It seems to me that we can, and should, look to other industries as a guide to the future of retail and the music industry may be a good guide for the changes impacting the retail market now. The music industry was also once a an industry of a few large and powerful labels that controlled not only the delivery of content but also the content itself. These large music labels once created markets for music, just as the large retailers created markets for products. Then the Internet came into the music industry and provided both consumers and artists a method to deliver and acquire music in ways that changed the music industry and also the large music labels. Today the music industry is much more open and collaborative and the large labels have lost their control of the market, of course they are still influential but many artists have succeeded without the help of the labels.
I see a similar set of impact in the retail industry as in the music industry where the Internet has impacted the major players with upstart retailers that are more nimble and able to engage consumers to purchase in non-traditional patterns. In the case of the retail industry after an initial dramatic disruption with book retailers, the retail industry in general has recognized the importance of eCommerce in their industry and has taken measures to incorporation into their capabilities. This has expanded over the years and spawned a new phrase to describe this new market - omni channel. This describes the retailers ability to sell across the brick and mortar and electronic sales channels with the goal to allow consumers to purchase any time and any where. The addition now of mobile and improved networking technologies has expanded the eCommerce channel dramatically and has provided the means for consumers to fundamentally change the way they shop and therefore purchase.
This is the new struggle for traditional retailers and you see the impact now in retail malls and sales numbers, consumers are shifting their shopping and purchasing practices and not spending the time in brick and mortar outlets as they used to. This is the new struggle for retailers and many of these larger retailers are struggling to survive and the retailers that are not currently struggling in all likelihood will be hit with the impact at a later date. Then increase in the number of millennials in the retail market has driven fundamental changes into that market and retailers would be wise to look to the music industry for guidance.
The interesting thing now is the entry of Amazon into the brick and mortar channel and the impact this will have on the channel. Amazon is one of the great leaders in retail market innovation and they have recognized a brick and mortar market opportunity that they can fill. Amazon does not bring legacy retail practices to the brick and mortar market and you can bet that they will drive additional change into that channel to further disrupt the retail market.
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?