Large retailers find themselves now in a struggle to maintain sales and develop a method and strategy that helps them reduce their dependence on low prices. Large retailers are struggling now with the growth of millennials in the marketplace and the impact on purchasing practices by millennials. Finally large retailers are also struggling with engaging and reacting to consumer lifestyle changes that are also impacting consumer purchasing and shopping practices. Retailers must now analyze how they react to these changes and also implement a strategy and process to institutionalize a continuous improvement process to identify and react to changes that are coming more quickly.
Consumers are changing their shopping practices and this I believe is the key to the changes currently impacting the retail market. These changes to shopping habits are being driven, by a very large extent, by millennials and they are driven by their comfort in the virtual world of social networking and communications. Their experimentation and pushing in social networking and also in mash-ups of different apps and technologies is the impetus behind the changes being driven into the retail market. This is also what is driving the confusion and frustration with major large retailers.
Large retailers have always been in control of the relationship with consumers and now they have been knocked off-balance by the changes that millennials are introducing for two reasons:
- The millennials are not intimidated with the size or the history of these large retailers.
- Millennials have a very deep comfort in both technology and collaboration that allows them to experiment and improve capabilities through a wide base of contributors.
Millennials have taken the collaboration group development practices of the open source technology methods and practices to a new level of practices and capabilities. They are using guerilla tactics to collaboratively develop these capabilities through a wide network of collaborators that is always growing and shrinking based on interest. Millennials seem to live at the bleeding edge of capabilities that is continuously pushing limits and practices. This type of practice is at odds with the major retailer practice of control and aversion to bleeding edge practices.
In order to survive in this new environment large retailers must increase collaboration and loosen their normal habits of control and aversion to change. Consumers have found that they are only limited in their shopping and purchasing by their imagination and most of the large retailers are three steps behind in their offerings. Consumers are putting together new combinations of shopping and purchasing capabilities based on a wide range of third party tools and support and these changes are being driven now at a pace that is unsettling for the large retailers. The retailers will continue to reel and stumble from one service to another until they learn to collaborate with consumers and third party services to create the ability to continuously change and react to consumer shopping and purchasing 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?