eCommerce Frontiers

I have noticed in a new WalMart TV commercial that the focus is on consumables and prominently displayed a laundry detergent brand.  Then I noticed an article that explained that the retail marketplace may not have identified the eCommerce penetration in retail because the retail market statistics include grocery and consumables. I find the article a little hard to believe simply because it seems to me that everywhere I look I see ads promoting the convenience and ease of purchasing consumables and groceries online.   These points started me thinking about eCommerce frontiers and where is the marketplace going.  This is especially germane because of the dramatic growth and impact of millennials on the retail market.  I believe that when thinking about frontiers we should focus on market expansion in eCommerce and the changes brought about by social shopping and purchasing.

The market has shifted dramatically based on the demands of the consumer along with a great deal of apps and of course the mobile technology market to blend virtual with physical shopping.  This has dramatically changed the apparel, electronics and even home marketplace already.  As the millennial impact on technology, processes and social networking and shopping grows these areas will also continue to change.  There is one area though that has been a new frontier in th eCommerce and that is the consumable market.  Consumables, of course, are home products and groceries that have not been greatly impacted by eCommerce and virtual shopping in the past.  There have been services and virtual shopping capabilities available to consumers for many years, since the first wave of eCommerce shopping in fact.  The services though have been, and continue to be, focused on grocery store shopping activities that allow the consumer to either pick up their order or have the order delivered.  I used to use a service called PeaPod for grocery shopping and found it very convenient.

The challenge though with these services is they only focused on one chain and did not support sale shopping across chains and outlets.  This is changing now with more shopping outlets offering such services to provide broader perspective and availability of offerings.  Added to the selection now is commodity sales from Amazon and most recently Wal Mart.  I think Amazon especially is developing the next frontier of shopping capability though by combining services for one-click orders of commodities and the Prime delivery service.  This allows consumers to order single products at the point in time when they notice they are starting to run low and they can use their phone, tablet, laptop or even the Echo to order.  This is going to revolutionize commodity shopping shortly, especially as the millennial generation grows in 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?

Retail Marketplace Adaptation

One of the major factors in retailers success in the future is their flexibility and ability to adapt to changing demands of consumers. This flexibility is provided by a technology and cultural framework supporting the flexibility to adapt to changing demands along with a culture of collaboration that supports the practice of collaboration with all partners in the marketplace, including and especially the consumer.  I think this concept of including the consumer as a partner in the marketplace is critical to the understanding of the consumer demands.  It seems to me that a key point of struggle for many retailers is the understanding and acceptance of the changes that millennials bring to the marketplace and one of the big changes is the demand and assumption of collaboration across the marketplace and the inclusion of consumers in this partner collaboration.

Retailers must incorporate a robust continuous improvement cycle that includes people, processes and technology to support continuous adaptation.  The large legacy retailers have maintained a process of identification and grouping of many changes in a major release and implementing this large release to address the changes.  After this implementation though the retailer then begins to group the next set of changes into a subsequent large release.  Retailer must shorten the timeframe of these releases and then incorporate the robust continuous review and improvement cycle to ensure they identify and are prepared to adapt to the new changes driven by the market partners in a much faster cycle.

It is the velocity of change along with the breadth of change that is unnerving retailers and causing them to struggle.  Retailers historically have been slow to change and have been even slower to change their culture.  In the past these practices allowed the retailer to maintain a steady growth and now these practices are hindering the retailer from adjusting to the market demands.  In this age of the millennial shopper along with social shopping and purchasing the retailer must collaborate and adjust quickly to meet the changing demands of the consumer.  The large legacy retailer focused for so long on gaining and maintaining market share and cost reductions through size that they are now struggling to change that practice to a method that is flexible and supports changing practices.

Millennials are curious and embrace experimentation that creates a high velocity of change.  Millennials are also adept at creating new capabilities by combining capabilities in new ways.  These two practices do not fit very well with a stoic practice of stability and a slow and plodding rate of change that is practiced by the large legacy retailers.  Due to the very nature of the millennial generation the large retailers must change their culture to one of nimble collaborative and iterative change, they cannot purchase this culture shift and must encourage and develop internally through practice and demonstration.  Millennials are changing the retail marketplace to support their adaptive and collaborative practices and retailers must change or die.

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?

Retail Social Marketplace

There is an upheaval in the retail market now driven by the growth of millennials in this market and especially their comfort in crossing between the virtual and physical shopping and purchasing channels.  The term ‘omni channel retail’ seems to be a term that no longer describes the market and I think now that ‘retail social marketplace’ more accurately describes the current state of the retail market.  We must look to the social network arena to see an accurate trajectory of the change that the retail market is going through right now.  Retail is changing in ways that were not foreseen 10 years ago or even 5 years ago and this is the direct result of the entry and growth of millennials in the retail market. Millennials are turning the retail market into a retail social marketplace that blends channels to support consumer shopping and purchasing choices and now it is also on the cusp of an upheaval of the consumer delivery practices.

Most retailers are chasing changes using a variety of brute force methods to support the changes.  This practice can be sustained for a short time however it cannot be sustained over a long period.  In order to be successful, retailers must implement a flexible framework that can quickly support changes with a limited and short term amount of brute force.  What we are seeing now in many of the large legacy retailers is the result of chasing these changes and not changing the underlying framework to support the long term need for flexibility to support sustained discontinuous change.  In addition, retailers are also acquiring companies that already are proficient at some of the new practices with the intent to buy the capability and improve faster.  This practice can only work if the acquisitions are used to drive improved flexibility into the underlying framework.  My suspicion is that this capability acquisition strategy is simply another type of brute force method to support changes and without the follow-on activity to incorporate the acquired capability and flexibility into the their framework it will also fail in driving long term capability to support change.  

Retailers must fundamentally change their culture and their foundational framework including people, process and technology in order to survive and sustain their place in the market.  This means they must embrace the retail social marketplace and work with both internal and external partners to build and maintain this social marketplace.  The rate of change is increasing and each new change is built upon a previous change, retailers must increase collaboration and flexibility in order to support this new model.

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?