Networks supporting and encouraging collaboration have been growing in importance and reach for years now and the expansion and growth of millennials in the retail marketplace has increased the use and importance of these networks. The only real surprise, in my opinion, is that retailers have not prepared for changes resulting from the growth of these networks. In hindsight it seems clear to me that the marketplace and these networks utilization have been waiting for a tipping point and this tipping point came with the growth of the millennial generation in the marketplace. Over the last couple of years the growth and expansion in use of these collaboration networks has allowed consumers to turn the tables on retailers and take control of their shopping and purchasing practices to support their changing lifestyles.
The success, or failure, of retailers is now dependant on their ability and commitment to re-align their focus and support to embrace the consumer collaboration changes. These consumer collaboration changes also drive changes in the retail supply chain that will ripple through the supply chain in ways that can be difficult to understand and requires quick reaction time to adjust the flow and direction of inventory. The changes driven by consumers require integration throughout the supply chain in orders to meet the demands.
Currently the retail supply chain is based on a simple and straight forward level of collaboration and partnership that supports the legacy requirements of the retail marketplace. The retail marketplace is now in upheaval and this will also dramatically change the supply chain relationships and interactions. The also requires retailers to change their planning and forecasting process to implement a much shorter cycle time which will drive the disruptions into their forecasting and planning models. These changes to the entire supply chain collaboration model require focus and support from the senior leadership across the entire supply chain and will bring the supply chain partners even closer in this collaborative relationship.
Wal Mart and Amazon may be the two retailers best prepared and most committed to meeting these types of changes because the supply chain capabilities and focus are ingrained into the DNA of these companies. Wal Mart is probably best at process and supply chain integration while Amazon is best at imagination and acceptance of risk and potential failure. Both of these cultures will do well in this upheaval for different reasons, Wal Mart for stamina and focus on process and integration while Amazon will drive the disruption with imagination and willingness to accept risk and potential failure. Other major retailers will simply follow their lead which which only increase the number of failures during this period.
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?