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Through a special arrangement, presented here for discussion is a summary of a current article from the TXT Group blog.
Clearly, it's not the best of times for a traditional retailer. The stock market is at a new high, unemployment a new low - normally plenty to warm a retail heart. However, the upward trend is store closings and pity parties. Worse, if you didn't move early and quickly to online, has that high-growth opportunity passed you by? Amazon.com wins about 50 percent of every incremental online dollar and just welcomed their 50 millionth apparel customer.
As in any other structural change, there will be winners and losers, as Darwin insures only the strongest (smartest) survive. Some will win by gaining market share from failed competitors, most need to adopt new business practices and operationalize significant changes in shopper interaction. The picture of the "new normal" is still hazy but there are early indicators of the types of capabilities that retailers should understand and align with to insure they are renaissance ready.
Firstly, you (still) need great product, ideally an exclusive brand that you control. Also, a quick adaptive supply chain, fast-fashion technique will spread to more industries, so hone your skills at designing or acquiring more products with shorter life cycles.
Secondly, you need to master the “fulfillment chain.” Unlike the supply chain, this is about planning and placing product and information along the path to purchase that your shopper will utilize -- researching and ordering on the web, while leveraging the multi-function store, (a showroom, a shop and a fulfillment/return center). A high functioning fulfillment chain is the mixed mode successor to the pre-renaissance model of buy in store, or on the web, with chaotic and expensive intersections in between. A modern fulfillment chain needs to make sense for your customer, organization and bottom line.
Retailers have thrived in the past by creating repeatable, high-scale, low-cost, hardened processes built on monolithic systems that supported a (formerly) profitable business model, but destroyed agility. Thriving in the future will involve turning that model on its head and creating high-scale, maybe not so -low cost but highly-agile capabilities.