Retail Discontinuous Transformation

The retail market transformation is coming in waves of changes driven by market conditions, technology and most importantly consumer demands.  The transformation is a marketplace initiative that involves all partners supporting the retail marketplace in ways that themselves are transforming with the market.  What really started as a new channel twenty years ago has transformed the market and relationships that could not have been foreseen when starting the trip and in the same manner, the future transformation cannot really be foreseen in the market.  There are many changes now in the works that are driven by consumer demands and reaction by partners to these demands. The collaborative network plays an important role in this transformation as the framework that supports the reactions to the demands by the marketplace partners.

This is where the transformation gets interesting because there are so many different actors in this transformation and as a result there are so many different potential reactions to the demands.  Up until now there have been many partnerships between individuals where in many cases the reactions to the demands are not necessarily coordinated by the marketplace partners. The next frontier in the transformation seems to me to be related to coordination and development of a social network across the marketplace participants.  This coordination is necessary because the rate of change is quickening to a point where it will shortly overwhelm any retailer that does not participate in the social network. This social network capabilities are supported by the collaborative network to provide the necessary framework to communicate across partners in the marketplace efficiently so that the marketplace can react to the changing demands.

The change will no longer be implemented through individual retailers but implemented by the marketplace through the participation of partners as necessary across the collaborative network.  In effect, the network will provide and support the transformation which will be made possible by the participation of the partners in this network. This is a big change for the retailers in the marketplace because these retailers at least felt they were the center of activities and partnered with others to provide services.  Now the market is changing where the retailer is just another partner in the marketplace that is supporting consumer demands. This transformation is furthering the truth that consumers control the marketplace now and that retailers are another player, or partner, in the marketplace and simply provide goods and services to the marketplace rather than forming and defining the marketplace.

I think the transformation is now reaching, if it hasn’t already reached, that tipping point where the market shifts from a retailer centric to a consumer centric marketplace.  The key point in reaching this tipping point can be identified as the point where consumers are deciding products rather than simply accepting products from the retailer. We have essentially reached this point now where consumers have so many choices that the product life cycle is impacted by the speed in which consumers can, and do, shift to different products.  This is where the retailers and marketplace partners must focus, the flexibility of product life cycle and product demand.

Consumer Collaborative Network

The retail market continues to transform based on demands and capabilities of the consumer and the consumer interaction with retailers and especially retail partners. These changes are buffeting the retail market in discontinuous waves of activities driven by the consumer as the consumer develops new social and technical capabilities.  Over the last few years these have been more focused in what I would call retail operational changes such as delivery methods or ordering capabilities and the foundation for the next wave of changes. The operational changes are delivered by technology capabilities while the next wave is being driven by the social aspect of shopping and purchasing which has a foundation in technology and the activities and effects are focused outside of the retail operational activities and focused on the retailer to consumer relationship through social activities.  

We seem to be between major technology retail developments and the focus now is on network connectivity from the retailer partners to the end consumer and all partners in between.  This time the change is related to culture within the retailer and the partners that support the retail marketplace. Consumers are still transforming their interaction and relationship to retailers and this transformation now is relational and focused on social interaction and capabilities.  These social interaction are the next logical step from consumers in the omni market retail transformation and bring together and highlight the social interaction that is an integral part of shopping for consumers.

Consumers have been using the social tools at hand for quite some time now in developing their virtual shopping practices and this has been manifested in the growth of sales through Facebook and Twitter.  You can see this manifested in the commercials for the consumer to consumer sales sites that have been on the rise recently. These sites provide a social foundation for the interaction among and across consumers to sell products that one consumer no longer requires or wants and another consumer needs, in essence a virtual garage sale and taking the legacy sites such as Craigslist to the next level.  This is the what I see as the next phase in the retail transformation.

Amazon has also staked a claim to the market of virtual garage sales through the Amazon services and has been very successful in providing an enhanced service.  Consumers will not wait for retailers to catch up or even accept new practices that benefit the consumer, consumers have shown this over and over again and the example I go back to is ‘window shopping’ where consumers shop physically in retail outlets and then search for best prices and purchase online.  This next wave of consumer social interaction is expanding now across consumers through the corners of retail and will quickly move across the marketplace through first adopters and this time with the collaborative network the first adopters may be retail partners unrelated to the sales of products but focused on services.  

This wave seems to be focused on services and how can the retail marketplace integrate the consumer services that enhance the consumer experience and simplify the shopping aspect of the retail experience.  The collaborative network provides the framework and the foundation for retailers to plug into the transformation and utilize partner services to support consumer demands efficiently and effectively. The retailer though must first recognize the need and then change their culture to embrace the partnership.

Retail Omni Market Framework

All of the pieces and parts are available and in use now for the support and long term success of the retail omni market and the challenge now for the partners is really the culture and putting these pieces together into a framework that supports the marketplace demands efficiently and effectively.  The pieces require focus on the connectivity to support the demands and the connectivity requires the collaboration and commitment from the partners in the network. The challenge is not the framework or the technology, the challenge is the collaboration and the partner connectivity across the collaborative network. The challenge is the commitment to the collaborative network from the partners to make the framework work.  This requires a commitment to the network and then the framework will support the demands identified through the network.

The commitment to the network requires a culture change to an open collaborative practice rather than a command and control practice for the retailers.  This must me a standard practice across all partners that participate in the collaborative network in order to take full advantage of the network potential capabilities.  The collaborative network is a commitment to the process and a commitment to the partnerships and relationships that will enhance the framework and allow the partners to truly sense and respond to the omni market demands.  The collaborative network requires the commitment form all partners to reduce friction in the flow across and through the network and most importantly to take full advantage of the framework and the technology.

We have reached a point in the retail transformation where the collaboration and partnership across the network and the participants is required in order to continue the transformation to the next level.  We have reached a point now with the technology where the friction across participants in the network must be addressed in order to move forward. The technology allows for a smooth flow of information and participation and now the partner culture must be modified in order to take full advantage of the collaborative network capabilities.  You can see the capabilities and potential opportunities throughout the industry delivered by social networks and the organic connectivity that allows the social networks to flourish. This same type of organic connectivity must be developed and maintained in the collaborative network in order for the entire supply chain network to flourish.  

Consumers are already in this place where they utilize the combination of the social network practices and capabilities along with the technology to support their lifestyle and this requires the retail omni market to fully plug into this social network.  The method for the retail market to connect is through the supply chain collaborative network and in fact many of the pieces and parts of this supply chain collaborative network are already plugged into the consumer social network. Consumers are already using many of the connected partners in their social network to support their purchasing and delivery requirements.  The missing pieces in this equation are the retailers. Unfortunately this has traditionally been a sticking point in the market where retailers have struggled with the changing consumer demands to try to make the consumer conform with the existing retailer practices that are most beneficial to the retailers. These retailers must embrace the social aspect to meet the consumer demands rather than fighting to bend the consumer demands to the retailer.

eCommerce Shaping Retail

The reality of eCommerce is that the practices and capabilities have been reshaping the retail marketplace now for a number of years, really since exploding in the market.  Since that time the market has been expanding and extending these capabilities across all aspects of retail to deliver on omni market capabilities that have been really driven by consumers re-inventing their shopping and purchasing practices.  The changes brought about by these practices has not only changed the retail market capabilities, they have also shifted the control of shopping and purchasing from the retailer to the consumer. This shift is control is probably the greatest change brought by eCommerce and is definitely the most lasting change process shaping retail going forward.  This change process will continue to be driven by the consumer and the retail marketplace must utilize the collaborative network to help realize the changes demanded by consumers.

You can see that eCommerce continues to change the retail market in ways that would have been unimaginable just a few years ago, such as auto shopping and purchasing.  This has probably been one o the most dramatic changes; purchasing an auto online and the biggest change - delivery of your auto purchase to your home. This would have been inconceivable just five years ago but now it is accepted as not unusual.  This example follows the life cycle of eCommerce shopping; things that were inconceivable become reality through the demands and support of consumers.

The change in retail requires a focus on connecting with the consumer to collaborate on shopping and purchasing improvements to meet the changing consumer demands.  The changes themselves are really secondary because they are refinements to the process really the key change really is the consumer collaborative network that can be utilized to support identification and implementation of consumer demands.  Retailers have focused on the infrastructure and the omni market framework that will allow them to efficiently support changing demands. These changing demands are not really implementing changes to the framework or the fundamental functionality, these changes are instead putting the pieces together in different ways to adjust to the changing consumer lifestyle.

The collaborative network itself is really an outcome from the eCommerce consumer demands on the retail market.  This collaborative network allows the partners across the network supporting shopping, purchasing and consumer deliveries to work together in a highly collaborative method to deliver on the demands.  The network is critical to the on going change support of the consumer demands. The strength of the network though is the ability to add partners providing services and products quickly and efficiently based on consumer demands and new partner capabilities to meet current and new demands.  

I am very excited by the prospects and potential of the collaborative network to not only support existing demands efficiently but to also provide the framework to support growth and change going into the future.  The impact of eCommerce on the retail market can best be supported through a foundation of functionality that can efficiently be delivered through a flexible framework that is wrapped then by the collaborative network that provides the communication framework to understand and react to the discontinuous change which is the new retail marketplace driven by eCommerce.

Smart Manufacturing Impact On Omni Market

Smart manufacturing technologies along with IOT technologies have reached the point now where they can provide new opportunities in products and services to the retail omni market.  When combined into the collaborative network services and capabilities smart manufacturing can provide a means to better support peaks and valleys in product demand and most importantly support a shortened product development lifecycle.  I really see the collaborative network with the extended partners as a key factor to the incorporation of smart manufacturing practices in the retail marketplace. This will allow retailers to better support the changing demands and shortened product life cycle without increasing overstock inventory.  The collaborative network provides the foundation for the partners to take advantage of smart manufacturing technologies without a large investment and this low investment is the key to increased adoption.

Smart manufacturing has been around for a while and is only getting smarter through continuous improvements.  Now I believe we have reached a point where smart manufacturing, IOT and the collaborative network will combine to produce capabilities that will drive increased acceptance and adoption of the technologies in the retail market.  The acceptance will be driven by specialty retailers that focus on customization of products to support customer demands for products that are customized to their particular tastes. Color is the most obvious customization opportunity and a very simple example of smart manufacturing that is especially easy to support online.  The retailer can provide a wide variety of color variations that can be produced at the time of order and then shipped directly to the consumer or the brick and mortar outlet. This example allows the product to be offered in a wide variety of colors only limited the consumer’s imagination and does not require an increased level of inventory to support and potentially require overstock sales reductions.  

Smart manufacturing can also support commodity product replenishment orders to support reduced replenishment cycles which in turn will also reduce overstock inventory as well.  Smart manufacturing combined with reorders of commodity products or IoT enhanced products can eliminate the guesswork and the consumer tracking of these products. A good example of this is cloud enabled printers that connect to the cloud to support wireless printing from any device and location.  These devices can monitor the printing volumes and automatically order and ship ink as necessary. It is an easy next step for these IoT products to reach out to maintenance and support when and issue is identified as well.

The omni market combined with the collaborative network now provide the framework to efficiently utilize and integrate smart manufacturing to support the demands of consumers more efficiently and effectively providing enhanced product selection without increasing overhead of increased inventory.  This allows the consumer to take advantage of impulse demands at any time through any device. This develop delivers a great deal of flexibility and capability to the retailer to support the changing demands of the consumer. This is a big deal for retailers in the evolution of the market and in addition is an especially important reason for the retailers to maintain their focus and support on the continuously evolving marketplace.   

Changes Driving Omni Market Network

The collaborative network and especially the extended partner participation in this network is driving changes to the omni market network that require retailers to reevaluate their place in the collaborative network.  This change is related to their importance and influence of the collaborative network in the omni market. One of the greatest influences on collaborative network and the omni market is the growth in importance and influence of the extended partners within this network.  The reality is that retailers’ influence and control of the omni market network is reducing as the increase of influence and importance of the extended partners in the collaborative network. This is based on the ability of these extended partners to support the demands of the retailers with the same services and the retailers’ needs for these services.

These changes in the collaborative network are creating a social network framework where there is really no single controlling partner and instead a collaborative connectivity that depends on the partnership and the technical connection. This social connectivity allow the partners to provide services and products across the network quickly and efficiently, allowing the partners share services and products base on demands of the network.  This is a rather large change for retailers and will require a great deal of change in process to support and most importantly will require a change in culture to embrace the concept of types of pass through services and products.

Many retailers have already embraced a similar concept in their retail store outlets where you see partnerships that offer goods and services to the store shoppers.  These added goods and services are focused on retaining customers in the store and provide benefits to both the retailer and their store partners. I am discussing a similar type of arrangement where the partner goods and services encourage the consumer to utilize them through the omi market.  The goods and services in this example are supporting the retail marketplace where the example of partners in retail store outlets are generally focused on retaining customers in the retail outlet and are separate from the retailer goods and services. In other words the retail store model leases space to the partners that might benefit from the location and the omni market model integrates these partners into the retail process in support of the retailer.  

These changes are much more that simply advertising placements on the web site, these changes are at the foundation framework for the support of the omni market.  This in turn is driving change into the retail omni market that will ultimately change the retail culture again. I think that the better term at this point though is these changes are driving a retail transformation that is being led by consumer embrace of social network practices and technology capabilities.  This next step in the continued retail transformation is the retailer culture change from command and control to shared collaborative execution. This is difficult to many retailers because of the feeling of loss of control and these changes are necessary as we move into the next phase of the retail transformation.

Omni Market Network

All of the pieces from the extended collaborative network to blockchain technologies come together to support the continuous changing and expanding demands of the omni market network.  The collaborative network brings the framework for this omni market network and the partners from end to end of the supply chain collaborate in their activities and support of the omni market demands via the capabilities of this network.  The omni market a robust network framework to support the demands and develop new capabilities in the retail marketplace. This network is critical to the continued success of the partners that contribute and make up the omni market network.  There is really no turning back now on these principles and the network growth because the consumer will not accept going back.

Retailers have struggled over the past few years with implementation of increased operational capabilities required as a framework for the omni market.  These operational capabilities are the basis for entry into the omni market and are baseline expectations of consumers whenever shopping and purchasing. There is really no place now for a simple multi channel market and the smart retailers have focused their attentions on bringing together the operational pieces and parts to support the omni market demands of the consumer purchasing.  Retailers have delivered this through a combination of build and buy technologies and this has worked well to allow the retailers to support the baseline operational demands.

The collaborative network then brings the tools necessary for the retailers to both connect to partners for services and products but most importantly provides the framework for the retailers to deliver  true shopping network that brings together the social and the operational aspects required to support the consumer demands on the omni market. This now creates the framework for retailers and in my opinion the more important aspect to this framework is related to the network partner channel connectivity and interaction.  This collaborative network really will turn the retailer culture on its collective head because is makes the retailer a participant in the network and not the owner of the network.

The common aspect of the omni market network is the extended supply chain partners that support the network.  The common aspect of these extended supply chain partners is that they support more than one retailer, their services are common services across retailers and these are the foundation of the collaborative network.  These are the partners that will gain a great deal of efficiencies through participation in the collaborative network as well. These services are common so retailers can plug into the network to quickly and efficiently begin to benefit from the services.  In addition, because these services are common, the service providers are continuously working towards expanding and improving services to support the market demands and the collaborative network provides the framework to quickly push new services out to all partners.

This aspect of participation in the omni market network turns the common retailer practice on its ear and requires a change in culture and participation in the network.  The consumer demands will only continue to grow and change and retailers must learn from past experiences with consumer demands to understand that consumers will not let roadblocks thrown up by retailers derail their demands.  Now the retailers must accept the change in the marketplace and embrace the collaborative marketplace.

Blockchain In The Collaborative Network

Blockchain is another technology expanding usage in the supply chain that will be expanding with the collaborative network as well to support and simplify the electronic sales process in particular.  Blockchain from a simplified perspective provides a means to track and trace activities and products through the supply chain for instance. These capabilities can be very useful in the retail omni channel environment as well to ‘tag’ products and services even through the purchase and delivery and provide the ability to track and trace purchases, warranty and service requirements without requiring the consumer to maintain a logjam of paperwork and calendar entries. The blockchain capabilities can easily be extended from the supply chain to provide product and service capabilities through the product life cycle that has the potential to simplify and improve both the process for the consumer from shopping to any product maintenance requirements.

I for one would welcome the simplification and benefits that can be provided by the blockchain practices to simplify the tracking and tracing of warranty and service requirements for my electronics, appliances and autos.  This expansion of the blockchain through the collaborative network could eventually eliminate the need to maintain all of the piles of paperwork everyone maintains for throughout their purchases. This would allow you to maintain the necessary maintenance records on your auto for instance that can be accessed throughout the industry from the auto’s cradle to grave providing valuable information for maintenance, recall and eventual resale of the auto.  This includes the type of recall information that is currently tracked through the auto VIN. The blockchain can allow the extension of the trace capabilities through the entire maintenance chain of the auto that can be used to support warranty claims.

As products become more complicated and therefore difficult to install, maintain and service the benefits fo the blockchain capabilities to support these needs also increases.  The complications introduced through the blockchain track and trace required to extend the reach of the blockchain as well will more than pay for themselves through the simplification of the warranty and maintenance process for consumers.  Then during the life cycle and maintenance of the products the blockchain technologies can provide the information required for warranty confirmation along with a history of the maintenance and repairs attached to the serial number of the product itself.  This becomes particularly valuable when the consumer moves around the nation and changes repair and service providers causing the ‘chain’ of maintenance to be broken.

It will only be a matter of time before the blockchain technologies begin the march through the entire consumer supply chain.  The value potential is great and the foundation is already a part of the supply chain. The expansion is a natural extension of the blockchain technology and practices that will be great benefits to the consumer. Consumers are already familiar and accepted the electronic receipts provided by many retailers and this will allow an easy transition to extend the blockchain into the everyday consumer life.  I see the blockchain as the next natural extension of the collaborative network and the initial expansion in electronics and appliances.

Technology Supporting The Network Control Tower

Technology plays a critical role in the implementation and support of the network control tower in the retailer collaborative network as result of the requirements that must be met to support the demands.  This control tower application must support the internal communication process and controls while also supporting the interaction and integration requirements of the external partners. The integration with the external partners provides the greatest challenge to the control tower capabilities and this depends on the technology capabilities and support required to meet the wide variety of standards and practices that will be encountered.  The network control tower must support these varieties of integration technologies from the newest integration methods to the legacy integration methods and this is no small task.

The difficulty brought about by the support requirements of the network control tower come as the result of the broad expanse and technology capabilities and requirements of the collaborative network partners.  This requires support for the gamut of integration technologies from the last twenty years and you can imagine the difficulties that can and will be encountered in supporting the various and sundry integration technologies.  This challenge also highlights the strength in the network control tower framework that can provide the external face that supports any integration technology while insulating the partner internal systems from the the array of technologies employed.  

The network control tower requires a great deal of planning and coordination to support the demands from the wide array of partners and the technologies these partners may employ.  This expanse of integration technologies will not be reduced over time and will only increase as new integration technologies are advanced. This is because there is so many integration points across the the extended collaborative network that both the risk and the cost of a conversion as massive as this would be would overshadow any advancements and support of new consumer and network demands.  

The partners instead must focus on retiring the legacy technologies as they are adding new capabilities and revising existing technologies.  One point of interest and also demand is the security demands on a network and integration related to the collaborative network. These security requirements cannot be delayed by the partners because the risk is too great for a breach and the cost of a breach can be devastating from both a financial and reputation perspective.  This though gives the network partners an opportunity to swap out legacy and less secure technologies with new and more secure technologies. All this while the internal networks are isolated from the external attacks. This network control tower will go a long way to helping the network partners to support the security demands to protect their interests and most importantly customer and business private data.

I do not think that it will be possible for partners in the collaborative network to support all of the demands without the robust integration and security technology that can be supported by the network control tower.  The technology enables the partners to quickly and efficiently support new demands securely. This is no small feat and requires a great deal of focus and priority in order to go to the promise of the control tower as quickly as possible.

Defining The Network Control Tower

The network control tower must be viewed as an access point that funnels and coordinates inbound and outbound traffic to the collaborative network.  This is a simple concept that allows the network partners to communicate safely and efficiently and provides that connection to simplify the connection of new partners to the network.  This also allows the partners to segment the and secure the communications to protect their own internal networks from the harm of external attacks and isolating the connection to the single control tower simplifies the security of the network.  This control tower design allows the partners to communication and also allows them to also select and expand the data from multiple partners into an internal data mart that will support the research and analysis to help the partners sense and respond to changing demands of the market.

The network access point is no small task for the control tower software and in addition, this is the point where the network security must also be taken into account to plan for the security of the access points and the integration from partners.  The Access point is important to be based on a robust and flexible framework that supports the integration technology requirements from a perspective and most importantly from a framework that will expand and change to support the demands of the network. The access point is important to support rules based integration using the communication standards of the time and must also be flexible enough to support the changing rules and communication standards.  The goal, or one of the key requirements must be the speed of integration to new partners. Without speed in integration delivery the entire collaborative network will fail under the weight of changing demands and delays in delivery. This is why it is so important to develop a flexible control tower based on standard communications protocols on a robust platform.

The communications between partners is very important and the control tower allows the partners to select and route communications across partners and communication to multiple partners at the same time through the rules based communications methods and also the standards based communication supports the simplification and speed of the communications.  This is important to support the expanding collaborative network and partners communication and demands of the network. Without a method to quickly and efficiently communicate across the network the network will soon collapse under the weight of communication requirements. Communications is the lifeblood of the collaborative network and requires a thoughtful initial approach to the definition of this network control tower to support the communication demands in the future.  

The collaboration network control tower provides a robust platform that will support the communications demands and most importantly practices of the collaborative network at large.  There is an important underlying need for the collaborative network to support the communications across the entire network and also provide the ability to focus and expand the communication to and across partners within the network in a non-linear manner that skips and includes partners based on the demands of the communications and also the demands on the partners to support their needs and the network demands.  These communications can quickly become very complicated and this in turn is a leading reason for the network control towers to support and coordinate the communications

Importance Of The Network Control Tower

The rise of the collaborative network and expansion of the social network practices increases the importance of the network control tower concept to help in coordination of the collaborative practices.  The practices and capabilities making up and supporting the collaborative network will not allow for any one partner to control the network. This requires a control tower concept implementation by the retailer to allow the retailer to coordinate the integration and communications across multiple partners and consumers.  This social relationships and practices required by the collaborative network requires a control tower type of capability in order to coordinate and encourage continued collaboration across all of the partners. The strength and stability of the collaborative network does not just happen, it requires effort by the partners within the network and this requires a control tower practice to coordinate and encourage collaboration.

This is where the collaborative network maintenance and support gets a little interesting, and complicated at the same time.  The collaborative network is based on a social network framework design that allows and expects each partner to maintain the connection and the communication.  Consumers are used to this and perform the connectivity maintenance as a matter of course and as the end consumer in the connection they are comfortable with maintaining the social links and connections themselves.  Consumers are accustomed to this maintenance as a result of interaction with other social networks and it should be a truly short trip for consumers to engage in the retail market collaborative network.

The challenge I see is with the retailers because of the requirement to release controls in interactions and in relationships.  This will be especially difficult for the larger retailers that have become accustomed to a level of command and control they have maintained for a long time.  This is where the benefits of the control tower practices and software capabilities can help to smooth the transition. The control tower provides the retailer with the ability to bring together the connections into a cohesive process that will allow them to control the flow and the interactions.  This is critical to the success of the collaborative network and will require a high level of focus to maintain and especially while the collaborative network is in the initial stages of integration and also communications.

The collaborative network creates a great deal of connections, both direct and indirect, and these connections themselves require a great deal maintenance, care and feeding, to grow and and expand over time.  This means that the partners much each maintain their own control tower process to maintain the number of relationships and demands from their partners. This control tower concept becomes essentially the collaborative network connection both to and from each partner and allows for the easy connection to new partners as well.  

This control tower must be easy to maintain and easy to connect to new partners and maintain the communication and interaction to existing partners.  This control tower allows the partners to provide access as necessary and also insulates the internal processes and data from external snoopers. The security provided by the control tower is an especially important aspect because of the potential impact of failure.  This security aspect is critical to the success of the entire collaborative network and cannot be scrimped on to ensure the comfort and the security of the network and the partners.

Extending the Supply Chain Network

The retail marketplace will never accept the status quo of a disparate and unconnected network of service and product providers because the consumers that make up the retail marketplace have moved beyond the islands of providers and separated connections to a connected network that supports collaboration and the smooth flow of data and activities.  The pieces and parts required to extend the network are available and proven, the retailers and network partners must now focus on connecting the dots and delivering the goods. The focus now of the retailers and other providers in the extended supply chain must be on collaboration and connectivity. This is easy to suggest and I think that everyone agrees with the concepts and the challenge is in the action and implementation.  This requires a change in culture for many of the players in the supply chain to open up and embrace the change.

This change must start with retailers and change their focus from an internal self centered view to a community and collaborative view.  This requires that the retailers embrace the concept that they cannot survive as a major force in the market based on their own singular capabilities and this means that they must embrace the true meaning of collaboration which is sharing and working in partnership towards mutually beneficial goals.  This does not mean that they must relinquish their identity, it simply means that they must identify the activities that are common practices more effectively so that they can share the support of these activities while focusing on the activities, products and even culture that makes these retailers special.  

Retailers will not need to replace their eCommerce sites although these sites will need to change to provide more social networking capabilities and connectivity to the extended supply chain in order to grow.  These connections and open technologies will allow the retailer to focus on their strengths and build the relationships within their newly extended collaborative network. This focus is important to allow the retailer to grow and succeed in the future.  Just like we saw the economy impact the supply chain, this time we will see the marketplace changes and increased velocity in these changes having a similar impact on the marketplace and retailers across the board. Based on a comparison of these changes I see that the retail network can take advantage of the learnings and practices from the supply chain network.

Now is the time for these retailers to take a look around at the networks that interact and support the retail marketplace to evaluate how to harness the strengths and capabilities available.  This is an important time now to react and take the time now to chart a course through the integration and extension of these capabilities to improve the retail marketplace and their place in this marketplace.  Retailers focused up to this point on what I would call operational efficiencies and now must turn the focus to the social and shopping aspect demanded by the market. The good news is that these retailers can utilize the social networking tools and the collaborative tools developed over the years to support their efforts.

Requirements for Extended Supply Chain Network

In order to extend the supply chain collaborative network to support the retail marketplace and retailer requirements there are certain requirements that must be defined and met.  This is a significant type of work that must be collected and compiled by retailers based on their experience and there strategic direction and plans and then these requirements must be reviewed against the capabilities and the strategic direction of the supply chain collaborative network in order to identify and plan to deliver those requirements.  Delivery of these retail marketplace requirements, while focused on adding to the supply chain network, must be coordinated and developed by the retailers themselves. The supply chain network provides the framework and foundation that is the basis for this development and delivery that retailers will be required to complete in order to extend the supply chain network.

This is the beginning of the extended social network that develops the connections and the capabilities that add to the base and provide the social network framework to extend partner connectivity and the capabilities to support the market.  The collaborative network requirements are now at the point where no single network can support the demands of the marketplace. We have reached a point in the market and the demands of the market where any single network, supply chain or retailer, can meet the demands without the support of the other networks.  We have also reached the point where the supply chain collaborative network can provide the guidance and the direction for retailers to extend the network to support the retail marketplace demands. Supply chain partners of and to the retailers can provide guidance and support and there will also be some heavy lifting required of the retailer to meet the demands and extend the collaborative network as well.

There is some heavy lifting requirements of the retailers to connect and extend the network to meet their needs and this is where the retailers must focus to identify the requirements to meet their individual demands from the retail marketplace.  The supply chain partners cannot be expected to meet all of the retail marketplace demands and, on the other hand, the retail partners cannot be expected to meet the all of the marketplace demands on the supply chain. This is where the relationship and the social network aspects come into play and these relationships and social network capabilities can be extended and related to meet the supply chain and the retail marketplace demands.

It is, however, a much different level of effort requires to build a collaborative network from scratch than would be required to extend an established collaborative network.  This truly is the point where we are at from a connected and end to end collaborative network in the retail marketplace. Retailers have a customer facing network that provide a great deal of capabilities to support the shopping and purchasing demands of the consumers and then the retailers are connected to the supply chain network to interact in product procurement and delivery to the end customer and there is still a disconnect between the two.  It is my opinion that there is a great deal of value in this last piece of connectivity to extend the network and this is where the focus on the future should be placed.

Extended Supply Chain Network

The supply chain has been building a collaborative network made up of partners supporting the supply chain for years out of necessity and there is really no reason that a retailer should reinvent the capabilities or, most importantly, the partner relationships all over again.  Let’s face it, the supply chain has already developed the partnerships and the network connectivity with these partners and, on top of this, these partners are already a part of the supply chain network and would really only require the retailer to plug into that network as an extended partner in order to take advantage of the network and the relationships.  Retailers can then take advantage of the supply chain network as another partner and jump start the retailer collaborative network activities through both the partners and the collaborative network that supports the supply chain.

This is really the simply an embrace of the collaborative network and the social network properties available that can support the retail marketplace demands.  There is no reason that retailers should rebuild networking capabilities when the supply chain network can be extended. This is after all the foundational principle of social networking and on top of that the framework has already been developed by the supply chain.  This will allow the retailer to easily connect to the supply chain partners to take advantage of services and capabilities without the development or the maintenance of a separate and distinct network. There is no reason why the network relationships should be re-developed and there are many benefits to extending the supply chain collaborative network.

There is only one key challenge or inhibitor to the extension of the supply chain network to include retailers as a contributing partner and that is reluctance of the retailer to join the collaborative network as a partner and not an owner.  Retailers have traditionally been very protective of their capabilities and this has extended to the collaborative network as well. Retailers would do well to overcome these protective tendencies to partnership in the supply chain network because the benefits to the retailer are so great.  This is not an insurmountable challenge for the retailer but it does require a culture change to realize that they will be partnered through extension to other retailers it the supply chain collaborative network. Of course there are separations and each of the partners participates a different levels of sharing and openness so none of the partners opens their internal network to the collaborative network.  

If you think about the opportunities that will be opened as a result of the partnership and the relations open to the partners in the supply chain collaborative network I believe the inhibitor will be well worth the effort to overcome.  In fact, the simple truth is that without the benefits of the supply chain collaborative network retailers will continue to struggle with the velocity of change in the retail marketplace. We have reached the point now were the service in not the draw for consumers and the draw consumers is product, availability ease of shopping and flexible delivery and purchasing capabilities.  The majority of the requirements are supported through the supply chain network and then the retailer can focus on the brand and the product.

Supply Chain Leadership For Change

The retail marketplace supply chain is in a perfect position to help retailers and the related service providers to sense and respond to the changing marketplace because of the supply chain experience with change.  The supply chain is uniquely prepared to lead their retail partners in their efforts to change in reaction to the market through the guidance and the implementation of programs that have allowed the supply chain to successfully navigate the changes that have buffeted the supply chain for years now.  These same programs and practices that allowed the supply chain to sense and respond to changes can be swiftly implemented in the the retail collaborative network to allow the retail network partners to sense and respond to the changes impacting the retail market and most importantly help the retail partners to successfully react to the velocity of change as well.

There are two key strengths in the the supply chain network that can lead the retail change;

1. The breadth and depth of the supply chain collaborative network and especially the strength of the collaborative and inclusive practices that allow the supply chain collaborative network to quickly and efficiently react changing demands.
2. The technology that has been integrated in the supply chain collaborative network and especially the execution across the the supply chain that supports integration, communication and transparency in the practices and activities both supporting and interacting with the supply chain.

Retailers would be well served to fully engage with the supply chain network and most importantly to ask for the help of the supply chain partners in building the retail market collaborative network as an extension of the supply chain collaborative network.  

It is frankly a little silly for retailers to build a network from scratch when there is a robust model of a collaborative network that retailers can engage to extend.  Supply chain leaders would be foolish not to push for the extension of the supply chain network in support of retail market demands and more importantly, retailers would be foolish if they do not also partner with the supply chain leaders to extend the network. The genius of the supply chain network is the framework that focuses on and supports collaborative connectivity that is inclusive and open based on an open technology that can be supported and ‘owned’ collaboratively.  The supply chain network focuses on a concept of collaboration and is therefore built on a framework of open technology based on Internet standards that supports speed and ease of integration and communication.

Retailers cannot afford now to stay with the ‘not invented here’ practices when developing the retail network and would be well served to follow the leadership of the supply chain leaders and extend the framework of the supply chain collaborative network to support the retail market change demands.  This requires changing the retailer viewpoint to understand the importance of the supply chain network in supporting the retail market demands. The same technology and especially Internet of Things that has been harnessed by the supply chain can easily and quickly be harnessed by retailers with the help and guidance of the supply chain partners and supply chain collaborative network.