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Tom Brouillette Thoughts at Large

781 posts


The trend towards social commerce has been growing for years now and over the last year this growth has really sped up dramatically due in large part to millennial growth and mobile technology.  This year is seeing the dominance of brick and mortar retail staggering and the impact on the large legacy retailers, especially department stores is dramatic.  It seems that each day and week there are more announcements of declining store sales and store closings with the most dramatic being the impact on Macy’s departments stores.  On the other side of the equation we are seeing large investments in online retailers by Walmart and and at the same time large investments in brick and mortar outlets by Amazon.

 

All of these factors lead to a dramatic upheaval in retail where long held practices and strategies are uprooted by a shift in consumer interaction that has not been anticipated by the legacy retailers.  I have started to refer to legacy retailers as a designation for the larger department store retailers that have been the anchor for large malls and also a driving factor in retail trends.  These legacy retailers seem to be in a major upheaval brought on by this new social commerce and they are frantically trying to adjust and determine a direction to incorporate the changes being demanded of them now.  This requires a shift though in more than strategy, in requires a shift in culture as well. In fact the strategy shift from a corporate perspective is straightforward and simple. The struggle now is the required culture change to define and implement the strategy.  These retailers struggle with the change, they are like a large ocean liner changing direction, when the retail marketplace now requires a nimble sports car.

 

Amazon is at the forefront now in creating this new retail marketplace and as usual they are not waiting on others to catch up.  Amazon is now putting together the pieces of their services to create a new marketplace that blends services such as video, music and delivery of these services with shopping and purchasing.  Amazon has embraced the concept of social commerce and they are creating the marketplace as the go.  They realize and embrace the requirement for nimble actions and reactions and they have developed a set of services that provide a robust and flexible framework to support social commerce.

 

There will be no time for the legacy retailers to wait to understand the direction before making a decision and incorporating the change in direction.  This social commerce is uprooting the retail marketplace and legacy retailers must change and embrace this direction or there will be a great deal more fallout and loss of these retailers.  They don’t have time to raise funding they must increase spending and then follow with the adjustments to their real estate holdings.  They must realize that a long term strategy now must focus on making it through the next year.

 

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?


Retailers must now embrace the social commerce in order to maintain their share in the market as a result of the consumer embrace of these practices.  This will be very difficult for retailers because is requires a fundamental change to the manner in which the retailer not only interacts with the consumer but also, and more importantly, the attitude towards consumers.  This change must include retailers collaborating with the consumer to better understand trends and then to react and incorporate these trends.  Then in order to incorporate the trends retailers must also invest in a robust and flexible commerce process and technology platform that supports the velocity of changes that will come about from the consumer collaboration.

 

A while back when Facebook grew in importance in the retail marketplace many retailers were caught flat footed and had to scramble to implement a process to integrate Facebook into their marketing strategy and toolset.  The retailers incorporated other social networking tools into their practices as well, all pretty much in the same manner; there was a presence created and then the content and interaction from that presence was managed separately outside the eCommerce sales framework.  This worked for a while until mobile and wireless technology grew in acceptance and now the consumer is demanding and integration across social networking and commerce tools to improve their shopping and purchasing capabilities.

 

These technology changes are the retailer pain point because it essentially requires a new technology framework that supports collaborative and iterative changes without a great deal of overhead.  This is where the culture collides with consumer demands and this is where the large legacy retailers are struggling and losing sales due to their struggle with meeting the new consumer demands.  This is where the legacy retailers will require large technology investments to support the new consumer demands.  Large legacy retailers have a huge investment in real estate and robust operating technology that focuses on the cost reductions that can be realized through scale.  Consumers now are changing their methods of interacting and more specifically shopping and purchasing practices that greatly impacts the retailer investments in real estate and technology.

 

This is the root of the issue and retailers are now beginning to struggle with these new consumer demands and practices in order to survive.  This is why you see now many large retailers reducing brick and mortar store presence in order to pay for the cultural and technology changes.  These changes will cause additional fall-out in the retail marketplace in the near future as retailers fail to change.  We are already seeing the impact on large legacy retailers that will lead to a dramatically different retail marketplace in the near future. Retailers must act quickly now because the consumer is continuously developing new methods of shopping and purchasing to meet their needs.

 

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?


Consumers have not just accepted, they have wholeheartedly embraced social commerce to such a degree that it is causing a major disruption in the retail market.  I saw reports of a recent survey stating that consumers are comfortable now with omni channel purchasing and I think this is really an understatement to say the least. Now there are reports on major news outlets trumpeting the potential end of department stores!  As with most reports on the major news outlets this is somewhat inflated and only provides the most basic background related to closings announced and the increase in online purchasing.  As I have mentioned previously we have entered a period of major disruption and there will be a great deal of fall out from this period.

 

This disruption is not immediate and did not suddenly occur overnight, the signs and build up to this have been accumulating over the previous few years and retailers to their credit have also been adjusting to these changes.  We have reached a point now where there has been a convergence of internal and external factors that have come together to bring a tipping point for the major legacy retailers.  In this case the impact though is on the larger legacy retailers in forcing a quickening of changes that require faster reaction and adjustment times than these large legacy retailers are willing to engage.  This is a cultural impact as well as consumer marketplace demands that have converged to disrupt the retail marketplace.

 

This convergence from the consumer perspective has come about as a result of a few factors:

  • Technology improvements coming from the mobile technology and especially the wireless technology arenas.  Consumers have embraced these technologies to simplify their shopping and support their changing lifestyles.
  • Extended supply chain improvements especially in delivery to allow consumers to coordinate delivery in the manner that supports their needs.
  • Growth and acceptance of Internet retailers and especially purchase and delivery options offered by Amazon as an example.
  • Growth of millennials and their mashing technology tools and social networks to support their shopping and purchasing practices.

All of these factors have come together to dramatically impact the retail marketplace and with it the large legacy retailers that are now struggling to meet these changing shopping demands. 

 

Consumer acceptance of social commerce is dramatically impacting the retail marketplace and there is now no turning back.  The impact of millennials on the marketplace will continue to grow and the changes they are driving will only speed up as the acceptance grows across the marketplace.  Retailers now must change both their culture and their technology and corporate infrastructure to increase flexibility in order to succeed in the future.  The current marketplace fallout with the large legacy retailers is more the result of these retailers recognizing and trying to account for these changes than the failure of the department store.

 

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

Social Commerce Culture

Posted by tbrouill Jan 10, 2017


Social commerce growth and adoption by consumers is a culture change for legacy retailers and not just a new method to interact and sell to consumers.  This requires a culture change of legacy retailers to change the way that these retailers interact with consumers and this will be the greatest difficulty for these retailers.  Legacy retailers must revise their own internal and consumer facing activities to take into account and support consumer demands to expand the social interaction across channels and partners in the channel.  This culture change must also extend across all partners in the social commerce marketplace.  This is no longer a question of sales channel, it is now the total consumer interaction across channels and this is the reason for the need of a culture change to support this new marketplace. 

 

This change coming is can be loosely compared to the introduction of social media networks on the retail marketplace and is beginning to have the same impact on retailers as that first wave of social networks.  You remember the impact of Facebook on retail almost ten years ago when consumers had embraced this new technology to share reactions to interactions with retailers and the struggles for retailers to develop a presence in this new technology.  Social commerce is the natural progression of consumer practices in the mash up of social networking and omni channel retail sales.  You can see this across the span of social networks that have embraced marketing and advertising in their social networks to support these networks.  Another growth area impacting the retail marketplace is the growth and consumer embrace of product search and comparison, especially price comparison. 

 

The catalyst for this major change in retail is the introduction and embrace of mobile and wireless technology.  These technologies have allowed the consumer to combine and share in new ways that are now significantly impacting the retail marketplace.  This is also impacted by the growth of technology companies such as Google on the retail marketplace.  Retailers seem to be caught flat footed by these changes as they were when Facebook first changed their interaction with consumers. 

 

Retailers must learn the lesson that consumers are taking control of their interaction with retailers and retailers must change their culture to embrace these new technologies and collaborate with consumers to develop the next generation of commerce.  Retail cultures have been driven by major events in the past and now these major events have morphed into a continuous stream of changes and revisions that must be embraced by retailers and even lead by retailers in order to increase consumer retention in this new and changing 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?


Legacy retailers must really step up their collaboration practices in order to succeed in the social commerce market.  This means that they must focus on the technology collaboration tools and integration of mobile collaboration technology while also providing a human interface to the collaboration to support a direct consumer interaction that encourages participation.  These requirements are nothing new to the retail environment, however they take on a much greater level of importance in the social commerce marketplace. Consumers are trying to engage with retailers as is demonstrated by the success of the Amazon customer retention programs legacy retailers must now invest in the technology and the processes and people to support these investments.

 

Legacy retailers are really in a good position to support these consumer demands because they already have the reputation and the base sales from consumers.  These retailers though must implement a technology investment program in order to support the ongoing demand for these consumer demands.  Consumers will not slow their demands and expansion of capabilities and legacy retailers must implement a continued investment program to support the demands going forward.  This requires a change in culture for the large retailers in order to implement a continuous investment program that supports incremental investments that support changing consumer demands.

 

Going forward the successful retailers will excell in the social commerce marketplace and this success begins with developing a relationship with consumers.  Legacy retailers have an advantage because they have an infrastructure of physical retail outlets with a consumer base that provides direct interaction with consumers.  These legacy retailers are at a disadvantage though because they are focusing mainly on operating cost reductions.  These retailers need to change their strategy and also their culture to encourage and support direct consumer interaction across sales channels to create a seamless marketplace for consumers to shop and purchase.

 

Legacy retailers must implement a difficult culture change including breaking down the barriers across channels and changing their technology investment strategy  in order to succeed in the social commerce marketplace.  These legacy retailers do have an advantage in their marketplace framework across channels, however they must change their integration and utilization of the channels in order to create a blended consumer experience that focuses on the positive consumer experience and not the retailer management benefits.  Legacy retailers have been slow to embracing these changes because of the difficulty and resistance to change in the culture.  Legacy retail leaders must focus on changing the culture and this will be a long process to not only start the process but also an even longer process to ensure this new culture will flourish.

 

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

Social Commerce Direction

Posted by tbrouill Jan 7, 2017


Social commerce has introduced a practice of discontinuous change to retail that will drive the market going forward in a manner that will not allow retailers to rest and will also require a discontinuous level of investment that will be the only thing that remains constant.  In this social commerce model there is no end state there is only a continuous journey with changes and turns that individually are extremely difficult, if not impossible, to predict.  This model is a dramatic change for large legacy retailers that have developed a model that takes advantage of size and bulk to drive profits, this model is being turned on its head by the leveling effect of social commerce that focuses on the consumer demands.

 

The social commerce impact is reverberating across the market and impacting all areas and partner in the market and one major change in this new landscape is that consumer driven demand and purchasing is no longer driven by the offerings of the large legacy retailers.  It seems that these practices of the large retailers is relegating their market share to commodity type purchases that are based on price and product availability.  This is a very difficult situation to find yourself in because it is so difficult to extract yourself once it becomes the consumer's’ view of your place in the market. On the positive side though, retailers such as Amazon are turning many purchases into commodity type purchases.

 

In my opinion, Amazon is probably the best example of a retailer that embraces and also is driving social commerce.  I think that Amazon is in fact the one retailer that is focused on building the components now that will make up the framework of the social commerce market.  Amazon has made developed a steady progression of tools and shopping capabilities while at the same time maintaining a focus on consumer social integration that has lead the market in developing and growing social commerce.  Amazon understands that consumers are changing their shopping and purchasing practices and Amazon is continuously experimenting with new tools and capabilities to engage the consumer and encourage active participation by the consumer.

 

Amazon is leading the way and now and legacy retailers need to develop their own strategy to engage with consumers, they should not focus on copying Amazon tactics, instead they should be developing tools and capabilities that engage their own customers.  Legacy retailers have a great advantage in the span of their consumer interactive options and also their reputation with the consumers.  These retailers are wasting their time in chasing Amazon because they will never win, instead these retailers need to focus on developing their consumer relationships that take advantage of their own strengths.

 

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?


Social commerce impacts the entire retail marketplace from the retailer to the consumer all outlets in between including real estate, food services and entertainment services.  Consumer changes related to the expansion and embrace of social commerce are impacting the viability of large legacy retailers along with the small and mid-size regional type retailers to meet the consumer shopping and purchasing changes. Real estate is impacted because these social commerce changes are causing a reduction in consumers that shop in all types of malls and especially the large malls that are anchored by the large legacy retailers.  Food and entertainment services are collateral impacts related to the reductions in consumers shopping in all types of malls.

 

The impact of social commerce on large legacy retailers has already impacted the real estate market for malls in the form of dramatic reductions in consumer mall traffic and also closing of anchor stores in many malls.  This is requiring mall management to develop a new strategy to bring consumers back to the mall and this requires retailers to incorporate consumer social commerce practices into their strategy.  We may be coming into a time where large malls are not shopping havens that depend on large legacy retailers for traffic.  It seems that the small specialty retailers are not impacted as much by the consumer changes brought by social commerce and this must be taken into account. 

 

This doesn’t take into account the impact on food and entertainment services. Reductions in mall traffic and shifting to eCommerce purchasing is also dramatically impacting the food and entertainment services.  The reductions in traffic, along with streaming video services is impacting the mall related food and entertainment services as well.  These changes require the related food and entertainment services that depended on mall traffic to also retool and develop new methods to draw consumers.  Whatever the outcome of these changes you can rest assured that there will be a cost to the reals estate.

 

It seems that malls are becoming gathering places for teens that have no other outlet, they are too old to want to stay at home and too young to have the means to explore other entertainment options.  In addition to this they are also not economically capable to support malls with their increased presence in the mall.  These teens and young adults are simply using the mall as a place to gather and interact rather than engage in the ‘normal’ mall economic activities.  Generally their economic activities consist of food and drink purchases from the food court.  The food court has turned into the gathering place and this is further impacting traffic to the malls.

 

There is a ripple effect across the entire marketplace brought on by consumer social commerce and this is, in turn, driving changes into the entire marketplace.  Consumers have embraced the social commerce practices and now the marketplace is struggling to reconcile and adjust to these changes.  The cost to the market will also be dramatic to adjust to these changes as changes are implemented to address the consumer demands.  This shake-out in the marketplace impacts all participants including employment and at this point it is difficult to foresee the endgame and quite frankly I don’t really know if there is what would normally be considered an endgame in the cards for the market.

 

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

Social Commerce

Posted by tbrouill Jan 3, 2017


Where omni channel retail supports purchases across all retail channels, social commerce encourages shopping across all channels and social network capabilities to allow shoppers to support their own personal lifestyle requirements.  Where omni channel purchasing requires support from the retailer, social commerce allows the consumer to construct the social capabilities across channels and technologies as required by the consumers’ changing needs at the time.  Social commerce now is at the root of the changes that are confusing the retail market and driving legacy retailers to the brink of failure.  The difficulties for retailers are compounded by the fact that consumers have taken control of their shopping practices and this is disrupting the purchasing methods that are the foundation of retail strategies and support practices.

 

Social commerce is defined and driven by consumer capabilities and imagination that enhance the consumer shopping capabilities currently supported for the most part by shopping malls.  Retailers are struggling with this concept now because they have not had to take these demands into account in their support activities in the past.  This level of control exerted by consumers now through social commerce is foreign to the large legacy retailers that have been accustomed to allowing shopping malls support the shopping demands of consumers.  The entertainment and food choices that have always enhanced and encouraged consumers to spend time at the mall are also being overwhelmed by the consumer changes driven by social commerce.  Technology now allows consumers to select their need, whether shopping or entertainment and they can compartmentalize to meet their demands to fit into their lifestyle.  Movie theaters are impacted now at the same level as retailers from the expansion of technology capabilities impacting the movie experience such as streaming video.  In addition, social commerce impacts the real estate market and especially as it relates to finding new uses for large malls that are left empty from the reduction in consumer interaction in the brick and mortar stores.     

 

Social commerce impacts the entire retail supply chain, from manufacturers to the purchase, whether that purchase is online or in a brick and mortar outlet.  The consumer demands are changing faster and more fluid as a result of the growth in purchasing by the millennial generation and these changes are overwhelming legacy retailers because these retailers are struggling with culture changes in collaboration along with shopping and resulting purchasing changes.  The greatest struggle though for these legacy retailers is the cost to retool their legacy technology to allow them to support these fluid and continuous changes.  This cost to retool is where the struggle begins for retailers because they will have no hope of keeping up with the changing shopping and purchasing patterns without significant investments in their infrastructure.  This investment is where the retailers struggle with justification because heavy and early investments in technology will impact profit margins and these investments in leading edge technology also run counter to the retailer culture.

 

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

Happy New Year

Posted by tbrouill Jan 1, 2017


This year has brought many changes to the supply chain and the retail market which has been both exciting and frustrating for both retailers and consumers.  It's been exciting for consumers because they are finally reaching the critical mass point where the are able to control and direct their activities and interactions with other consumers and the retail market.  Its been frustrating for retailers because I’m sure that it feels to them that now they cannot maintain their control and direction of the retail marketplace and interaction with consumers.  A third aspect to the changes in related to the growth in the market of the millennial consumer base and this is also pushing the consumer demands and activities to a level of interaction and experimentation that has not been seen before.

 

Retailers are now buffeted by the demands of consumers, the need for cost and inventory controls, the cost of supporting the consumer demands and finally the changes to the retail market that is spilling over to the real estate market. The large legacy retailers hare caught in the middle of an industry upheaval that is changing the brick and mortar market to blend changels more fluidly in order to support consumer demands.  These changes are being driven now by the growth of millennial consumers in the market.  Millennials are now dragging the retail market into the twenty first century by introducing social technology and mash-ups to support their lifestyles.  The growth of millennials in the market is dramatically increasing their influence and the impact of their demands is much greater on the retail market.  The key challenge for retailers is the impact of these activities on the retailer culture and the cost of this impact.

 

Consumers are embracing the technology introduced through mobile technology, wireless capability expansion and social network utilization along with the capabilities introduced by millennials at a greater rate and velocity to support their lifestyle requirements.  This hearty embrace and growth of technology capabilities is building on existing capabilities to quicken the velocity of change that is being developed by consumers and pushed onto retailers.  Retailers now must prepare and develop a framework and strategy that will allow them to quickly react and integrate new features and capabilities as they are introduced by consumers.  Most important though is that we are entering an age of intense collaboration and retailers must prepare their framework and strategy to quickly identify, react and integrate new capabilities into the market and the best way to support these new requirements is through increased collaboration with market participants.

 

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

Retail Holiday Changes

Posted by tbrouill Dec 26, 2016


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

 

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

 

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

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

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

 

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

 

tbrouill

Death Of Traditional Retail

Posted by tbrouill Dec 26, 2016


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

 

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

 

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

 

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

 

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

tbrouill

Retailers Changing Commerce

Posted by tbrouill Dec 24, 2016


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

 

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

 

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

 

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

 

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

tbrouill

Retail Social Commerce

Posted by tbrouill Dec 23, 2016


Using comparisons from the music industry as a guide and the impact of millennials on the retail industry I see the retail industry moving into a concept of social commerce driven by these demands of consumers and the technology capabilities.  The term social commerce really consolidates and describes the next direction of retail and relationships with consumers.  I see retail as the next industry to experience major disruptions and turmoil especially as it relates to the legacy major retailers.  Just as in the music industry, consumers are now taking control and driving direction of the retail industry through the combination of ecommerce, mobile and wireless network technologies and the drive, curiosity and imagination of millennials as they emerge as a major force in the retail market.

 

These disruptions are already beginning for the major retailers as they struggle with consumer demands to provide a more cohesive shopping experience across all channels.  Retailers have traditionally fought consumer desires to shop and purchase across channels and allow a purchase from any channel in any channel.  This is an important distinction that can have an immediate and positive impact on their consumer relationship.  An example of this is the retailer’s struggle against showrooming by consumers.  Their struggle never stopped consumers from this practice and generally caused ill feelings and lost sales. 

 

Retailers are now also struggling with the impact of universal low selling price sales.  Consumers have become accustomed to the ability to search for, and obtain, the lowest cost on any purchases and this has quite frankly negatively impacted the major retailers as they have engaged in these price wars to the point where the large retailers are now struggling to maintain profits as a result of their legacy cost structures.  Retailers must address these consumer practices through a cohesive shopping strategy that incorporates and plays to the benefits of the retail outlet rather than simply providing services that drive consumers to the store. 

 

In my shopping during this holiday period I have experienced a range of services from the store sales associates that depended on the associates desire to help and also their experience and knowledge of the retailer’s capabilities.  Generally across the board the store associates would suggest shopping online if a product could not be found in the store and then the follow-up after this suggestion diverged depending on the sales associate.  Many associates wanted to help in searching for the but they were all limited by the capabilities of the in store technology and specifically the point of sale systems. 

 

I think that retailers must invest heavily in the in store technology and the point of sale systems in order for the brick and mortar stores to survive in the future.  Consumers will not wait for retailers to catch up and retailers will hesitate due to the cost of the investment.  This means that retailers must develop new methods to address these consumer demands if they will survive in this connected future.

 

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

Industry Comparison As Guide

Posted by tbrouill Dec 22, 2016


It seems to me that we can, and should, look to other industries as a guide to the future of retail and the music industry may be a good guide for the changes impacting the retail market now.  The music industry was also once a an industry of a few large and powerful labels that controlled not only the delivery of content but also the content itself.  These large music labels once created markets for music, just as the large retailers created markets for products.  Then the Internet came into the music industry and provided both consumers and artists a method to deliver and acquire music in ways that changed the music industry and also the large music labels.  Today the music industry is much more open and collaborative and the large labels have lost their control of the market, of course they are still influential but many artists have succeeded without the help of the labels.

 

I see a similar set of impact in the retail industry as in the music industry where the Internet has impacted the major players with upstart retailers that are more nimble and able to engage consumers to purchase in non-traditional patterns.  In the case of the retail industry after an initial dramatic disruption with book retailers, the retail industry in general has recognized the importance of eCommerce in their industry and has taken measures to incorporation into their capabilities.  This has expanded over the years and spawned a new phrase to describe this new market - omni channel.  This describes the retailers ability to sell across the brick and mortar and electronic sales channels with the goal to allow consumers to purchase any time and any where.  The addition now of mobile and improved networking technologies has expanded the eCommerce channel dramatically and has provided the means for consumers to fundamentally change the way they shop and therefore purchase.

 

This is the new struggle for traditional retailers and you see the impact now in retail malls and sales numbers, consumers are shifting their shopping and purchasing practices and not spending the time in brick and mortar outlets as they used to.  This is the new struggle for retailers and many of these larger retailers are struggling to survive and the retailers that are not currently struggling in all likelihood will be hit with the impact at a later date.  Then increase in the number of millennials in the retail market has driven fundamental changes into that market and retailers would be wise to look to the music industry for guidance. 

 

The interesting thing now is the entry of Amazon into the brick and mortar channel and the impact this will have on the channel.  Amazon is one of the great leaders in retail market innovation and they have recognized a brick and mortar market opportunity that they can fill.  Amazon does not bring legacy retail practices to the brick and mortar market and you can bet that they will drive additional change into that channel to further disrupt the retail market.

 

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 brick and mortar market may not be collapsing for all retailers, however it is going through such significant change driven by the demands of consumers that it will be become unrecognizable from its current incarnation.  This change is driven by consumer changes in shopping and purchasing made possible now by mobile technology and wireless network improvements along with the growth of millennials in the retail market.  The interesting part of these changes is that the change seems to be focused on the major retailers and the retail mall marketplace.  Major retailers are under duress as a result of their dominance of the market that has allowed them to become rigid in their practices and controlling in their relationship with consumers. 

 

Consumer lifestyle change is driving a large portion of this change experience and it seems that the spark is provided by the millennial increase in the market and along with this increase of millennials in the market  a contributing factor is their refusal to accept the commonly accepted retail practices.  The challenge for the large retailers is the demands from consumers to develop a relationship with the retailer and this is the key challenge to the major retailers that have maintained a focus on reducing costs to increase their margin and compensate for reductions in sales.  These changes have been a long time in the making and are now reaching a tipping point where the momentum and the changes are self supporting. 

 

Small, or boutique, retailers have not been impacted by these changes to the same degree because the strength and focus of these retailers has always been a focus on the consumer relationship.  This relationship provides the basis for the stability and the product mix in the boutique provides the reason for consumers to return.  On the other hand, the major retailers are dealing in commodity products, or products that can be found generally available in the marketplace.  These types of products allow consumers to shop for price and this practice changed the retailer’s focus to price rather than relationship.  This has become a learned focus by consumers and now with the growth of online sales and retail this practice has turned on the large brick and mortar retailers. 

 

The large brick and mortar retailers have created and encouraged the very focus that Internet retailers are using to destroy the large brick and mortar retailers.  These large retailers now must change or die and this is a struggle for them.  The retail brick and mortar marketplace is collapsing and retailers must adjust their strategy and their operations to meet the changing demands.  There is definitely a place for the brick and mortar retail outlet and retailers must now determine how it can fit into their future strategy and practices.

 

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?

 

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