Technology starting with the high speed Internet and continuing with mobile and wireless technology improvements have been continuously changing the relationships between retailer and consumer. This started with the consumer wresting control of their shopping and purchasing to support their lifestyles and continues with continuous experimentation and changing practices and demands from consumers. The changes started with the Internet and eCommerce and have continued to progress with wireless and mobile technology along with millennials that bring with them a comfort with technology and a tendency to experiment with technology capabilities to support their lifestyle demands. This is spreading to change the relationship between consumer and retailer to take into account the need to develop a virtual relationship.
This virtual relationship is the next frontier in the retail omni market and may be one of the most important developments in retail since the Internet. Consumers have been striving to develop relationships with retailers really since the Internet changed the marketplace starting with the embrace of Facebook to reach out and connect first to friends and family and next with retailers. Unfortunately for the large established retailers they were compelled to focus on cost competition to remain competitive in the marketplace and this seems to have precluded focus on developing the virtual relationships. In fact this focus on cost has resulted in the reduction of clerks in brick and mortar stores in order to cut costs to support the product price wars with online and multi channel retailers.
Retailers have been struggling to keep up with the changes in operational processes to support consumer shopping and purchasing in the changing marketplace. This focus on the functional rather than the relationship has, in turn, caused these retailers to now struggle with developing and maintaining relationships in the new marketplace. This seems to be a hold over from the practice of attempting to control the relationship with consumers. The challenge for the larger legacy retailers is accepting the change in control and then developing the capabilities to build the virtual relationships with consumers.
Amazon, for example, has practiced a two prong approach in retail and developing relationships with the consumer. Amazon has realized early on the need to develop the relationship with the consumer early on because they did not have the physical presence and therefore a physical relationship with the consumer. This required that Amazon develop the tools to develop a virtual relationship with consumers while they were encouraging consumers to purchase through a lowest price strategy. This strategy to develop the virtual relationship while encouraging consumers to return has continued and unfortunately for the legacy retailers, they only focused on the lowest prices and operational side of shopping and purchasing so they are not struggling to maintain their place in the market.
The large retailers are lucky, though, because it seems that the operational changes have slowed at a time when the relationship changes and requirements have increased in importance. This gives these retailers an opportunity to develop the tools and capabilities to develop and maintain a virtual relationship. Retailers must understand and accept though that this is a continuous program that must be maintained and improved over the long run.