One of the major factors in retailers success in the future is their flexibility and ability to adapt to changing demands of consumers. This flexibility is provided by a technology and cultural framework supporting the flexibility to adapt to changing demands along with a culture of collaboration that supports the practice of collaboration with all partners in the marketplace, including and especially the consumer. I think this concept of including the consumer as a partner in the marketplace is critical to the understanding of the consumer demands. It seems to me that a key point of struggle for many retailers is the understanding and acceptance of the changes that millennials bring to the marketplace and one of the big changes is the demand and assumption of collaboration across the marketplace and the inclusion of consumers in this partner collaboration.
Retailers must incorporate a robust continuous improvement cycle that includes people, processes and technology to support continuous adaptation. The large legacy retailers have maintained a process of identification and grouping of many changes in a major release and implementing this large release to address the changes. After this implementation though the retailer then begins to group the next set of changes into a subsequent large release. Retailer must shorten the timeframe of these releases and then incorporate the robust continuous review and improvement cycle to ensure they identify and are prepared to adapt to the new changes driven by the market partners in a much faster cycle.
It is the velocity of change along with the breadth of change that is unnerving retailers and causing them to struggle. Retailers historically have been slow to change and have been even slower to change their culture. In the past these practices allowed the retailer to maintain a steady growth and now these practices are hindering the retailer from adjusting to the market demands. In this age of the millennial shopper along with social shopping and purchasing the retailer must collaborate and adjust quickly to meet the changing demands of the consumer. The large legacy retailer focused for so long on gaining and maintaining market share and cost reductions through size that they are now struggling to change that practice to a method that is flexible and supports changing practices.
Millennials are curious and embrace experimentation that creates a high velocity of change. Millennials are also adept at creating new capabilities by combining capabilities in new ways. These two practices do not fit very well with a stoic practice of stability and a slow and plodding rate of change that is practiced by the large legacy retailers. Due to the very nature of the millennial generation the large retailers must change their culture to one of nimble collaborative and iterative change, they cannot purchase this culture shift and must encourage and develop internally through practice and demonstration. Millennials are changing the retail marketplace to support their adaptive and collaborative practices and retailers must change or die.
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?