Consumer Chain Values

In order to maintain the participation of the consumer and the success of the consumer chain this chain must be built on values.  These values must clearly define the methods and roles that will be required to meet the retailer and the consumer chain objectives.  The retailer must articulate and live these values in order to drive them into the consumer chain and all interactions.  These values should clearly define the expectations for the methods and principles that will guide the consumer chain and interactions between partners and especially the interactions between the retailer and the consumer.  The values of the consumer chain are an important factor in the continued success of the consumer chain and must not be overlooked if the retailer and the consumer chain is to succeed.

The values must be first articulated and explained by the retailer as a step in building the consumer chain with the internal and external partners.  The values provide the basis for the governing principles of the relationship and provide the guidelines to delivering success.  The values and principles defined and maintained by the retailer through the consumer chain provide the roadmap to the continued success of the consumer chain.  Without these values as the foundation there can be no consistency in the direction and this will result in a discontinuous ability to achieve results and success.  Without the values and resulting principles the success of the consumer chain and the retailer will be hit or miss.  

The consumer is one of the key participants for achieving benefits from, in addition to the key audience for the retailer values.  While the consumer is not directly guided by the values and resulting principles they are the focus and the reason for developing and maintaining the values and principles.  A consumer chain attracts and retains consumers through the values and the principles of the retailer and the consumer chain supporting the retailer.  While the consumer is searching for value in their retail experience I believe that another key factor in consumer attraction and retention is the values of the retailer and the consumer chain.  You see this over and over again from the Toms Shoes practice of donating a pair of shoes for every one purchased, to the Nordstrom value of the consumer satisfaction over short term gains.  

The values and principles should be evaluated and revised as necessary as part of the continuous improvement process in order to maintain their freshness.  The values embraced and guiding the retailer and the consumer chain are the greatest factor in attracting and retaining customers.  Price can only really attract the customer for the transaction and the retailer must constantly be focused on on the lowest cost in order to maintain the customer base.  This is a losing proposition because first the lowest cost model does not produce the profit margin to sustain the retailer and more importantly there is always another retailer that will provide a lower cost.  Principles based on values provides a solid foundation for customer retention that will last and also support a fair margin for return.

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?

Consumer Chain Relationships

It is the responsibility of the retailer to maintain and encourage the relationships supporting the consumer chain.  These relationships cross from the consumer to the suppliers with all partners between.  There  are also many channels and routes supporting the consumer chain that require strong relationships to support.  The retailer is the hub of both the relationships and the consumer chain and so plays the critical roles of both communication hub and also relationship manager especially for consumers.  This presents a challenge to the retailer to manage not only between consumers and the suppliers but also across channels because of the differences in both communication capabilities and also the requirements.

The relationships between the retailer and the suppliers, carriers and and distributors is relatively straightforward because it can be defined and measured by contracts and service levels via performance indicators.  The contractual obligations can be clearly defined with the deliverables and obligations for which each party in the agreement is responsible along with the means that will be utilized to measure the performance.  Each party in the agreement will then be rewarded based on definitions and performance defined in the agreement.  These agreements are then reviewed and updated on a regular basis based on performance and schedule defined in the agreement.  These are all standard procedures based on contractual agreements that benefit each of the parties that are parties to the agreement.  The values realized by the parties are clearly defined over an agreed to period of time.

The consumer relationships are much more complicated and require a greater amount of effort in maintenance to achieve the benefits because, in part, there are no contractual agreements between consumers and retailers.  The relationship must continuously provide a value and generate the interest of the consumer to ensure they return to participate in the community and as a result purchase.  The relationship building with the consumer requires continuous encouragement and both real and perceived value for the consumer.  The consumer community is the vehicle that will provide this encouragement and value to the consumer.  The consumer relationship should be built on mutual benefits along with participation in the community that provides value to both parties.  Consumers perceive value through both discounts and value received from their participation along with the satisfaction of giving and receiving help from other members of the community.

There is no formal agreement between the consumer and the retailer which makes the relationship more difficult to maintain.  This is why it is important to encourage and reward the participation of the consumer in the community.  This participation provides the means and the reason for the consumer to return to the community.  This participation also provides the retailer with at least two types of value, the sales realized by the returning consumer and the data provided for analysis by the consumers’ participation and shopping patterns.  These provide a great value to the retailer and compensates the retailer for the time and the effort to maintain the consumer relationship.

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?

Consumer Chain Engagement

Engagement at all levels must be the objective of all participants in the consumer chain to maintain and grow their success.  The consumer chain and therefore the partners in this consumer chain cannot survive without the full engagement across the chain of all partners in delivering and maintaining the mutual benefits across the chain.  The retailer is the hub of this consumer chain is the retailer and the greatest requirements to delivering and maintaining the success lie with the retailer.  One of the key objectives of the retailer is to encourage and maintain the engagement across the chain.  This retailer must continuously monitor and nourish the desire of all partners across the chain in order to ensure the continued engagement.

Maintaining a high level of engagement with the suppliers and distribution network in the consumer chain is a relatively straightforward activity that is based on agreements and monitoring the service levels and performance indicators measuring these agreements.  These agreements are the glue that holds the commercial internal and external partners together in this chain.  These agreements clearly define the expectations and interactions of these commercial partners.  These agreements also clearly define the methods and procedures that will monitor and deliver continuous improvement.  In this environment there are clear objectives and goals that can be monitored and maintained and when the objectives and goals are met, there are also clear results and benefits achieved.  This is actually the easy part because these commercial internal and external partners are driven by the real returns that will be achieved through participation.

The consumer partners in this chain though are more fickle because their engagement is based on interest and not contractual agreements, service levels and performance indicators.  Consumers on the one hand are driving the metrics that are measured in the commercial service levels and performance indicators.  However, on the other hand there is no obligation for these consumers to engage in any one consumer chain.  For this reason, it is the retailer’s responsibility to understand and create and maintain the consumer engagement that will produce the benefits to the commercial partners in the consumer chain.  This is a very difficult task because the consumer can be a fickle partner that requires constant encouragement and reasons to engage.  

The challenge then for the retailer in the consumer chain is two-fold.  The retailer must maintain and continuously improve the products and services offered to the end consumer while also maintaining and encouraging the interest of the consumer.  Both of these efforts obviously have a symbiotic relationship; you cannot have one without the other.  However the consumer engagement must be maintained utilizing different methods and tools than the commercial partner engagement; consumers will engage based on interests while commercial partners will engage based on financial opportunities.

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?