There is an upheaval in the retail market now driven by the growth of millennials in this market and especially their comfort in crossing between the virtual and physical shopping and purchasing channels. The term ‘omni channel retail’ seems to be a term that no longer describes the market and I think now that ‘retail social marketplace’ more accurately describes the current state of the retail market. We must look to the social network arena to see an accurate trajectory of the change that the retail market is going through right now. Retail is changing in ways that were not foreseen 10 years ago or even 5 years ago and this is the direct result of the entry and growth of millennials in the retail market. Millennials are turning the retail market into a retail social marketplace that blends channels to support consumer shopping and purchasing choices and now it is also on the cusp of an upheaval of the consumer delivery practices.
Most retailers are chasing changes using a variety of brute force methods to support the changes. This practice can be sustained for a short time however it cannot be sustained over a long period. In order to be successful, retailers must implement a flexible framework that can quickly support changes with a limited and short term amount of brute force. What we are seeing now in many of the large legacy retailers is the result of chasing these changes and not changing the underlying framework to support the long term need for flexibility to support sustained discontinuous change. In addition, retailers are also acquiring companies that already are proficient at some of the new practices with the intent to buy the capability and improve faster. This practice can only work if the acquisitions are used to drive improved flexibility into the underlying framework. My suspicion is that this capability acquisition strategy is simply another type of brute force method to support changes and without the follow-on activity to incorporate the acquired capability and flexibility into the their framework it will also fail in driving long term capability to support change.
Retailers must fundamentally change their culture and their foundational framework including people, process and technology in order to survive and sustain their place in the market. This means they must embrace the retail social marketplace and work with both internal and external partners to build and maintain this social marketplace. The rate of change is increasing and each new change is built upon a previous change, retailers must increase collaboration and flexibility in order to support this new model.
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?