Omni Channel Speed Of Disruption

There has always a level of disruption in the retail marketplace and the difference over the years since the Internet boom in the late 1990’s is the speed of this disruption.  The speed of the disruption has reached the velocity now of a regular occurance of market upheaval and realignment every year or two at the most.  You can see with the annual year over year growth that the eCommerce channel of the marketplace combined with consumer acceptance has reached a level of escape velocity where this market has become a leading segment of the retail marketplace.  While the eCommerce channel may not have become the majority market channel by sails, it has definitely attained a major market channel as measured in disruption.

The combination of tools and consumer acceptance and embrace of the eCommerce tools and capabilities has reached critical mass now and these capabilities are now driving the retail marketplace and disrupting not only the brick and mortar channel but all channels.  Consumers have embraced mobile technology and mobile tools to change the way that they shop and interact on an every day basis with the retail marketplace.  These tools and technology have allowed imaginative and forward thinking retailers such as Amazon to disrupt the retail marketplace at a speed that is only increasing.  Retailers who previously cobled up competitors in a strategy to grow market share are not finding that they cannot adjust to the technology and consumer demands quickly enough to maintain their market share.  

Amazon is the easiest example now to see the disruption at work in the marketplace.  Amazon started with a focus on growing product line and sales volume at the expense of profit.  They then began to add technology tools and services to these offerings to simplify the purchase process and encourage the consumer to return and stay at the site.  Their focus is on consumer site retention through a broad offering of services and technology that not only simplify shopping but also simplify the consumer’s shopping process to provide the consumer with a balance while freeing time for activities the consumer enjoys.  Amazon has realized early that consumers driving force is simplification and the ability to free time to spend with family and friends.  This focus on free time is a direct response to the career forces that have been consuming more free time and result from the consumer drive to socialize.  

This consumer drive to spend quality time with family and friends is a key factor to the speed of consumer adoption of these disruptive technologies and tools.  Retailers must accept the concept that consumers are taking more control of their time and also manner in which they interact with the retailer.  The speed of disruption is increasing now as a result of consumer embrace of new technology and tools and this will only increase with the millennial generation demands on the retail marketplace and their careers.  The retailers that do not embrace this disruption will lose, no matter their share of the market.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Omni Channel Retail Disruption

The omni channel and retail market in general are also disrupted by retailers via a combination of practices, products and consumer interest.  For instance the fashion apparel marketplace continues to be disrupted by fashion forward or fast fashion retailers and there is the classic example of the Amazon entrance into the book market.  Once upon a time a retailer could offer product at a fair price and fair customer service and the retailer could earn a solid return.  There have always been market disruptions that have really been driven by new retailers bursting onto the scene and offering a new service or a new combination of products.  You can see the progress, and the disruption, in looking back now and not realize the upheaval of the disruption at the time it occurred.

Throughout the ages of retail there have always been disruptions in the market that are driven by the combination of practices, products and consumer interest and I think the difference now is the rate of change driven by consumers and creative retailers themselves.  In the past, retailers have been known mainly for their products, or the size of their product mix, or their service offering but retailers were never really known as technology innovators.  With the Internet age this has changed though and now retailers must embrace technology innovation in order to weather the market disruption and in fact these market disruptions are driven by technology.  The age of the Internet has increased the velocity of change and disruptive retailers such as Amazon have embraced and driven market disruptions through their creative implementation of technology.

Disruptive retailers have a couple of key traits that allow them to disrupt the market; they view the market and technology creatively and they are willing to take a risk on new technology or services and accept failure.  The disrupters are leaders whose actions and leadership are driving the retail market forward while the remainder of the market at first fights the change and then accepts when they are forced and follow the market leaders two or three steps behind.  This turns into the issue now because of the velocity and level of change the leaders are driving into the market, so even when the followers are two or three steps behind they are having a problem maintaining due to the rate and velocity of change.

The issue is now the combination of the leaders disrupting the market with innovation and the speed of this disruption.  In fact I think of the disruption as the rate of change combined with the collaboration of retail leaders with consumers to define and implement consumer driven changes.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Omni Channel Market Disruption

All signs in the omni channel retail market lead to a realization that the omni channel and especially the retail market is going through a period of intense change and disruption.  The signs and the resulting disruption is quickening now with the consumer embrace of both social networking and mobile technology combined with the cultural changes being driven in part by the millennial generation along with the aging of the baby boomers.  This quickening and discontinuous nature of change is clashing directly with the institutional large retailer culture of thoughtful control of change in the retail market.  The combination of omni channel retail, social networking, mobile technology and consumer free time availability are driving this disruption and the retailer impact is intensifying.

The signs of this disruption can be seen through the market fallout resulting in retail failures along with retail successes based on the position and ability to react to changes and even drive changes to the market.  There is an increase in retailer failures in the area of forward fashion and also in the ‘historical’ retailers that show when taken in combination the result of these cultural and technological changes.  The retail fashion apparel market is now being driven by the millennial drive and passion for quickly changing fashions at a reasonable price and the fickle nature of this forward fashion market is a direct reflection of the interesting combination of impatience and practical drives of the millennial generation.  With the aging of the baby boomers and the resulting increase of the impact of the millennials I see this trend as increasing and spreading the disruption to other retail market segments such as home improvements.

You also see the signs of the disruption in the large department store and large chain retailers in the form of sales and market share loss.  These large retailers seem to have focused on a price war and market channel segmentation that has not kept pace with the desires of the consumer.  These large retailers have focused on tactical actions in an attempt to shore up sales and have missed the strategic actions that would bring success in the future.  As an example, instead of a long term focus on agility and ability to quickly react to changing consumer shopping and purchasing strategies these large retailers have focused on market channel and lowest price sales strategy. This has left them struggling to cope when the lowest price strategy cannot be maintained, you see that in the JC Penney failure when attempting to change their focus on providing special low sale pricing to a focus on ‘everyday low prices’.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?