Consumers have not just accepted, they have wholeheartedly embraced social commerce to such a degree that it is causing a major disruption in the retail market. I saw reports of a recent survey stating that consumers are comfortable now with omni channel purchasing and I think this is really an understatement to say the least. Now there are reports on major news outlets trumpeting the potential end of department stores! As with most reports on the major news outlets this is somewhat inflated and only provides the most basic background related to closings announced and the increase in online purchasing. As I have mentioned previously we have entered a period of major disruption and there will be a great deal of fall out from this period.
This disruption is not immediate and did not suddenly occur overnight, the signs and build up to this have been accumulating over the previous few years and retailers to their credit have also been adjusting to these changes. We have reached a point now where there has been a convergence of internal and external factors that have come together to bring a tipping point for the major legacy retailers. In this case the impact though is on the larger legacy retailers in forcing a quickening of changes that require faster reaction and adjustment times than these large legacy retailers are willing to engage. This is a cultural impact as well as consumer marketplace demands that have converged to disrupt the retail marketplace.
This convergence from the consumer perspective has come about as a result of a few factors:
- Technology improvements coming from the mobile technology and especially the wireless technology arenas. Consumers have embraced these technologies to simplify their shopping and support their changing lifestyles.
- Extended supply chain improvements especially in delivery to allow consumers to coordinate delivery in the manner that supports their needs.
- Growth and acceptance of Internet retailers and especially purchase and delivery options offered by Amazon as an example.
- Growth of millennials and their mashing technology tools and social networks to support their shopping and purchasing practices.
All of these factors have come together to dramatically impact the retail marketplace and with it the large legacy retailers that are now struggling to meet these changing shopping demands.
Consumer acceptance of social commerce is dramatically impacting the retail marketplace and there is now no turning back. The impact of millennials on the marketplace will continue to grow and the changes they are driving will only speed up as the acceptance grows across the marketplace. Retailers now must change both their culture and their technology and corporate infrastructure to increase flexibility in order to succeed in the future. The current marketplace fallout with the large legacy retailers is more the result of these retailers recognizing and trying to account for these changes than the failure of the department store.
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?