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2017


Retailers are enhancing their store experience with consumer mobile interaction while shopping in brick and mortar stores that are based on both location awareness and in store promotions and service activities.  These activities take advantage of mobile and wireless technology capabilities in an attempt to enhance the customer’s experience.  Retailers are now releasing mobile apps that use the location available from the consumer mobile phone to push notifications and provide self help capabilities for consumer during their in store shopping activities. These retailer breakthroughs take advantage of the technology already supported by third party technologies that allow and encourage the consumer to utilize their phone more while shopping. 

 

This is a great development for the major retailers and provides a platform for the retailers to extend collaborative activities including micro surveys and also consumer interaction on product selection and information.  The retailer app that I have used initially (Macy's) provides a means to perform product price look-ups and also promotes in store sales and  price reductions.  This app also encourages the consumer to utilize the store network for improved capabilities and elimination of dead spots while the consumer is shopping.  This apps integration with the retailer store systems also allows for price reductions to be taken by the consumer from any purchase outlet, store or online.  The mobile app is user based so the retailer can actually track the consumer in their store visits and purchasing based on discounts because of a combination of location and access to the store’s network.

 

One of the key benefits the retailer can gain from this improved app is through product prices checks which provides a means to track consumer shopping activities in the store.  Then through a combination of loyalty program and product electronic discounts the sale closure on products can be tracked.  This is where the consumer collaboration activities can really expand to improve the experience.  These activities should include inventory availability for all related product sizes and colors based on price checks, suggestions to ship the purchase directly to the consumer, and most importantly providing consumer reviews and feedback regarding products.  All of these activities highlight an increased consumer interaction and option for collaboration that enhances the consumer shopping experience by providing an personalized service opportunity for consumers. 

 

My shopping experience was enhanced through the improvements to the mobile app and this is just the beginning of the potential.  These activities should focus on improving the retail shopping and purchasing business process model to improve the consumer experience.  Macy’s has made the leap to these integrations and focus on the consumer shopping and purchasing experience because this is what consumers demand.  Now the next step for retailers is to create a two way relationship with consumers by increasing interaction through every touch point. 

 

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 develop and implement a method to sense and respond to changes resulting from consumer demands that supports and encourages collaboration between consumers and retailers to both identify the change and also determine the appropriate reaction to the demands.  Consumers will provide information when asked and the challenge for retailers then is to determine how to ask and the appropriate questions that will draw out clarification and demands from the consumer.  Consumers require a continuous stream of questions in the form of mini-surveys to create the type of collaborative relationships that provide value to the retailers.  This type of activity in itself requires a continuous improvement process in order to refine the relationships and most importantly to define the questions and timing of interaction that supports a value add collaboration.

 

Retailers have implemented a survey process to obtain consumer reviews and evaluations of their purchase experience which acts as a Consumer Collaboration 1.0 platform for basic information.  The next phase of this collaboration is to increase the interaction times and also decrease the number of questions.  This is required to begin to understand what is important to ask and also ensure that the likelihood of consumer response increases.  This is where the value comes into play through both the volume of response and the actual questions to which the consumer is responding.  I believe the struggle for retailers is in the survey definitions and the triggering survey incidents. 

 

I see retailers as struggling with implementation of a survey process that brings value to the consumer response results.  I also believe this is due to the retailer cultural definition of surveys as larger efforts with a great deal of questions that also require additional consumer action to even start the survey as resulting limitations of the response and the value derived from the response.  These difficulties are structural in nature and must be resolved for the retailers to bring value and develop a collaborative relationship with consumers.  The effort to resolve the structural challenges can be very difficult for retailers because of the level of effort required at a time when these same retailers are focused on the effects of eCommerce purchasing to the brick and mortar stores.

 

This challenge though is not insurmountable and retailers can provide guidance in resolving these challenges from the large online presences of Amazon and Google.  For instance, Google has developed a couple of pertinent options that focus on micro surveys and also location detection to respond to location activities based on your travel.  These two activities provide a great basis to support retailer collaboration activities.  Retailers can use these concepts to redefine the methods in which they interact with consumers to improve both the consumer relationship and build the type of collaborative relationships that will help retailers to sense and respond to 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?

 


The retail marketplace requires support for order management across all channels along with the inventory to fill these orders across all channels. Without a cohesive strategy to coordinate and management these business processes across all channels retailers will continue to struggle with the changing demands from consumers.  Flexible and robust order management capabilities is the flip side to the coin of flexible and robust inventory management that supports the new retail marketplace.  The retail market requires a cohesive, flexible and robust business process strategy that can support the current requirements and be flexible enough to sense and respond to new demands.  The business process must support any manner of consumer shopping and purchasing in a manner that is cohesive across the business process. 

 

I don’t like to refer to a channel anymore when discussing the retail marketplace because discussion of channels implies a separation between order management, inventory placement and product delivery that should not be there.  Order management cannot be overlooked in the business process definition and management strategy reevaluation.  Just as the inventory management business process must focus on function over channel, the order management business process must also focus on function over channel.  This is not hard but requires a careful and thoughtful process to evaluate and define the process that starts with the generic functions initially and build then to support the entire process flow.

 

This effort can be difficult because the retail culture, especially in the for large legacy retailers, has a strong tendency to separate functions and process into silos.  The order fulfillment silo can be the most difficult to breakdown because of this cultural and business silos that have become ingrained over the years.  Due to these ingrained tendencies the effort to define the business processes will be difficult.  Success in this effort requires an iterative process, a continuous improvement process, that will institute review, analysis and refinement of the process throughout the efforts.

 

This continuous improvement process is a base requirement to the success of these efforts to define a robust process that first meets the consumer demands and second provides a basis to sense and respond to the changing demands.  This continuous improvement process provides the tools necessary to develop and maintain the order fulfillment business process models as required to support the changing consumer demands.  A key to success is the realization and acceptance that these efforts are not a ‘once and done’ exercise but a continuous effort to maintain the process model through these change requirements.  The large legacy retailers must develop the model that provides the means to provide the effort to maintain the functionality required to support the 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?

 


Collaboration is critical to the success of retailers in this new retail marketplace including collaboration across the entire extended supply chain along with the end consumer.  Consumer collaboration is a difficult objective for retailers to attain because consumers can be a very fickle group as far as interaction and collaboration are concerned.  In the retail marketplace consumer collaboration is based on situational requirements and specific needs at the moment.  The consumer must be courted and encouraged every day to react and interact with the retailer.  Consumer interaction and engagement has been raised to an artform by Amazon, based on their practice of continuously engaging with the consumer through suggestions and questions.  I believe the secret to consumer collaboration is the engagement activities that encourages reaction and engagement from consumers. 

 

Retailers have been engaged with suppliers and carriers for collaboration and interaction for quite some time now and all of the retail partners have certainly realized the benefits resulting from robust collaboration.  The consumer, though, has been a difficult nut to crack for most retailers and the reason for this, I believe, is that consumers must have a reason to engage and react.  There are many reasons for this but I think the most prevalent reason is that consumers simply do not generally engage without a reason.  This is difficult especially for the large legacy retailers because these retailers only engage consumers electronically via rewards programs and email programs.  These large retailers must learn the virtual customer interaction portion of customer relationships and relationship development to encourage a two way interaction and communication.

 

This is where the large legacy retailers can learn from outlets such as Amazon and Google in ways to engage and interest consumers to participate.  This consumer engagement practice is where Amazon and Google really stand out.  It is well know that Amazon has perfected consumer engagement from a retail and consumer perspective and Google has perfected the engagement from a situational perspective to provide reactions and ratings.  Google has really stepped up their game in consumer reaction and engagement to improve their maps and also suggestions for locations on the map.  Google has really extended the situational consumer collaboration through a combination of their short surveys that pay for response, their tracking of travels and then their requests for reviews and questions related to the places you travel and spend time. 

 

Large legacy retailers need to learn from these practices to engage consumers and these retailers need to develop these new programs as part of their redefinition of the retail marketplace model.  Retailers have the opportunity to create a new consumer experience but they must take important steps now to first survive in the market and second to create a niche in 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?

 


Large retailers in the midst of reacting to the marketplace disruption must reevaluate their business process model and develop an omni channel inventory management strategy that can react to the disruptions.  The market changes and velocity of these changes require a strategy that is robust and flexible to support the velocity of change.  This requires a strategy that focuses on the base business process model and not on current practices and legacy requirements.  The large legacy retailers must break from the multi channel strategy to a true omni channel inventory management strategy that accounts for the business process objectives and requirements rather.  The omni channel strategy is based on a flexible business process model that focuses on process function and not on channel.

 

The multi channel inventory management strategy was in reality a transitional strategy that provided a bridge between the separation of channels and the true omni channel strategy.  This was not understood initially and only became clear with the continued change and the quickening disruption in the market that requires another view of the requirements based on a flexible business model based on process and not on legacy capabilities.  The multi channel strategy supported a transition inventory strategy that straddled the transition of channels to the omni channel model.  The omni channel model must now be based on business process as demanded by consumer practices rather than existing retailer capabilities.

 

Consumers have created an omni channel marketplace without the support or participation of the large legacy retailers and this became abundantly evident over the last year when the shift to online purchase and delivery reached essentially the same level as the brick and mortar sales.  The impact to the retail marketplace reached a critical mass at that point and is driving change at a dramatic velocity on the large legacy retailers.  Retailers have been struggling to react to the changing demands including re-inventing the legacy retail experience.  The challenge for retailers though is how to retrofit legacy processes to support the changing consumer demands.

 

This challenge requires a break from the past and a focus on the future to enable the retailer to efficiently sense and respond to changing consumer demands.  In order to meet the challenge retailers must focus on process demands and not to current capabilities.  Consumers have used technology to take control of their shopping and purchasing processes to meet their lifestyle requirements and retailer must recognize that they can no longer control how or when consumers shop and purchase.  This is a very disrupting change to the large legacy retailers because it wrests control from the retailer.  This change requires that retailers develop an omni channel inventory management strategy that focuses on process and not control.  This strategy must support processes that are at odds with the current retailer culture and this is very difficult and requires stamina and focus to change.

 

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 disruption is driving the disruption in retail inventory management requirements to support the new marketplace.  My concern is that retailers have focused on the disruption to the retail store and reduction in traffic to the detriment of the inventory management changes necessary to support the retail marketplace.  Retailers should be reviewing their retail business processes to identify changes required of the inventory management process as a means to address the marketplace disruption.  Retailers only focused on the impact to brick and mortar store real estate are missing a potential root cause of the disruption itself which is the change in consumer shopping and purchasing practices. This change in consumer shopping and purchasing impacts the retailers in many ways and the retailer must understand how to address the changes in the most cost effective manner and not simply by divesting real estate holdings.

 

The large national retailers  are focused on the impact of reduced store traffic while the sales have transferred to eCommerce purchases.  This attitude is only natural and the result seems to be a focus on reductions in the retail store real estate holdings when in reality these retailers cannot afford to simply focus on cost reductions and divesting store real estate.  These retailers must recognize the resulting impact on the inventory support requirements and determine how to react to these changes to the inventory demand requirements first.  In my opinion the definition of the new inventory strategy should be completed prior to determining next steps in the store real estate requirements.

 

Where this change to the inventory strategy will truly impact the retailer and the future requirements of store real estate is defining how the inventory strategy will address the changes in consumer shopping and purchasing.  In my opinion the retail inventory strategy will, and should, drive the real estate decision.  I see the inventory strategy as a key starting point for defining how retailers will increase their flexibility to support the changing consumer shopping and purchasing demands.  The retail inventory disruption should drive a simplification and standardization of inventory management practices across all channels and then determine how to ensure that inventory is distributed throughout the retail network to most efficiently support the consumer shopping and purchasing demands. 

 

The retail strategy is the key to the large retailer strategy to meet the disruption in the consumer sales and purchasing practices. Retailers must take the long view in the market disruption and to me this means addressing the disruption through an inventory strategy that views store real estate as a distinct market advantage to allow retailers to move inventory closer to the consumer. 

 

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the 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?

 


Omni channel shopping, purchasing and delivery process improvements will also simplify the omni channel inventory management requirements by standardizing the business processes.  Retailers must standardize these business processes in order to support the discontinuous changes form the consumer incorporation of technology and social networking capabilities.  All of these changes can be overwhelming if the retailer has not standardized there business processes to support the demands.  This standardization will also dramatically simplify the inventory management requirements resulting in a higher instock position and reduces out of stock and overstocks conditions.  This will dramatically improve the retailers capabilities to support the changing consumer demands and also improve their margins.

 

I understand that all of this sounds too good to be true and all of these benefits cannot be achieved without some kind of catch.  The catch here is that retailers must change their brick and mortar store strategy from an almost pure retail outlet to a distribution center that includes a retail outlet.  This is the first step to an omni channel inventory management strategy that will support the fluid nature of omni channel shopping, sales and purchasing.  This requires an initiative to review and redefine the retail business process to support the omni channel consumer demands.  This can be difficult to move outside of the comfort zone of accepted retail practices that have been ingrained in the culture over a long period of time.  The challenge must be overcome though in order to achieve and sustain success in the marketplace. 

 

I understand that this is at odds with generally accepted best practices however this also provides a cost effective method to address the challenge of the marketplace. This initiative needs to start with the objective to define an inventory management strategy that can support the purchase demands of consumers in an omni channel marketplace. It is important to start with an objective that provides a robust and stable foundation to meet current demands and provides the flexibility to support changes.  A focus on inventory management provides this stable and robust foundation.  In addition, inventory management is the root of the challenge for retailers and the key challenge to the success of their omni channel strategy.

 

Retailers must realize that they must change their foundation to meet the current and future demands of the consumers.  We are at a point now where the retail marketplace is in the midst of a major disruption that is caused by changes in consumer practices.  Retailers cannot gloss over the basic demands with superficial acts such as order online and pick up in the store capabilities, they must reinvent their shopping and purchasing support to align with changing consumer demands.  The focus of retailers must be redefining the shopping and purchasing experience and not real estate, this is the only way to succeed in the 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?

 


The large legacy retailers with a large chain of stores are now going through a rebuild phase in their brick and mortar retail strategy to improve the consumer interaction by redesigning their store strategy.  Many of these retailers are evaluating and building a strategy around a smaller footprint for their brick and mortar store network as a reaction to the increase in Internet sales and decrease in store sales.  I think this is a mistake.  I think that retailers should instead redesign and rebuild their brick and mortar strategy to support the omni channel marketplace that consumers are demand and even building on their own. Consumers have really been very open in broadcasting their intentions towards the retail marketplace and have been embracing the tools and technology that allow them to shape their shopping and purchasing to meet their own needs.

 

These retailers are fooling themselves with their initial reactions to shrink their brick and mortar store presence to adjust to the shift in the consumer purchasing channel.  This focus on reducing the number of stores is increasing their loss and reducing the focus and funding for activities such as improving delivery times and inventory management improvements.  The large legacy retailers are still reacting to changing in the marketplace from a multi channel perspective and not an omni channel perspective and this reaction will not bring the turn around in purchasing and profits for which these retailers are hoping. 

 

Many of these large retailers are still focused on multi channel retail even though consumers have moved to an omni channel expectation and practice. A true omni channel requires one cohesive interaction with consumers from shopping to delivery where the shopping process includes and supports shopping online or in a store or both at the same time and then this concept follows through the subsequent selection purchase and delivery concepts.  To the consumer shopping, purchasing and delivery should not depend and be separated by channel and retailers are still struggling with, and many are stuck in a multi-channel retail practice.

 

Retailers must make a foundational change in their practice to focus on supporting the process that meets the consumer demands at the time of interaction.  Consumers may be in the store shopping and decide that they would like to purchase online and deliver to their home and the retailer must support these demands.  There are legacy IT applications that must change in order to support these demands and these have always been the stumbling blocks for major legacy retailers.  This is also where the size of the operation matters as well because this very often plays into the flexibility and cost of the initiative.  At this point in the retail experience these large retailers do not have the luxury of time to make decisions and begin a major initiative to redesign the shopping experience.  These retailers must start the change process now and understand that they are starting a new phase of continuous change and reinvention.

 

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 large legacy retailers with a large chain of stores are now going through a rebuild phase in their brick and mortar retail strategy to improve the consumer interaction by redesigning their store strategy.  Many of these retailers are evaluating and building a strategy around a smaller footprint for their brick and mortar store network as a reaction to the increase in Internet sales and decrease in store sales.  I think this is a mistake.  I think that retailers should instead redesign and rebuild their brick and mortar strategy to support the omni channel marketplace that consumers are demand and even building on their own. Consumers have really been very open in broadcasting their intentions towards the retail marketplace and have been embracing the tools and technology that allow them to shape their shopping and purchasing to meet their own needs.

 

These retailers are fooling themselves with their initial reactions to shrink their brick and mortar store presence to adjust to the shift in the consumer purchasing channel.  This focus on reducing the number of stores is increasing their loss and reducing the focus and funding for activities such as improving delivery times and inventory management improvements.  The large legacy retailers are still reacting to changing in the marketplace from a multi channel perspective and not an omni channel perspective and this reaction will not bring the turn around in purchasing and profits for which the retailers are hoping.  Instead this strategy will result in continued sluggish profits and continued store closings and shrinkage for the retailer.

 

Consumers are now demanding an omni channel retail experience that allows them to shop in any channel and purchase from every channel.  Retailers must implement support for every permutation of shopping to purchase and instead I am afraid the retailers are still focused in their strategy on supporting the consumer in shopping and purchasing from the same channel.  I really do not think that consumers are viewing the retail marketplace in this manner because I know that I am not viewing the retail marketplace in this manner. 

 

Consumers want to shop and purchase in the channel that is most convenient for them.  I think that Amazon has realized this and that is the reason why Amazon is moving quickly into the brick and mortar physical store channel.  This allows them to capture sales in the markets from the consumers that find it convenient to purchase from a brick and mortar store and also allows for a regional presence to improve deliveries.  The legacy retailers must view their options from an omni channel perspective to allow them to improve delivery and stock positions close to where the consumer lives in a distributed strategy rather than a centralized strategy.  

 

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 are demanding increased collaboration from retailers and their partners interacting across the entire fulfillment chain to meet the changing consumer demands and shopping experience.  Consumers will no longer meekly accept the controlled response and attempts from retailers to control the shopping the shopping experience because the technology available provide many options that will meet the consumer demands.  The result is that omni channel retail requires a very high level of collaboration and active participation across the entire network to support the changing consumer demands.  Since the beginning of the Internet age retailers have attempted to mold and control the consumer shopping experience based on their own best interests and now consumers have embraced the technology that allows them to break free from these limitations.

 

Collaborative fulfillment means to me that each partner in the extended supply chain interacts with each and across the extended supply chain to first understand the optimum fulfillment objectives and then to continuously communicate across the extended supply chain until the product is received by the consumer and the consumer accepts and keeps the product.  While this sounds straight forward in the explanation it covers a great deal of communication, connectivity and processes across the extended supply chain.  This is not simple process and requires robust integration capabilities and also security to protect consumer and retailer information across the extended chain.  All this said, though, this is not an option or nice to have for retailers to create their omni channel marketplace. 

 

Many retailers and partners have been moving ahead with the integration and collaboration over the years through internal initiatives and partners to develop a framework.  For instance Wal Mart has been increasing and improving integration and communications with supply chain partners for years to improve their efficiencies and reduce costs, Amazon has been increasing and improving communications with consumers for years to develop a relationship and reputation for customer service and transparency.  Now carriers like UPS are providing direct consumer interactions and delivery management capabilities to improve the delivery coordination and reduce theft.  Add to this the increased consumer capabilities available through mobile technology and the retail marketplace seems to be coming to a point where all capabilities are converging to deliver a true omni channel.

 

All of this places the large legacy retailer in a very difficult position because it requires the retailer to change their culture from a command and control to a collaborative practice.  These legacy retailers will not be given an opportunity to mold the processes to simplify their own requirements but will need to focus on meeting the demands of the new omni channel marketplace.  These legacy retailers must rebuild their brick and mortar retail market into an omni channel marketplace all at the same time they are being forced to meet the new consumer collaborative 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?

 


It seems that the initial wave of multi channel retail practice made the process more complicated in many ways causing a great deal of conflict between channels especially from an inventory and sales management perspective.  It also seems that the current consumer demands to support what I refer to as a true omni channel experience bring with them the opportunity to simplify and streamline the inventory and sales management perspectives.  These omni channel demands and expectations require that retailers redesign their operations and transform the retail store into another distribution hub with a retail channel outlet in order to meet the demands in a cost effective manner that meets both customer demands and most importantly for the retailer supports a forward looking strategy to overcome the current retail store challenges and loses.

 

This is not an easy strategy and first requires that retailers re-evaluate their sales and forecasting models to take into account this new omni channel reality.  In this new reality the sale, and the forecast, should not be segregated to the purchase channel, instead they should be consolidated into a sale from a district or distribution hub, formerly known as a store.  This will allow the retailer to more accurately forecast deliveries by region and store in order to support more a multi-echelon inventory planning and forecasting strategy that supports more efficient inventory consumption.  This strategy will help to reduce overstock and will also allow retailers to redirect inventory across the entire network chain to more efficiently address inventory shortages and overstock.

 

This new sales and forecasting model should simplify the process and also improve the accuracy.  This does though fly at odds with legacy concepts and practices and will require a complete paradigm shift to implement.  This revision to the sales and forecasting model  is the next logical step to the realization of the omni channel retail model to provide the ability to quickly adjust to changing consumer demands from a purchase and delivery perspective.  This does require adjustments to strategy and most importantly adjustments to staffing strategy and placement.  While this would require an increase in staffing in each of the existing store outlets it also provides a cost savings in parcel delivery.  This is because the majority of shipments to consumers would be able to utilize zone one shipping rates which reduces the transportation costs.

 

These times are challenging for retailers because of the rate of change demanded by the consumer and this requires the retailers to re-evaluate their fulfillment methods to support a true omni channel retail environment.  The rate of change in the market increases the urgency to accept and implement changes to support the demands.  This also requires an increase in standardization to increase the flexibility.  All of these demands point towards a need to revamp the sales and forecast strategy to allow retailers to flatten the hierarchy to meet the demands in a creative manner that stops losses and increases efficiencies and reduces costs.

 

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?

 


Large legacy retailers have been challenged with multi echelon inventory requirements with the growth of the consumer omni channel shopping and purchasing that has left them hampered due to these significant inventory management challenges.  These omni channel inventory challenges are causing lost sales and increased costs for these retailers as a result of the consumer increased purchasing from Internet sources and the decreased spending in stores. These challenges can really only be addressed through changes in retailer inventory management practices to support the multi echelon inventory requirements.  These challenges require that retailers remake their use of the retail stores, warehouses and supplier network to meet the challenges and the demands of the consumer omni channel market.

 

Retailers are challenged to move from a multi channel environment to an omni channel environment in order to meet the consumer demands.  These challenges crossover channels, locations and partners to meet the consumer demands and this is where the inventory challenges come into play.  Retailers must realize they cannot overcome the omni channel inventory challenges with a mult channel strategy; consumers want to shop in a store and have their purchases delivered to their home or office as much as if not more than shopping online and picking up the purchase in the store. 

 

Retailers are currently viewing their store real estate as a challenge to overcome rather than a strategic advantage in the omni channel struggle.  Retailers are challenged to view their inventory from a holistic point where inventory can fill demands across delivery methods instead of viewing inventory from a channel perspective.  Home Depot refers to each of their stores as a warehouse mainly because of the size and the amount of inventory located in each of the stores and the large national and regional retailers must begin to view their retail stores as fulfillment centers as well.  This change in strategy would provide a great strategic inventory advantage to meeting consumer omni channel shopping and purchasing demands. 

 

The great omni channel inventory challenge for retailers is efficient inventory placement to support the purchasing demands across all channels.  This can be achieved through changing the retail store from a retail channel outlet focus to an omni channel fulfillment center.  This strategy can be achieved through a refocus on meeting the consumer demands and not a focus on the store, warehouse, online channel.  This strategy can provide advantages in consumer delivery times and inventory utilization while at the same time overcoming an initial obstacle with under utilized real estate stores due to shifts in purchasing channels.

 

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.


Omni Channel shopping, purchasing and delivery requires inventory management to be extended across channels to support the entire range of options required to support omni channel retail.  The inventory visibility and extension across all potential shopping, purchasing and delivery channels provides the foundation and framework to support a true omni channel environment.  Retailers must open this foundation to the shopping and purchasing services whether they are from a retail store, online or blended.  The channel for retailers is to provide the inventory framework that opens availability across all channels and allows purchase across all channels.  In order to survive retailers must extend their inventory capabilities and not differentiate between channel or delivery method.

 

Retailers should not be fooled by the increase in Internet sales to believe that they can simply provide consumers the option to shop and order products from the Internet.  Most retailers speak of an omni channel experience and then their execution is still separated by channel, in other words multi-channel.  Each channel provides services that are distinct to the channel.  While retailers may have developed and blended inventory visibility at the distribution center level this visibility disappears when the inventory is shipped to the retail store channel.  This practice does not provide the necessary visibility to easily fill online sales from the retail stores.  Consumers expect now the option to shop and purchase as they desire and from any channel, this means that retailers must change their inventory management practices to extend across all channels and all times.

 

This is a dramatic change for the large legacy retailers and requires they define each of the retail stores as a warehouse in their inventory systems to provide the visibility to the inventory.  Then in addition this also requires a robust order routing and management system to allow for the efficient inventory consumption and replenishment across all locations and to any delivery point.  This is needless to say a dramatic change to the retailer inventory management practices and requires a change in systems and the operating management practices supporting sales. 

 

In my experience this can be extremely difficult for retailers because the legacy systems are not flexible and conducive to quickly change the management and visibility capabilities.  In addition to the systems there is also a physical process and procedures revisions that is probably more difficult to implement because of the preparation and implementation requirements, this includes the revisions required to support heightened inventory management and control procedures required to support efficient omni channel capabilities.  These requirements are now baseline to the consumer expectations though and must be supported by the retailer 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?

 


Retailers must quickly and efficiently expand services in both shopping and purchase delivery and the only way they can effectively and efficiently hope to execute on these demands is to break down the silos and collaborate across customers, internal marketing and operations, and the extended supply chain including the transportation partners.  Retailers must quickly act to build this collaborative network in order to turn around the slippage in sales across channels.  Consumers have already moved to implement their own omni channel practices through the technology and network capabilities.  This collaborative strategy must be implemented in order for the retailer to support the consumer practices, retailers can no longer direct and control consumer retail shopping and purchasing and if these retailers continue to demand that consumers accept their control the consumer will simply walk away.

 

Consumers have too many choices now in all of their interactions and these choices are being encouraged by the simplicity of online purchasing combined with improved mobile technology and wireless networks.  Large retailers have been slow to react to these demands I think because they have believed in their practices and control.  These retailers incorporated multichannel retail capabilities however they never implemented omni channel capabilities, the multi channel capabilities seem to have been viewed has almost a necessary evil because the brick and mortar outlet was the key channel. Omni channel capabilities seem to have been focused on how they could be incorporated to support the retail brick and mortar outlet. 

 

I think the issue is a cultural issue in the large retailers that causes a hesitancy to collaborate across the channels and a with consumers.  I think that the large retailer focus is on internally developed strategies based on standard industry practices and their accepted norms.  The problem with this culture is that consumers are now collaborating with each other and Amazon is disrupting the norms of all standard industry practices.  Large legacy retailers are attempting to add capabilities that fit into their culturally accepted practices and Amazon is disrupting these industry practices at the same time.

 

Retail has now reached a turning point and consumers are collaborating with retailers such as Amazon to support their shopping and purchasing to create a true omni channel experience.  Large legacy retailers have been caught in their culture and as a result have not recognized the signs that were clear for years.  These retailers now must open up and collaborate across the entire extended marketplace to obtain information and most importantly to act on the information in a manner that is not influenced by pre-conceived industry 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?

 


Consumers have created a true retail omni channel marketplace through collaboration with other consumers and technology in order to support their changing lifestyles using imagination and third party mobile apps to build the marketplace  Retailers must now accept these changes and realize they must change as well to meet the demands of this omni channel marketplace.  A new strategy to support these new omni channel shopping and sales demands must start with collaboration across the supply chain  and across the retail operational and marketing silos and expand across throughout the extended supply chain partners for inventory management and transportation support across the omni channel market.  Retailers must break down the silos with a robust collaboration strategy to flourish in the future.

 

The retail market and the supply chain supporting this market must change to support consumer demands in shopping and most importantly in sales and product delivery.  The focus on the process to order online and pick up in the store is a great stride forward, however it is only one piece of the puzzle.  In order to flourish in the future retailers must provide a true omni channel experience and currently at best the large retailers are providing a multi channel experience.  Consumers have stepped into this mix and created an omni channel market through their own means to address their demands..  The consumers have done this through social collaboration, mobile technology, social networking tools and most importantly collaboration across these different outlets.  It is time for the large retailers to embrace these collaboration demands to become an important part of the omni channel market.

 

I do not see how the large retailers can survive without embracing the collaborative efforts across the supply chain.  One small case in point is parcel delivery changes from major carriers to adjust to the changing consumer lifestyles and collaborate with consumers on the best method and times for delivery of parcels.  As an example UPS provides two services now in collaborating with consumers for delivery; the direct notification and ability to redirect to another address, and drop lockers where the consumer package can be dropped for the consumer to retrieve by entering the package tracking information at their convenience.  In my opinion these are two important ingredients to the omni channel purchasing experience and the only experience retailers are promoting is purchase online and pick up in the store.

 

Retailers must quickly and efficiently expand services in both shopping and purchase delivery and the only way they can effectively and efficiently hope to execute on these demands is to break down the silos and collaborate across customers, internal marketing and operations, and the extended supply chain including the transportation partners.  Retailers can quickly turn around the in store profit loses by extending their stores into omni channel shopping and delivery hubs and they cannot do this without extended the collaboration practices across all partners, internal and external.

 

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?