The retail marketplace is experiencing extreme turmoil that is redefining the consumer shopping experience as a result of changing consumer lifestyles along with the growth of a new generation of consumers in this marketplace. This turmoil seems to have caught many of the large legacy retailers by surprise in the level and speed of change. This is interesting to me because the forces of change have been growing for quite some time and in hindsight it's easy to see these forces that have converged to disrupt this marketplace. It seems to me then that the level and seeming speed of disruption in the marketplace can be attributed to a large extent to market inertia and retailer complacency. I think that retailer complacency was a key driving factor in the market inertia and this complacency left the large legacy retailers open to this disruption.
In hindsight you can see that the retail marketplace and especially the large retailers were living in denial of the signs in the market that started with the introduction of eCommerce and Amazon. Amazon is the great disrupter in the retail market since it came into being and remade the literature retail market. Amazon has never been coy about its intentions and now in this current market it's easy to look back and see that Amazon has taken advantage of the retailers inertia and complacency along with the growth of younger generations purchasing power to now disrupt the entire retail marketplace. Amazon is not the only disrupter, however it is the first with the greatest impact and the greatest power in the US marketplace.
Inertia and complacency go hand-in-hand in this story and are truly the key ingredients to the disruption of the retail marketplace. The large retailers have been focused on their expansion in their physical store presence in the country and the drive to increase sales via a lowest price strategy. This single minded focus allowed the retailer to become complacent in their research and reaction to the changes in consumer shopping and purchasing habits. Retailers have in the past been slow to change and this has been no different.
Complacency and the resulting inertia have allowed the changes to consumer practices to appear to sneak up on retailers. This has created a disruptive cycle that is now impacting retailers and real estate across the marketplace. Retailers must learn to fight inertia like Amazon has always fought inertia in order to maintain their standing in the marketplace. Retailers must now fight two life threatening cycles to address a change in their low price strategy and also how to address the changes driven by social commerce. Retailers cannot afford to be complacent though because of the speed of change now begin driven by consumers in social commerce.
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?