the supply chain.  The challenge for retailers though is the culture that generally waits for the improvements to be proven by the market and others in this market, the vast majority of retailers are followers and this will be come a leading contributor to their struggle to simply maintain in the developing retail marketplace.

This puts the large legacy retailers in a bit of a conundrum because they have traditionally played a follow-the-leader strategy in technology implementation and integration.  This has been fed in large part because of the cost to implement technology in a large brick and mortar network of stores. This can no longer be accepted in the retail omni marketplace because of Amazon, basically.  Retailers must embrace the continuous improvement model as a means to integrate technology improvements to react to the market demands. Retailers no longer have the luxury of waiting for someone else to define and implement technologies to prove out the model because as soon as one improvement is implemented the continuous improvement model calls for validation and identification of the next improvement.  In other words, retailers can no longer afford to wait and implement major changes to their model because of the velocity of change in the market.

Future Proof Retail Supply Chain

There are many companies and service providers out there that promise to future proof your retail supply chain through various features and services.  I believe the simple truth is that there is no software or service per say that can truly make that claim without the condition that you must maintain the software or the service in order to meet their claims.  This is the place where the retailer can, and should, maintain their ability and take action to build a process and and network that can provide the same future proof abilities while maintaining their participation and influence on the results of the activities.  Future proofing your retail supply chain requires commitment and participation by the retailer and partners in a robust collaborative partnership network. This network and especially the partners provide the abilities to support the future demands and the cost is active participation from all partners.

Software will be an integral part of the equation to future proof your retail supply and this software will focus on the omni-channel shopping and sales capabilities.  It is important to maintain the software to enable the latest capabilities though because these shopping and sales capabilities complete the supply chain. Efficiencies and capabilities are important in these capabilities and this is the reason to continuously upgrade and as necessary even add new modules and software to support the shopping and purchasing capabilities demanded by the market.  These are important aspect of the equation to future proof the supply chain although these are also basically the price of admission to the market. The latest and greatest shopping and purchasing capabilities are expected by consumers across the marketplace and deficiencies can and will hamper the success of the retailer and the supply chain, however while these are important aspects, they are also only pieces of the overall solution that support the retail supply chain.

The future of the retail supply chain is multi-functional collaboration across services and product availability and delivery and this requires commitment and long term participation in order to succeed.  These capabilities and practices supported by the long term commitment of the partners in the collaborative network are truly the means that will ensure the future of the retail supply chain. The network capabilities and social connections to consumers and partners is becoming a key differentiating factor and this is truly where retailers and the supply chain must focus in order to maintain their place in the market.  

I think that at this point we have reached a level of shopping, purchasing and delivery in the omni market that provides the capabilities to support all of the needs of the consumer.  The future of the market will be driving by the collaborative network supporting the shopping and purchasing. This network is changing and becoming a type of organic network that can support many partners, including retail partners, in a manner that extends and supports the services that extend the shopping and purchasing capabilities.  I think that the future requires these social networking capabilities and collaborative partnerships in a non-exclusive manner to efficiently support the demands of the market. These networking capabilities require culture changes and a long term commitment so in reality I guess the retail supply chain requires culture changes and long term commitment in order to future proof the supply chain.

Retail Collaboration - Innovation - Transformation

Transformation is hard work and is not completed overnight, no matter how it might seem or be viewed in the future, and technology is now making transformation a continuous and disruptive force in many business practices and the retail market may be the most visible example.  The transformative process is made up of changes that happen over a period of time that disrupt the business practices and there are steps taken along the way resulting from collaboration across the practice, or market, that bring innovation that transforms the market. Transformation, or disruption, does not occur overnight, it is made up of many changes and these changes now are driven by collaboration between partners in the retail market network.  These collaborative practices and interactions are building every day the innovations that will transform the marketplace.

Innovation building blocks that are developed through the collaborative efforts of the retail network partners are continuously driving the retail transformation that is driven by market demands for efficiencies and consumer demands for new goods and service.  This continuous process simplifies the change because it allows the partners to change and improve through steps of the continuous change model and this eases the transformation for the participating partners. This makes the process a little more hungry for attention and participation because of the continuous nature.  The result though allows the retail network partners that participate fully and embrace the collaborative innovation made possible by these practices to drive the transformation rather than chase the transformation. This is an important difference because the level and velocity of transformation is just increasing and will not allow for retailers to chase the transformation with any success.

The basic, and I believe most important, ingredient to the transformation model is the collaboration among and across partners in the network.  The collaboration across the network and the partners allows the partners to sense and respond to the changing demands through a continuous model of experimentation and verification (PDCA - Plan, Do, Check, Act) that itself is driven by collaboration.  This model can only succeed through the collaborative efforts of the partners in a continuous process, there can be no part time participation. The nature of the process innovation and transformation requires continuous participation to maintain the level of innovation.  There will always be differing levels of change and innovation across partners, however the requirement for continuous participation by the partners maintain the feedback loop for the innovation and change which then improves the quality of the resulting changes.

The next important aspect is the collaborative network and the partners that make up the network.  The partners must expect and prepare for expansion and even contraction of the network and as the network grows and the market changes there will be a steady growth potential and opportunity for expansion based on changing demands and specialization of goods and services.  I see specialization as one of the key factors to responding to market pressures and service demands especially. These specialized partners in the network provide the network and partners with the ability to flex and change quickly and efficiently with their investment in collaboration rather than an investment in developing the new service.  The market will no longer wait for a retailer to develop services and the retailers relationships with the collaborative network will allow them to quickly push new services and goods into the market to meet the increasing demands.

The rule of the day for the retail marketplace in change and especially the velocity of change required to meet the market and consumer demands to transform the marketplace.  The most efficient and effective manner to adapt to this transformation is through the collaborative network. This will become evident shortly as the market reacts to new technologies and potential capabilities, and frankly as Amazon and other forward looking retailers push the envelope.  Retailers will be forced to join a collaborative network to continue to grow or they will stagnate and eventually fade away and the rate of these occurrences will also increase.

Retail Continuous Transformation

There is definitely a lot of potential benefits to the collaborative market and that is why you see the forward thinkers and trend setters such as Amazon in the retail marketplace moving in this directions, its a natural next step to transformation of the retail marketplace to a collaborative marketplace.  There is also a great deal of planning coordination and change required to realize the benefits of the collaborative marketplace, including technology, process, partners and culture. Becoming part of the collaborative network and realizing the benefits from the collaborative marketplace will take planning, coordination and patience and the results will not only deliver the benefits, it will also prepare the market for the next iterative change that will come.  The collaborative network is the next step in the retail market transformation and there is no shortcut through and you cannot simply buy a solution, it still requires culture changes to integration the collaborative practices and capabilities into the retail market.

There is a common theme flowing through each of the changes in the retail transformation and that is the continuous change of the retail culture.  This continuous change in culture requires an open and transparent relationship with partners and also the consumer. The retail market has been moving towards the collaborative network based on social network concepts and practices since the early days of eCommerce and this continuous transformation to the collaborative market is the next logical step in the realization of the market to support the consumer.  The consumer is the driving factor in this transformation and the consumer is driving the change in a continuous manner to incorporate technology and social capabilities to reshape the shopping experience. This should be an accepted pattern now for retailers and the culture must be one that can sense and respond to the changes as they occur. The learning for the retailer is that it is no longer acceptable or even feasible for these large retailers to wait for the direction and the process because the direction and process is changing at a rate that cannot be ignored.  

The retail culture must now realize that the velocity of change will not slow and that there is a continuous, and rapid, change culture that is driven by consumers that must be met with change in the shopping and purchasing capabilities.  The drive to the omni market was driven by consumer demands to shop across channels to meet their changing lifestyles and consumers drove disruptive shopping and purchasing practices such as showrooming because it met the consumer requirements.  These changes for a large part were driven by smaller retailers and service providers and especially mobile technologies and apps. While the larger retailers fought many of these changes, the consumer and therefore the marketplace ignored the attempt to limit the shopping practices.    

Retailers must quickly come to the realization that the can no longer control the shopping and purchasing of consumers and must embrace the collaborative network and retail market in order to meet the changing demands.  The demands come in discontinuous waves via consumer changes in practices and the retailer must be plugged into these changes in order to sense and respond to the demands and the direction. The retail market is going through a continuous transformation that is enabled by technology and retailers must plug into the collaborative network in order to understand and react to the transformation.

Realizing Collaborative Network

There is definitely a lot of potential benefits to the collaborative market and that is why you see the forward thinkers and trend setters such as Amazon in the retail marketplace moving in this directions, its a natural next step to transformation of the retail marketplace to a collaborative marketplace.  There is also a great deal of planning coordination and change required to realize the benefits of the collaborative marketplace, including technology, process, partners and culture. Becoming part of the collaborative network and realizing the benefits from the collaborative marketplace will take planning, coordination and patience and the results will not only deliver the benefits, it will also prepare the market for the next iterative change that will come.  The collaborative network is the next step in the retail market transformation and there is no shortcut through and you cannot simply buy a solution, it still requires culture changes to integration the collaborative practices and capabilities into the retail market.

There is a common theme flowing through each of the changes in the retail transformation and that theme is retailer culture change.  This is not to say that the retailer culture has not changed through the transformation from the single change to the omni channel marketplace, it is to say that the retailer culture must continuously change in order to meet the demands of the marketplace.   This is probably the greatest realization of the market transformative changes, however it is also as common as the nose on your face,since retail is a social activity the retail market must continuously transform as the social interactions change. The is the greatest realization for retailers and while I do see that retailers have overcome their hesitation they still have not embraced a practice of experimentation and still hesitate I think because of fear of failure.

The collaborative network is the next transformation of the the business networking that is now facing the market as a result, really, of the need of the market to support the demands of their consumers.  This collaborative network transformation comes about as a result of the demands of the marketplace along with improvements in technology. The collaborative network came about as a result of a few forward thinking partners is the supply chain that put together technology and social networking practices to allow them to communicate and most importantly offer new services to the network.  There will always be forward thinking companies that will push the limits and now the technology capabilities make these changes even easier to deliver and experimentation is pushing changes at an ever increasing velocity. This means that the retailer culture must change to sense, embrace and encourage change more quickly.

The realization of the collaborative network, then must also result in the realization that the retailer culture must incorporate change in their acceptance and embrace of new technology to support experimentation in their relationships and their services.  One important concept to realize in this transformation is the importance of continuous change process to sense and respond to the changes in the consumer social networking. The change, I think, is to realize that shopping is a social experience for consumers and therefore shopping, and purchasing, will change as the social networking practices change.

Retail Market Hyper Connectivity

The simple definition of hyper connectivity is ‘everything is talking’, people to people, people to machine and machine to machine and people to networks and networks to networks.   The retail omni market has, along with consumer demands has brought about the realization of a collaborative network framework that supports and encourages hyper connectivity in the retail marketplace.  This is extremely important because it reduces the friction of the free flow of data and communications that is required to produce knowledge and reactions to the data to support the network. I see this aspect of network to network communications and especially as it relates to the social networks and relationships to the retail collaborative network as a key to the growth and change in the retail market.  This allows and encourages the network to support a living growth and interactions across social networks that in turn will drive change and further disrupt the retail market.

This is where the sense and respond practices and capabilities of the network partners becomes important.  This sense and respond capability becomes more important as the hyper connectivity increases to allow the partners to change and align strategies to deliver personalized products and services anytime and anywhere.  The partners in this network must develop methods to assess the demands and expectations against the products and services to help to guide the selection and promotion of them. This will allow the partners to continuously and quickly refine and improve the consumer offerings based on the near real time interactions and responses to these actions and interactions.  These continuous interactions across partners and networks must be monitored to sense potential change and alert the partners of the change in near real time to allow for reaction. This is where AI comes into play and the amount of data available to analyze and sense change can quickly guide the reactions of the partners to realize and take advantage of network responses and changes.  

The retailers and especially large retailers must plug into these networks in order to survive because the speed of change supported by this hyper connectivity will quickly overwhelm these retailers’ current capabilities and practices.  These changes have been building and the hyper connectivity capabilities coupled with AI are coming together to push the process to ever increasing speed of reaction and change. These changes in connectivity and the span can depth of the collaborative networks are all very positive changes that will allow the retailers to more quickly and efficiently sense consumer preferences to change and align their services and even personalize product and offerings to consumer purchase anytime and anywhere.  These changes, though, can also be very detrimental to the success of the retailers that do not embrace the network and capabilities.

The collaborative network and partners, especially including consumers, will allow the retailers and service providers to quickly assess new products and services to align with consumer preferences and this will allow the the retailers to more effectively and efficiently forecast demand.  The result of these improved demand forecasts the demands and expectations of the entire supply chain from manufacturer to delivery to the retailer and consumer will also change dramatically.

This network supporting and feeding the hyper connectivity is by its very nature and open and collaborative network that focuses on demands and capabilities that bring benefits to all partners, which are all very good things.  The challenge for many of the large retailers is the change in culture and practices, including much of the back office activities. These large retailers have always been challenged to quickly change and the velocity of change is continuously increasing.  These retailers must embrace first the collaborative network and then the tools and culture that will allow them to sense and respond to consumer and network demands and capabilities.

Trust And Openness In Retail Market

Success in social networks depends on trust and openness and the retail collaborative marketplace is no different and in fact trust and openness is even more important now in the collaborative marketplace.  There are just too many partners and participants in the collaborative marketplace for untrustworthy partners and with the speed of actions and reaction these less than trustworthy partners are quickly identified and can be either reformed or eliminated.  The power and the speed to delivery are enabled by an open and trusting relationship to act in a way that will produce the most benefit for the network. Consumers react quickly to walk away from partners that stretch these limits, I’m not saying these types of retailers or participants in the retail marketplace will not survive, I am saying though that these types will quickly gain a reputation and will struggle with the reputation rather than fluidly participate in the collaborative network.

The collaborative network works best with partners that are focused on mutually beneficial benefits across the network for all partners.  This means a change from the competitive response to a more open and collaborative response,especially as it relates to the partners in the network.  The collaborative network partners represent the parties that extend services of each of the partners to strengthen the offerings and most importantly the relationships with partners across the network, including consumers.  This is a change in attitude for the large legacy retailers, especially as it relates to consumers. This is not a change though for the small retailers, the niche specialty service and customization providers and the the supply chain and all of these are partners that must be included in the collaborative network in order to be successful.

These open partners within the collaborative network can help the other partners, especially the large retailers to be more open and trusting, or collaborative, in their relationships across the network.  These large retailers though must be receptive to the suggestions and give up the controlling practice to become more collaborative. The whole point, or business objective of this collaborative network is to provide a means where the partners can support each other to meet market demands in a mutually beneficial manner.  What we have learned over the recent years from outsourcing is that the most successful model provides a mutually beneficial relationship that allows the partners to support the market demands. Large retailers cannot meet these demands alone and in order to succeed require the collaborative network and in order for this collaborative network to success all of the partners must have a high level of trust and openness within the partner framework.   

This, I believe, is the secret to the success of retailers in this next phase in the retail marketplace transformation and this collaborative network will allow the retailers to better sense and respond to the marketplace demands.  The retail market is all about sensing changes and reacting to these changes early enough to benefit from the change. Change in the market is increasing in velocity and we have reached the point where no single entity can hope to respond to all demands.  Therefore is is critical to embrace a collaborative network based on openness and trust in order to respond.

Supply Chain As Customer Experience Channel

It would seem at odds with common accepted practice to view the supply chain as a customer experience channel, however, the omni market and especially the growth in collaborative market now push the supply chain out as a key touch point with the customer.  As a key touch point, retailers and service providers must account for all consumer touch points in all interactions with consumers as an opportunity to interact and impress the consumer. This makes the supply chain an even more important piece in the puzzle picture and increased the importance of a strong partnership to both drive the positive touch point and also incorporate both consumer and supply chain feedback to improve the consumer experience and relationship.  Retailers must leverage all consumer touch points in their relationship and the supply chain has become an extremely important partners in this relationship with the growth of the omni channel market.

Supply chain partners have a great deal of information that is relevant to the consumer relationship to start with and the supply chain provide that final touch with the consumer that can make or break an initial relationship.  The speed at which the market is changing and especially in the area of consumer demands and experience challenges has caused the supply chain to grow dramatically in importance in supporting the consumer relationship. These demands, coupled with the imagination and focus on improvements from the supply chain in the last mile type of delivery services have driven the supply chain partners to delivery new and improved services, especially in delivery flexibility, that have not only increased choice and options, they have also improved the supply chain carrieres, and the retailers relationships with their consumers.

While the touch points are extremely important for the retailer it is also important to manage and improve the efficiencies of the supply chain from the manufacturer as well.  The supply chain has improved their support activities and especially transparency in the coordination and delivery from the suppliers to the point where the retailer can more effectively plan for the availability of product for that last mile delivery.  The blockchain practices are improving the visibility and transparency of the entry supply chain to enable the retailers and by extension their customers to better trace the heredity and the steps along along the supply chain delivery process and this information can then be used to improve and streamline the entire supply chain.  Consumers are demanding increasing improvements in delivery and value add services and these demands are driving the global market to increased efficiencies and transparency to meet these demands.

In addition to the customer experience interactions above with the supply chain there are also demands and new capabilities continuously entering the picture that must be evaluated and incorporated into the retail offerings and this is where the collaborative network takes on an important role.  The market is at the point now where the velocity of changing demands requires a great deal of cooperation and collaboration across all partners in the marketplace, from supplier to the end consumer and the partners along the way, from supplier, to transport, to storage, to consumer shopping and purchasing require a network that supports the efficient flow of communications to support these demands and this is where the collaborative network increases in importance.  

Collaborative Control Tower

The control tower concept at first would seem at odds with the concept of the collaborative network however there is a real need for a means to coordinate the communications and the collaboration contacts and interactions in a flexible and robust platform and the control tower concept checks all these boxes.  The challenge with the control tower is to develop a method and process that creates and supports a social network control tower across multiple partners. This social network control tower provides a method for standard communications and connectivity across partners in a manner that allows the information to flow across partners fluidly and quickly to support the conversations and collaboration activities across partners.  So the control tower is a communications control tower that supports the flow and does not control the message within the flow. It is important for this collaborative control tower to support the communications and not the information in the message.

I think that from the perspective of supporting the flow of the message that Facebook provides a good model of the social network control tower.  Facebook provides the framework and the technology foundation for the social network to support the flow of communications and messages without controlling those communications or messages.  This is exactly the framework necessary to support the retail collaborative market in a manner that supports the communications and a fluid message flow. This framework concept supports the addition, and subtraction, of partners easily and efficiently along with a means for the partners to focus and address messages or ignore messages.  The framework supports the social aspect of the collaborative network and allows for the growth of the networks and the partners through a social growth that supports and benefits the partners. This framework allows for growth based on necessity and opportunity rather than a planned out process. This fluid social growth more effectively supports the network than a controlled communication through any one partner.  

The challenge of this type of control tower is the maintenance and support across a network of partners with varying degrees of capabilities to participate in the support.  This control tower framework also allows for the support of all partners based on their capabilities providing an on-ramp for the participation and collaboration supporting partners that do not, or cannot, maintain their own connectivity.  This is especially important for the entrance of consumers into the collaborative network. The social network maintenance can and should be maintained by the partners that gain the greatest return, in other words, the small partners providing a niche specialized service would participate based on a simple connection model that allows for communications and participation as necessary where the large retailer or even supply chain carrier for instance would provide the hardware to support the connection and communication from other partners.  

The collaborative control tower framework provides the connectivity and the foundation for the collaborative social network to prosper and grow and as such it only makes sense that the technology would be provided by the partners with the most to gain..  This is an important aspect of the social network concept of share and supporting the network to the benefits of the partners. There may need to be some type of subscription fee for some partners in order to allow for the expansion and growth necessary to support the demands of the customers.  These details, fortunately can be addressed over time as the needs are identified. The important aspect of the collaborative control tower though is the social aspect that provides an open and robust network for collaboration and communication.

Supply Chain Guide For Retail Market

The supply chain network are spent a great deal of time, effort and money in developing a collaborative network of partners supporting supply chain demands.  This network of partners has evolved into the current state collaborative network that encourages and supports partners to develop a high level of specialization to support specific supply chain needs.  These specialized partners can be very successful within the collaborative supply chain network where the interesting aspect of the network relationship and the level of specialization in some cases would probably cause the partner to fail and disappear outside of the collaborative network.  The retail market has also moved into the direction of the collaborative network and the experiences and lessons learned by supply chain partners in developing and growing a similar supply chain network can be very beneficial to the retail marketplace network.

Amazon has developed a collaborative marketplace and based on services offered and span of partners participating in this market it appears that Amazon has a strong lead in this area.  I believe this is because Amazon has spent years developing the framework and platforms that supports open collaboration across partners, whether consumer or supply chain partner, including all aspects of the supply chain from the supplier to the consumer.  These efforts and developments have prepared the way for Amazon to provide a retail collaborative network to the consumer. Amazon, I think, realized a long time ago that their storefront did not need to supply all products and services themselves but it is important to provide the ability to obtain all of the products and services.  This is interesting to me because it seems that Amazon modeled their vision after the Wal Mart retail store model to provide everything a consumer wants under one roof, where the Amazon ‘roof’ is virtual. This virtual model though allows Amazon to provide unlimited aisles of products and services because there is no limitation on real estate in the virtual world.

Many retailers have provided the ‘endless aisle’ concept in their eCommerce site with various, degrees of success, through drop ship programs.  Amazon has simply extended that concept manyfold through a robust sort front platform. Amazon has been working on the storefront concept for a long, long time first I think out of necessity and then realizing the power of the concept they began to expand and extend the framework to the point now where they are advertising as a strategic initiative to support and extend the capabilities of their small retail partners.   In my opinion, this is the key to their strategy and their key to future success, they have brought to the broader market the concept and reality of a collaborative marketplace that extends the Amazon brand and reach through a mutually beneficial collaborative storefront.

This is the next retail marketplace disruption and while the technology can be acquired by anyone, especially the large legacy retailers, the concept of the collaborative marketplace requires a culture change to implement.  The large department stores have similar concept where major designers and brands have their own mini storefront this is still owned and controlled by the department store. There is no collaboration involved in this concept, fact even the areas that would provide the opportunity to collaborate are rebranded and fronted by the retailer.  The legacy retailers first must focus on collaboration and how to build the collaborative framework that extends from the manufacturer to the consumer with connections and actual two way communications and collaboration across the entire network. The retailers must change their culture from one of command and control that waits for a concept to be proven before the embrace to a nimble collaborative culture that encourages experimentation and failure.  In this new world, failure is an important concept and method to move forward and this is a concept that the large legacy retailers must embrace in order to survive the disruption.

Building the Collaborative Marketplace

The retail collaborative marketplace is truly a combination and extension or the collaborative supply chain for the retail market and this collaborative marketplace adds to, or extends the omni market through the goods and services offered through the collaborative retail market network.  The collaborative market is truly a network of providers of goods and services that enhance the offerings of the retailer and provides a means establishing robust social commerce network for consumers to engage. This collaborative network is build in the same manner as your personal social network through connections and relationships through connections that relate and provide related or specialized goods and services to the collaborative network.  This network requires a shared and collaborative framework to encourage participation and requires a shared management and coordination rather than a command and control management of services.

The key differences between the omni market and the collaborative market is the shared management and coordination that requires a change in culture and the resulting requirement for a robust and flexible technology platform that allows and encourages the growth of the social network aspect of the collaborative network.  This requires first building and supporting a culture that is open and collaborative that encourages the open interaction between partners and consumers to provide a virtual shopping mall of goods and services. This requires the ‘entrance’ to this virtual shopping mall to be through any retailer or search engine or ad content.  This is a dramatic change that will push the large retailers outside of their comfort zone of command and control that has been used to control their marketplace offering. These practice has hindered the relationship with consumers through the omni market and has hindered the goods and services that encourages the return of the consumer.  All other changes and functionality is merely technical details that can be delivered, however none of the technology will make a difference without the culture change to overcome the current practice of command and control, or internal focus, to become more externally focused and collaborative.

The technology capabilities regarding connectivity and collaboration are important to the long term viability and success of the retailers in the collaborative marketplace and the good news is that these tools and capabilities have been proven out in other areas and business functions.  The supply chain has been especially successful in developing these technologies and tools to support a far flung network of partners and services and the retail market can embrace and integrate the tools and concepts to support the collaborative marketplace objectives. The large legacy retailers have shown their ability to support implementation of tools and technologies as they are identified based on the omni market operational requirements.  The challenge that I see is the need to not just support and implement collaborative technologies and tools, but these retailers must embrace and join the collaborative community.

I embracing the collaborative community as a key factor in the future success of the large retailers and this is a critical juncture for these large retailers.  I believe that we are seeing the initial stages of this collaborative marketplace from Amazon in their offerings and promotion of goods and services from small partners and specialty retailers.  Amazon has built a network of partners as an integral part of their platform from the beginning and they have encouraged participation from consumers along with small businesses to take advantage of this platform.  In addition, Amazon has also spent a great deal of money and time in developign a cloud platform that can support a wide array of services. These activities are all coming togehther now in a platform and services that is creating a collaborative marketplace that allows the partners within the marketplace to take advantage of these services and capabilities to grow both their own sales along with related sales and income to Amazon from providing the platform.  The large retailers have been two steps behind and this is no longer an option they must embrace this collaborative marketplace culture and technology to succeed in the future.