Collaborative Commerce

Collaborative commerce is an interesting term that brings the method of shopping to attention as it relates to the purchasing aspect of the retail omni market.  Collaborative commerce really describes the omni market shopping and purchasing practices that focus on the relationships between consumers and retailers. This is the bottom line and frankly the key factor to the changes experienced now in the retail marketplace.  These changes will not slow and retailers will only be able to support the changes by changing their focus from control to collaboration with the customer. Collaborative commerce is the natural result of the changes demanded by consumers to support their lifestyle needs.  Again, consumers have used technology and the Internet to support their needs. They have been open about their desires to simplify the shopping and purchasing process and retailers must now catch up and support these demands to survive.

Consumers and retailers have been at odds with each other it seems for a long time and it two the Internet and a visionary retailer like Amazon to take advantage of this consumer unrest.  Consumers are not unreasonable in their demands, in fact consumers are the driving factor behind collaborative commerce practices. It did however require a retailer such as Amazon to recognize and react to these consumer demands.  Consumers are more than happy to share their considerations and desires for shopping and purchasing capabilities. Collaborative commerce is nothing more than the next stage of the retail evolution and relationship between retailers and consumers.  

The challenge for retailers is the relationship. Retail has always been a social activity and consumers have always been drawn to the relationship and retailers have always depended on the sales associate.  The challenge for the larger and especially the legacy retailers is they have been focused on cost cutting measures that resulted in reductions in the sales associates that supported the consumer relationships.  The desire for the relationships did not subside, only the retailers’ support for the relationships. Now these same retailers that have focused on cost cutting measures to meet consumer demands are forced to create the abilities to support the virtual relationships with consumers.  This seems to have caught these retailers unprepared and requires a concerted effort develop the capabilities.

The good news is that consumers are more than willing to help in developing the collaborative commerce capabilities if only the retailer would ask.  This has been the focus of Amazon since their inception because they recognized the need to develop virtual relationships with consumers. More than anything else that Amazon has done in developing into one of the largest and most successful retailer, their development of the personalized relationship with consumers has probably been the greatest factor in their success.  It seems to me that Amazon recognized the consumer relationship deficit early and focused developing the virtual relationship to make up for this deficit. In addition to the virtual relationship, Amazon focused on a means to encourage the consumer to return to the site based on cost in product and delivery.

Adaptive Omni Market

The retail omni market is built on the concept of adaptation and flexibility to meet the demands and velocity of change required to meet the demands.  This requires not only a focus on flexibility to support the changes it also requires the ability to sense the changing demands to allow the retailers and the market to respond to the changes.  The ability to sense the changes requires a dramatic increase in consumer and retailer collaboration and engagement. This challenge requires that retailers step up their game to meet the new demands and retailers, especially the large legacy retailers, will never be able to meet the consumer demands in the short timeframe without developing an adaptive ability to change and most importantly the ability to sense the changes in a time frame that allows the retailer to adapt to the changes.

Adaptation takes on a whole new meaning in the retail omni market and this includes a focus on flexibility and velocity, or speed of delivery.  Retailers cannot follow the same rules or practices followed in the past to adapt to changing market demands and requirements. Consumers have a new viewpoint and most importantly a new level of control in the market that requires retailers to redefine their definitions of adaptation. This new definition of adaptation is driven to a very large extent by consumer lifestyle changes and the consumer reaction to their lifestyle changes.  When consumers add this new definition to the technology, especially mobile technology, and network capabilities it gives them a dramatically higher level of control in the omni market that retailers must recognize and support.

The level and velocity of adaptive demands now requires the retailers to recognize and redefine their own understanding of adaptation.  This is a large challenge for retailers not because of the technical or practical aspects of the challenge, it it more the control aspect of the challenge that will challenge the retailers.  As time moves along in the retail marketplace retailers have been forced to give up controls each step of the way in order to survive and this has now reached the point where the control of the relationship and really last remaining stronghold of retailer control has been attacked by the consumer demands.  

Adaptation now requires a continuous change cycle to allow experimentation by the consumer to help them identify the appropriate direction.  This trial and error practice is best supported and requires a high level of collaborative engagement with the consumers to allow them change, measure, react and change again.  This is the really the process required to develop and strengthen the relationship between consumer and retailer. This new retail omni market incorporates technology to allow the consumer to develop a relationship with the retailer that augments the person-to-person relationships with their customer.  This requires creation of a new method and type or personalized relationship with the consumer that takes advantage of the technology to allow consumers to interact and relate with the retailer in a manner that suits the consumer demands.

This new relationship requires a high level of adaptation because the consumer is continuously defining and redefining the practices of the relationship.  Technology augments the relationship and consumers have embraced the technology to support their new lifestyle demands. This requires a greater level of adaptation and collaboration because consumers are still trying to figure out what is required to best meet their lifestyles.  This is not about continuously changing lifestyles it is about continuous changes to determine the best method to support the lifestyle.

Omni Market Transparency

Consumers now are searching for transparency in their interactions with with retailers and the entire extended supply to allow them to meet and react to their lifestyle.  This requires collaboration across all participants in the extended supply chain to allow consumers, retailers and the extended supply chain partners to understand and react to the changes in the consumer interactions.  The extended collaboration and increased engagement within and across all aspects of the consumer relationship is the new challenge for retailers and unfortunately this is also the most difficult challenge because of the velocity of changes and types of changes resulting from the consumer embrace of technology and WiFi capabilities.  These changing expectations and demands from consumers will drive the marketplace now for some time to come and retailers cannot afford to ignore the changing demands.

Retailers must fight their general tendency, especially for the large legacy retailers, to follow the lead and wait for the change to settle.  The reason for this is simple; the change in this case will not settle and will continuously build upon yesterday’s changes to create new experiences and shopping interactions.  The consumer in this case is searching for information and integration with the retailer and this search will continuously change to react to both consumer needs and also the extensions of technology to enhance the interactions and bring a more personalized interaction with consumers.  This requires a general increase in retailer transparency as its related to the shopping experience and the product usage and capabilities.

Retailers must change their practices now to focus on consumer collaboration and engagement in order to meet the consumer changing demands.  Consumers are searching now for transparency in their interaction and relationships with retailers and this transparency has traditionally been a challenge for retailers.  Retailers have traditionally focused on control and exclusivity whereas today the exclusivity has been dramatically curtailed as a result of the expanded retail market resulting from Internet sales.  Control was one of the first aspects in the retailer to consumer relationship that was eliminated through the Internet and it seems that the large legacy retailers have been attempting to regain the lost control ever since.  

Consumers are searching for transparency in their interactions with retailers and this provides a means to develop and enhance the relationship with consumers.  Success in the retail marketplace will rely on the relationships developed and encouraged over time between retailers and consumers. The means and glue that will hold these relationships together is the transparency that is developed through enhanced collaboration and engagement with and between consumers, the retailers and the entire extended supply chain.

You will notice that I do not mention exclusivity in this discussion on consumer relationships and transparency and this is because there is really no place in this new retail marketplace for the controls and limitations to consumers that would be required for exclusivity.  In my opinion, transparency in relationships with consumers leaves no room for controls and limitations in the relationships. Consumers demand collaboration and engagement with retailers to develop a mutually beneficial relationship and this relationship provides the basis for the enhanced retail marketplace.