Supporting Discontinuous Change

The current retail marketplace experience of discontinuous change causing disruption and in some cases extreme challenges to react should not be a surprise to anyone. In fact, I think the big surprise is the continued dependence of major retailers on historical reactions such as cutting costs to react to the market disruption. This type of marketplace disruption requires a new way of reacting and not just retrenching into more of the same tactics used during market downturns. We are not experiencing a downturn in the market, we are experience an overhaul of the market shopping and purchasing while the market is expanding. These are the most difficult conditions to address and requires investment in rebuilding the retailer business model.





The level of discontinuous change in the retail marketplace has disrupted this marketplace demanding of participants a transparent and cohesive shopping and purchasing experience. The waves of demands have not given the large legacy retailers much of a chance to catch up with the demands and the bad news is that these waves of demands and change will only increase in velocity and impact as they build on the previous changes. This requires a new paradigm from the retail marketplace of participants and partners to support both the level and velocity of the change.





This paradigm change requires a focus on increased and improved capabilities to sense change and, probably most important, a new increased focus on experimentation, especially in meeting change. What has become abundantly clear though is that this new paradigm requires a high level of collaboration across not only partners but consumers as well. This is requires as an integrated plan and partnerships to support not only the necessary activities and practices to sense change, it is also required to support the reaction to the change. Every single change and and especially change leading to disruption requires requires a coordinated response across a multitude of partner to react and support the demands.





In looking back and looking around I do not really see any marketplace disruption that required only one organization to drive, yes there was one leader that recognized the opportunity for change and market disruption, however, that leader then partnered with other participants to support and enable the disruption. The key issue that is see that absolutely must be overcome in order to survive is supporting a robust collaboration model and unfortunately this is the one issue that requires a culture change in the large legacy retailers to enact. In looking around I see many companies that speak about the importance of collaboration and are even taking steps to improve collaboration with their external partners, the issue that I see though is that many of the same larger legacy retailers are still hung up in internal silos that are slowing change through the controls to maintain these silos.





In order to truly support the discontinuous change and the market disruption that will only increase in velocity I believe that the market must create chief collaboration officer that is empowered to seek out and expand collaboration across internal silos while also seeking out and expanding collaboration across their market partners. This is a culture change that will require support of the organization leadership and the best way to broadcast the support and importance is through the creation of a chief collaboration officer that is empowered to make change. This chief collaboration officer will be charged with sensing and supporting the change and disruption in the marketplace and this officer will also be charged with the authority to experiment and the encouragement to fail.

Disruption Culture

The disruption roaring through the marketplace now requires imagination, flexibility and a culture that does not freeze or shrink from the change driving the disruption. This disruption culture requires a willingness and encouragement to experiment and fail while reacting to the change in the marketplace. The key to success in the disruption is the imagination to experiment with new ideas and processes to meet the demands of the marketplace with a goal of creating the disruption in the marketplace. Disruption seems to be the norm, or at least it the changes are greater and increasing in frequency, requiring reactions from the marketplace in order to maintain their place. In the past retailers could wait for the change to solidify before reacting and now they cannot afford to wait for the change to solidify before the next wave of change.




Disruption is identified later in time when the changes have increased in velocity and impact resulting in a broad spectrum change that impacts the marketplace and changes it forever. In other words, disruption is identified when you realize the impact to the marketplace. This is also why it is so important for each participant in the marketplace to react and support the changes in their field. If any one or two of the participants do not support the change they run the very real risk of being left out of the marketplace. In my opinion, this lack of supporting market changes is the key factor for the retail market failures of some of the major retailers recently.




The retail marketplace is now in a time of discontinuous and disruptive change and the only way for the market to react is to develop and encourage a culture of change that embraces and encourages the changes that disrupt the marketplace. That is why it is so important for retailers and the supply chain partners to create a disruption culture that is guided by change and more importantly embraces the change and the resulting disruption. This is not an easy lift because requires the largest partners with the most to lose to be the leaders in the change.




The secret of Amazon and Google and Facebook is that they have developed a disruption culture that searches out change that can disrupt the marketplace and they use this as a way to get ahead of their competition. We have seen this over and over where an upstart enters the market with a new idea and this idea catches fire with the consumer and before you realize it they have disrupted the market and leave the competition behind. This is the point though where especially the largest retailers must focus their resources on sensing and responding to the change. They must realize that they are under attack from the market and the competition and they cannot reduce spending to address the issue, they must refocus their investments on the tools and the culture that will allow them to sense and respond to the changes.

Preparing For Disruption

Disruption is defined as a break or interruption in the normal course or continuation of some activity or process and so you would also assume that this disruption is caused by some time of surprise, unplanned, event that causes the interruption. Then by this definition it is very difficult to plan for disruption, however you can prepare for a disruption by developing flexibility and improved sensory tools to quickly react to the disruption. The challenge then is; how do you prepare for a surprise or unplanned event? Considering the worst case result of the disruption, though it is one of the most important activities for any business and especially for the retail marketplace and the partners and infrastructure supporting the retail marketplace. In short somehow preparing for disruption is at least as important and should receive the same focus and effort as sales forecast and product development.




I say this because disruption by its very definition cannot be planned and as a result there is no way to forecast how or when the disruption will materialize. So the disruption can be in products or sales channel or even marketplace and the disruption ripples across a large number of participants and even other marketplaces impacting process and activities in its wake. We have reached a point though in technologies supporting the marketplace activities and processes that has dramatically increased the partner flexibility capabilities along with the analysis and forecast capabilities that can be incorporated to support the sensory early identification of potential disruptions and allow the partners in the marketplace to quickly adjust in a manner that allows them to react to the disruption and address the interruption.




The focus in the retail marketplace must be on sensing or even creating the next market disruption. This can be achieved through robust collaboration and data analytics. The key though, in my opinion, is the sense potential change and move to react and take advantage of the change. In order to succeed in the response to change the partners must embrace failure and understand that the only way to meet the challenge is through a continuous improvement process of plan, do, check, act, or, trial and error. This process must increase in velocity though in order to reduce the reaction and action timing. The goal of this process is to not just improve the ability and the speed of reaction but to actually help to disrupt the marketplace base on the reactions of the consumers. This, in effect, has been the path taken by Amazon in their market disruption over the years, Amazon has recognized signs from consumers and taken action to react and support the consumer demands.




Unfortunately this is a culture change in addition to the change in process and the culture change will be the most difficult to install. It will require a continuous focus and engagement from all levels and all partners in the marketplace to succeed. However, there really is no other option and the sooner this is realized and embraced, the sooner the disruption will be understood and embraced.

Conversational Commerce

For a very long time the brick and mortar retail could be considered what I would call conversational commerce in that there was a give and take type of interaction between the consumer and the sales associate. This was disrupted with the entry of eCommerce bringing online sales and also a push towards cost savings in the the brick and mortar market that all but eliminated the give and take. Recently though I see a resurgence in in the conversation in the omni market between the consumers and starting to see an increase in the virtual personalized service which leads me to believe that the retail marketplace is on the cusp of a return to the conversational commerce practice. I see the entry of the 5g wireless network capabilities and the growth of the unlimited data as two driving factors that will push this over the tipping point.




In the last few months I have experienced a semi-personalized retail experience with an online retailer that made me rethink the potential for conversational commerce in this omni marketplace with the growth and expansion of consumer utilization of technology. This online retailer uses a combination of email that was personalized based on the service and the potential sale and then continued follow-up using both personalized email with special offers and targeted text messages with special offers. These are not uncommon things by any means, however this retailer used the combinations of technologies to try to create a direct and personalized message. This made me think about the potential available from tools and technology in combinations to create direct and personalized messages to create a conversational shopping and sales experience.




The goal of the eCommerce retailer is the customer return and the ability to keep the customer on the site for a longer period of time. This goal is necessarily expanded for the omni market retailer to encourage the customer to not only return to the eCommerce site but also to return to the store for shopping and purchasing. This enticement to return is much greater when customer is engaged in a personalized conversation with the retailer that is continuously reaching out for reaction and interaction with the customer. This conversation requires a strategy plan to utilize the social networking tools, email and texting in a coordinated manner the engages the customer cohesively across the tools and the channels. This requires an increase in focused customer service human support to both identify and coordinate the conversation topics focused on individual customer shopping and purchasing habits. This is where the big data and AI technologies play a critical role to help the retailer identify the these conversation topics and then to track and revise the conversations based on the responses.




I see this conversational commerce as a coming major disrupter in the retail marketplace and the retailers that have been focused on AI and data analysis will be the retailers that are best prepared. This is another development that does not require a great deal for the initial entry, however the retailers that invest early in the technologies and participate in the early discovery aspects of the conversational commerce will be the retailers that thrive in the coming years. This will also be the retailers that are best prepared for the next wave of change and disruption.