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Tom Brouillette Thoughts at Large

885 posts


Forecast accuracy is probably at least one of the most difficult practices within the extended retail supply chain .  The seasonal planning generally practiced by the larger retailers is a very difficult target to meet because of the fluctuations from weather and consumer purchasing fluctuations.  The changes in the retail purchasing channels and consumer shopping and purchasing practice changes and demands have only added to the difficulty to plan and forecast accurately.  The results of the missed forecasts are easily evident in the retail outlets from the amount of markdowns which seems to be growing.  How can retailers overcome the challenges of changing consumer shopping and purchasing along with a quickening of the product change cycle?

 

In many ways retailers have brought these difficulties on themselves as a result of their changes to the seasons.  Christmas sales practically start in September now and are overrunning sales for Halloween and even Thanksgiving, it is barely July when back to school and fall products appear on the shelves.  These extensions of the key shopping holidays seem to be the result of the desire to support lagging current season sales with the next.  These practices though add to the level of overstock product that must be sold at reductions.  This cycle continues the spiral of increasing overstock that diminishes the retailers profits.  This cycle also makes it very difficult to plan and forecast for inventory to support the sales.

 

This is where the fast forward retailers enter the equation with a shorter cycle and continuously updated product to interest the consumer.  These retailers have identified and are continuously adjusting to the demands of the consumer with shorter product cycles and continuously turning inventory.  This gives the consumer a reason to regularly return for fresh product offerings and by the same token, the overstock is also liquidated on a more frequent cycle.  There are the same winners and losers in product sales and because the replenishment cycle is shorter there is a greater opportunity to weed out the slow selling product while the strong selling product can be replenished.  This shorter cycle may increase costs for both product manufacturing and transportation however there is a greater cost elimination for product overstock liquidation that I think offsets the increased costs.

 

There is another benefit to the shortened product life cycles and that is an increase in consumer interest and frequency of returns to the store and the eCommerce sites.  This alone is a powerful reason for retailers to revise their planning and forecasting cycles; it changes the consumer interest from checking for price reduction on product they wouldn’t pay full price to consumer interest for new products and willingness to pay full prices so they don’t miss out on the product.  One of the most difficult jobs for retailers is generating consumer interest to return frequently and this process of shorter product life cycles and ‘fast forward’ retailing is a great tool to help to generate interest and draw consumers 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 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?


The retail marketplace is changing at a breakneck velocity and this is leaving many retailers behind in their ability to meet the velocity of the changing demand.  The velocity of these changing demands requires retailers to change both their sales and inventory planning and forecasting strategies.  This is a very difficult proposition for the large legacy retailers because these same retailers have to change not only strategies but also the methods, culture and potentially software utilized in their planning and forecasting strategies.  These changes are inevitable however and cannot be put off any longer.  The marketplace continues to change and the velocity of change is only increasing as consumers continue to revise their shopping and purchasing habits is support of their changing lifestyles.

 

Consumers have already eliminated the separation between retail purchasing channels and retailers must not only eliminate this separation, they must also redesign their sales and purchasing strategies to eliminate the separation as well.  This presents both a challenge and an opportunity for the retailers to develop a collaborative relationship with consumers to redesign the strategies in a manner that provides direct input and guidance from consumers in addition to the direct purchasing and eCommerce shopping practices data that is required to support the planning and forecasting.  This consumer collaboration is a huge opportunity for retailers to understand and plan for the demands rather than simply react to the actual sales. 

 

This is a great challenge though for retailers not only because of the changes required to their planning and forecasting methods and procedures, it is also a challenge because of the change in culture that is required to also support these changes.  The large legacy retailers are comfortable in their reactive practices and have basically built their businesses around these practices.  Now consumers have changed their shopping and purchasing based on their own needs and have developed the capabilities to go around the normal retail practices of these large retailers to change the marketplace.  These changing demands require that these large legacy retailers change their culture, first and foremost, from a reactive to a collaborative practice in order to meet these changing demands and survive in this new marketplace.

 

Its a brave new world that requires dramatic planning and forecasting changes in both strategy and most probably technology.  Technology has provided consumers the opportunity to reinvent their shopping and purchasing practices and large legacy retailers must also use technology to support the required changes in sales and inventory planning and forecasting.

 

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?

 


In the current retail environment it is very difficult to forecast long term inventory and even product plans and this is especially difficult in the apparel and electronics markets.  This requires a change in strategy and execution for both the demand planning and forecasting practices and this will be a boat anchor for retailers until they change their strategy.  The changes in the retail marketplace driven by consumer shopping and purchasing practices is not going to stabilize and in fact, changes in demand and forecasting will only increase with these marketplace changes.  These changing consumer demands must be met with a forecasting and planning strategy and methodology change that will depend a great deal on expanded data collection and analysis along with expanded interaction and collaboration with consumers.

 

Many planning and forecasting strategies are focused obtaining the lowest cost for product purchasing which drives a methodology for planning a season and purchasing large quantities of products to support the majority of the season.  This causes peaks and valleys in purchasing and then in fulfillment to stores and eCommerce where the beginning of the season sees high volumes of receipts and then the remainder of the season the flow shifts to outbound shipping.  This planning and forecasting strategy has helped retailers to increase their profits and reduce their costs in the legacy marketplace.  This strategy has also created a high incident of highs and lows in inventory availability; the unplanned high volume demand causes lost sales at full purchase price, while the overstock causes sales at mark down price losses. 

 

My observations of retail and especially stores identified a large volume of mark-down overstock product in stores, so much so that in some stores I’ve seen between a quarter and half the floor space dedicated to overstock product mark-downs and in some store they have dedicated a large department in the store for overstock.  It seems like the retail marketplace is entering a new phase of off-price sales of product in order to address the overstock issue.  This cuts into the profit margin and then it can set off a series of reactions to lower prices earlier to reduce the volume of out of season markdowns.

 

Large retailers can learn from the fast fashion apparel marketplace and shorten their cycle of planning and forecasting.  This would require a redesign of the extended supply chain and supply chain partner agreements in order to change the planning and forecasting strategy however I do not think this is an insurmountable hurdle.  I think the greatest hurdle to changing demand planning and forecasting strategies and forecasting is the hesitancy to change by these large retailers.  The change would require re-thinking timelines, rethinking purchasing strategies and rethinking supplier partners in the extended supply chain and all of this means an increase in the continuous stream of effort required to support these new strategies, methods and partnership arrangements.

 

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?

 


One of the greatest impacts on the retail marketplace of social commerce is the quickening of cycles of activity and the forecasting cycle may be one of the most significant impacts because of the far reaching impact to the marketplace.  Outside of the impact of an increase of millennials in the marketplace, I don’t know that these demands have changed much from previous consumer demands.  The changes in cycles now are the results of the availability of options made possible through eCommerce, mobile technology and the growth in throughput of the networks. These factors have all come together at a point and a time when consumers are flexing their muscles in experimentation with methods to support their shopping and purchasing demands.

 

The quickening of cycles is evident in demand planning and forecasting with the level of overstock seen in stores along with a flattening and even decrease in sales for legacy retailers through their brick and mortar channels.  Another symptom of the quickening cycles is delays and inability to adjust to spikes in sales on products.  These changes in the velocity of information can definitely be overcome through collaborative actions across the extended supply chain with revisions to data collection and analysis along with improvements in demand planning and forecasting software.

 

There are many challenges for retailers, and especially the large legacy retailers with a large investment and footprint in brick and mortar stores, that require increased spending to overcome.  There is also an increase in consumer interaction and collaboration, which also requires additional spend in internet and mobile technology to support along with an increase in labor to provide the personal interaction that consumers require.  These points require significant and long term change in culture along with significant increase in spending to address.  These investments require significant support from the senior leadership to allow the changes to be implemented and more importantly to allow for the time to adjust and build the relationships with consumers that will deliver results.

 

I believe that the greatest challenge to the large legacy retailers is increased consumer collaboration.  This collaboration is a requirement to help the retailer identify consumer demands and trends in a manner that allows them to quickly and efficiently adjust their demand forecasting and planning.   Improved consumer collaboration has the greatest investment in people and requires a commitment to a long term investment in people along with a culture change to be successful.  I believe the most important point to this is that I do not believe that demand planning and forecast can be successful without a focus on consumer collaboration in order to understand and gain an edge and confirmation on changes in consumer demands.

 

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?

 


Inventory optimization is the key objective of the combination of forecasting and planning and the social commerce marketplace has dramatically changed both the priority and the practice of these activities.  The key change that must be incorporated is the velocity of changing demand and the impact on the forecasting window that is manifested with the new social commerce demands.  Social commerce has dramatically changed the retail marketplace and there are many factors driving these changes especially the impact of the fast fashion and the speed of changing demands across the marketplace driven by the expansion of eCommerce shopping and sales.  The changing demands of the marketplace must be incorporated just as quickly in the demand forecasting and planning models of retailers. 

 

Fast forward retailers have especially impacted the retail marketplace with their changes in the velocity of product change.  This has in reality coincided with the consumer demand changes in the retail marketplace and the fast forward retailers success has been related to their forecasting and demand planning practices, especially their increased change cycles of demand planning.  This is a practice that is important to all retailers in order to maintain their success.  The velocity of demand change is different in some market segments than others, for instance I don’t think the home appliance market changes at the same rate as the mobile phone market for instance. I don’t know if the fast forward apparel retailer recognized the change and revised their forecasting and demand planning practices but I do think that they recognized that consumers were changing their shopping and purchasing methods and practices and they are trying to meet these new consumer demands.

 

The key consumer change that is making the largest impact in forecasting and planning is the change in shopping and purchasing practices that has been brought about by the combination of eCommerce and the increase in millennial consumers in the marketplace.  The cycle velocity of shopping and purchasing has been changing over the last 10 years and the increase in millennial consumers has finally pushed the practices to the tipping point where the changes to the marketplace is driving dramatic changes across the retailers.  I think we  are seeing changes in the marketplace now driven by the retailer inability to forecast and plan at the velocity that is demanded by consumers as a result of their changing lifestyles.

 

Unfortunately for the large legacy retailers the marketplace changes require a large investment of money and resource focus and skills in order to react appropriately to the changing consumer demands.  Retailers that are impacted the most are the legacy department store and large chain retailers that have a heavy investment in brick and mortar real estate.  The marketplace though will not allow retailers to delay or ignore these changes in forecasting and demand requirements and retailers must invest or die.

 

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?

 


Retail demand planning is a very difficult activity in the current tumultuous marketplace because of the velocity of change in consumer demand and the length of the extended supply chain.  Forecasting and inventory planning takes on new importance in this marketplace to support the velocity of change.  Consumers have used the social networks along with the omni-channel tools and capabilities to take control of their shopping and purchasing to support their changing lifestyles.  The key point to successful demand planning is understanding the consumer lifestyle demands and this requires a very flexible and also robust forecasting and inventory planning and management practices in order to react to the velocity of changing consumer demands. This supply planning must be a focus of the retailers now in order to support the changing marketplace and survive.

 

For a long time the retail supply chain was developed and focused on cost containment and this, in turn, drove a focus on obtaining the most advantageous price in order to support the low cost strategy and maintain a level of profit.  This focus on price required purchasing large amounts for the entire season in order to command a low price to support their strategy to create consumer interest, traffic in the stores and sales based on low prices.  This focus on the season demanded a long range forecast horizon that in itself created a level of risk in the forecast and the supply demand.  This in turn creates a risk for a higher level of overstock inventory that must be addressed through price reductions.  This created a downward spiral that taught many consumers to delay purchases until the end of the season when they know the product pricing would be dramatically reduced to make room for the next season product. 

 

This is a negative cycle that drives additional costs in the retail demand supply chain that overshadows the original low cost purchase thereby negating the low price strategy.  These new cost pressures drive a requirement to improve the demand planning and forecasting to address the overstock risk.  This new pressure on demand planning requires a shorter planning horizon in very large part due to the velocity of change driven by consumers and the social commerce marketplace.  This shortening of the demand forecast time period allows the forecast to be more accurate, however this shortened time period requires a shift in the supply chain to reduce the buy quantity and then find new and near shore supply chain partners that can complete quick turnaround purchases.  Another option to the shortened supply cycle would be air shipments of smaller quantities. 

 

Social supply chain planning needs to change dramatically as a result of the changing retail marketplace.  These changes though are dependent on retailers changing their practices and more importantly their supply chain to support the shortened cycle and flow.  These changes will increase inventory efficiency and which in turn should recoup some of the additional costs related to supporting the changing supply chain demands.  The good news is that technology improvements can support these changing demands more efficiently than ever, the bad new is that it will require retailers to spend on the new 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 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?

 

tbrouill

Planning Collaboration

Posted by tbrouill Aug 3, 2017


Supply planning can be a very difficult process requiring a great deal of information in order to increase the accuracy of the plan.  Planning collaboration increases the accuracy of the plan by obtaining and including information from your partners across the supply chain. Retailers can increase their supply planning accuracy by including consumers in the planning process to help to determine demand.  Supply planning is very important to the success of an organization and especially retailers and this planning is just getting more complicated on a daily basis.  Miss planning can have a huge impact and considering the speed of business these days the difficulty with a planning failure is the ability to recover.  There is now less time to recover from a missed plan and this requires a great deal of information, and in the case of retailers on key factor to success in planning is the level of collaboration for consumers.

 

There is a great deal of uncertainty in the retail industry these days due to the velocity and amount of change driven by consumers.  These changes are not random and in addition, these changes are building on each other along the way as consumers experiment.  This uncertainty places a great of pressure on the retailer to incorporate the changes in their interaction and relationship with the consumer.  This level of change also places a great deal of pressure on supply planning activities to adjust to the changing environment. 

 

These changes and the impact of these changes to the supply planning capabilities are not insurmountable however they do require a level of planning and collaboration that has not been previously required.  Data is required to be successful in supply planning, market data, product data and sales data are all key aspects to the planning and this planning cannot simply change direction on a whim due to the time between planning and delivery in today’s extended supply chain.  This is why it is so important to include as much data as possible in the planning process. 

 

The retail marketplace can learn a great deal and improve the planning process by evaluating and implementing supply planning practices of the fast forward fashion retailers.  Consumer collaboration provides a method to obtain critical early information to use in guiding the supply planning process.  Then the increase in velocity that bleeds in the supply planning process can be understood and incorporated earlier in the process to support the velocity of change.  It seems to me that the key challenge to the retail marketplace and supply planning is the ability to quickly and effectively incorporate information in the planning process.  This also requires shortening the cycle of the supply chain and delivering less in a more frequent basis to allow the changes in the marketplace to be quickly implemented. 

 

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?

 

tbrouill

Collaboration Networks

Posted by tbrouill Aug 1, 2017


Networks supporting and encouraging collaboration have been growing in importance and reach for years now and the expansion and growth of millennials in the retail marketplace has increased the use and importance of these networks.  The only real surprise, in my opinion, is that retailers have not prepared for changes resulting from the growth of these networks.  In hindsight it seems clear to me that the marketplace and these networks utilization have been waiting for a tipping point and this tipping point came with the growth of the millennial generation in the marketplace.  Over the last couple of years the growth and expansion in use of these collaboration networks has allowed consumers to turn the tables on retailers and take control of their shopping and purchasing practices to support their changing lifestyles.

 

The success, or failure, of retailers is now dependant on their ability and commitment to re-align their focus and support to embrace the consumer collaboration changes.  These consumer collaboration changes also drive changes in the retail supply chain that will ripple through the supply chain in ways that can be difficult to understand and requires quick reaction time to adjust the flow and direction of inventory.  The changes driven by consumers require integration throughout the supply chain in orders to meet the demands. 

 

Currently the retail supply chain is based on a simple and straight forward level of collaboration and partnership that supports the legacy requirements of the retail marketplace.  The retail marketplace is now in upheaval and this will also dramatically change the supply chain relationships and interactions.  The also requires retailers to change their planning and forecasting process to implement a much shorter cycle time which will drive the disruptions into their forecasting and planning models.  These changes to the entire supply chain collaboration model require focus and support from the senior leadership across the entire supply chain and will bring the supply chain partners even closer in this collaborative relationship.

 

Wal Mart and Amazon may be the two retailers best prepared and most committed to meeting these types of changes because the supply chain capabilities and focus are ingrained into the DNA of these companies.  Wal Mart is probably best at process and supply chain integration while Amazon is best at imagination and acceptance of risk and potential failure.  Both of these cultures will do well in this upheaval for different reasons, Wal Mart for stamina and focus on process and integration while Amazon will drive the disruption with imagination and willingness to accept risk and potential failure.  Other major retailers will simply follow their lead which which only increase the number of failures during this period.

 

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?

 

tbrouill

Collaboration Retention

Posted by tbrouill Jul 26, 2017


Retention of consumer collaboration partners is very important and requires a great deal of focus and continuous interaction.  Consumers are only enticed to participate based on content and self interest and they do not continue to engage unless the level of interest continues and the interaction and opportunities are continuously refreshed.  It is important to retain consumers in this relationship in order to build the customer base and also to develop a relationship.  Social commerce is all about relationships and regular interaction between the retailer and the consumer and since there is no contract to ensure the consumers continue to engage in the relationship it is up to the retailer to continuously find reasons for the consumer to return and engage.  This requires continuous refreshment and also communications with the consumers to inform of new features and opportunities to participate and shop.

 

The engagement is about interest and encouraging the consumer to return to the retailer and then once there the interest must remain high for the consumer to remain on the site.  Therefore, the goal of the retailer is the return of the customer and retention with the retailer because the longer the consumer remains in the store or on the web site the higher the likelihood the consumer will purchase.  Consumers can be encouraged to return to the stores and the web sites by an interest or a need, then once there the consumer can be encouraged to stay and shop with a hope of the consumer making opportunistic purchases. 

 

Retailers are attempting to attract consumers not just for one or two purchase but for a lifetime of purchases.  The Internet and eCommerce has fundamentally changed the concept and demands to develop a lifetime customer when the consumer used these platforms to wrest control of their shopping and purchasing practices to meet their changing lifestyles.  To a very large extent retailers created this new practice by a single minded focus on low price.  This focus has changed the consumer perspective and they have used the Internet to the detriment of the retailer because the Internet allows consumers to shop at their own discretion and encourages consumers to jump from site to site in their search.

 

Retailers now must change their focus from a one dimensional price focus to a focus on engaging the consumer and providing a virtual shopping environment where the consumer will stay and interact with other shoppers and their friends and family.  This new focus is very much on collaboration in order to retain the shopper.  The challenge for retailers now though is related to technology, skills and focus on interaction. The retail industry in general is not based on leading edge technology so there is an investment required in both technology and skills to build the technology capabilities.  Then these same retailers must increase their focus on engaging with the consumers to collaborate on defining and then meeting consumer demands.  These hurdles are extremely difficult to meet however the reward is the long term success of their business.

 

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?

 

tbrouill

Collaboration Support

Posted by tbrouill Jul 25, 2017


Collaboration requires a great deal of support and effort and most importantly encouragement in order to be successful and consumer collaboration requires and even greater amount of these three ingrediants because the consumer must be re-engaged every day in order to maintain a usable and value add level of collaboration.  Collaboration requires a level of engagement in order to deliver value to all partners and this level of engagement can only be encouraged for consumers.  Consumers must be interested and encouraged to maintain the level of engagement and this can be very difficult because there are many things vying for consumer attention in their life and frankly collaboration with retailers is not very high on that list of activities.  For this reason retailers must maintain a large number of channels and also a continuous stream of communication with the consumer. 

 

This stream of consumer communication must be value add as well and it must be something other than a steady stream of discounts and sales.  The communication must provide hints and suggestions on product usage and also must include phrases and opportunities for consumers to reply and provide their own suggestions for usage.  This is where the social networks come into play to support a broad spectrum of response and usage on an open platform that encourages participation and engagement.  Retailers are not required and they absolutely should not develop their own social networks, instead they should participate and engage on the existing social networks.  The social networks provide a means and a ready audience to communicate and collaborate with consumers and develop a community.

 

The next areas of communication and participation is related to mobile apps and mobile location based shopping services that will reach out and engage consumers based on their location and proximity to stores and malls.  This provides another means to nudge and engage the consumer to collaborate and encourage consumers to participate and shop.  These tools provide a means to simplify the shopping and purchasing experience and an opportunity for the retailer to leave a positive impression and encourage participation and collaboration.  The retailer must engage the consumer at every opportunity and the mobile technology and wireless networks provide another means of communicating and engaging by encouraging interaction. 

 

All of these methods of engagement require a solid technology framework and control tower framework capability to capture and collate data for consumer engagement.  This requires acceptance that the collaborative engagement will never be ‘completed’ and that it will always require a high level of involvement to encourage active and continuous participation from consumers.  This will most of all require a high level of support and encouragement from leadership to ensure the continued engagement and growth of participation.

 

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?

 


Collaboration does not just happen, it requires commitment and coordination to be effective and delivery benefits to the collaboration partners.  This is especially true in developing a collaborative partnership with consumers due to the need to maintain interest and encourage the consumers to continue the relationship.  A collaobrative partnership between professionals and companies is defined and measured via a formal agreement, however consumers do not and will not enter into a professional agreement to collaborate with retailers.  Retailers must grow a relationship with consumers to encourage collaboration and this relationship must continuously provide reasons and encouragement for consumers to participate in the collaborative relationship.  This effort requires coordination and planning to be effective.

 

Collaboration coordination requires careful planning along with a mechanism to collect and then implement changes based on feedback mechanisms.  This all requires commitment from senior leadership and also a mechanism to store, track and measure the results of the feedback.  The strength of the collaborative partnership cannot be maintained extended through haphazard activities, it requires a great deal of information, planning and coordination to be successful.  This requires a tool to collect data and support analysis of the data so that the feedback can be used to identify and direct new methods for shopping and purchasing.

 

This tool provides a control tower concept to support and coordinate and improve collaboration opportunities. Collaboration continuous improvement must be a focus and the control tower tool provides methods to measure and evaluate improvements to increase the collaboration level and in turn support new shopping and purchasing demands of consumers.  This continuous improvement focus provides a method for retailers to collect feedback from consumers to feed back into the improvement process.  The control tower provides the means to store and analyze the information.

 

Consumers are fickle and have short attention spans and this requires a continuous level of attention in order to maintain interest in the consumer.  This requires a greater level of focus and, in addition, a greater level of information to ensure greater attention is focused on the topics and that are important to consumers.  This level of detail must be stored for access and research and this belongs in a control framework that collects and supports relational analysis. 

 

Retailers will do well to focus on developing two relational frameworks, the first to collect and store data to allow for big data relational analysis and the second to support quick integration of new apps for support of consumer demands.  I do not think retailers can be successful without both of these frameworks and capabilities.  Then the focus and the work for retailers is can be the collaborative relationship with consumers that will remain fresh and interesting for 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?

 

tbrouill

Experimentation Culture

Posted by tbrouill Jul 21, 2017


Retailers must develop and embrace a culture that supports and encourages experimentation.  This can start with a focus on consumer relationship experimentation, although I firmly believe this will quickly expand throughout the enterprise as the realization of the scope and breadth gains understanding.  I focus on a culture change here because it must be embraced by the senior leadership in order to succeed across the organization.  Individual initiatives will result from this culture change to support and develop the capabilities.  The senior leadership though must focus on the strategic direction to change the culture and encourage experimentation throughout the organization.  This will be difficult to maintain a focus especially while the retailer is navigating through a great deal of disrupting changes.  I believe this is the only way though to successfully navigate the changes and disruption.

 

This experimentation culture is not a new phenomenon, it has been embraced and expanding in the consumer market and especially in the technology market for years.  It has now reached a level though in the retail marketplace that it cannot be ignored.  General retailers and especially the large retailers have never chased bleeding edge technology however I am not speaking of bleeding edge technology in this place either.  I believe this can quickly be addressed through an expansion continuous improvement that focuses on consumer collaboration and demands.  The retailer viewpoint and support must be changed from large project implementation to a smaller cyclical cycle of improvements.  When viewed this way it should sit very well with the retail senior leadership.

 

The challenge however will be with the implementation of a control tower type of technology that allows functionality experimentation in addition to a change in culture to reach out and collaboration with consumers.  This cannot be implemented in a controlled manner without a control tower technology to route and monitor, the changes are coming too quickly and are frankly disruptive to a legacy type of technology framework and process and methodology framework.  The control tower supports change in a manner that is efficient and allows for experimentation quickly and efficiently. 

 

There are many suppliers and practices in the market that can help with the technology aspect of a control tower implementation.  There are also many service providers that are capable of helping to implement a strategy of experimentation and collaboration.  The key ingredient to this challenge is the desire and commitment of senior leadership to support and drive these changes into their organization.  Unfortunately it is too easy to go along with the legacy process and procedures, it is always easier to stay the course.  However we are seeing that the retailers late to the table or still fighting change are the retailers that are struggling the most to survive in this new marketplace.

 

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?

 

tbrouill

Consumer Experimentation

Posted by tbrouill Jul 19, 2017


The growth of the Internet along with high speed network capabilities brought a time of experimentation and expansion into new tools and capabilities.  The growth and expansion of wireless and mobile technology quickened expanded the experimentation and quickened the change process.  Consumers are now probably the greatest segment of experimenters in the marketplace.  With the expansion of millennial generation in the marketplace this pace of experimentation and change has only quickened.  One of the key driving factors for this increase in experimentation and change is the social networks and the play store.  The social network along with the expansion of focused ads in the web has increased the visibility of new tools and capabilities that have drawn interest and increased consumer experimentation to incorporate new tools into their online experience.

 

Consumers embraced these new opportunities to bring about a new explosion of experimentation to determine how to use the new tools and social networks together.  The growth in millennials in the the marketplace sealed these practices and really pushed the market disruption into overdrive.  This experimentation has caught the omni-channel retailer by surprise and this disruption has impacted their business model in ways that they have not come to understand yet.  Consumers have taken control of their shopping and purchasing and this is the key reason for the disruption in the marketplace.  The major retailers are no longer in control of the marketplace and can no longer dictate how and when consumers purchase and shop.

 

Experimentation is not new in the retail marketplace, what is new though is the level and types of experimentation possible through eCommerce, and the expanded availability and capabilities of technology tools that consumers use to shop.  Consumer experimentation and the technology tools and capabilities have reached a critical mass and now consumers are mashing tools in ways that the creaters of the tools did not imagine.  This experimentation leads to a dramatic and discontinuous increase of change in the retail marketplace.  Retailers must stop fighting and must embrace the changes in the marketplace to survive.  This means that retailers must change their culture from a relatively closed, command and control culture, to a more open and collaborative culture.  This collaborative culture must embrace consumers to open the communications and create a shared experimentation method that encourages participation from retailers and consumers to develop new methods to support the consumer demands.

 

I think that Amazon’s greatest practice and belief is the power of experimentation.  Amazon encourages experimentation and does not fear failure, don’t get me wrong I understand that continuous failure is not a successful strategy, however fear of failure is also not a successful strategy.  The draw of consumers to Amazon is not only the price and the ease of purchase it is to a large extent the Amazon belief and practice of experimentation.  These practices have encouraged new customers to try the retailer and have also created new market opportunities and even markets.  

 

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?

 


In order to be successful in this new retail marketplace retailers must work to become social commerce trend leaders.  Social commerce trends are continuously changing and adjusting as consumers change and adjust their practices and shopping and purchasing methods this means that retailers in turn must adjust and change in order to meet the changing consumer demands.  Retailers have two methods to meet these changes; either through chasing the changes or guiding the changes through collaboration with consumers.  In any course, the consumer has already taken control of their shopping and purchasing practices by embracing the practice of experimentation and integration of tools and capabilities available via the web and mobile apps.

 

Retailers have no choice now but to change their only decision is the method for change.  Do retailers change in a reactionary manner based on consumer tools or do retailers change based on consumer collaboration.  No matter the course chosen by the retailer, they will be changing and these changes will surely disrupt the way they do business.  In my opinion, the best option that provides the greatest long term value and supportability to the retailer.  The direction seems straightforward and that leaves the decision and the strategic plan to the retailer. 

 

I see that the strategic direction that seems to have been chosen by at least some of the large retailers is a reactionary strategy that is based on acquisition of tools that allow the retailer to support current consumer demands.  What I do not see though is changes to the retailer culture to collaborate with consumers in developing new practices.  This will become the defining factor in the long term success of these retailers.  It will be difficult for the retailer to chase the trends and capabilities because the velocity of these changes is increasing.  These changing trends of consumers are based on trial and error of tools and especially mobile apps that are not in the control of retailers and cannot be planned by the retailers.

 

These changes require active interaction with consumers to understand the reasons and the direction for their experimentation.  This is the essence of social commerce trend leaders; the practice of experimentation based on collaboration with consumers.  This is really the next development in focus groups that have always tried to understand consumer demands.  In this new world though the focus group is replaced by collaborative practices with the consumer to collaboratively develop new methods and practices for shopping.  I see Amazon moving in this direction through their interactive base of consumer communications and data analysis coupled with their penchant for experimentation with new tools and technology.  If legacy retailers to not change and embrace this method of experimentation and collaboration with consumers they will be delegated to remain followers that spend large amounts of time and money chasing trends that are past their prime.

 

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?

 


Trial and error is a key factor in developing a collaborative relationships and especially in developing that relationship between consumer and retailer.  Consumers are a fickle group with a short attention span and this drives a level and velocity of change in interaction that is breathtaking and also extremely intimidating for the retailer.  Many of the larger retailers are struggling with the concept and as a result are attempting to buy into the consumer collaboration through acquisition of tools.  While it is important to use the appropriate tools in collaborative efforts it is also probably more important to use and interact with the tools to engage the consumer and this is the part that requires active participation by the retailer.  The difficulty is that there is no guidebook on what works for consumers so there is a great deal of trial and error involved in the process that can make the retailer uneasy.

 

The majority of retailers and especially the larger retailers are not known for their experimentation in new technologies or retail practices.  These retailers are followers that wait for the leaders to vet new technologies and practices before embracing and implementing themselves.  This practice has been very productive for retailers in the past and this practice is also driving the current strategy for the larger retailers in acquisition of new technologies and tools.  In other words, these large retailers are embracing the new technology through acquisition after this technology has been vetted by the marketplace.  This strategy is a very good way to bootstrap their capabilities to meet the demands of the marketplace.  However, without a paired new human practice to collaborate with consumers and experiment through trial and error these technology capabilities will only allow these retailers to remain two steps behind demands of the marketplace.

 

Retailers must pair the technology capabilities with human practices to collaboration and engage consumers direction in order to discover and implement new practices to support consumer demands.  This pairing requires a long term commitment to change their culture to interact and collaborate with with consumers along and with this a commitment to encourage experimentation and an acceptance for these experiments to fail.  This requires a long term commitment from leadership to accept and even encourage failure in experimentation supporting consumer demands.

 

These large retailers must change their practices from trend followers to trend leaders in order to survive in the marketplace.  The velocity of change driven by consumer curiosity and experimentation will not allow for retailers to wait for practices and methods to become engrained in the marketplace because the new velocity of change does not generally support standard practices very well.  The new standard practice is change and this change requires a method of trial and error to experiment with the changing consumer demands.  This is the driving factor of the market disruption and retailers must embrace and change in order to survive. 

 

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?