It is easy to say that retailers and manufacturers must change their interactions and relationships with each other in order to support changing consumer demands, but what does that look like? What it looks like is that retailers, and especially large legacy retailers must change to become more like distributors of products and manufacturers much change to become more like retailers. The difficulty in this relationship will be determining where one lets off and the other begins and between the two there will be a large gray area where the practices and services seem to cross over. The power of the Internet, and the social shopping practices that I have been discussing is the support of these gray areas and especially consumer navigation through these areas can be provided in a seamless manner through collaboration and partnership.
The retailer now through the eCommerce channel has begun to provide an endless aisles approach to product offerings and utilizes a drop ship relationship with manufacturers and distributors. This relationship has allowed the retailer to provide a great deal more options to the consumer for selection and purchase without the additional overhead of additional product purchases, shipping to the retailer distribution center and then the additional costs of handling and storage. This was a great deal for the retailers and helped to expand selection and sales of products in addition it also provided an additional outlet to the manufacturers and distributors to allow them to expand their product sales.
This all works great from the retailer perspective while the retailer owns the relationship with the consumer. This is now where impact is being felt of the growth of the eCommerce sales channel, coming to the point this year of catching up to brick and mortar sales with no sign of slowing. Now consumers have become accustomed to a blurring of the shopping and purchasing lines with no regards to the outlet from which they purchase. The purchase is completed by the consumer now based on the provider that best meets the consumer needs at the time of the purchase. Consumers are using their smart phones now to shop online for deals and more options in product, purchasing and delivery while they are shopping in the retail brick and mortar store. Add to this mix the growth and improvements in the capabilities of manufacturers and distributors to complete a consumer purchase and deliver to the consumer based on their demands at the time.
The commerce marketplace is now a multifaceted environment that uses the Internet foundation and framework to tie the disparate pieces and services together in an easy to use package. Consumers are mashing these pieces together in changes ways in order to meet their changing lifestyle demands and the commerce marketplace must be flexible to accept and encourage the changing demands in order to survive.
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?