Retail Increased Velocity of Change

The velocity of change in the retail market has been increasing for quite some time now and is only showing signs of increasing both volume and the velocity of the change cycle.  This is really related to the opportunities afforded by the connectivity and flexibility of the Internet, mobile technology and increased network capabilities that have all come together to deliver increased speed of delivery and also expansion of the parties involved in the change cycle.  The change cycle is permanently changed by the methods of delivery and also the types of changes delivered. The days of monolithic change are definitely over and have been replaced by a continuous change cycle of incremental changes that allow for adjustment and speed to market to meet the increased velocity of demands that are encouraged by the Internet players such as Amazon.

There is an old phase that is particularly fitting in this retail market - ‘Change at the speed of life’.  This reflects the current reality very clearly and explains the velocity of change as well. The velocity of change is increasing because the change cycle is quickening and the changes are actually building on each other.  These factors are then related back to the improvements in consumer technology and network capabilities. Consumers are actually driving the change now as a result of their embrace of technology and the improvements in consumer technology.  Add to this mix Internet retailers and service providers that are encouraging these changes and you can see the reasons for this increase in velocity.

This new reality puts many of the larger retailers in a bind to meet the increased velocity because the standard practice for these large retailers has been to bundle changes into larger releases that require more time to deliver.  This practice puts them squarely behind the curve and constantly chasing the changes causing lost customers and lost sales. Even the reaction to the changed model, increase capabilities through acquisition, has caused the retailers to remain behind the curve.  

These large retailers must now revise their change cycle to implement smaller, incremental, releases to deliver change in a more frequent and iterative manner.  The large releases provided major enhancements to features and functionality however it also allowed the market to change during the period of development of these large releases, thereby increasing the risk of delivery either too late to take advantage of the market or no longer required by the market.  Large retailers must focus on a flexible and extendable framework that supports quick incremental change in addition to the acquisition of new companies to support the changing demands. I think that the greatest impact of Amazon in the retail market is their focus on the velocity of change through incremental changes that build on each other.

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?

Omni Market Evolution

While it may feel like the omni market has revolutionized the retail marketplace these changes have been incubating and growing for a long time to the recent seeming explosion of change and retail disruption.  In other words, this seems like a revolution only because retailers have been seen as struggling to maintain share in the omni market in an especially visible manner recently through acquisition and reported focus on the eCommerce channel.  Travel through the history of the changes though and it is easy to see that the appearance of revolution is only an appearance and in reality is the culmination of many changes and technology over the last ten years. This is important to the retailers’ plans and strategies for the support of the retail market disruption and provides the roadmap for retailers to build an engaged and collaborative strategy to meet the demands of future evolution.

This perspective of evolution allows retailers to build a framework and structure based on broad collaboration and engagement across the market in order to sense and respond to the changing consumer demands and especially to the changing market demands.  The importance of this framework cannot be overstated as a key to the retailers’ ability to act on demands. This framework allows retailers the time to plan and evolve solutions rather than the current practice of waiting for the market leaders to develop the change.  It is important to realize that change in the retail market is evolutionary and requires retailers to accept this and implement the changes in both culture and strategy to allow them to evolve with the market and not be left behind.

This change requires a revolution in leadership management strategy to continuously search for the changing demands by both consumers and the retail market and especially market leaders.  The retail market has always been made up of leaders and followers. The make-up and number of followers compared to leaders has always been rather large with the market leaders taking the risk and then the followers reacting after the change has been accepted by the market and consumers.  I do not think that the ratio of leaders to followers has changed, I think that the time to deliver the change has decreased and this has thrown the followers behind the curve. In other words, the velocity of change in the market has increased and the retail followers have not changed their cycle leaving them further and further behind.

Amazon and similar online retailers have been able to drive this velocity of change because they can make a change in one place and it pushes to the consumers where the larger retailers have a huge infrastructure that increases the cost and difficulty of change.  We are seeing the large retailers now reimagining and rebuilding their capabilities now to allow them to sense and respond to the market shifts more efficiently. They now seem to realize the importance of evolution over revolution.

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?

Omni Market Data Security

The retail omni market must be cognizant of data security requirements and especially personally identifiable information (PII) that can put consumer identities at risk.  In the fast moving and quickly changing omni market environment coupled with hacker advances in technology to mine and extract consumer data for identity theft purposes it can be very easy to overlook and fall behind in data security requirements.  Any type of breach can cause consumers to lose confidence in the retailer’s site and be extremely damaging to business. Any loss in consumer confidence can be much more damaging to a retailer and also the retailer’s leadership than any failure to maintain pace with consumer demands in the omni market.  

Data security in the fast paced world of the retail omni market can be easy to overlook and in addition to this the retailer could go for a long period of time without an incident.  The greatest risk to data security is compliance and loss of focus on the risk. The abilities of hackers is continuously improving and the attacks growing in sophistication and this only increases the requirements for retailers to maintained a heightened awareness and also heightened tools to monitor and rebuff any attacks.  While it may be very cumbersome to maintain this type of awareness and capabilities to monitor and rebuff attacks this is also much more cost efficient in the long run than any recovery activities could ever be.

Data security must be a continuous and early focus in order to protect the retailer from the results of a breach.  A breach of any nature could not only seriously damage the confidence of consumers but more importantly could and would damage the viability through loss of business and fines to the retailer up to and including putting the retailer out of business.  Consumers and government agencies are much more aware of the damages that can be caused by data security breaches and this translates into a dramatic increase in requirements for retailers to protect consumer personally identifiable information.

Retailers walk a fine line with data security between protecting the consumers’ data and utilizing consumer shopping and purchasing practices to improve the consumer experience.  This requires a great deal of focus and awareness of the requirements in order to maintain the appropriate level of protection. Retailers must be ever vigilant for potential breaches and this vigilance extends to the retailer employees and leadership.  Retailers must act under the assumption that they are under continuous attack from outside entities and must maintain a very high level of awareness and vigilance to stop any potential attacks to protect the consumer information with which they are entrusted.

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?