Executive Briefings

Let's Just Call E-commerce - Commerce

Analyst Insight: Retail continues its massive digital evolution; we no longer should look at e-commerce as a separate activity for retailers. Consumers are only concerned about commerce. The lines between different retail channels have blurred, consumers expect retailers to service their demands and needs regardless of which path they decide to leverage with the retailers. Retailers' supply chains must keep pace with these digital changes. -- Guy F. Courtin, Vice President & Principal Analyst, Constellation Research

Let's Just Call E-commerce – Commerce

Retailers are focused on driving greater customer experience - how can retailers serve up contextual experiences for their consumers? From our conversations with retailers, over 80 percent of them recognize that their ability to convert more customers will be driven primarily from the experiences these customers receive from the retailers. The retail environment has shifted to one where the customer is the digital powerhouse, and drives the relationship between retail and the customer.

Some of the salient points associated with the retail supply chains:

Nimble supply chain. The retail supply chain has to be increasingly nimble. Not a news bulletin. But digital has transformed the consumer expectations and with it the pressure on the supply chains. The supply chain associated with retailers is being asked to handle an every growing number and combination of SKUs. The average American supermarket carries close to 50,000 items! Tesco, in England, offers 91 different shampoos and over 110 household cleaners. And retail giants such as Zara produce 18,000 new designs a year. This proliferation of SKUs is in direct response to consumers gaining strength in the relationship and demanding these changes.

Turn the oil that is data into fuel. Without data there is no retail! Retailers must continue to seek and leverage new sources of data. More importantly they must leverage the systems and business processes to transform the oil that is the data into fuel that can be used to drive new business models. Consumers expect that their experience with the retailer is the same regardless of which channel is employed. Retailers must lean on the information that is becoming more available to create the right experiences - contextual experiences - for the consumer. It is not enough to know that a person visited your web site before coming to your store. Retailers must strive to fill in the gaps around those touch points. Why is the consumer looking to make a purchase, what is the context and what might be the future context surrounding that interaction? Turning the data into insights can answer some of these questions and create a richer view of customer experiences for the retailers.

New fulfillment models. Retailers are constantly looking for new ways to meet their customer demands. We are moving beyond click and collect. Whether it is pop-up stores, subscription-based delivery, mobile commerce (think trucks and vans, not your mobile phone) or even delivery to the trunk of your car - retailers are trying and implementing new ways in which they can fulfill the customer transaction. Retail must push their thinking when it comes to how fulfillment will happen for their customers. Consumers expect the retailer to be flexible, not the other way around.

The Outlook

In 2016, responding to the ever-growing voice of the customer, savvy retailers will look to the growing pools of rich data to create the contextual experience needed to attract and retain their customers. Their supply chains will be an integral part of this. Both the technology and the business processes must be studied that can allow retailers to create these contextual experiences.

Retailers are focused on driving greater customer experience - how can retailers serve up contextual experiences for their consumers? From our conversations with retailers, over 80 percent of them recognize that their ability to convert more customers will be driven primarily from the experiences these customers receive from the retailers. The retail environment has shifted to one where the customer is the digital powerhouse, and drives the relationship between retail and the customer.

Some of the salient points associated with the retail supply chains:

Nimble supply chain. The retail supply chain has to be increasingly nimble. Not a news bulletin. But digital has transformed the consumer expectations and with it the pressure on the supply chains. The supply chain associated with retailers is being asked to handle an every growing number and combination of SKUs. The average American supermarket carries close to 50,000 items! Tesco, in England, offers 91 different shampoos and over 110 household cleaners. And retail giants such as Zara produce 18,000 new designs a year. This proliferation of SKUs is in direct response to consumers gaining strength in the relationship and demanding these changes.

Turn the oil that is data into fuel. Without data there is no retail! Retailers must continue to seek and leverage new sources of data. More importantly they must leverage the systems and business processes to transform the oil that is the data into fuel that can be used to drive new business models. Consumers expect that their experience with the retailer is the same regardless of which channel is employed. Retailers must lean on the information that is becoming more available to create the right experiences - contextual experiences - for the consumer. It is not enough to know that a person visited your web site before coming to your store. Retailers must strive to fill in the gaps around those touch points. Why is the consumer looking to make a purchase, what is the context and what might be the future context surrounding that interaction? Turning the data into insights can answer some of these questions and create a richer view of customer experiences for the retailers.

New fulfillment models. Retailers are constantly looking for new ways to meet their customer demands. We are moving beyond click and collect. Whether it is pop-up stores, subscription-based delivery, mobile commerce (think trucks and vans, not your mobile phone) or even delivery to the trunk of your car - retailers are trying and implementing new ways in which they can fulfill the customer transaction. Retail must push their thinking when it comes to how fulfillment will happen for their customers. Consumers expect the retailer to be flexible, not the other way around.

The Outlook

In 2016, responding to the ever-growing voice of the customer, savvy retailers will look to the growing pools of rich data to create the contextual experience needed to attract and retain their customers. Their supply chains will be an integral part of this. Both the technology and the business processes must be studied that can allow retailers to create these contextual experiences.

Let's Just Call E-commerce – Commerce