Over the years there have been many examples of small and nimble retailers overcoming obstacles by quick reaction to the market and consumer demands. You would think that by now large retailers that have been around for a while would have embraced this concept and implemented techniques and practices that support and encourage quick and nimble reaction to market and consumer changes. However the opposite seems to be an almost overwhelming draw for the leadership of these retailers. This pull to complacence and what is perceived to be stability is obviously a strong human reaction and tendency in leaders, it is hard to recognize when it is time to change and the ‘if it ain't broke don’t fix it’ draw is hard to overcome.
Human nature is to be drawn to stability and complacence and this tendency in large retail leadership can be seen to work in the beginning of a cycle. Once in the middle of the downturn the natural reaction for these retailers is to view the market change as a threat to their sales and they react to stabilize their sales. This is a natural reaction and these retail leaders must fight this tendency in order to survive. We are in the midst of one of these major cycle shifts now and large retailers are struggling to survive because they are slow to embrace the need to change. You see this over the recent years when retailers fight the window shopping and other consumer trends in retail omni channel shopping.
The large retailers have paid lip service to the demands of consumers related to social shopping and purchasing, just as they initially paid lip service to the social networks a few years ago. This highlights a second challenge for the large retailers, namely the cost of change. Most of the large retailers are hampered by legacy technology that is good at large enterprise management and bad at nimble discontinuous change. This provide a challenge and probably more importantly an excuse for retailers to struggle to maintain stability and attempts to support consumer change without change to their base systems.
In addition to these challenges the large retailers struggle with disparate inventory locations and accuracy of the inventory in these locations to fill consumer eCommerce orders. I am referring here to the practice and ability to fill customer orders from retail stores. The issue with this type of fulfillment in my experience is challenged by the accuracy of inventory, the availability of clerks to fulfill the orders and then the coordination of delivery to the customer. In my experience, a delivery from the a store to a customer home can be anywhere up to 12 days.
These challenges must first be recognized and accepted by retailers so they can begin to resolve them. These retailers must also implement a culture of continuous improvement and change in order to meet the challenges. Retailers can buy capabilities but they must also change their culture in order to maintain the growth and ability to recognize and adjust to the changing demands.
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?