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?