Using comparisons from the music industry as a guide and the impact of millennials on the retail industry I see the retail industry moving into a concept of social commerce driven by these demands of consumers and the technology capabilities. The term social commerce really consolidates and describes the next direction of retail and relationships with consumers. I see retail as the next industry to experience major disruptions and turmoil especially as it relates to the legacy major retailers. Just as in the music industry, consumers are now taking control and driving direction of the retail industry through the combination of ecommerce, mobile and wireless network technologies and the drive, curiosity and imagination of millennials as they emerge as a major force in the retail market.
These disruptions are already beginning for the major retailers as they struggle with consumer demands to provide a more cohesive shopping experience across all channels. Retailers have traditionally fought consumer desires to shop and purchase across channels and allow a purchase from any channel in any channel. This is an important distinction that can have an immediate and positive impact on their consumer relationship. An example of this is the retailer’s struggle against showrooming by consumers. Their struggle never stopped consumers from this practice and generally caused ill feelings and lost sales.
Retailers are now also struggling with the impact of universal low selling price sales. Consumers have become accustomed to the ability to search for, and obtain, the lowest cost on any purchases and this has quite frankly negatively impacted the major retailers as they have engaged in these price wars to the point where the large retailers are now struggling to maintain profits as a result of their legacy cost structures. Retailers must address these consumer practices through a cohesive shopping strategy that incorporates and plays to the benefits of the retail outlet rather than simply providing services that drive consumers to the store.
In my shopping during this holiday period I have experienced a range of services from the store sales associates that depended on the associates desire to help and also their experience and knowledge of the retailer’s capabilities. Generally across the board the store associates would suggest shopping online if a product could not be found in the store and then the follow-up after this suggestion diverged depending on the sales associate. Many associates wanted to help in searching for the but they were all limited by the capabilities of the in store technology and specifically the point of sale systems.
I think that retailers must invest heavily in the in store technology and the point of sale systems in order for the brick and mortar stores to survive in the future. Consumers will not wait for retailers to catch up and retailers will hesitate due to the cost of the investment. This means that retailers must develop new methods to address these consumer demands if they will survive in this connected future.
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?