Retail Shopping Levers

Retail shopping has gotten more complicated over the recent years as a result of the expanded shopping and purchasing channels, technology, including wireless network technology, and most importantly the social network capabilities.  These new capabilities along with the explosion of mobile shopping apps has dramatically increased the number of shopping levers, this is what I call shopping and purchasing options. These levers have grown and expanded to the point now that has created a omni market retail marketplace that eliminates the lines, or silos, between the different purchasing channels.  Consumers have lead the charge in this direction through their embrace of the technology to explore capabilities and then utilize the new capabilities.

This consumer embrace of technology is the lever that is the most critical to the ability of retailers to meet the changing market and consumer demands.  This technology lever is also the most powerful lever for consumers to drive change into the retail market. When looking across the retail landscape you can see many of the key challenges and failures for retailers have been, and continue to be, driven by technology and especially when this technology is also embraced and driven by online retailers such as Amazon and and mobile technologies.  These changes are disruption because of the continuous level of iterative small changes that build on each other. This iterative and continuous change process is the key to success and a key lever of failure for many retailers.

Retailers have begun to recognize the importance of this practice on their business capabilities and success drivers and also have been struggling to catch up and maintain the pace of change.   You see this from the level and speed of acquisitions and capabilities supported by retailers. This is a key to the future and success of the retailers and it will be interesting to follow the results of this drive and the endurance of the large legacy retailers to maintain the pace of change.  

I believe that in order for retailers to maintain the pace it also requires a change in leadership culture and focus to maintain the pace.  There is a great deal of history examples where the retail market experiences a disruption that results in changes from the retail leaders to incorporate the disruption and move forward.  In this case though the disruption is more the change process and velocity than what the change delivers. This is the most interesting and challenging lever after all is said and done, the disruption in not an event but a process of change and retailers must change their own internal shopping and purchasing levers to increase flexibility and most importantly the ability to sense the 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?

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 market place.  This is a good thing and really 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 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 change and renewal. This is the theme of this cycle of renewal and this is one of the key differences in this change cycle as well.

This cycle is driven by consumers rather than by some retailer, as in the past and this is a very important difference in this disruption.  The last major disruption to the market in my opinion was the explosion of Wal Mart 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, 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 lowest price from consumers.  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 though 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 and this concept has also in many ways now bitten the creator of the concept.

Now this concept along, with the combination of technology and the growing ability of the consumer to direct and even change their shopping is also disrupting the market.  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 disruption also is creating a model for continuous renewal and disruption as technology changes and increases capabilities.

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?

How Incremental Change Can Increase Velocity

Retailer change cycles must change to become shorter and focus on incremental change in order to keep up with consumer demands.  This is a dramatic change to the historic view of change in the market and I believe the only way to increase the velocity of change for larger retailers.  Velocity in the retail market is the result of a continuous cycle of incremental changes that confirm assumptions and move the needle forward as it relates to meeting consumer demands.  This is an implementation of a classic continuous improvement program (PDCA cycle). While this may sound like a simple thing to enact, the difficulty lies in the execution and especially in the continuous nature of the execution.  It is easy for the cycle to be broken as a result of diverted attention, this is why the success of the program depends on the embrace and encouragement of leadership.

The large legacy retailers have worked in what I would call a monolithic development cycle, the changes are planned and coordinated together into major event releases that require significant development time and significant change management.  A good example of this is the ERP implementations that produced significant benefit to the business at a significant disruption. Granted, after the significant event there follow a period of time where enhancements are performed until the next significant major release of the software.  This approach works well for back office type applications and has served the legacy retailers to support a consistent platform across the many locations in the chain.

The Internet changed all of this because of the change in the shopping capabilities and practices.  Shopping and interaction with consumers require continuous change to the ‘store front’ in order to encourage consumers to return and purchase.  The large retailers have always continuously changed their product displays for season or special events or holidays and the eCommerce channel requires the same level of change in order to maintain a fresh view.  This approach and model has then extended into consumer offers and sales and purchasing capabilities as a result of the market opening up to social networks.

Amazon has perfected a model of incremental change to increase the velocity of market change to disrupt the omni market.  This model allows and encourages experimentation with features in quick cycles of trial and error and Amazon has even extended this model into their product development and offerings.  This change, and the disruption produced, is the velocity of the incremental change and the speed of disruption that this model produces. This is the shift that the large legacy retailers must make, they can do this by changing their culture to focus on incremental storefront improvements and building a flexible integration layer back to the back office systems.

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?