Consumers gain a great deal of efficiencies resulting from the social commerce shopping and purchasing and as a result of these shopping and purchasing efficiencies they also gain a great deal of time back for their schedule to enhance their lifestyle and family requirements. Retailers and suppliers can also gain a great deal of efficiencies from the social commerce shopping and purchasing practices as long as they focus on their methods, processes and procedures to standardize across channels and every interaction with the customer. This, however, is also the greatest challenge for the retailer because it requires a change in culture along with an overhaul of their shopping and purchasing support practices. These are deep seated and ingrained practices for the retailer and will require focus and stamina to change.
Consumers have adapted to and embraced a continuous process to improve efficiencies across all of their lifestyle and interactions and I think this practice has become so common and ingrained in the daily interactions of consumers that they perform these analyses and improvements without a thought. The consumer is constantly interacting with family, friends, other consumers, service providers and other retailers of all shapes and sizes and these interactions and even sequence and priority of these interactions is changing continuously to provide suggestions and demonstrations of improved efficiencies. The consumers are then open to trying new methods based on recommendations or opportunity in their daily interactions. This is a very robust and efficient method for continuous improvements and continuous efficiencies.
Retailers and especially large legacy retailers are must more rigid in their methods, processes and procedures as a result of years of focus on the command and control culture along with a focus on cost controls. I say specifically cost controls and not efficiencies because the retailer has been focused on reducing costs in their channels rather than improving the efficiency of the product flow through their channels. Inventory is a great example of this because retailers are mainly focused on procuring the lowest cost, highest quality for that cost, and distributing this product to the various channels for purchase by the consumers. This supports the store and mall channels for retailers to generate sales through these channels although the inventory management is not very efficient and can generate a great deal of overstock inventory that require price reductions to move the product. This produces inefficiencies in inventory management and replenishment in the retail stores along with impacts to profitability.
The challenge for retailers to improve methods, process and procedures improvements has been greatly highlighted as a result of the changing consumer shopping habits and the reduction in traffic in malls. Retailers must catch up to consumer efficiency demands and methods in order to stop the slide. This is something that retailers must address internally through culture changes and improved processes that focus on shopping and purchasing and not the channel in which these activities are performed.
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?