Customer delivery practices are being disrupted now as a result of changes in consumers shopping and purchasing practices. You can view the results of the disruption in the brick and mortar retail outlets by the reductions in sales that have hit these brick and mortar outlets over the last year or so as reported in the retails sales figures by outlet. The delivery disruption is the natural reaction to the disruption experienced across the retail market where increases are being experienced in eCommerce sales and the brick and mortar sales have dropped. I think this disruption is less focused on the outlet store market because in my unscientific analysis I did not view a large visible reduction in traffic to the outlet malls.
Retailers are reacting in different ways to this disruption and unfortunately I believe the reactions may be rooted in legacy assumptions which will not address the true market trend. In my opinion retailers in general are addressing half of the issue when implementing the order online and pickup in store delivery model. This model simply does not address the complete challenge of strategical location of inventory to support the changing consumer demands. Retailers seem to be using this strategic model to try to increase consumer traffic in stores and these retailers should be focus on the business problem. The business problem is that consumers are simplifying their retail shopping and purchasing to focus on shopping when it best fits with their lifestyle demands. Consumers are focus on simplification of purchasing to allow time to focus on important family and work considerations.
The challenge is that many consumers no longer have the time to shop like they did in the past and technology allows them to perform a time shift for these needs to a time that is most convenient to their schedule. This does not necessarily mean that consumers want to shop online and pick up in the store, except for some specialized market channels such as home improvement. I believe that consumers are now mashing shopping, purchasing and delivery practices across channels and as a result are further disrupting the retail market.
These disrupting practices require an evaluation of the consumer relationships for retailers in an unbiased manner to identify a strategy to navigate the disruption. I believe that many retailers are still stuck in pre-conceived beliefs of consumer practices as a result of preconceived ‘laws of retail’ that no longer apply. Retailers must focus on the consumer clues and not on how the consumer actions fit into existing retail practices. The standard brick and mortar retail model is broken and retailers must develop a strategy based on this fact or they will simply vanish.
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?