Omni Channel Supply Chain Disruption

The retail supply chain is going through the same types of upheaval as retail purchasing channels driven by changing demands of consumers.  The changes disrupting the retail marketplace are rippling out through the entire supply chain.  In addition, suppliers are also expanding to interact directly with consumers in ways that were not previously anticipated.  All of these consumer demands are converging and driving ripples of disruption throughout the retail supply chain.  Retail supply chain partners face the same challenges resulting from the velocity and discontinuous nature of the changing consumer demands that retailers have been experiencing.  The retail supply chain partners must now focus on an agile supply chain to meet these changing demands.

In addition to the changing consumer demands, the retail supply chain must deal with an almost overwhelming level of data and information that results from the consumer direct and indirect interactions with retail outlets.  The value of the extended interaction and connectivity with consumers and retail partners is the data that can be collected to analyze trends and plans while the challenge of the extended interaction is determining how to deal with the data that is collected.  Extended supply chain partners including and especially the suppliers are in a great position to gain value through data analysis due to the volume and variety of data that is available to the extended supply  from a variety of retail and direct consumer interaction.  This data is a critical factor and mechanism for the extended supply chain partners and especially the suppliers to understand, recognize and even focus disruption events and factors.  

Another challenge for the supply chain is to support variations on demands from all of their retail partners.  This brings another level of complication and requirements for increases the need to focus on agile capabilities rather than only lean capabilities to support this wide range of demands.  While this may be an intimidating prospect for supply chain partners that interact and support a range of retailers, it is also a great opportunity for these supply chain partners to increase their value to the chain by providing a means to measure cross market consumer practices and consumer demands.  This cross market, or omni market information can provide a means for retailers to potentially forecast and prepare for consumer changing consumer demands.  

This beginning of supply chain disruption will ripple across all markets increasing the level of disruption and also the importance of agility in meeting the changing demands for all partners across the supply chain.  This will be creating an omni market viewpoint of consumer demands across all retail markets from apparel to electronics to groceries and the cross market data that can be collected and provided for analysis by the extended supply chain partners will be invaluable to the retailers ability to identify and support the consumer demands.

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 Consumer Portal

Consumers are using mobile apps and smartphone technology along with new shopping services to develop their own personal shopping portals.  They are then sharing these shopping portals with the friends and family to develop their own social shopping and purchasing networks that are not dependant on any specific retailer or technology.  Consumers are using their personal portals across tools and technology to shop any time and any place as their shopping needs and curiosity dictates.  This consumer portal allows consumers to develop their own virtual shopping mall based on social networking tools allowing them to expand and interact as much, or as little as they desire and all with mobile tools and third party apps.

The closest thing that I have seen to this concept that is being delivered and supported by a retailer is from Amazon.  Amazon is focused on the consumer experience and interaction that generates consumer retention.  Amazon’s strategy of providing a service or a tool and encouraging consumer adoption has paid off over and over again from the Prime service to the Fire Stick and Amazon Video and Amazon produced shows to the Echo.  These are all tools and services that simplify consumer daily activities and as a side benefit to Amazon encourage consumers to return over and over again.  While many retailers are focused on price and delivery, Amazon has long ago moved on to focus on consumer relationships and building a community that offers a wide range of services, products and tools to simplify and encourage the consumer’s interaction.  Amazon truly provides a portal of endless aisles of products and services.

Many retailers have also focused on an ‘endless aisles’ strategy of product offerings without a huge difference in their sales.  I really don’t think its the product selection that is a big deciding factor for consumer purchasing, I think that now consumers are looking for a social interaction and connection that gives them a reason to return.  I know that I have developed what I would call is a portal of apps and services that I reference all the time when shopping.  I’m looking for other versions of the product and product reviews and pricing or specials.  In many cases I will order from an eCommerce site because I don’t want to carry the product and I use Amazon Prime so the shipping is free.  I am not the most savvy shopper and so if I am developing my own version of a portal I would clearly expect others and especially millennials to be developing own versions of portals that combine product and special offer search engines with social networking tools to enhance and simplify their shopping.

Retailers are missing the point if they only focus on product offerings and ease of purchase.  The consumer has passed that priority and in fact have taken it for granted.  Retailers must now connect and collaborate with consumers in order to succeed in this new mobile world.

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 Black Friday 2016

Over the previous few years consumers have been trending to eCommerce purchasing during the holiday season and especially the Black Friday and Cyber Monday kick-off weekend.  I believe that this year will continue that trend in a much greater way and I also believe that retailers must begin now to prepare for this change.  This year may not be the year where eCommerce sales match brick and mortar sales however this year will show that eCommerce sales are poised to match brick and mortar sales and then over the next year or two eCommerce will surely overcome brick and mortar sales.  This is the next in a series of retail market upheavals that are driven by the changing consumer focus and the advances in mobile technology.

I think the upheaval this year will come from an increase in brick and mortar ‘window shopping’ coupled with an increase in eCommerce purchasing.  This is a continuation of last year where overall sales increased and brick and mortar sales were relatively flat.  The shift this year will be fueled again by mobile technology and social networking and third party shopping tools.  I have said previously that retailers and especially omni channel retailers must focus on social networking consumer interaction to build the consumer relationship and increase the retention on their eCommerce site.  Smart phone technology and consumer usage is continuously increasing and this increase in usage and capabilities brings with it an opportunity for consumers to shop virtually using social networking tools and third party mobile shopping tools to allow them to shop across locations and channels virtually.  

I think consumers will utilize these tools to improve their shopping experience and reduce the confusion in purchasing and also reduce their labor in purchasing.  Amazon has been continuously working to improve and simplify their shopping experience through technology such as the Echo and through services such as Prime.  I think that consumer usage of virtual purchasing services such as Prime are poised and ready to dramatically increase this year along with the increase in mobile shopping and purchasing.   It is just too easy to shop at the mall with friends and family to touch and try products and then purchase via mobile technology and sites such as Amazon and have the products delivered directly to your home at no cost.  Consumers would be foolish not to take advantage of these capabilities, and consumers are not foolish.

I think we are reaching, if we haven’t already reached, the tipping point where consumers shop and purchase across channels without concern about the channel or retailer loyalty.  Retailers are realizing that they cannot compete only on prices and hope to remain successful and they are focusing more and more on loyalty programs.  Retailers are missing a critical piece of the consumer relationship by only focusing on omni channel purchasing and loyalty programs and must begin to focus more on consumer collaboration and relationship development and management.  Retailers have only focused on the sales aspect of the relationship and consumers are now reacting to this through mobile technology and social networking and retailers must now focus on consumer relationships to maintain success.

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?