The changes in the retail market are just as much a consumer reaction to their frustrations with brick and mortar shopping as they are embrace of new technologies. Consumers have reacted to their frustrations with shopping and purchasing by building their own virtual retail market where they can shop and purchase while interacting with friends and family in a virtual shopping experience that allows them to meet their lifestyle needs efficiently and effectively. Amazon and other eCommerce retailers have taken advantage of these frustrations to expand their reach and disrupt the retail market as a result. Some retailers have realized their challenge and are now scrambling to react and adjust to the new and changing consumer demands with some success.
Amazon is a great example of a retailer that has recognized the frustration and provides a robust alternative that embraces consumer choice and collaboration. Amazon has made the online shopping experience personal and has focused on developing the relationship with consumers to develop a bond and expectation of value for the consumer. Amazon has been able to create a two way conversation with the consumer that legacy brick and mortar retailers have be eliminating for years and this is the secret sauce for Amazon and other online retailers.
Small local retailers have not really suffered during this disruption and I believe this is because these small local retailers focus on the relationship with the consumer, they personalize the experience and consumers react positively. Contrast this to the large legacy retailers of a pure focus on price without the personal consumer relationship and you can see that consumer reaction to leave in droves for the eCommerce marketplace where price is a competitive advantage.
Large retailers must change their focus to improving the shopping experience and giving consumers a reason to come to the store again. These retailers cannot change traffic jams but they can change parking challenges through a focus on experience getting to the store as an example. Large retailers have spent years focused on cost reductions in the store and this has resulted in reducing the attraction for consumers to go to the store. Large retailers must now focus on the omni channel shopping and purchasing capabilities in the store and the consumer experience when in the store. In my opinion, these retailers should reduce the square footage of product display in the store, increase the space for product backroom storage to support direct to consumer shipping to support the omni channel shopping and purchasing demands of the consumer.
The last addition for these large retailers is to produce product events in the store as a means to attract the consumer to spend more time in the store. When I was young we used to go to the mall and the large retailers for the entertainment just as much as the purchase. As a result of the product demos and other entertainment options people spent more time in these stores and purchased more. Omni channel shopping and purchasing allow the retailer to redirect their spending into areas in the store that will produce greater value and greater sales.
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?