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.