Social commerce has been expanding for some time now and has reached the tipping point to disrupt the retail marketplace now in a manner that is extremely difficult for many retailers to address. This disruption is different than the initial Internet boom and bust because of its pervasiveness across consumer groups and probably most importantly because of the growth of younger generations in the retail marketplace. The initial boom was feed by a combination of potential and hype and did not expand past the initial hype because the technology could not support the consumer demands. Now the technology capabilities have finally reached the level where they can at least begin to meet consumer demands and this has caused the disruption. This disruption is based on a broad acceptance across all consumer groups of the technology and the ability to reshape the marketplace to meet their lifestyles.
The current disruption is based on consumers that are more comfortable with technology and technology that is pervasive in their lives. This is important to understand because this points to long term changes and trends that will continue to change the marketplace. Seeing as how these changes have disrupted the marketplace and the fact that this trend is not slowing it is extremely important for retailers to adjust their internal practices to make their capabilities more flexible. This means retailers must implement a technology framework that supports flexibility and provides a robust base to support the changing consumer shopping and purchasing practices.
Even more important than the technology platform is changes to business processes. These changes must be implemented and encouraged to expand within the business in order to understand and identify early changes to consumer practices in order to incorporate into the retail marketplace. This is the most difficult task for retailers now and is absolutely the greatest challenge for these retailers.
Retailers can easily purchase new technology and in fact this practice is increasing and quickly expanding for the large retailers such as Wal Mart. These technologies are only one piece of the puzzle and in order to remain successful in the changing marketplace these retailers must change their practices as a first priority. Unfortunately this is also the most difficult change to make for retailers because it requires a concerted and long term effort from the top of the organization to the bottom. This is not a once-and-done process and requires implementing and encouraging a business process change in order to support the long term requirements of the business.
Remember that large online retailers are also continuously changing and they are already ahead of the curve in cultural and business processes to support the online marketplace. Make no mistake, these capabilities are a definite advantage and allows them to identify and mold marketplace changes to their advantage. This is a huge advantage for these retailers and must not be taken lightly by the large legacy retailers in their actions to adjust to the new reality.
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?