Market Disruption Framework

There is no way to avoid the disruption in the marketplace and this means that both retailers and partners must face the forces driving the disruption and meet the demands head on. The good news is that it is not necessary to meet all of the demands, however you must meet the demands focused on your market segment and product mix. This means that really all demands and changes must be evaluated to determine the impact to the particular market segment in order to identify what is required to in order to be successful. This task is overwhelming without the framework to provide an early warning system directed by a robust analytics capability. There is a robust disruption sense and respond framework that is required for participants in the marketplace that will allow them to sense the change based on the data analytics and then help to define the necessary response to the change.




This disruption framework truly comes down to a foundation of robust and flexible integration, analytics and communication platforms that supports a culture and focus on change and continuous improvement. The retailers and partners in the marketplace must focus on sensing and responding to the demands and market changes through the process of continuous improvements rather than any newly minted functionality or software. This is good news is that this will allow the partners to focus on the foundational framework required to support the changes so they can focus on responding to the changes rather than developing all new functionality for every change. The bad news is that there is no silver bullet to solve the demands as there were in during other times of disruption.




The current disruption activities in fact require a focus on culture and social networking rather than software, although to be fair software plays a very large role in identification of the market demands. The actual reaction to the change is based on the means that the partners either integrate new partners or put together existing functionality with a new integration or social communication connection. These changes are related to identification more than brand new functionality. Don’t get me wrong, there is some level of new functionality being introduced as a matter of improvements to efficiencies for instance such as robotics or new delivery capabilities, however the vast majority are changes in relationships and interactions between partners and existing functionality.




The most important ingredient to this equation is the analytics capabilities that are required to sense the change in the market in a timeframe that allows the most time for the partners in the market to react. This is the single tool that will provide the greatest impact to the abilities of the partners to adjust to the disruption market actions This must be a key foundational capability to the disruption framework. The analytics capabilities are key ingredient to the continuous improvement process and must be a key focus in order for the continuous improvement evaluation and direction process to be successful.

Conversational Commerce

Omni channel commerce is growing and morphing now into new capabilities bring into reality a conversational commerce capability that will bringhe the next wave of disruption into the market. Consumers are continuing to drive the change through embrace and experimentation with technology. The tools available to consumers have been growing and expanding in capabilities and the Internet of Things is providing the type of capabilities that produce conversational commerce capabilities that can and will be pervasive across the market. I see these capabilities in the early stages now and experimentation from early adopters from both consumers and retailers are coming togehter with these experiments drive the changes to produce a new conversational market that encourages and allows the smooth blend and transition of shopping and purchasing across all attitudes.





These can be unnerving times for the market partners because of the level and velocity of the disruption. There is an almost overwhelming urge to focus on the change, however it is important during the early stages of this increased disruption on the basics. This is why partners must focus on the foundational framework that will allow them to react and change and experiment with the market to develop and support the new capabilities. Experimentation is the key trait and action required to respond to the change in the market begin driven by consumers and technology. The foundation framework though supports the velocity of change in a manner that is sustainable and robust.





Recently it seems that the focus of partners in the retail market has been operational capabilities such as pick up in the store. This was a requirement to the current stage of the market and I would even call this a type of founcational development because of the way that the operational functions support the retail demands across the shopping methods. The change from conversational commerce adds onto the operational capabilities and the integration capabilities to drive change into the shopping marketplace. This is now the time where data and analytics really shows value in providing a means to sense and respond to the changes. The focus must be the give and take between partners and consumers in a conversational mode that supports reactions to change more efficiently and also provides a means to sense change.





The challenge is that there is no roadmap for the capabilities and the direction that will be demanded for the conversational commerce marketplace and the market partners must focus on the capabilities to sense and respond to the changes. Operational processes focus on efficiencies and capabilities while shopping focuses on communication across platforms, partners and consumers. Shopping capabilities are taking the forefront now because the operational capabilities have already been put into place. There are two requirements to supporting the shopping demands and developing conversational commerce capabilities; interaction between partners and consumers and data analytics to sense and measure the demands and response to the demands.

Market Obsolescence

Obsolescence is a by product of the market experimentation that must be recognized, accepted and reconciled by the participants as a real an looming outcome of the drive to experiment within the market and especially the supply chain. Experimentation produces both new features and functionality to push the market forward and also elimination or obsolescence of existing or previous capabilities that are not longer necessary or relevant. This obsolescence must be accounted for in the process in order to ensure that the portfolio of services and capabilities remain current and provide value. This effort to specifically identify obsolescence is important to the vitality and support requirements for the market participants to eliminate the support for obsolete services and functionality. The continued support of obsolete services and capabilities will place a drag on the ability to experiment and move forward.





Every experiment will potentially create an obsolete process or function and this must be recognized and taken into account and planned as part of the process. The effort and impact to the business increases with each obsolete process or function that is not retired and eliminated. Elimination of the obsolete functions and services must be a key part of the experimentation process because of the overhead required for ongoing maintenance and support. Planned obsolescence is an important practice in the market from a maintenance and value perspective. The value of the improvements realized from experiments will be quickly overwhelmed if the obsolete functions and processes are not retired.





Planning and executing obsolete service retirement is not the fun, or sexy, part of the experimental improvements proces, however it is an important part of the process to ensure the function and service catalog is appropriately maintained and services and functions are bringing value. The costs of maintaining obsolete functions and services will quickly escalate to overwhelm benefits of the improvements realized from improvements realized through experimentation.





In addition to the increased maintenance and support costs, the obsolete functions and services also impact and delay the realization of improvements from experiments, in other words, working around obsolete functions impacts the complexity and delays the delivery of experiments because of the effort to work around the obsolete functions. Eliminating the obsolete functions improves the velocity of change through experimentation. Google is a great example of eliminating obsolete services and functions. They regularly announce the retirement of functions and services that have outlived their useful lifespan and the value added capabilities are provided through new services or functions that have been created as a result of experiments.





The challenge for many of the partners is recognizing and accepting the obsolescence of services, features and functionality and most importantly eliminating the obsolete items. This can be especially challenging when you are focused on responding to change in the market. This challenge must be rationalized and prioritized through the realization of the potential impact to the partner in the event that the obsolescence is ignored. The weight of obsolete services, features and functionality will become overwhelming in the event that they are not retired and this challenge comes down to the focus; it is too easy to walk away and ignore because of the demands of the changing market.

Market Experimentation

It is abundantly clear from the industry leader practices that a key aspect of success is the practice of experimentation. This practice has become necessary to confirm demands of the consumer and other partners within the extended supply chain. Data and analytics will take you so far in responding to the demands of the marketplace and then the final clarification and confirmation requires experimentation as part of the continuous improvement process. In fact, the experimentation is a critical piece of the continuous improvement process and these leaders in industry are extending the continuous improvement practice to the the business decision process. This is an important factor in the ability to sense and respond to changing demands, the reaction to change must utilize the continuous improvement process to test validity of process and change in meeting the market demands.




The growth and importance of experimentation in clarification and implementation of change is a reaction to both the velocity of change and the almost overwhelming cost of bad decisions in the model of increased velocity of change. There are really two factors involved in the increase in experimentation:


The velocity of change and the amount of data available to help the market to sense and respond to change is increasing. First the velocity of change has reached a tempo of discontinuous velocity that requires continuous evaluation and re-evaluation. While the volume of data available has increased exponentially with the growth of omni channel commerce the analytics can take you so far and then the final steps require a series of trial and error experiments.


The cost of change has increased to a level that almost prohibits very large change. This means that the change must be coordinated and executed in steps that allow for validation and corrections prior as part of the change delivery cycle.

These are important factors to encourage and expand the level of experimentation.




When the market partners reach of level of capabilities to segregate the back office planning and forecasting and financial systems from the customer and partner facing capabilities to allow for change in the customer and partner facing applications to be implemented efficiently and without significant change to the back office operations then the model of experimentation can really take the center stage. This takes significant investment from the retailers and an especially large investment from the larger retailers. Unfortunately for the retailers, they must perform both activities at the same time in order to continue to succeed. Amazon and Google both excel at these activities as they have built the foundation with the concept of integration and segregation to reduce effort and impact of change on their back office and both us experimentation as a foundation function in their activities.




One of the lasting effects from Amazon is their practice of experimentation and willingness to drop a concept when it does not succeed. This impact of this practice is the market of discontinuous change and increased velocity of change. Others must also embrace this practice now in order to survive and this can be very tough for the large retailers. The initial reaction was to acquire operational capabilities and now these retailers much change their culture and framework to support quick an iterative change to react to the demands of the market.

Velocity of Failure

The twin to the velocity of change is the velocity of failure and these two opposite actions are closely related and end up driving each other in increasing discontinuous cycles. These are increasingly related and a failure to meet the velocity of change will surely increase the velocity of failure but meeting the velocity of change can also increase failure as well. The challenge in meeting these demands is the knowledge of insight and direction of the change. The challenge to obtaining the knowledge is the data collection and analytics required to collect and develop the knowledge from the data. There is really no way around this challenge because the velocity and types of change will surely overrun any retailer that ignores the challenge. What we should have learned from Amazon is that change is iterative and very much a trial and error process and this must be embraced in order to succeed in change.




This is no time to wait for the change to be identified by the industry to react and implement the change. The level and also types of change will interact and react in ways that create all new changes and the only thing that really can be predicted is that the rate of change will only increase, bringing with it an increased velocity of failure. This can be extremely intimidating for large retailers because they are not generally equipped for high velocity change and this is not their general practice. They are just coming out of a long time practice of generally waiting for the change to stabilize before responding. This practice no longer works because of the velocity of change and this is a great example of how the velocity of change increases the velocity of failure.




In order to avoid, or at least respond and change to the changes that will drive failure retailers must not only become more nimble and open to executing change and they must become increase their knowledge of the factors driving change, they must focus on the factors that will allow them to sense and respond to change. The most important aspect is the improved ability to sense the changes and then the analytics to understand how to respond. The sense practice becomes the early warning of direction and types but the most important aspect is the analytics to understand how and when to respond. The velocity of change and most importantly, the velocity and volume of data available in the marketplace has dramatically increased the velocity of failure and as the volume of data increases both the velocity of change and failure increases. Retailers, and truly all partners in the marketplace, must focus on the data and the analytics in order to sense and respond appropriately to the change.




There is an even greater change that is disrupting the marketplace now; the change that is important today can be the failure of tomorrow. This is probably the greatest marketplace disruption factor. Amazon is probably the best example of the velocity of change and change experiments to understand the marketplace. Amazon is continuously implementing change as a means to experiment and better understand the market and also the potential. Google is another example from the technology and retail sector that has focused on experimentation to meet and create the marketplace. These practices should be mimicked by others to ensure their success and most importantly reaction and change to avert failure.

Supply Chain Multi Sourcing

The velocity of change is impacting all aspects of the marketplace from customer relationships to partner relationships to the manufacturing relationships and everything between. Retailers in the fashion industry seem to be the first to recognize and many of them have reacted to the changes to implement the fast fashion market segment. I find this as a great initial example of the results of the velocity of change in the marketplace and believe this will be the model for many of the aspects of the changes. The collaborative supply chain is providing the tools and the network to support the changes and the partners are expanding their experiments into all aspects of the collaborative network to improve their ability to meet the demands. The next step from a sourcing perspective is the expansion of the multi sourcing practice to develop manufacturing partners locally to meet spikes in demand and support end of life cycle demand to reduce overstock.




We have reached the point now in the retail marketplace where the specialty service providers are expanding in the services and even products they offer to support the specialty demands. This includes the local manufacturing of products in the marketplace. These collaborative practices in the extended supply chain along with the growth in capabilities of data analytics provide the tools now for retailers and manufacturers to improve planning and forecasting so demand to a point where the majority of retailers can improve their abilities to support the consumer demands. These capabilities now provide the framework for any retailer to utilize to their advantage.




There is no way to go back and the supply chain partners including manufacturers, transportation and retailers must accept and embrace the change. I see technology manufacturers embracing the global manufacturing and marketplace along with home products. These have all blazed the trail of this model and going forward the collaborative supply chain network will provide the support necessary to link and communicate in this global model. I envision this model to grow and expand as the market demands change and grow to require the global model to meet the demands. The multi sourcing model provides the framework to support the changing demands.




Just as the retail marketplace changed with the growth and expansion of the collaborative and social tools integration with the sales and shopping, these same tools and practices will expand into the sourcing and manufacturing realm to support the consumer demands more efficiently bringing with them a quickening and shortening of the product life cycle. The result of the collaborative supply chain growth and expansion will spread through the forecasting, planning and manufacturing practices in the supply chain. As this multi sourcing model expands the through the collaborative marketplace the results will change the way that consumer demands are met, increasing the flexibility to meet the spikes more efficiently to increase sales and opportunities.

Visibility Across The Supply Chain

The need, and demands, for visibility across the supply chain has always been a key focus in the extended supply chain network and to this end, the extended supply chain network has always been focused on using technology to achieve results.  The extended supply chain recognized early on that technology must be utilized to meet their objectives and moreover, have always been open to the investments in technology to meet these needs. The extended supply chain partners have recognized and achieved dramatic benefits through the use of investments in technology.  The Internet of Things is the most recent wave of technology investments for the extended supply chain partners and these tools combined with the growth and improvements in data collection and data analytics is fueling the next wave of improved and extended visibility across the extended supply chain.

The supply chain extended partners have shown over and over again an ability to incorporate technology and network capabilities to increase the visibility across the supply chain to help improve services and capabilities and each time these efforts have provided a great return on investment.  Now with the increase of collaboration and the even greater extension of the supply chain reach there is even more opportunity to leverage technology through enhanced collaborative practices. The key now to the efforts is the collaborative capabilities through the network. The growth of consumer interaction and demands on the market through their embrace of similar collaborative technologies is now pushing the edges of supply chain visibility even further.

Every partner in the extended supply chain including the end customer of the supply chain is now demanding increased visibility and capabilities to optimize and even adjust within the supply chain.  You see the results of this especially within the retail supply chain where the end consumer is interacting directly with not only the carriers to coordinate the last mile delivery but also interacting directly from the manufacturer to the end retailer in shopping and purchasing.  The enhanced visibility supports the endless aisles concept beautifully and efficiently and these capabilities have moved the baseline even higher.

The visibility drive is enhanced from the improved data analytics and the tools incorporated by the supply chain to track and manage the processes through the supply chain provide a treasure trove of data to be used to increase the visibility and tracking through the supply chain.  The data is the driving factor of the visibility across the supply chain. The technology improvements in networks and wireless capabilities allow the tracking and visibility of each individual delivery and shipment and container from cradle to grave. This capability is truly available now and in some industries has been incorporated and other industries have already started moving in this direction.

Enhanced visibility in the supply chain is a reality and the visibility is driven by the demands of all partners across the extended supply chain that is fueled by improved data analytics and expansion of the Internet of Things technology to capture data from additional outlets.  To put it into a consumer perspective, the days are limited where consumers will sit at home waiting on a morning or afternoon appointment. The number of partners that provide specific time and tracking of deliveries and repair trucks is increasing every day. This is only a surface example of the types of capabilities available and the extended supply chain is continuously pushing the limit to increase efficiencies and eliminate issues.  The increased visibility becomes now a key tool in the validation process of the continuous improvement process.

Growth of Supply Chain Collaboration

The supply chain collaborative network provides great potential for benefits to partners and as their participation grows the benefits will also grow. The importance of the collaborative network has been growing, as well, as a framework to support the disruptive transformation currently at work in the supply chain and in fact, I really do not see another option that provides the foundation and the flexibility to support the change driven in the supply chain by demands of consumers’ embrace of technology. I am viewing this as a dramatic change in the culture of the market where there has historically been a focus on develop, license or acquire companies with capabilities the market is moving into a much more nimble environment driven by an increasing velocity of discontinuous change based on technology combinations and demands of the marketplace. In this market the collaborative network capabilities take on a new, much higher, level of importance because there is just no time for development or acquisition.





Amazon probably provides the best example of creativity in utilizing the power of the collaborative network. Amazon has shown their creativity in extending their product offerings through partnerships with small and specialty manufacturers and even private citizens to provide a powerful shopping and sales outlet and they are showing again their commitment to collaboration by partnering with small carriers and even private citizens in the delivery of products to the end consumers. I see that Amazon has been building infrastructure to support an extended collaborative network for years and they are now expanding their collaboration to take advantage of this foundation and help them to change the market again.





This puts others in the retail market at a distinct disadvantage, again, and this extends out through the entire extended supply chain, including all partners, as well. In this arena Amazon is the 800 pound gorilla driving the change and they are now in an advantageous position because of all of the preparation in foundational activities and their drive the create the future. I think this may be the key differentiating factor for Amazon, in this market Amazon seems to have the vision and are driving to create the future. This means that they are able to define the future as it fits into their foundational framework and it puts an even greater significance on the collaborative network and partnerships that others must follow to keep up.





I see collaboration as the next transformation mechanism and market disruptor and Amazon has shown from the beginning their commitment to collaboration to grow their offerings and market share. We are now seeing the results of this collaborative culture through their acquisition and growth over the last few years. They are continuously focused on leveraging all aspects of their offerings, technology and shopping outlets to produce a cohesive image and flow across their offerings. This collaborative culture will provide the ability to quickly sense and respond to the time of disruptive change that we are entering and there will be a great deal of fall out during this time.