Retail Internet Convergence is the explosive arrival and growth of mobile commerce that will have a significant impact on the way businesses are managed in the future, from revenue and logistics to the supply chain and bottom line. Today, after more than 20 years of Amazon success, ecommerce is still less than 10 percent of total retail sales – in other words, a little more than nine out of every ten commerce transactions are comprised of offline retail sales. But mobile capabilities will effectively “internetize” the offline world, bringing internet values like real-time and customer targeting into play for all businesses, with the portability of mobile phones making them much more accessible.
Keeping Logistics in Step with the Speed of Mobile
While the new mobile-powered environment will be of significant benefit to consumers, it will have implications for the offline world as they convert their attention to a real-time environment. In order to capitalize on this market opportunity, companies will have to:
• Understand the Customer, Go Local: Businesses will have to acquire “local” information about current and potential customers. Such information databases are used widely in the online world today, but few actually exist with brick and mortar retailers. This will enable organizations to more effectively target consumers with more relevant information and offers.
• Put the “Real” in Real-Time: Business leaders will have to understand the implications of real-time in their management approach. Today, customers demand treatment as served by ecommerce (“I want what I want when I want it.”). Since the offline world must now fulfill such demands, organizations need to manage their business in real-time throughout – including supply chain, inventory management, other logistics, customer service, etc. – to meet customer needs.
• Shine the Light on Inefficiency: A shift towards mobile commerce will put all businesses on the same transparent footing and put major pressure on the inefficiencies of supply chains, which, in many respects, ecommerce businesses have been built to disintermediate. Offline businesses will have to achieve greater efficiencies and effectiveness in their logistics management, especially where added costs are involved.
The Necessary Evolution of Retail Internet Convergence
As the phenomena of mobile commerce and internetization redefine customer behaviors and needs, business leaders in ecommerce must be prepared to take advantage of the changing landscape in a positive way. For example, Joinem – a social commerce startup that I head up as Executive Chairman – focuses on creating collaborative buying groups that band together to receive guaranteed best prices below the internet’s lowest prices on a wide variety of products. That guarantee is backed by a unique model where we work with the lowest stage vendor or factory and generate savings by disintermediating much of the current supply chains.
Similar deconstructions and transformations to conventional supply chain models will be necessary by ecommerce players in order to keep pace with changes in consumer technologies and behaviors. As smartphones and mobile devices empower shoppers, digital commerce cannot sit back and conduct business as usual – innovative evolution will be critical to delivering greater value, and areas such as logistics will be among the first to need an overhaul.
Mr. Richard (Rick) Braddock joined as Executive Chairman of the Board of Joinem in late 2013. An esteemed business leader, Rick was at Citicorp from 1973 to 1990, where he was President and Chief Operating Officer, as well as board member of Citicorp and its principal subsidiary, Citibank N.A. After resigning from Citicorp, Rick served as CEO of Medco Containment Services, Inc. until its acquisition by Merck & Co., Inc., and then spent a year as a principal at Clayton, Dubilier & Rice, Inc. He served as Chairman (non-executive) of True North Communications Inc. from 1997-1999. He then served, from 1998-2004, as Chairman and CEO of priceline.com, which he took public. He was Chairman and CEO of FreshDirect from March 2008 to early 2011 and during that time also served as Chairman of MidOcean Partners. Mr. Braddock is on the board of directors of The Aspen Institute, Lincoln Center for the Performing Arts, Cristo Rey Network, and several private companies. He is also a member of The Council on Foreign Relations. Rick can be reached at – [email protected]
For more information regarding Rick Braddock or Joinem, visit: http://www.joinem.com/about
By Rick Braddock – Executive Chairman of Joinem (www.joinem.com).