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Tom Brouillette Thoughts at Large

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Retailers relationships with their customers has changed over the last few years due mainly to the technology tools and services available to consumers.  The impact to the retail industry continues be impacted by these tools and services as a result of the expansion of mobile technology.  In the past, retailers would have been successful in their strategy and actions to fight and limit the impact.  Due to the broad impact and the consumers’ embracing these services and technology the ability of retailers to limit their use of these services is almost non-existent. 


Retailers have lost the upper hand in their relationship with consumers and the simple fact of this new reality is that retailers must maintain the focus on the personal relationship with the consumer and demonstrate that this relationship is important.  Consumers now have the technology to turn the purchase experience into a shopping experience.  These same consumers have been searching for the ability to create a shopping experience for a long time, they have missed this shopping experience due to the increased demands on their time that limits their ability to spend time physically with friends and family.  The new technology and especially the mobile technology allows consumers to blend the virtual with the physical to create a shopping experience.  Retailers that focus only on the purchase transaction will lose the battle of customer retention that maintains their sales.


Retailers must change their culture to focus on the relationship with the customer in order to remain successful.  This needs to be a critical factor in hiring practices and it also must be front and center in the reporting and business strategy development.  This is a dramatic change in strategy for most large retailers and this change needs to come from the top in order to change and this means that the senior leadership must show in both words and actions that they have embraced this change.  Large retailers must re-learn the techniques that small and local retailers have always maintained as a cornerstone of their business.  This can be difficult for the large retailers, this is a dramatic change in focus and requires a continuous focus from leadership in order to institutionalize the practices.


I am sure that everyone will agree that relationship building is very difficult, and especially when you are trying to institutionalize these habits in a culture that did not previously place a high level of importance on building and maintaining relationships. Consumers now are demanding this relationship and are actively engaged in developing these relationships utilizing the technology, tools and services in new methods and cannot be ignored.  No one can say where this will lead, what we can say though is that future success depends on recognizing and embracing these new demands from consumers.  To ignore these demands will only lead to failure and the demise of the retailer.    


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 consumers’ experience?  Improving the consumers 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?


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There are basic differences in the types of relationships with consumers that small retailers and large retailers build and maintain with the consumers.  Small retailers build a personal and collaborative relationship with their customers while large retailers focus on a transactional relationship that is based on the sale.  This change in relationship with the consumer seems to be based on the size of the retailer and this size relationship also develops a culture that is impersonal and based on the transaction or the sale. 


The growth of a business, and this is any business in any marketspace, seems to naturally generate a greater focus on the sales and profits while reducing the focus on the personal relationship.  I don’t believe that these businesses purposely reduce the focus on the personal relationship, I think that is simply is not a priority and step by step is just eliminated from the culture.  There are some areas that may not require a personal relationship such as receiving product, however all businesses large and small require a personal relationship with their customers.  Small businesses have this as a key focus area and large businesses lose this focus as they grow and believe that they must focus on the impersonal objectives in order to grow.


Someone told me a long time ago that all business is personal and over the years, over and over, this has been proven true.  Why is it then than businesses lose this with their end customers as they grow?  I think one reason for this is the distance that grows from the senior management of a company with the end customer as the business grows, the senior levels of management lose any personal interaction with their end customers and focus more and more on the impersonal objectives.  On the other hand, the small business owner starts on the front line with the end customer day in and day out. They develop a relationship with their customers and this relationship retains their customers and the resulting sales.  Small businesses understand that this relationship is key to their success and they nurture this.  This means that they order specific products at their customers’ request and by the same token, the customers are willing to pay a little more for these services.


The $64,000 question is how can large retailers maintain the relationships with their end customers and be successful and profitable?  The simple answer is that they must maintain the focus on the personal relationship with the consumer and show, from the top, that this is important.  This needs to be a critical factor in hiring practices and it also must be front and center in the reporting and business strategy development.  This all needs to come from the top in order to change the culture and this means that the senior leadership must show in both words and actions that they have embraced this change.  One important thing to remember is that personal means people and not electronic surveys or electronic measurement of sales.  


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 consumers’ experience?  Improving the consumers 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?


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Over and over I have discussed the requirements of retailers to engage the consumer to collaborate on solutions and develop a relationship that engages the consumer.  This aspect of engagement is critical to the retention of the shopper.  These aspects all tie together to make the retailer successful in the new omni channel retail marketplace.  This consumer engagement is the missing link to most retailers’ strategic plan.  Consumers however are adamant on their desires to develop a shopping environment and have embraced a wide range of tools and technologies to build this environment.  Retailers must take this opportunity to embrace these same tools and technologies however the retailers have a greater hurdle to overcome; they must develop a collaborative relationship which requires a change in most retailers’ cultures.


The critical aspect to developing the shopping environment for which consumers are searching and actually building on their own is the culture of collaboration and inclusion from the retailer.  This is both the most important and unfortunately the most difficult to deliver.  Retailers in general have developed a type of bunker culture that is based on a viewpoint that sharing information and collaboration helps their competitors.  This is also actually a key challenge for all members of the extended retail supply chain from the materials through manufacturing, purchasing and delivery to the consumer.  This cultural change requirement has been holding retailers back for a long time.  Interesting enough though, I see this to be an issue with large retailers; the small and local retailers have embraced the collaborative culture and implemented this culture in their relationships from consumer to supplier.


This cultural change involved can best be shown by the recent efforts from retailers to stop shoppers from going into the retail outlet to look and touch the item and then complete the purchase online.  This shows the bunker mentality culture from the retailer that I mention where the retailer looks at this practice as a negative activity that must be stopped.  The simple reality of the matter is that consumers are changing their shopping practices and have already blended their shopping over all outlets, or platforms.  Shifting the viewpoint of the retailers from of view of stopping a lost sale to embracing and encouraging customers to utilize the brick and mortar outlet as a showroom will engage the consumer and encourage the retention of the shoppers. 


Retailers must change their view of the consumer from a transactional view and the sale must be captured to a relationship view where the focus is an open and long term relationship will increase the consumer engagement with the retailer.  This engagement will translate to retention of sales and also the social recommendations and encouragement from the consumer for others to join them in shopping with that retailer. This focus on the long term relationship and engagement also changes the focus from a lowest cost transaction to a value add relationship.  This will help the retailers get out of the lowest cost transaction battle which simply cannot be maintained over the long term.  Local small retailers understand this reality, they provide an environment that is friendly an open to the consumer and not focused on the transaction, they don’t focus on the lowest cost and yet they still maintain their customer base.


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 consumers’ experience?  Improving the consumers 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?


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Consumers have been showing a very high level of engagement with other consumers and with shopping services that offer notifications of sales, discounts and recommendations from other consumers.  These services have grown exponentially over the last couple of years as the mobile technology and capabilities have expanded.  Retailers for the most part have been left behind in these consumer engagement practices and this has impacted the relationship with consumers and the retention of customers.  There has been an interesting trend occurring in the eCommerce marketplace; the sales have been increasing while the retailer engagement with the consumer has remained flat. 


I believe this trend of increase sales is going to flatten soon because it is being driven by a cost and availability model and product cost cutting is a losing battle for retailers that cannot be sustained.  Instead, I believe that retailers should shift focus to customer engagement.  This means that retailers should ask the consumer their help in providing product evaluations, service improvements, types of promotions and frequency, promotion of the sale over social media.  In other words, the retailer should focus their engagement of their customers on activities that will tie the customer to the retailer.  I know that most retailers are saying that they already engage the customer by sending email blasts on a regular basis to the subscribed customers, they also request the customer to participate in a survey after their purchase to rate the experience.  I do not consider these impersonal actions to be engaging the consumer.


To me, activities that engage the consumer make it easier for the consumer to shop and provide a more personalized experience.  As an example, only a small handful of retailers recognize the customer when returning their web site, most retailers require the consumer to actively request to log into the site.  When I go to Amazon the site recognizes me and provides the customized ‘storefront’ that I have selected based on my purchases and stated preferences.  As another example, when I go to a social networking site for the first time the site provide options for a simplified login by using your Facebook or Google accounts.  The social shopping service Retail Me Not utilizes both login using Facebook and location based notifications for shopping services and offerings. 


Consumers are searching for the little points that show the retailer has made the effort to recognize them.  Consumers are more than willing to tell the retailer the products in which they are interested, they are more than willing to promote their purchase to their social network and they are more than willing to suggest to their network the positive benefits of shopping with the retailer.  Most consumers are interested in prices as a secondary selection option.  Retailers use frequent shopping programs to track sales and send sales offerings to consumers, retailers also incorporate mobile web sites.  Why is it so hard for retailers to combine the two into an offering that recognizes when the consumer enters a store to send customized offerings to the consumer?  


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 consumers’ experience?  Improving the consumers 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?


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Consumers and third party services have developed a model to incorporate new mobile tools and services in their shopping practices.  This model, as a general rule, does not include the retailer, aside from the mentions and notifications from the retailers.  These services come and go in their consumer acceptance based on the usability and value provided to the consumer.  These services are easy to find from a variety of offerings and all of them have incorporated an array of social networking capabilities that support two objectives; notifications to the subscribers of events and offerings, encouragement of subscribers to invite friends to the service.


We have seen the services rise to a level of community and consumer acceptance as in Yelp and we have also seen these services fail, or consumed by other services.  I find that the most interesting aspects of these services and tools is the way that the retailer, or the end target of the services has been left out of the discussions.  The retailers, restaurants, theaters, etc, all have one thing in common as far as these services are concerned, they are the target and consumers utilize the service to identify sales and deals, or rate the target.  For all intents and purposes, this model follows the same shopping practices utilized for shopping  and purchasing for decades, the only change being that technology has opened a new channel to support these same practices.  Instead of a newspaper providing sale flyers and coupons, consumers use email and location based mobile services.


Forward thinking retailers such as Amazon and Google are beginning to use these capabilities now to engage the consumer.  For instance, Amazon encourages shoppers to ask questions and will pose those questions to previous purchasers.  Google is using search algorithms developed to support their search engine to enhance the purchasing and searching capabilities of the Google Play store.  This is the type of experimentation that retailers need to incorporate into their commerce shopping support capabilities. 


These commerce shopping support capabilities do not require custom development on the part of retailers to incorporate.  The initial cost of entry is to simply expose the retailer’s internal services through a social commerce gateway to allow access through standard Internet protocol services.  The technology though is not the difficulty, the difficulty is taking that first step culturally to change the practice and the relationship between the consumer and retailer from adversarial to participatory.  This is what I reference when I say the only way to implement a change of this size and nature is one step at a time.  This first step in this case is to change the culture to engage the consumer as a partner and not an adversary.


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 consumers’ experience?  Improving the consumers 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?

Inviting consumers to participate in the product selection and quality review process is a great way to engage the consumer.  People in general are social beings and they will communicate and develop communities to share and socialize both physically and virtually.  Consumers have demonstrated through social networks and the tools supported through these networks that they are anxious to engage in the shopping experience with both other consumers and the retailers.  The retailer that channels this engagement will become very successful.  There are two challenges the retailer must overcome to successfully engage and develop a relationship with the consumer; culture and capabilities.


The capabilities challenge can at first seem overwhelming.  After all, how can one company hope to keep up with all of the varieties and types of tools that consumers use in their social networking and then add to this the mobile capabilities and tools supported that both crossover and add to the choices.  Add to this the internal culture and potential staffing requirements and the task at hand can very easily become overwhelming. 


It seems like a long time ago when eCommerce was first incorporated into the corporate and retail culture providing another channel to sell products to consumers.  When Facebook started to expand into common use by the public in general they started using the platform as a means to share views about companies.  Companies then incorporated Facebook as another marketing channel and customer service channel.  Customers embraced this channel as an electronic link to retailers, and retailers used this channel as a marketing tool.  This tool required additional levels of staff to monitor and respond.  All of this occurred however prior to the explosion of mobile technology and the resulting increased velocity of change. 


The explosion of mobile technology is allowing and encouraging consumers and retailers to extend the link and the types of interaction.  Consumers have embraced these capabilities and have been expanding their actions into a social shopping community that utilizes the capabilities and technology to create new communities.  These capabilities and technologies though are all built on a standard open framework and only really require network bandwidth to support.  Consumers have been expanding their capabilities and use of services and tools to change the landscape of shopping.  We have reached the tipping point where the acceptance and utilization of the tools has become pervasive.  This speeding of change and increased use by consumers of tools can seem overwhelming to the retail industry and generate a bunker mentality to fight these practices. 


This is exactly the opposite of the appropriate response to these changes.  Wishing it will go away and fighting the challenge will only leave the retailer further behind the curve.  The only way to overcome any challenge that seems overwhelming is to start, just take the first step to identify the capabilities and then take the next step to identify the challenges, and then take the next step…..



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 consumers’ experience?  Improving the consumers 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?

A consumer quality feedback program is a key area of improvement that is dramatically enhanced by the eCommerce and mobile tools and technology.  This area deserves a formal program with all of the measurement tools to monitor progress and areas for improvement.  A prominent area for engagement with the consumer is a consumer feedback loop.  This consumer feedback loop is important for customer retention and quality improvement.  The consumer feedback loop allows the retailer to develop a conversation, feedback loop, between the consumer and the retailer. 


Retailers and manufacturers have developed supply chain feedback loops that monitor and continuously improve the quality of the products, packaging and transport.  The consumer quality feedback program incorporates these same principles for a consumer feedback loop.  Without a consumer feedback loop the retailers and manufacturers lose a very valuable voice in product development and delivery.  In addition the consumer feedback loop engages the consumer with the retailer in a partner relationship where each partner benefits.  This consumer feedback loop can utilize the same tools and technology that retailers are incorporating into their omnichannel market support to provide the additional data points to improve the demand forecasting, sales and manufacturing of the products.


A very important area for success in retail is the customer retention.  Due to the instant availability of products and services at competitive prices, the retention of the customer is critical to the future success of retailers.  One tool in the customer retention toolbox is engaging the consumer for advice and feedback that can be incorporated into the retailer’s product, sales or marketing programs.  Consumers can find coupons and lower prices with ease from many new services that pop up almost on a daily basis.  Retailers cannot fight these services by simply lowering the prices.  Instead the retailers should focus on engaging the consumers in their target market to develop a relationship that discourages the consumers from looking around for lower prices.


The consumer quality feedback loop provides the methods to engage the consumer and incorporate their feedback into the retailer’s omnichannel strategy.  The retailer should look around, as if they were a consumer, to identify the programs that would enhance their own personal shopping experience, or better yet, engage consumers to provide the feedback and then engage these same consumers to ‘test’ new programs and products.  This consumer engagement process will provide more value and higher retention than any price matching program and does not cannibalize the sales, or more importantly the profits. It simply utilizes tools and procedures that you may, or should, already be using with your supply chain partners.


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 consumers’ experience?  Improving the consumers 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?

Tom Brouillette

Commerce 2.0 Quality

Posted by Tom Brouillette Apr 7, 2015

The quality feedback and improvement loop process will be another area of great improvement as a result of the collaborative marketplace that I call Commerce 2.0.  There are two types of performance improvements that can be achieved through the collaborative marketplace; shopping performance quality and product performance quality.  Up until now I have been discussing the shopping performance and engagement aspect of quality and now I will begin a discussion on the product performance quality.  It is important to establish the customer communication and engagement model to provide a feedback loop to the product quality.  Product quality then engages the entire supply chain from materials to the customer delivery.


Lets start with the customer feedback loop as the beginning of the process.  The customer determines the starting point for the quality discussion.  This is where the product style and material used to produce the product are determined.  The retailer selects the market and the products to offer to the customer, the target customer has been defined for the particular market along with the value and cost of the products offered to that market.  This is true of any product from produce and groceries to automobiles or appliances.  The retailers’ first requirement is to understand the market and the products included in that market. 


Customer feedback is important at every step of the product supply chain, whether it is direct or indirect.  The retailer starts with indirect feedback that pertains to the market, types and cost of the products, then as the products flow through the extended supply chain there are customer feedback points along the way.  Each step along this chain the various customers will provide feedback on the product and quality until the product reaches the point in the chain where the end customer, or consumer, gets involved. 


The retailers, and especially the leading retailers, will have a quality assurance program instituted for the manufacture and delivery of the products to these retailers.  This includes product sampling and testing, packaging and delivery to the retailer.  There is also a consumer quality assurance program that is not generally as well defined, however it also includes sampling and testing (through shopping) packaging and delivery and then in addition there is an additional feedback loop from the customer returns, or reverse logistics. 


Each program has been instituted with varying degrees of formality and measurements.  The key area of improvement to be captured from the collaborative marketplace is the consumer quality program.  This area deserves a formal program with all of the measurement tools to monitor progress and areas for improvement.  The most prominent area for improvement is the consumer feedback loop.  This is where it is important for customer retention and quality improvement to develop a conversation, feedback loop, between the consumer and the retailer.


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 consumers’ experience?  Improving the consumers 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?

The collaborative marketplace, or what I am calling Commerce 2.0, is all about the impact of social networking as a type of shopping tool that is supported by mobile technology.  This mobile technology supports extended collaboration within and around the consumers’ omni channel retail purchasing.  This extended collaboration through the changing mobile technology is essentially about extending conversations and introductions.  Consumers desires and demands have essentially running at direct odds to the retailers’ desires and demands - consumers search for the social interaction and not the purchase and on the other hand, retailers’ search for a low cost purchase solution.  If the retailer would support the social interaction in addition to the purchase they would provide consumer with critical reason to return again and again to the retailer for purchases.


Consumers have accepted this difference because in the long run, a key factor to the consumer’s purchase in the eCommerce environment is also price.  Retailers have focused on the market channel of the purchase because research has shown that multi-channel customers, ones that purchase from more than one outlet, are much more valuable than any single change purchasing customer.  I think though that this has relied on the traditional shopping paradigm - consumers felt more comfortable seeing and touching the product themselves.  This has traditionally been a valid shopping trend, or paradigm, for a very long time. 


This paradigm is shifting again though based on two factors; the reduction in free time available for the consumer to go to look and touch the product; and the increase in capabilities of mobile technology combined including the expansion of the wireless network capabilities.  These factors are allowing the consumers to add the social aspect to their eCommerce shopping.  This added social aspect is the addition of the conversation and the introduction to the eCommerce shopping experience.  This added social aspect is changing the methods that consumers incorporate in their shopping practices and these improved social networking aspects supported and enhanced by mobile technology will change the way that consumers shop across market channels.


The addition of mobile technology and the wireless network capabilities combined allows the consumer to converse during the eCommerce shopping experience.  The ability to converse with other consumers, whether or not in real time during the eCommerce shopping experience actually reduces the need for consumers to touch the product and this in turn reduces the dependence of consumers on the brick and mortar retail channel. 


These capabilities are all being embraced by the consumer now because of acceptance that has been achieved by social networking over the years.  Mobile technology in combination with the availability of wireless networks has simply allowed the consumer to expand their social networking into more areas of their life.  Consumers now use the mobile technology capabilities as natural extension of the conversation while they are shopping.  Retailers would do well to recognize and support these extensions of the conversation to develop their positive shopping experience.


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 consumers’ experience?  Improving the consumers 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?

Collaborative partners are another important aspect to success in the new Commerce 2.0 environment.  There have been dramatic strides in the ability and even the openness for developing partnerships over the recent years.  The realization has finally been embraced that collaborating brings dramatic benefits that would not have been possible in a lone wolf model.  Collaboration allows the partners to overcome their weaknesses through the strengths of their partners.  How does this relate to the eCommerce collaborative marketplace?  The partners in this particular case should be engaged to provide the marketplace consumer shopping capabilities. 


The leaders in the omni channel market have done a very good job in developing their extended supply chain and partnership supporting the purchase and delivery to the consumer.  This includes both the purchase, or outbound logistics and the return, or the reverse logistics. There will always be  need to monitor and improve the execution of the purchase and the extended supply chain partners provide an important ingredient for these capabilities.  The mobile technologies and increasing usage by consumers though requires the purchase and delivery of the product to be a more robust and flexible capability to meet these changing consumer demands. 


The changes to mobile purchasing is only a small function in the overall changes that are being driven by mobile technology.  Another aspect that will cause the greatest disruption in the eCommerce market is the social shopping capabilities that are supported by the mobile technology and the expanding data and network capabilities.  These capabilities will drive the greatest marketplace disruption and they will also drive the greatest value and retention of customers.  Mobile technologies allow the consumer to turn the eCommerce marketplace into a social collaborative marketplace that utilizes all of the social technology (Facebook, Snapchat and Instagram) for the communications aspect and the location networking technology (yelp, google+) for their store and product ratings.  These technologies turn the consumers’ smartphone into a virtual neighborhood shopping mall experience.


This virtual neighborhood shopping experience is where a new set of partnerships are required to support the demands of the consumer.  There are many services now offered on a subscription basis to consumers the providing specials of the day even based on location for instance.  We’ve all used one or another of these services.  The retailers’ objectives now should be focused on embracing these services and then adding a social layer to their eCommerce that allows consumers to connect and participate to provide feedback and recommendations to share with other consumers.  So the additional partners that retailers must integrate are the marketing partners that offer specials and incentives to the consumer and the most critical partner is the consumer themselves.  The retailers must create a two-way conversation with the consumer in order to create this collaborative marketplace and also to increase customer retention.


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 consumers’ experience?  Improving the consumers 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?

Tom Brouillette

Commerce 2.0 Methods

Posted by Tom Brouillette Apr 3, 2015

Commerce 2.0 methods must focus primarily on defining, developing and implementing flexibility in controls.  Controls, however, in the collaborative marketplace that will be Commerce 2.0 should be defined as principles of operation.  In these initial stages of developing the Commerce 2.0 collaborative marketplace, and actually this will probably continue into the foreseeable future, the market is changing quickly, in both demands and capabilities.  These discontinuous changes in demand require a flexible framework to guide the methods in which the retailer supports the changes.  The principles of operation will support this flexible framework in which the retailers can support the changes in the collaborative marketplace.


I am a big believer in the ‘Process, People and Technology’ business process methodology and there is a great significance on the sequence.  I always start with process because we must understand the process in order to determine where people are required and what skills the people will require, and then you are at the point where you can determine the technology required to support the process and people.  This is where the principles of operation come into play, this provides the framework and the rules that will support managing change. It is also important to have this framework in place early so you don’t get swept away with the excitement or immediacy of a change.  The principles of operation should define your methods of evaluation and adoption of change.  Think of it as a type of checklist to review throughout the change evaluation and implementation process. 


Adopting and implementing a repeatable process to address change will allow you to speed your change implementation process.  The retailer must be careful not to be swept away in a wave of technology change and end up with a cobbled together solution that is not flexible and boxes them into a very expensive resolution to increase flexibility.  Discontinuous change is a difficult process to manage and retailers have entered into a storm of discontinuous change that will disrupt their business model to meet the demands of the consumers.  A repeatable process of ‘Process, People and Technology’ that is guided by a robust principles of operation will help the retailers navigate these changes in a manner that does not paint them into a corner.


In order to ensure the long term viability to meet new consumer shopping demands of the collaborative marketplace the retailer cannot expect that a single technology will meet the needs.  On the other hand, the retailer will collapse from complications if they adopt new technology after new technology simply based on industry trends or technology marketing, unfortunately there are no silver bullets. This is why the retailer must adopt the repeatable process supported by a framework that allows speedy review and adoption of new processes. 


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 consumers’ experience?  Improving the consumers 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?

As a baseline assumption, in order to support the demands of consumers as they change and increase in flexibility demand due to the integration of mobile technology in consumer shopping the retailer must move into a collaborative marketplace framework.  This in itself is a fundamental change in philosophy; from a purchase based method to a shopping based method of interaction with the consumer.  In order to achieve this change, the omni channel framework must also change from a closed, purchase based framework to an open, collaborative marketplace framework.  I don’t think there is much of a decision to be made to change the philosophy and framework, it will be a requirement to maintain the business.  The decisions come from how quickly you can move to this new framework and how you will integrate this new framework.


How will you support the consumers’ demands in shopping?  This is a discussion in customer retention and engaging the customer in the experience.  I think this is becoming the key to customer retention; engage the customer so they are invested in the shopping experience.  The customer is driving towards a collaborative shopping experience the crosses channels and utilizes mobile technology as the glue.  Customer service surveys after the purchase will no longer meet the customers’ desire to engage, the retailer must engage the customer in the product decision making process.  In the past this was done as a type of passive customer evaluation, by this I mean that retailers would analyze the customer purchases to select the products with the highest sales as a guide to customer likes.  This is not true; this only identifies the customers choices across the offerings from one retailer.  Retailers should look at this as the customers notification of the product they feel sucks the least.


Consumers on the other hand would be happy to share their thoughts with retailers, if they would only listen.  You find this desire to share across many of the Internet sites that are very popular from Angie’s list to Yelp.  The retailers would be well served to provide product reviews and ratings from customers as a starting point to help shoppers make a decision.  This would simply be a starting point however and should be expanded and encouraged to engage the customers more in product selection and also in pairing items.  Retailers are simply not paying attention to the marketplace and consumers demands when they do not provide these opportunities to collaborate with their customers.


Retailers should stop trying to control the market and the consumer shopping methods simply because it will not work any more with the increased availability and capabilities of mobile tools and technology.  Retailers would be better served to focus on engaging their customers directly, because their customers are definitely engaging without the retailer through new web services, mobile and social technologies.


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 consumers’ experience?  Improving the consumers 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?


Tom Brouillette

Reverse Commerce 2.0

Posted by Tom Brouillette Mar 29, 2015

Another important aspect to commerce and the consumer shopping demands is the customer returns, or reverse logistics, handling.  No discussion on commerce can be complete without inclusion of reverse logistics.  This was the critical aspect required for the consumer to first engage with eCommerce retailers.  The requirement is the ability of the consumer to return any purchase within a time period for any reason and be provided credit for the purchase. 


This provides additional complications for the retailer to handling the returned product in a manner that recovers the most cost as possible.  The requirements for product handling change dramatically for each product type and each of these requirements must be incorporated in the merchants process flow.  For example, apparel can be easily examined and reconditioned for resale, where electronics can be costly to examine and recondition and even then electronics must be sold at a discount as ‘open box’.  These are all obviously processes and procedures that can be clearly defined and implemented.


The challenge in this though is incorporating these processes and procedures in your collaborative supply chain network to support these requirements.  Handling customer returns is much easier when the retailer provides all services and sales support to the consumer.  However it becomes a little more difficult when you bring additional partners into the equation.  This support will most probably start with a single point of support from the retailer and then as the collaborative partnerships grow the opportunity to push the support of the processes and procedures may be appropriate to shift to one or more partners. 


There are two factors you must take into account with your collaborative supply chain:

  1. The support of the consumer especially as it relates to satisfaction.
  2. The cost of handling the returned product.

The most critical aspect of these factors is the satisfaction of the consumer.  The merchants and their collaborative supply chains are responsible for containing and recovering the cost of these returns.  The merchant must realize that they will never recover the full cost of the product, services and original shipping and delivery to the consumer. 


The reason why this is so important is because of the impact it has on the consumer retention and long term satisfaction of the consumer.  As I have been saying for a long time now the key to success is the long term satisfaction of the consumer which itself leads to the long term retention of the consumer.  Retailers understand this and have included these processes and procedures as a cost of doing business.  This cost view however sometimes colors the interaction with the consumer.  Retailers must be careful to train and provide electronic services that simplify and even encourage the return of unwanted products.  Too many times this view of a cost is projected to the consumer in their interaction through many questions and complicated procedures to 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 consumers’ experience?  Improving the consumers 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?

Tom Brouillette

Supplying Commerce 2.0

Posted by Tom Brouillette Mar 28, 2015

The supply chain supporting retailers’ Commerce 2.0 framework must also be a collaborative and flexible framework in order to support the changing demands of the consumer.  Retailers cannot overlook the requirements to support the demands of consumers’ shopping for both selection and purchase and delivery options.  Just as retailers must revise their sales channels to meet the changing shopping demands, the extended supply chain must also change and increase flexibility to support the changing delivery and demand cycle of the consumers. 


Retailers have tried to meet the consumer purchasing demands through a variety of strategies from earlier purchasing to meet the demand to purchasing after the consumers have ordered to meet the demand of the orders.  As with most strategic decisions the optimum strategy is somewhere in the middle. A collaborative supply chain network provides the framework and the collaborative partners in the supply chain provide the means to meet the changing consumer demands.  The key to the success of the retailers in meeting the demands of the consumer is a collaborative supply chain strategy and the key to the success of this strategy is the partners in the collaborative supply chain network.


This strategy allows the retailer to focus on the consumer shopping demands and utilize the collaborative supply chain to support the purchase delivery.  The consumer shopping demands require the retailer to extend the support of the consumer purchase delivery across the extended supply chain network.  This extension and strengthening of the collaborative network increases the flexibility of the retailers’ commerce network providing the flexibility necessary to support the changing demands of consumers.  This strategic collaborative network extends from the raw material and manufacture of products all the way to the consumers’ door. 


In order to remain successful in this collaborative marketplace, the retailer must support both the shopping and delivery demands of the consumer.  These demands are changing at a much faster rate due to the capabilities and improvements delivered through mobile technology.  This rate of change can only be successfully met through an extended collaborative supply chain.  This strategy allows the retailer to focus their efforts on supporting the consumer shopping demands and then collaborate with the extended supply chain to support the purchase delivery, whether through the brick and mortar store or the the direct delivery to the consumers’ door.


This network supports the consumer demands in two directions; from the purchase to the consumer’s door and then from the consumer to intake back into the extended supply chain.  It is important to remember that the retailer must support the consumer demands in two directions in order to retain the sales.  The consumer returns, or reverse logistics, back into the extended supply chain are a critical aspect to the the customer 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 consumers’ experience?  Improving the consumers 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?

Tom Brouillette

Embracing Commerce 2.0

Posted by Tom Brouillette Mar 26, 2015

By all appearances and actions consumers are embracing Commerce 2.0, or the collaborative marketplace, and this is leaving many retailers chasing the market and the sales.  In order to maintain success the merchants must also embrace this new practice and framework.  Consumers are not simply sitting back and waiting for the next product that a major retailer has decided should be accepted and purchased by the consumer, they are actively searching out, and also recommending products through their social networks and the specialized services such as Groupon.  The successful merchants will embrace the collaborative marketplace and focus on the shopping rather than the purchase.


Consumers not only want to get value, they also want to give value.  We are now seeing where consumers will engage in many types of services to provide feedback to improve the service or even the product.  The entertainment and restaurant market is probably the best example of this engagement.  Yelp provides a platform for consumers to engage and network with other consumers to rate service from both merchants, restaurants and entertainment venues.  There are many others providing this same type of service and this is the type of services that the large retailers should embrace.  We already see small local retailers engaging the consumer through social networks, the ‘shop local’ practice is strong and successful not because its a catchy phrase, its successful because the local merchants engage consumers through social networks. 


The initial focus of retailers on social networking was and in many cases still is as a marketing channel and a consumer complaint channel.  This was a good beginning however consumers have progressed dramatically in their capabilities and as their capabilities increase they are also pushing their desires and methods for interacting.  Large retailers must recognize these additional demands and support them in order to maintain their success. 


The greatest challenge for large retailers is to understand and embrace the concept that the consumer has wrested control of their shopping and purchasing from the retailer.  I think the large retailers have been expending a great deal of effort in fighting these trends because first it is hard to recognize the shift and second because it is difficult to give up control.  How will these merchants select products to offer?  This is where the merchants must begin to focus on engaging the consumer and bringing them into the process.  Embracing this method will provide two values to merchants, first it will provide the merchant with the types of products and features the consumer desires, second the engagement will retain the customer.

 

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 consumers’ experience?  Improving the consumers 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?

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