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?