Changes normally come from outside the mainstream of the normal practices and retail is no different. Legacy retailers (retailers with a large brick and mortar presence) are under tremendous pressure to change from many directions or influences including the consumer and non-traditional, or new, retailers such as Amazon. While consumers are placing a great deal of pressure on retailers, I think that non-traditional retailers such as Amazon are really the ones that are driving the greatest pressure for change on the legacy, or traditional, retailers. This pressure is changing the retail market from a channel driven commerce to a social driven commerce and the pressure now between new retailers experimenting with social commerce and consumers mashing new methods of shopping and purchasing will shortly become overwhelming for the traditional retailers.
There can be tremendous pressure for change without a great deal of impact as long as there is no acquiescence to the pressure. In other words there has been unrealized pressure for change in retail in the past that has taken a long time to realize because the pressure was never great enough to force the change. The retail market has been under intense pressure for change over the last 20 years now from consumers to meet their changing lifestyle needs and this is just now beginning to have dramatic impact on the traditional retailers. A major force in driving this change is non-traditional retailers such as Amazon.
Consumers have embraced eCommerce and the social commerce aspect to blend the electronic with the brick and mortar commerce channels to create a social commerce capability. This is now driving a great deal of change into the retail market and placing dramatic pressure to change or die on traditional retailers. This aspect of change will not diminish or lesson and now adding to this pressure is the addition of Amazon brick and mortar outlets. These started with bookstores and are now expanding to convenience outlets. The significance here is the payment interactions presented in these stores that allow the consumer to pay without the inconvenience of the checkout line.
The potential impact on traditional retailers of these experiments can be immense from a financial aspect because of the investment in point of sale technology by the traditional retailers. This is can be an immense cost to replace and upgrade and these experiments by Amazon could represent the beginning of the tipping point. Consumers will embrace these changes quickly and this will produce an immense pressure on the traditional retailers to change. It will not cause these traditional retailers to fail immediately however without change and the resulting capital investment from the retailers it can represent a slow and painful death.
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?