Moving Beyond Retail is the fusion of multiple channels with collaboration, scale and profitability.
Companies must be prepared to tear themselves away from routine thinking with its associated behavior and outdated processes. The line between offline and online commerce is increasingly blurred. Adapting to the digital world means removing the distinction and transitions between one business channel and another. Think Creative Destruction! 1
Innovation needed to create significant new business and growth directly conflicts with the operational effectiveness currently at the very core of most retail business models with their outdated processes and tools. What is your turnaround strategy? Without a transformation strategy as a starting point, the innovation becomes a tool buried inside a company’s routine operations. Keep in mind that’s it’s only the beginning of digital disruption. The road to success has not been paved.
The consumer supply chain focus defines
the evolution of the digital road map.
Criteria for the customer-centric supply chain include:
Omnichannel is about having a defined roadmap and strategy. Its’ larger definition is fundamental for global commerce, the production of goods and services, logistics, and customer centricity. Digital transformation works, including driving bigger shopping baskets, increased loyalty, raising the in-store foot traffic and engagement capabilities. At every step creating a new, richer and better customer experience – clearly improving people’s lives in the process. The new exponential growth opportunity of e-commerce, including grocery, is the focus to redefine and extend the parameters of the traditional retail model with a new strategy. Many challenges of the food retailer are also applicable to other retailers.
Create, Operate and Digitally Disrupt, while retaining full control.
Create an effective ‘How’. We need to look at the how of consumer purchasing journeys and not just touch points. This adventure is based on unique experiences from the warehouse to store floor to the online stage. We are creating new buying decisions with dynamic performing categories, removing brands, applying both the Pareto principle (80/20) and statistical models. Effortless and seamless entry points to digital in fact destroys brand recognition. Witness the success of Amazon and Walmart. Here the value equation is the continuity of the customer experience with different places (including mobile devices, car, store, home) and the journey’s adventure (jump across all spaces that allow consumers to craft their own experiences and points of view). This is a winning formula for the new social digital world “out of store” business, where smaller is better, agile and adapting to innovation, with something different and unique. Continuously improving the Omnichannel model through mobile and online channels, the digital business needs to maximize the vertical integration between the physical and online operations. It’s time to experiment, building market awareness and unifying data streams. Test new digital business solutions and tools to gain an Omnichannel advantage. There is no silver bullet.
Operate at, or better, exceeding the pace of the market: moving to the speed of the consumer's motion. The focus is on simplification and agility with quicker, better processes and continuous improvement of the consumer’s supply chain. Building social communities first, product as a service (PaaS) devices and tools and everything-to-everyone stores (X-to-X), help to define the transformational process. Customer values here involve zero-waste markets (waste reduction, green, organic) and click & collect-only grocers using cool and intelligent lockers with virtual and augmented reality digital foodscape stores. The marketing story is about Millennials & Generation Z, mobility augmented reality, NOSH and recipe/meal kits. It’s about a better story and deep trust to build a completely honest value chain that understands today’s consumers.
Digital disruption is about creating a better ‘Why’. 2 The core business values start with authentic communication and strategic direction. This is what we mean by the heartbeat of digital disruption. It’s about genuine honesty, integrity of all transaction values, traceability and direct communication which is the cornerstone of seamless, authentic engagement. An example here is augmented transparency (AT) and, by extension, the project of digital logistics. Technology is changing the process of gathering information and presenting a deeper, better, and more engaging way for the consumer to discover and connect with food. This technology includes not only nutritional and wellness information, but also the end-to-end food source to table story with full traceability. "From customized recipes, nutrition tours and educational events, AT will offer expert level knowledge on demand and filtered based on one’s personal interests and change the perspective of the food world into a 3600 view."3
The Why is a fundamental re-engineering of the retail department store concept with a new mindset. Ecommerce is fundamentally a collaborative and hybrid business model. The key ingredients are entertainment, wellness, social communities and value. Let’s consider some values that are part of this digital transformation.4 Full line versus part line stores, big-box retailer versus small-box environments, large retail space versus smaller retail space, on-price retail versus off-price retail (discount), augmented reality versus “touch & feel”, mobile only versus “walk through”, easy low-effort convenience of click & collect and intelligent locker locations versus the complicated, harder-effort of physical locations – to name some key values.
1. Omnichannel is not about retail duality with its’ resulting supply chain duality. It’s about unification – a hybrid combination of the consumer experience and dynamic of a mobile integrated digital lifestyle. It’s about retail unity, creative disruption, and innovation focused on the consumer supply chain. The transition is about re-engineering the supply chain versus a few tweaks to the same old and well-worn retail model.
2. The fundamental dynamic starts and ends with seamless convenience and consumer engagement. Simplify, making it fun and easy: first-and-foremost, making it convenient. Innovation here means maximizing mobile only and digital technology such as voice activation.
3. Route optimization starts with the efficient augmented reality (AR) experience of the consumer’s shopping list mapped to the online (out of store) experience. An app maps out the fastest and easiest way to shop the virtual store, guiding you around to pick up your favorite food, including the items on your weekly grocery list. In addition, the same app works to benefit the instore experience. The extension to digital logistics involves integrated route optimization to manage the delivery process to the consumer, reducing the number of vehicles on the road with the increased efficiency of delivery end-points, including click & collect.
4. Seamless engagement, a continuous flow, or motion, of actions and intentions, puts the consumer in control and not the other way around. Not the retailer “forcing” the consumer with its’ control, it’s advertising, it’s systems, asking you to do this or that. Consumers know what they want to do. Never force them away from what they want to do – or do so at your peril!
5. Multi-channel shopping is about choice and seamless convenience. Convenience and speed at every step provides the best purchasing journey and a natural continuation of the consumer’s current story as they move to the next story with its immediate and emotional feeling of life. Shop tons, Click once, Deliver fast.
6. Accelerate convenience at the pace of life. Faster delivery, better convenience, results in consumer loyalty and growth. Last mile consumer automation is strategic and the next phase of logistics-marketing evolution. New marketing, new channels, new locations – new advantages for your business! Intelligent lockers are part of this exponential growth.
1. See Richard Foster's Creative Destruction, who applied Schumpeter’s theory to the modern practices of management and innovation. Some ideas are developed in this article. Good intro: http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/creative-destruction
2. It’s always good to review basics. This includes the now famous TED talk by Simon Simenuk. The YouTube short version is here: https://www.youtube.com/watch?v=IPYeCltXpxw
3. Phil Lempert’s “Ten Food Trends That Will Shape 2017” has AT as a key trend quoted here. http://www.forbes.com/sites/phillempert/2016/12/14/the-supermarketgurus-2017-food-trend-forecast/3/#233aafe12e4b
4. Transition economies show an even more impressive process of creative destruction and thus can be used to leverage insight and innovation for growing digital economies. http://siteresources.worldbank.org/INTWDR2005/Resources/creative_destruction.pdf