All signs in the omni channel retail market lead to a realization that the omni channel and especially the retail market is going through a period of intense change and disruption. The signs and the resulting disruption is quickening now with the consumer embrace of both social networking and mobile technology combined with the cultural changes being driven in part by the millennial generation along with the aging of the baby boomers. This quickening and discontinuous nature of change is clashing directly with the institutional large retailer culture of thoughtful control of change in the retail market. The combination of omni channel retail, social networking, mobile technology and consumer free time availability are driving this disruption and the retailer impact is intensifying.
The signs of this disruption can be seen through the market fallout resulting in retail failures along with retail successes based on the position and ability to react to changes and even drive changes to the market. There is an increase in retailer failures in the area of forward fashion and also in the ‘historical’ retailers that show when taken in combination the result of these cultural and technological changes. The retail fashion apparel market is now being driven by the millennial drive and passion for quickly changing fashions at a reasonable price and the fickle nature of this forward fashion market is a direct reflection of the interesting combination of impatience and practical drives of the millennial generation. With the aging of the baby boomers and the resulting increase of the impact of the millennials I see this trend as increasing and spreading the disruption to other retail market segments such as home improvements.
You also see the signs of the disruption in the large department store and large chain retailers in the form of sales and market share loss. These large retailers seem to have focused on a price war and market channel segmentation that has not kept pace with the desires of the consumer. These large retailers have focused on tactical actions in an attempt to shore up sales and have missed the strategic actions that would bring success in the future. As an example, instead of a long term focus on agility and ability to quickly react to changing consumer shopping and purchasing strategies these large retailers have focused on market channel and lowest price sales strategy. This has left them struggling to cope when the lowest price strategy cannot be maintained, you see that in the JC Penney failure when attempting to change their focus on providing special low sale pricing to a focus on ‘everyday low prices’.
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?