The large legacy retailers with a large chain of stores are now going through a rebuild phase in their brick and mortar retail strategy to improve the consumer interaction by redesigning their store strategy. Many of these retailers are evaluating and building a strategy around a smaller footprint for their brick and mortar store network as a reaction to the increase in Internet sales and decrease in store sales. I think this is a mistake. I think that retailers should instead redesign and rebuild their brick and mortar strategy to support the omni channel marketplace that consumers are demand and even building on their own. Consumers have really been very open in broadcasting their intentions towards the retail marketplace and have been embracing the tools and technology that allow them to shape their shopping and purchasing to meet their own needs.
These retailers are fooling themselves with their initial reactions to shrink their brick and mortar store presence to adjust to the shift in the consumer purchasing channel. This focus on reducing the number of stores is increasing their loss and reducing the focus and funding for activities such as improving delivery times and inventory management improvements. The large legacy retailers are still reacting to changing in the marketplace from a multi channel perspective and not an omni channel perspective and this reaction will not bring the turn around in purchasing and profits for which these retailers are hoping.
Many of these large retailers are still focused on multi channel retail even though consumers have moved to an omni channel expectation and practice. A true omni channel requires one cohesive interaction with consumers from shopping to delivery where the shopping process includes and supports shopping online or in a store or both at the same time and then this concept follows through the subsequent selection purchase and delivery concepts. To the consumer shopping, purchasing and delivery should not depend and be separated by channel and retailers are still struggling with, and many are stuck in a multi-channel retail practice.
Retailers must make a foundational change in their practice to focus on supporting the process that meets the consumer demands at the time of interaction. Consumers may be in the store shopping and decide that they would like to purchase online and deliver to their home and the retailer must support these demands. There are legacy IT applications that must change in order to support these demands and these have always been the stumbling blocks for major legacy retailers. This is also where the size of the operation matters as well because this very often plays into the flexibility and cost of the initiative. At this point in the retail experience these large retailers do not have the luxury of time to make decisions and begin a major initiative to redesign the shopping experience. These retailers must start the change process now and understand that they are starting a new phase of continuous change and reinvention.
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?