Retail Renewal

The retail market is in a process of renewal as a result of the disruption brought about by the omni market change by consumers to the marketplace. This is a good thing and a necessary thing that drives the market forward to support consumer demands. This time though the renewal is in part driven by consumers through technology and collaboration and in part driven by consumer focused Internet retailers like Amazon that are themselves encouraging and experimenting with consumer changing demands. I believe though that this renewal cycle is different from previous cycles in that the renewal will be a continuous cycle of disruption and renewal in the market. This is the key theme coming through in this cycle of renewal and this is one of the key differences i this new cycle from previous market cycles.

During the market renew driven by eCommerce and essentially lead by Amazon there was a theme carried through the disruption and the market renewal; the consumer demands to simplify their shopping via the Internet and eCommerce. This theme carried retailers into the next generation of the marketplace to produce and omni channel shopping experience. This was comforting to the market players as well because it was a proven direction that they could copy to produce results. The challenge to this cycle in the marketplace is that there is no common theme that carries through each example of disruption and renewal.

There is no visible common theme that can be reproduced for success, the success of one retailer cannot simply be reproduced by others. There are two key differences in the current cycle of disruption:


There is no common thread of success in the market. At odds with previous cycles of market disruption and change; the success from one cannot be copied by another. One retailer thrives and grows because of the strength of their brick and mortar outlets while another succeeds because of their online presence.


The disruption comes in a discontinuous cycle that does not give the market a chance to really settle. This presents a struggle to maintain the pace of the change and also does not allow for the response to be duplicated for across the market. Almost as soon as a disrupting force is recognized and addressed the next disruption is sweeping the market

This cycle of disruption is driven by consumers rather than by some retailer, as in the past and this is a very important difference in this disruption cycle. The last major disruption to the market in my opinion was the explosion of Amazon on the market. This disruption, like previous disruptions, was driven by a retailer with a vision that was embraced by consumers. This disruption, also like previous disruptions, spread through the market quickly with the concept, in this case the drive for the lowest price combined with ease of purchase and vast selection, was accepted and extended by other retailers until it seems to be embedded in the market DNA. This disruption is also in many ways at the root of the current disruption.

This current disruption started with the concept and the drive for the selection, price and ease of shopping. In the beginning, consumers' focus on low price was supported and driven by the opportunity of Internet retailers to cut prices. This was the result of retailers reacting to consumers and these same retailers attempting to gain market share. This drive from Internet retailers was borne of the drive to succeed and the ability of these new Internet retailers to take advantage of the market and cut costs dramatically because of their reduced overhead. Now this lowest price concept and drive has become the foundation of the retail market in many ways has also in many ways now bitten the creator of the concept.

Now the combination of technology and the growing ability of the consumer to direct and even change their shopping is also disrupting the market in a series of discontinuous changes that are driven by the imagination and the demands of the consumer. Now this new renewal is all about the consumer ability redirect and direct their shopping in ways that support their individual lifestyles along with their desire to spend less and get more in return. This new discontinuos disruption cycle also is creating a model for continuous renewal with technology providing the means and consumer lifestyle demands providing the direction.



This new market driven by continuous disruption requires each participant in the market to sense and respond to the disruption in a manner that is based on their own imagination and capabilities. This is the change that is impacting the market in the greatest manner because in previous cycles there was always time to confirm the most effective response and then this response would be reproduced by others. Now when the most effective response for a particular retailer is identified the market has already entered the next disruption cycle which changes the success factors. Retailers must change their culture then in order to succeed in this discontinuous disruption cycle.

Market Technology Transformation

Disruption in the market is now being driven to a very large extent by technology and this technology transformation is being led by the demands on the supply chain from consumers on the market. In all aspects of the market we are seeing a transformation that is being driven by the changing lifestyles of consumers. These changing lifestyles are, to a very large extent, enabled by technology that is available to consumers in every aspect of their daily activities. Consumers have embraced technology in every aspect of their daily activities and the impact on their lifestyle has been dramatic in the opportunities to meet their changing demands. This presents a challenge to the extended supply chain partners to support the market transformation that is driven by changing technology.

The most obvious example of technology that has dramatically impacted consumer lifestyles is the smartphone. Consumers have embraced the smartphone in every aspect of their daily activities to enable them to meet their changing lifestyle. These demands have transformed the methods in which they communicate, shop, pay bills and share experiences. The smartphone, in combination with improvements in wireless network technologies, are key factors in the market transformation and this transformation is only increasing in velocity. I know in my own activities that this technology has transformed my ability to meet the daily demands of family and career to allow me to blur the line between all activities; I can shop any time and then plan for delivery to meet the immediate demands, I am available for response any time the need arises whether personal or work related and the technology allows me to react based on the demand.

Technology has become pervasive across all activities and this has transformed the consumer market into an expectation of 24/7 shopping and delivery to meet the demands at the time. These demands have required the transformation of the extended supply chain to quickly and efficiently address the demands first and foremost. Most importantly this has required the transformation of the extended supply chain to develop the methods and processes to quickly and efficiently sense and respond to the changes. The transformation requires not only efficient response to new demands but experimentation with capabilities to create new consumer demands. The velocity of transformation has reached a level where the ability to react to demands is not enough to maintain share in the market participants must anticipate demand before consumers realize in order to maintain share.

Experimentation can be frustrating because of the potential for mistakes and failures. However, the market is changing at such a velocity that there is no choice but to experiment with creating future demands. This is especially difficult in the retail market because the culture and accepted practice is at odds with leading edge experimentation. We are seeing now though especially with Amazon and niche eCommerce retailers the rise of experimentation as a key capability. This transformation has dramatically impacted large legacy retailers causing failures and a struggle to keep up with the changes. The market is now seeing early signs of leading retailers such as Target or Walmart finally transforming their practices to leverage the multi-channel marketplace to transform their business.

Change has been supercharged into transformation and consumers are driving the retail market into continuous transformation that requires new methods and processes to anticipate demand rather than react to the demands. These processes must support faster and more flexible adjustments that are driving continuous transformation of the market. We have reached a point with technology where the speed of change requires anticipating and adjustments rather than sense and respond. This will further shake out the market and drive transformation in the supply chain.

Collaboration In Time Of Disruption

I see conversational commerce as a major disrupter coming to the retail marketplace and while the retailers that have been focused on AI and data analysis will be the retailers that are best prepared sense and respond to the changing demands of the market, there is also no question in my mind that collaboration is critical to the ability to execute on the demands. Collaboration will increase in importance in the future markets because there is no way that a single partner can respond to all of the changing demands of the consumer. The extended supply chain is probably the key to the success of supporting the market demands. These demands can only be met through a robust collaborative network in the extended supply chain.




The extended supply chain is in a unique position in this disruption because of the previous work building a collaborative network that supports the ability to sense and respond to the changing demands in a global marketplace. This experience has forced the extended supply chain network to develop a strong collaborative network of partners that support the demands and provide a connected network of partners that provide point solutions to meet the demands. This is the ‘secret sauce’ of the supply chain collaborative network. This collaborative network provides the framework for point solution providers to flourish because the connectivity framework is already available for the solution providers to market and deliver services. This was an unintended benefit from the work to develop a robust collaborative network; the framework to support share support of the global supply chain demands and encourage point solution development to rapidly deliver solutions to the partners.




The disruption of the global market demands was a precursor in the extended supply chain to the disruption the retail marketplace is beginning to experience now. This disruption will roll through the retail marketplace in a manner similar to the global marketplace disruption on the extended supply chain and the smart players in the marketplace will be incorporating the lessons learned from the global market disruption to build a collaborative network that supports the speed of change necessary to meet the demands. This means embracing network capabilities that encourage and support the point solution model developed in the supply chain. I believe this is the single most important key to supporting and even encouraging the disruption in the retail marketplace.

Disruption is not a point that impacts only the retail market or only the extended supply chain.  Disruption is a cumulative effect that builds on past change and disruption to redefine the market and I believe that we have reached a ‘perfect storm’ point in time where the demands and expectations of consumers, and market partners are being driven by technology and the converging of technology capabilities, embrace of the capabilities and lifestyle demands imagination of consumers and market partners to build a new marketplace that eliminates channels and the lines between channels to produce a new marketplace. 

Supply Chain In Retail Disruption

The retail market disruption is being driven and supported to a very large extent by the capabilities and services supported by the extended supply chain. The long list of recent changes and demands on the retail market are implementations of supply chain services to support the demands of the consumer in remaking the retail market into an omni market that supports the varied demands of the consumer shopping and purchasing. The demands for goods from consumers has remained in the same pattern over time where the consumer fashion and hardgoods have remained relatively constant, colors may change or styles might change but these products have remained relatively constant. While appliance features have changed as a result of technology advancements, the microwave, the washer, the dryer have all remained relatively constant. The shopping and purchasing demands have, by and large, driven the disruption through the market though with new services to support consumer lifestyles.





The supply chain places a great deal of focus and dependence on technology to support and develop new services and one of the most important aspects of supporting and delivery of new services is the collaborative supply chain network. The supply chain extended network is a model of collaboration and the practices and services required to sense and respond to the changing demands of the market. This is evident in the network support of point solutions and collaboration to coordinate services and activities throughout the supply chain from the point of raw material forecast and delivery to the manufacturing plant to the point of deliver to the end customer. The supply chain has developed these capabilities to support a global services and delivery network that must quickly and efficiently react to changing conditions across this global network that cannot necessarily be planned in the beginning of the chain. Without the strong extended collaborative network that support quick and efficient flow of goods and services to support the flow the retail market would not be possible.





Now retailers must realize and accept the forces in the marketplace and collaborate more effectively and robustly with the extended supply chain to not only support their customers’ demands for goods but also to understand and embrace the collaborative network concepts and framework to help sense and respond to the demands a of the market. The supply chain network and partners realized a long time ago that they are not islands and they require the support of the network in order to meet the demands of the market. It is now time for retailers to also come this realization and make the moves to enable their participation in the extended network.

Omni Market Culture

The disruption currently sweeping through the retail marketplace must be met with both sweeping and continuous process change and also sweeping culture changes from the retailers to meet the increasing velocity of change. The scope and breadth of change in the marketplace have reached a level where change in process cannot hope to meet the demands. The culture must change now to commit the resources and focus to increase collaboration and sharing not only between the retailer and extended partners but also with all participants in the marketplace and especially consumers of the market goods and services. Consumers have always participated in the marketplace in a reactionary mode with shopping and purchasing and now these consumers are becoming an integrated partner in the retail marketplace demanding new interactions and services that can only be met through increased collaboration.




Communications and interactions across the marketplace have eliminated the lines between social networks and personal interactions and as these changes increase in velocity and scope across the marketplace there will be more and more pressure placed on the culture to support and adapt to the change. Marketplace disruption is driven to a large extent by communications and interactions across channels, participants, goods and services. This is significant because it is such a divergence from the past. The interactions between all market participants is required to increase dramatically now in order to support the demands of shopping and interactions across all channels. The lines between the online and the brick and mortar realms are being smashed now by consumer demands and the retailers are scrambling to catch up.




The sooner the retailer accepts this new reality the sooner they can begin the change. Since this requires a change in culture it cannot be purchased and must be built internally starting with continuous encouragement from the top leadership to build and grow the culture from the bottom. This is the most difficult type of change to implement because it is a long term initiative that cannot be purchased and the marketplace is filled with short term demands for change. The trick then for the retailers is to accept the fact of the collaboration requirement that carries through each of the demands and then to engage, encourage and develop the culture that supports these demands for collaboration.




The collaborative culture will help the retailers and partners across the marketplace sense and respond to the demands of the marketplace because they will be plugged into the channels that are developing and changing the demands. This is a major change to the ways that the marketplace participants engage and most importantly, the key participants driving the change, consumers, are driving these changes through the social networking and wireless technology tools already available. There is really no choice now for retailers but to engage and focus on the culture that will support the new collaborative demands and interactions from so many different tools. The signs and are now visible across the market and leaders such as Amazon are engaging in all channels to understand and respond to the demands. Large retailers that do not accept and respond to these new types of demands will be left behind and struggle to survive.

Omni Market Supply Chain

The omni market renewal is a massive undertaking that will span years and will in all reality probably not end and the extended supply chain plays a major role in the success of the renewal. As a result of the market renewal, the extended supply chain is also experiencing and in turn also being driven by the same disruption renewal in the retail marketplace. The extended supply chain began to recognize and take actions much earlier in the cycle than the key retailers because to a very large extend the extended supply chain and partners experienced a major market disruption a result of the great recession and this disruption forced the supply chain partners to address extreme pressure on costs and capabilities with similar impact as the disruption currently being experienced in the retail marketplace.




I think the leaders in retail disruption and renewal have long recognized the importance of their extended supply chain in supporting demands and they have shown their understanding through their focus on working with their supply chain to incorporate new capabilities. As example, the key retail players in this current disruption and renewal cycle, Amazon and Walmart, have both been early adopters of supply chain services and capabilities and have shown their recognition of the potential of a robust collaborative extended supply chain. Their demonstration of this understanding has come across as a focus on the automation that can improve throughput and costs and most importantly efficiencies. Early on efficiencies in supply chain execution were a key focus and these were critical to support the retail model in a global supply chain.




Now we have entered into a time where the retail marketplace is highly dependant on their supply chain to support the consumer selection and delivery demands and the supply chain has stepped up in many imaginative ways to address these challenges. This extended supply chain is able to now only support these demands but also develop and implement new solutions to simplify the process and they are able to do all of this because of their historical drive to manage costs, and improve services. The extended supply chain partners may be uniquely positioned to provide guidance and support to their retail partners to help guide through the challenges and demands of changing a culture while flying at 800 miles an hour.




The solution and means to meeting the marketplace disruption are rooted in collaboration and partnerships. This requires an extended focus on changing the culture of both organizations and the market. The market culture really starts with the consumer and consumers now are driving the disruption through technology tools and services available to them and most importantly these tools and services are continuously changing and improving as well to provide new capabilities and combinations to consumers. We have seen that consumers can be impatient in their demands and require a continuous interaction and reactions from all retail marketplace partners to sense and respond to the demands.

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.

Age Of Disruption

We have entered into an age of disruption in the market and this disruption is fueled by the consumer embrace of technology and especially the explosion of wireless technology. The technology has allowed consumers to reshape their interactions with retail to support their lifestyles and the velocity of this change has been increasing past the point of market disruption. The market partners must realize now and accept this as the new reality. The velocity and volume of change will not slow and will continue to disrupt the market for a long time. This disruption, though, can be addressed through a robust continuous improvement program, or more appropriately, a continuous disruption program. It is more critical than ever to implement a strong process that can sense the direction of change, or disruption, and also identify the most flexible and robust method to address the disruption.




As change velocity and magnitude increases the market disruption also increases to the point of reaching a continuous disruption model that remakes the market on a regular basis. The tensions of this model have been building for a while now and it seems that the technology advances and especially the wireless technology advances have provided the foundation to deliver the disruption that as been in the wings of the market. Market participants can no longer wait for the change to settle an then implement the new standard because the new standard is changing at a breakneck pace. This continuous disruption will require that market participants increase their rate of change to meet the demands or they will be left behind on the periphery if they are lucky. You can clearly see the results of the disruption in the retail marketplace by the increase in the number of bankruptcies.




This requires the market participants to step up their game, especially in the ways that they are collaborating and developing partnerships to meet the demands. The supply chain is leading this integration and partnership drive and has been developing the tools for a while now. The extended supply chain has developed a strong model for implementing the type of network that will allow the entire marketplace to sense and respond to the demands and even help to create the disruptions in the marketplace. The supply chain extended network supports speedy and efficient integration of new partners and encourages specialized service providers to bring new point solutions to support the supply chain demands.




The way to succeed in the age of disruption is not through harder work but through AI technologies to sense change and then a strong collaborative network to react to the change. No single organization can hope to bring the resources and the flexibility of capabilities to address the disruption (maybe Amazon, but that’s another story). This is where the flexibility and capabilities of the extended supply chain network can be viewed as a model for future direction.

Market Repurposing

The market is changing at a breakneck pace an impact on participants in ways that never would have been imaginable just 3 years ago. This is the result of breathtaking advances in technology and especially the network and connectivity of the technology and tools across the marketplace. I live in an urban area and can just look out the window and see the impact of the technology and the connectivity. Add to this the promise of 5g wireless technology and this pace will only increase and the disruption based on the technology will increase as well. This all leads to a focus on market repurposing of technology capabilities and more importantly of real estate and the use of physical locations to extend and provide new capabilities to the brand. There is really no telling right now how the market will look in the next 5 to 10 years but I think it's safe to say that the retail brick and mortar location will be completely re-purposed.




We are in the midst of almost complete market disruption where many of the largest historic retailers are failing in new ways as result of the digital retail competition coupled with consumer embrace of the technology and the opportunity to reshape their shopping and purchasing to meet their lifestyle needs. This change has reached a level of velocity that is most difficult for the legacy retailers to maintain as a result of their need to redesign their services and practices to support the new digital demands of consumers to support their shopping. Another result of the digital disruption is the impact on the brick and mortar stores and malls. You can see the results everywhere with empty malls and store fronts and as the larger retailers are fighting to survive they are also shedding real estate. This leaves new opportunities in the market to address other demands of the market but it will take imagination to re-purpose to meet the digital demands.




Repurposing is an important method recycle and reuse processes systems and most importantly physical structures. Retailers have been very adept at adding new processes and systems to meet the market demands and now these retailers must also become adept and re-purposing processes and systems to quickly and efficiently adapt to the market change. Frankly I don’t see a way that retailers especially can survive the velocity of change and market disruption without re-purposing. Repurposing becomes even more valuable when you extend your capabilities through enhanced and increased collaboration with network partners.




Repurposing is also becoming important in the brick and mortar side of the omni market as well. Real estate re-purposing presents and allows the market to reuse the real estate to better support the changing market demands. As the real life shopping decreases it leaves more time for life style enhanced activities and drives the re-purposing of the real estate landscape. For instance, with the increase in eCommerce sales, the demand for big box stores and brick and mortar outlets is changing and decreasing which provides the opportunity for retailers and malls to repurpose building, perhaps converting large big box stores into direct to consumer fulfillment centers, for instance, or even entertainment centers or even living spaces.

Disruption Includes New And Obsolete

Market disruption, and especially the current market disruption, must include two side, the new and the order or obsolete. This is an extremely important concept for the long term success in meeting the change and in my opinion should be viewed as an opportunity to replace legacy inflexible processes and interfaces with a more flexible and robust framework that can support the velocity of the change. The key to success is in reduced reaction time and this means reduced time to sense the change and then reduced time to react and respond to the change. One of the key limiters to the reaction and response to the change is the technology infrastructure and framework of tools and processes supporting the framework. The actions taken to address obsolete functionality and processes will be large factor in the ability of market partners to react and respond to change from within and outside of the organization.




In my experience, every company or organization is enamored with the new and this is especially true in the social commerce marketplace and you see examples over and over again of organizations acquiring new technology in the omni market space to allow them to provide new sales and delivery options. This is all well and good however these organizations also must obsolete and retire services as well. Again, in my experience, there is less of a focus on the obsoleting process than there is on new service development. This weight of the maintenance for support and also more importantly the cost and effort to take into account the obsolete services and technology required for implementation of new capabilities will quickly overwhelm the organization. In the past, an organization could conceivably implement new capabilities and just stop using the legacy capabilities without much of an impact. In this current market environment though the level of change is only increasing and this will require the retirement and removal of obsolete capabilities and services in order to support the velocity of change.




The challenge now for organizations is how to balance, or include, the effort to retire obsolete capabilities while implementing new capabilities. This can be a bit overwhelming at first because the level of effort required to obsolete and retire capabilities is not included in the organization effort plans and schedules, at least initially. These organizations must quickly overcome these issues in order to incorporate the retirement as part of the new capabilities delivery. This can be addressed by updating the capabilities delivery process and procedures to include the questions initially when reviewing the new capability to identify the legacy services and capabilities that should be reviewed for obsolescence. In my opinion this is the best place to evaluate and also enforces the process and procedures in new development.




Traditionally large legacy organizations focused on the new initiatives and this focus tended to leave at least remnant technology and services after the new product delivery. This practice did not impact the organization when change moved at a slower pace. Now with the increased change velocity turning into market disruption, these organizations must focus on the process to obsolete technologies and services because of the impact these unused legacy technologies have on the ability to delivery new change in the manner and speed demanded by the marketplace.

Disruption Culture

Culture plays a large role in the acceptance and the reaction and support of disruption in the marketplace in the ways that change is recognized and the reaction to the change in both the cultural reaction and the reaction to the change. The culture guides the organization in reaction to change and some organizations have a culture that seeks out change in the marketplace to lead in the reaction to the demands and some cultures ignore the change and try to maintain the status quo. In these times where the velocity of change and disruption is increasing it is important for the organization culture to seek out and embrace change. In these times the culture must also change to embrace change and encourage reaction and change into the organization capabilities to meet the demands.





A disruption culture not only encourages change, it also encourages review of the existing environment to identify process and functionality that can or should be retired. It is important for the organization that the leadership develops the culture to seek out and embrace change because of the need to change in order to succeed. Organizations can no longer wait for someone else to drive the change and wait until the change is generally accepted because before the change is generally accepted the next wave of change is already in cycle. I cannot impress enough the importance of developing the culture of change in the continued viability and success of the organization.





This second point of retiring functionality is just as important as embracing change because without the retirement and elimination of unnecessary functionality the weight of the obsolete functionality will quickly overwhelm. The effort and work arounds required to support the change will delay and potentially stop the ability of the organization to incorporate change. At a very minimum the obsolete functionality will complicate the requirements and efforts to incorporate new change as demanded by the marketplace.





I understand the challenge of change on the market and also on the partners in the market to meet the demands of the change and realize that initially the culture and the focus must be on the change and embracing the change. This, however, is another point of contention and struggle to support the change. Organizations must very quickly focus on the identification and retirement of obsolete functions. The market is never going back and this must be viewed as an opportunity to eliminate functionality that cannot be changed as easily. This elimination of obsolete functionality will allow the organization to put into place a robust framework that allow and encourages change integration to allow the organization to support and react to the market disruption quickly and efficiently.





It is important to understand that the disruption culture has two facets; embrace change and embrace retirement of obsolete functions. This two sided coin view of the organization culture is important to succeed in the growing market disruption. Anything other than this approach will simply delay the inevitable decline to reaching the inability to change and then failure. I do not think this is being over dramatic and this decline will be slow but the speed will be dictated by the rate of change and disruption in the marketplace.

Obsolescence In Disruption

A significant result of disruption is the obsolescence and the market disruption is no different. This means that the market partners must focus on both the change creating new features and functionality along with the retirement of obsolete services in their drive for change in order. This can be a very difficult process because it requires additional focus on the determination and then the retirement of the obsolete services and this can be almost as much work as the development of the new services and capabilities. The challenge for everyone is spending the time and effort on elimination of obsolete capabilities and services because this is not the exciting aspect of disruption and in general is rather thankless. This now requires a bit of cultural modification to focus on the importance of eliminating obsolete features and its role in supporting development of new features.




While it may be difficult to identify legacy features and functionality that has been made obsolete it is definitely not impossible and it is really important to eliminate obsolete features not only because it is no longer necessary but also because the obsolete features can also impact the functionality of new features. This may seem at odds with the concept of new features and functionality, however the obsolete features can get in the way of new features and even negate the feature or benefits unwittingly. In addition to the general housekeeping concept of cleaning up obsolete features there is also a need to eliminate unnecessary costs of license and support costs that will continue on until the feature is eliminated. There is no real easy way to identify and there is also, unfortunately, no standard process to eliminate the obsolete features. Each feature is unique and the challenge with the elimination is the integration of these features. The good news though is that there is an additional benefit to elimination of the obsolete features which is that obsolete features will also eliminate direct hard integration while the new features will deliver loosely coupled integration that simplifies the future obsolescence.




In addition to the effort required to identify and remove obsolete features there is a cultural aspect to this challenge. The culture of the organization must focus and encourage the elimination of obsolete features in the same manner as focus on new features. This is a critical aspect to the equation because of the speed of disruption there must be an equal focus on elimination of obsolete features to support the development of new features. We must realize that the acting of eliminating obsolete features is just as much a part of the market disruption as the development of new features. One way to modify the focus is the realization and the promotion of the benefits of eliminating obsolete features. One very important benefit of the elimination of obsolete features is that these obsolete features currently are more hard wired to the overall functionality and this increases the difficulty to change at the velocity the market demands.




Remember there are always two sides to a problem and change and these must be taken into account in order to meet the changing demands in the manner and velocity required. This requires a two pronged approach to delivery; change in culture to encourage and recognize the importance of eliminating obsolete features in addition to the focus on responding to changes in the marketplace.

Analytics Key to Disruption

The retail marketplace has developed a robust set of tools to support consumer purchase and delivery over the years providing a solid framework of tools and capabilities that can be combined in many ways to support consumer demands. Now it is important to focus the same kind of attention and effort to develop and support the tools that will allow the marketplace partners to sense the change and respond to the demands of the marketplace. In my opinion, analytics tools and data collection is the key to the ability to sense change and demands and as such provide the key to navigating and responding to the disruption that is rocking and will continue to rock the marketplace. Analytics is truly the next frontier and provides the key to addressing and reacting to the demands for change and interactions.




The disruption will continue and increase in velocity and the change will be focused on collaboration and integration of marketplace services with the consumer. A contributing factor to this integration and collaboration will be services and internet tools that are growing in numbers and capabilities to provide new consumer services and tools that will naturally require integration with omni market shopping and purchasing. These tools and services themselves while driving change into the market are also producing a huge amount of data that can be harvested for analytics by the smart marketplace partners. This is where the smart partners will focus because this data provides them with a goldmine of information and capabilities to sense and respond to the marketplace. This is why assistant software is so important to companies like Amazon, Google and Apple not only does the assistant engage and lock the consumer to the assistant, the assistant is also collecting data specific to the consumer for analytics.




We are now entering an age of analytics as a tool to navigate the velocity and force of disruption in the market. I think this is a bit of a chicken and egg question because I believe that as much as analytics enhances the understanding and the how to address the change, I also believe that the analytics is also driving change to new depths and capabilities because of the types of analytics and the data available and utilized in the analytics. In other words the analytics is actually creating new change and disruption because of the types and breadth of the analytics performed.




Analytics are not only the key to navigating and surviving disruption, the analytics practice and framework is also driving the disruption in ways that were not available just a few years ago. In addition the analytics of the future will also be dramatically different in a few years as well. Analytics is a practice that people will improve with use and addition of data, however, analytics is also much more than just a practice. Analytics is truly the key to disruption; not only sensing and responding to disrupting change but more importantly driving disrupting change into the market. This is truly a practice that must be started and invested in for the future and partners must start immediately so they are not left behind. The velocity of change and disruption will not allow time for waiting to settle, the settling of change is really the introduction of the next change and as a result there can be no waiting to follow the lead.

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.

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.

Low Carbon In The Supply Chain

Low carbon initiatives in the supply chain are important for both current and future supply chain initiatives because of the growing focus on climate change and the impact of the supply chain on the climate initiatives. The supply chain transformation includes low carbon as a key tennant resulting from the transformation initiatives that will impact the supply chain carbon footprint, especially demand forecasting improvements across the entire supply chain. Because the extended supply chain plays such a large role in the overall climate improvements initiatives it requires a focus from the supply chain to delivery on the improvements in a manner that does not dramatically increase the costs to the consumer. Also, and most importantly, these low carbon initiatives support the supply chain initiatives currently driving the transformation of the supply chain and the extended supply chain partner and services.




Low carbon initiatives have been an integral part of the supply chain for a long time. In reality low carbon initiatives started a long time ago with a focus on reducing costs of transportation in the supply chain to improve profits and these initiatives really kickedinot gear with the increases in fuel prices. These increased costs drove improvements in transportation efficiencies and with these efficiencies reduced carbon levels. The improvements in efficiencies was also coupled with new regulations into emissions which in turn also pushed increased efficiencies. These costs though were essentially a zero sum gain because the increased efficiencies driving the reduction in fuel consumption more than anything simply covered the costs of increased fuel.




Then regulations began to impact the supply chain by spreading the focus from transportation into buildings and also locations of the distribution centers to improve the transportation efficiencies. These regulations were coupled with tax incentives to offset the costs and entice supply chain partners to convert and build using the new efficiencies. These are also driving supply chain partners to reduce their carbon footprint through solar energy, low power LED lighting, increased insulation to reduce heating and air conditioning cost along with increased safety through the implementation of these measures. These building regulations though expanded the low carbon initiatives into the warehouse, distribution center and offices thereby lowering the overall carbon footprint of the supply chain along with the entire business community.




The supply chain in the last five to ten years has increased use of intermodal transportation methods to increase efficiencies in long haul transport, especially from import ports around the coasts. This is another area where the outcome will provide benefits to the environment while also not increasing the costs in the supply chain. In fact, I think this is one of the major areas where the impact on the environment and the supply chain may result in reductions. We are quickly reaching the point where transportation demands in delivery time reductions and efficiencies in the volumes of deliveries demand a model that takes into account all factors in the supply chain to develop the most efficient, cost effective and environment neutral solutions.




The latest piece in the puzzle is the use of the data analytics and artificial intelligence to develop highly efficient solutions that are flexible and highly efficient to improve the end to end supply chain while maintaining and reducing costs. We have reached the limit, I think, of what I would call non-assisted solutions and artificial intelligence solutions can take the vast amounts of information available to analyze and develop new solutions. The demand for low carbon solutions is only increasing and the supply chain will continue to be at the forefront of these solutions through the implementation and integration of AI designed solutions.

Artificial Intelligence Improving Logistics

Over the last few years there has been a great deal of interest and development in the area of artificial intelligence (AI) and the potential to improve the supply chain and logistics. There is an immense amount of data available across the supply chain from a combination of Internet of Things (IoT) devices connected directly to supply chain partners and the partners across the supply chain network. In addition to the data produced internally to the supply chain there is now also an immense amount of data available from external customers to the supply chain partners though the direct interaction with in the supply chain through through partner portals and direct interactions through integration points with supply chain external customers. The Internet and online interactions provide this data and supply chain partners would be foolish not to use this data to improve their logistics capabilities.





The challenge though for the supply chain has been two fold, how to utilize the data and what data to collect for the analysis and use of the data. Artificial intelligence starts with the collection of data for analysis and this is an important starting point. There is no way early on in the journey to determine what data will be important because the analysis must be performed first to understand the foundation and the potential. The intelligence part of the analysis also requires a great deal of information in order to validate the the hypothesis and then to determine direction based on the intelligence. Starting with the data then you can see why it is so important to collect everything because the intelligence part of the equation will generally require additional data from the same periods to confirm and validate direction.





It is important to collect all data then because you cannot tell what may be important for the analysis and then determining direction. The good news here though is that storage is cheap and the technology to analyze vast amounts of data has been improved through the improvements in technology. These two points have probably done more for the growth and development of artificial intelligence than any other developments over the last few years. These improvements in technology allow the supply chain to refine and redirect logistics activities and practices based on facts and data rather than hunches and hopes. Combine these two technologies with the growth of the Internet of Things capabilities and technologies and the potential for improvements is almost overwhelming.





These capabilities bring improvements and opportunities in automation including warehouse location and slotting, drones and robotics to improve efficiencies and reduce costs. These are not the only areas of improvement to the achieved through artificial intelligence. There will be improvements in volumes, inbound and outbound, forecasts for instance, that will bring dramatic change to the supply chain as the extended partners in the supply chain, especially manufacturers and transportation providers as the revise their processes to incorporate the analytics into their plans and procedures. The warehouse operation though will also be dramatically impacted as artificial intelligence brings the analytics to the equation that allows the operation to understand and immediately adjust labor forecasts to changes in the operation during the date based on near real time events. Artificial intelligence is just another force bringing transformation to the supply chain and the supply chain must start with a baseline of continuous improvements in the flexibility and continuous change practices in order to meet the transformations.

Smart Manufacturing Impact On Retail

The retail marketplace is poised now to truly leverage the capabilities and benefits of smart manufacturing with the integration and expansion of the collaborative retail network. Smart manufacturing provides capabilities to customize and deliver on demand and the practices in smart manufacturing supporting the efficient product changeover and customization allows retailers to refine and expand their offerings into a type of endless aisle without the expense of manufacturing an endless aisle of inventory. This is just one example of the opportunities available with the combination of the collaborative network when combined with the capabilities of smart manufacturing. This can be the next wave of improvements in the retail shopping experience and is really just in the infancy of development and implementation in the retail marketplace.





I believe that retailers have a great opportunity to develop a relationship with smart manufacturers to enhance the consumer shopping and purchasing opportunities for new and customized products for customer purchasing. This will be an awesome development in the retail shopping experience and is an important improvement and additional transformation for the consumer shopping experience. This capability potential from smart manufacturing combined with the capabilities of the collaborative network provide the framework for the next retail transformation.





I see this transformation utilizing smart manufacturing to start from two different directions both the smart manufacturer through direct interaction with consumers and through specialized service providers that partner with smart manufacturers. This will be the first wave of transformation in the retail marketplace because of the traditional retail culture this marketplace change will start with the small and nimble providers that are experimenters and forward thinking. The benefit to the marketplace starts with the collaborative network that provides the framework for the types of services and offerings that are required to introduce the opportunities from smart manufacturing.





Retailers and especially the large retailers should focus on embracing these capabilities offered by smart manufacturing to refine their product development and replenishment strategies. The smart manufacturing capabilities will provide retailers with the opportunity to develop a replenishment strategy to reduce overstock and refine and improve the replenishment cycle in a manner that transforms their forecasting and replenishment to reduce overstock and the costs associated with overstock. This requires though retailers to reevaluate much of their retail strategy because of the recent growth and expansion of the overstock marketplace. The capabilities fit perfectly with the collaborative network capabilities though and this is why it will catch fire with consumers.





Unfortunately, from an historical perspective, the large retailers have historically followed the lead of smaller retailers to experiment and develop the new technologies or capabilities in the retail experience. This needs to change though because of the speed in which the retail marketplace is changing now. The marketplace development is not slowing down and every new development and improvement in the marketplace is in fact speeding the changes in the market. This should be the next focus for the large retailers in their transformation because consumers will embrace these capabilities because it fits right in with their lifestyles.