One of the greatest impacts on the retail marketplace of social commerce is the quickening of cycles of activity and the forecasting cycle may be one of the most significant impacts because of the far reaching impact to the marketplace. Outside of the impact of an increase of millennials in the marketplace, I don’t know that these demands have changed much from previous consumer demands. The changes in cycles now are the results of the availability of options made possible through eCommerce, mobile technology and the growth in throughput of the networks. These factors have all come together at a point and a time when consumers are flexing their muscles in experimentation with methods to support their shopping and purchasing demands.
The quickening of cycles is evident in demand planning and forecasting with the level of overstock seen in stores along with a flattening and even decrease in sales for legacy retailers through their brick and mortar channels. Another symptom of the quickening cycles is delays and inability to adjust to spikes in sales on products. These changes in the velocity of information can definitely be overcome through collaborative actions across the extended supply chain with revisions to data collection and analysis along with improvements in demand planning and forecasting software.
There are many challenges for retailers, and especially the large legacy retailers with a large investment and footprint in brick and mortar stores, that require increased spending to overcome. There is also an increase in consumer interaction and collaboration, which also requires additional spend in internet and mobile technology to support along with an increase in labor to provide the personal interaction that consumers require. These points require significant and long term change in culture along with significant increase in spending to address. These investments require significant support from the senior leadership to allow the changes to be implemented and more importantly to allow for the time to adjust and build the relationships with consumers that will deliver results.
I believe that the greatest challenge to the large legacy retailers is increased consumer collaboration. This collaboration is a requirement to help the retailer identify consumer demands and trends in a manner that allows them to quickly and efficiently adjust their demand forecasting and planning. Improved consumer collaboration has the greatest investment in people and requires a commitment to a long term investment in people along with a culture change to be successful. I believe the most important point to this is that I do not believe that demand planning and forecast can be successful without a focus on consumer collaboration in order to understand and gain an edge and confirmation on changes in consumer demands.
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?