Published May 29, 2018
Digital disruptions continue to play an important role in the evolution of retail. The dot-com era of the 1990’s begets the dot-com bubble that burst to create the dot-com collapse. By 2003 the few dot-com survivors began playing an important role in retail. By 2010 eCommerce had reached a level of significance creating the term multi-channel retail, describing retailers who participate in stores and online. The field has evolved, entered the era of New Retail.
Jeff Bezos has said consistently for 15 years, “We would love to open Amazon retail stores, but we want to do something that is uniquely Amazon, but we haven’t found the idea yet.” Jeff in the last six months has been talking about “Retail Innovation” while at the same time buying Whole Foods Market.
Similarly, a year ago Jack Ma said in a letter to his shareholders, “Pure eCommerce will be reduced to a traditional business and replaced by the concept of New Retail.” Now as he has substantially grown the Alibaba store footprint via Hema, In-Time, He Ma, and more. As Ma approached the 2017 Global Shopping Festival he said, “eCommerce is rapidly evolving into “New Retail”. The boundary between offline and online commerce disappears as we focus on fulfilling the personalized needs of each customer.”
What we see as the foundation of “Retail Innovation” and “New Retail” is a new era in retail where:
- The digital disruption goes beyond online retail and now is also deployed to offline retail.
- Retail is not driven by merchandising, but rather by the supply chain.
- The future is not driven by Bricks vs. Clicks but rather by Bricks and Clicks.
- The future goes beyond Multi-channel to Omni-Channel and now onto Unichannel (Unified Channel).
- Not just driven by the case supply chain but by both the case and the each supply chain.
The three foundational supply chain requirements to achieve New Retail are:
- Unichannel: From the financial perspective of Multi-channel, to the inventory perspective of Omni-Channel, to the customer experience perspective of Unichannel. Where we realize there is no eCustomer and we seamlessly integrate customers’ experiences regardless of channel.
- Collaborative Logistics: By leveraging the network effect and the economies of scale in multi-tenant, get local, automated fulfillment, and distribution centers with great final delivery to achieve low cost and high speed, customer focused logistics.
- Each Supply Chain: The utilization of demand driven frequent store replenishment of eaches to reduce store inventories and to increase on-shelve availability.
New retail will result in the increased profitability of retailers, the increased customer satisfaction of customers, and the evolution of a seamless and integrated ecosystem experience regardless of channel. To achieve these results a total reinvention of your supply chain is required to enable collaborative logistics and an eaches store replenishment as channels are unified into a seamless flow of goods throughout your supply chain.
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