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?