Retail Holiday Changes

This holiday shopping season we are seeing the cracks in the walls of retailer control resulting from consumer demands and especially millennial demands and collaborative shopping practices.  Consumers have expanded, again, their use of technology and eCommerce and especially mobile eCommerce to support their shopping in this holiday season.   This holiday season has  seen an increase in retail sales, however the increase continues the trends from last year and is coming more from eCommerce purchases this year than brick and mortar outlets.  The most dramatic statistic though is the percentage of mobile sales at 53% as part of the eCommerce total sales. This indicates that my suggestions regarding the embrace of mobile technology and especially in purchases seems to be accurate.

All of these statistics when coupled with conversations of friends, family and acquaintances shows the quickening of the trends due to the acceptance and embrace of technology to simplify consumer purchasing and support their changing lifestyles.  This acceptance has been helped, I think, a great deal by the maturing of millennials and their growth in sales percentage.  Millennials are bringing their same embrace of technology and collaboration to their consumer practices and this is also now embraced by more of the consumer market to drive a major trend in retail sales.  In other words, as millennials expand into the workforce and expanded direct interaction with other generations they are also demonstrating the benefits of their use of technology to support consumer lifestyle and deliver the changes that will simplify and support their demands.

In my conversations more than half of the people I have spoken to performed more than half of their shopping either online or via television, such as QVC or Home Shopping Network.  The interesting thing in each of these conversations it the driving factors to changing shopping habits are;

• Ease and convenience of finding items.  Over and over people explain that shopping online improves the ability to find the products and the simplicity of delivery directly to your home, or better yet shipped directly to the recipient when they are not local.
• Ease of finding a low cost version of the product.  While I don’t think this is a very high priority in the purchase decision, I still hear over and over again - not only was it easier to find what I was looking for online but when I found what I was looking for it was a better price.  This is interesting because many people said that the purchased the product from the same retailer and there were extra discounts offered to purchase online.
• Support of lifestyle demands.  This is the most interesting in my opinion because in conversation it comes across as a secondary comment but in level of importance this probably has the greatest personal impact.

Retailers must now take these changing consumer demands and practices into account in order to modify both their sales and shopping practices along with their relationship with consumers.

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?

Death Of Traditional Retail

Traditional retail made up of large national and department store retailers seems to be in a down cycle and potentially going through its death throes.  I know it's been said before by many people and I’m sure that this time as well we are going through major revisions now rather than the death of traditional retail.  I think it is more accurate to state that we now seeing many large national retailers going through major upheaval that will see failures along with major changes to the retailers that make it through these difficult times.  These changes are the direct result of millennial growth in the market and the ability to make changes in shopping practices and demand that retailers in turn change their practices to support the consumer demands.

We all realize that millennials simply provide the tipping point to shove the retailers over the edge.  The change in these times is the introduction and embrace of mobile technology that allows all consumers to shop and interact with both other consumers and retailers in new ways that bring great change and upheaval to the traditional retailers.  Retailers have been controlling the marketplace for a long time and they continue now to place controls on the market.  The difference now though is that consumers can simply bypass the controls completely with the traditional retailer, or simply purchase the same product from another retailer.  

Traditional retailers are at a great disadvantage because of the potential cost of supporting the changes demanded by consumers.  The national retailers have focused on the cost advantages of size and have driven these cost savings expectations for consumers which results in a drag on profits.  This drag on profits reduces the capital available for the types of major technology investments that are now required to meet consumer demands.  Large national retailers have a huge base of technology investments in each store that requires upgrades and revisions in order to meet the demands and these large retailers cannot afford such investments.  So instead these retailers nibble around the edges of investment and place controls on consumers that in the past have succeeded where now they are failing because of the capabilities available through mobile technologies and wireless networks.

You can see the results in many different facets of the retail marketplace, from the reduced traffic in malls, to the increase in eCommerce sales, to the entry now of Amazon on the brick and mortar market.  As I stated earlier this does not necessarily spell the end for traditional retailers however we certainly are in the midst of dramatic changes to the retail market and there will be a shake out period where some of these major retailers do not make it through without major changes to their 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?

Retailers Changing Commerce

Changes normally come from outside the mainstream of the normal practices and retail is no different.  Legacy retailers (retailers with a large brick and mortar presence) are under tremendous pressure to change from many directions or influences including the consumer and non-traditional, or new, retailers such as Amazon.  While consumers are placing a great deal of pressure on retailers, I think that non-traditional retailers such as Amazon are really the ones that are driving the greatest pressure for change on the legacy, or traditional, retailers.  This pressure is changing the retail market from a channel driven commerce to a social driven commerce and the pressure now between new retailers experimenting with social commerce and consumers mashing new methods of shopping and purchasing will shortly become overwhelming for the traditional retailers.

There can be tremendous pressure for change without a great deal of impact as long as there is no acquiescence to the pressure.  In other words there has been unrealized pressure for change in retail in the past that has taken a long time to realize because the pressure was never great enough to force the change.  The retail market has been under intense pressure for change over the last 20 years now from consumers to meet their changing lifestyle needs and this is just now beginning to have dramatic impact on the traditional retailers.  A major force in driving this change is non-traditional retailers such as Amazon.

Consumers have embraced eCommerce and the social commerce aspect to blend the electronic with the brick and mortar commerce channels to create a social commerce capability.  This is now driving a great deal of change into the retail market and placing dramatic pressure to change or die on traditional retailers.  This aspect of change will not diminish or lesson and now adding to this pressure is the addition of Amazon brick and mortar outlets.  These started with bookstores and are now expanding to convenience outlets.  The significance here is the payment interactions presented in these stores that allow the consumer to pay without the inconvenience of the checkout line.  

The potential impact on traditional retailers of these experiments can be immense from a financial aspect because of the investment in point of sale technology by the traditional retailers.  This is can be an immense cost to replace and upgrade and these experiments by Amazon could represent the beginning of the tipping point.  Consumers will embrace these changes quickly and this will produce an immense pressure on the traditional retailers to change.  It will not cause these traditional retailers to fail immediately however without change and the resulting capital investment from the retailers it can represent a slow and painful death.

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?