Loren Padelford, a vice president at Shopify, said in a recent online article:
“For the first 5,000 years of commerce, the merchant has been at the center. In the last five years, it’s flipped. The consumer is at the center,” she says. “A lot of traditional merchants and retailers are struggling with that change. You now have to figure out a way to get your product in front of people who no longer come to your store. That’s a really tough change if you’re tied to legacy processes and capabilities.”
The track record to this dramatic shift is mixed, at best.
On the one hand, retailers overly invested in big brick-and-mortar haven’t adapted quickly enough to the rise of eCommerce. Malls across America stand empty, while Amazon takes more and more of the retail-sales pie.
On the other hand, companies of all stripes are hopping on to the “super trend” of retail product customization.
Nike, for example, last year rolled out NIKEiD, an online store where customers "create" footwear that sells at a 30% to 50% premium over what they might buy in a store off the shelf, a potential boon despite the three- to four-week delivery window.
The customer-centric reality has multiple implications to the way companies do business, from how they replenish stock to how they track inventory through to their multiple sales channels.
1. Customers shop at all times of the day. They may potentially buy from anywhere in the world. Customers don’t line up outside your store to purchase the latest model of a particular item. Sure, there are exceptions (Apple comes to mind) and the brick-and-mortar store is never going away, but companies, more often than not, must now go to where the customers are.
2. Customers are finding more ways to shop around and make a purchase. It used to be that eCommerce was enough, but companies are increasingly selling and fielding customer queries in more places such as social media, chat windows, and mobile-optimized websites.
3. Companies are shortening their product renewal cycles. This especially true in fashion, where a competitive edge is everything. This means manufacturing and supply chain operations must be more adaptable to changes in demand and business models in a particular region or market.
The conclusion? Companies can compete better in the customer-centric universe if they manage their inventory in real time from one end of their supply chain to the other.